Mcdonalds The Biggest Fast Food Restaurant Marketing Essay

McDonalds the biggest fast food restaurant in the word established in 1955 in Illinois USA, more than 30,000+ restaurants located in 120 countries worldwide, serving more than 54 million customers per day. In December 2005 McDonald’s reached a record high of avenue of more than US$21 billion world wide. With 390,000+ employees, McDonald’s now is the largest over the counter food service restaurant in the world. The corporation functions mostly by means of franchisees. McDonalds is one of the many corporations that have successfully used a combination of various marketing strategies to be a globally successful organization.

McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.

A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation’s revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald’s revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald’s primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruit. The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino, California.

McDonald’s first filed for a U.S. trademark on the name “McDonald’s” on May 4, 1961, with the description “Drive-In Restaurant Services”, which continues to be renewed through the end of December 2009. In the same year, on September 13, 1961, the company filed a logo trademark on an overlapping, double arched “M” symbol. The overlapping double arched “M” symbol logo was temporarily disfavored by September 6, 1962, when a trademark was filed for a single arch, shaped over many of the early McDonald’s restaurants in the early years. Although the “Golden Arches” appeared in various forms, the present form as a letter “M” did not appear until November 18, 1968, when the company applied for a U.S. trademark. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald’s restaurant overall. Kroc later purchased the McDonald brothers’ equity in the company and led its worldwide expansion, and the company became listed on the public stock markets in 1965. Kroc was also noted for aggressive business practices, compelling the McDonald brothers to leave the fast food industry. The McDonald brothers and Kroc feuded over control of the business, as documented in both Kroc’s autobiography and in the McDonald brothers’ autobiography. The San Bernardino store was demolished in 1976 and the site was sold to the Juan Pollo restaurant chain. It now serves as headquarters for the Juan Pollo chain, as well as a McDonald’s and Route 66 museum. With the expansion of McDonald’s into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility

The first McDonald’s opened in Des Plaines, Illinois in June 1955. In five years there were 200 restaurants. After ten years the company went public, and the share price doubled to $50.00 in the first month. By 1995 there were over 18,000 restaurants worldwide. In 1996, McDonalds signed a ten year global marketing agreement with the Walt Disney Company to promote and help each other. Coincidentally, Ray Kroc and Walt Disney first met in an Army camp in Connecticut in 1918, when both were unknown visionaries. Xerox took 63 years to make its first billion dollars; IBM took 46 years. But the McDonald’s Corporation managed to surpass one billion dollars in total revenue in just 22 years.

Aim and Objectives-

Aim:

To examine and explore the globalization of McDonald’s in India.

Objectives:

* To analyze published data on globalization and to investigate the McDonald’s operations in home country and in India.

* To analyze global issues like entry mode, social and cultural issues economic and political conditions, impact of globalization, benefits and problems associated with it.

* To critically analyze the findings and provide recommendations

Reasons for selecting McDonalds:

More than 58 million people and 31000 local restaurants are engaged in McDonald’s as it is the world’s largest food service retailer. More than 75% of McDonald’s restaurants worldwide are owned and operated by independent local men and women. The reason for selecting McDonald’s for this research are various. It is a well-known brand name. Its success story and example for other multinationals are the main reasons for choosing this corporation. McDonald’s has become emblematic of globalization, sometimes referred to as the “McDonaldization” of society. Its big-Mac is used as an Index by The Economist magazine for comparing living standards and purchasing power parity around the world . The company is credited for providing standardised and high quality service globally. The success of McDonald’s globalization depends upon its adaption of local approach and values alongside social, cultural and environmental issues. Its success thrives on adapting to consumer demands. What makes McDonald’s stand out from the rest of the fast food industry is its creation of a set of standardized procedures and its changes in order to satisfy consumer needs. Company’s international success is guaranteed by the methods which McDonald’s uses entering foreign market. “Think global, act local” describes the goal which McDonald’s follows in foreign countries. Introducing American culture to the world the company raises its success, profitability, and compatibility. McDonald’s globalization model serves as an example for many other franchises. McDonald’s uses the in-country production mode entering foreign countries. International restaurants are either company-owned, joint ventures, or operated by franchisees .

Other reasons for selecting this company are its sound operational practices with innovative marketing strategies, its image as leading global foodservice company and one of the strongest and most recognized brand names in the world, its successful creation of its brand, its extension and expansion strategies and its successful operations in India. The researcher selected this company because of personal interest and also because a lot of data is available on McDonald’s global operations in India.

MICRO AND THE MACRO ENVIORNMENT OF THE MC DONALD’S

MICROENVIRONMENT

Relationships with all these customer must be developed so that marketing management can successfully create customer value and satisfaction.

All the interrelated functional groups within the company form the internal environment.

.Marketing management must take these other groups into account:

. Top management sets the mission, objectives, broad strategies, and policies.

Finance finds the money to carry out the marketing plans.

R&D designs safe and attractive products.

Purchasing gets the supplies and materials needed.

Operations produces and distributes the product.

Accounting measures revenues and costs, and helps marketing understand how well is it achieving objectives.

All these departments must work in concert and according to the “marketing concept” to “think consumer.”

Suppliers

Suppliers are an important link in the company’s value delivery system.

Marketing managers must pay attention to the availability of supplies, because shortages, delays, and strikes could damage customer satisfaction.

Suppliers today are frequently treated as partners in creating and delivering value to customers.

Marketing Intermediaries

Marketing intermediaries help companies promote, sell, and distribute goods to final buyers.

They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries.

Resellers are distribution channel firms that help the company find customers or make sales to them. They include wholesalers and retailers, who buy and resell merchandise.

Physical distribution firms assist the company in stocking and moving goods from their points of origin to their destinations.

Marketing services agencies perform some of the marketing functions such as market research, advertising, and media selection and placement.

Financial intermediaries include banks, credit companies, insurance companies and others that help finance transactions or insure against risks.

Marketing intermediaries are also important links in the value delivery system.

Customers

There are five types of customer markets that must be studied.

Consumer markets are made up of individuals and households that buy goods and services for personal consumption.

Business markets buy the goods and services for further processing or for use in their production process.

Reseller markets buy goods and services to resell at a profit.

Government markets consist of government agencies that buy goods and services to produce public services, or transfer the goods to others who need them.

International markets are made up of and of the above types of customers in other countries.

Competitors

1. Marketers must know their competitors’ strengths so that they can develop positioning strategies that differentiate their own products against the competitors’.

2. No single competitive strategy will work for all companies.

Publics

1. A public is any group that has an actual or potential interest in or impact on an organization. There are seven types of publics:

Financial publics influence the company’s ability to obtain funds.

Media publics carry news, features, and editorial opinions.

publics may develop and enforce regulations on product safety, truth in advertising, and other matters.

Citizen-action publics are consumer organizations, environmental groups, minority groups, etc. that may question a company’s decisions.

Local publics include neighborhood residents and community organizations.

publics may be concerned about a company’s products and activities.

Internal publics include workers, managers, etc. who need to feel good about their company.

MACROENVIRONMENT

The forces that affect the micro environment and are the part of the larger society refer to as the macro environment. It includes concepts such as economy,natural forces,politics,culture and technology.

Demographic Environment

1. Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

2. This is interesting to marketers because it involves people; it is people that make up markets.

The world population totals 6.4 billion, and will pass 8.1 billion people by the year 2030.

A growing population means growing human needs to satisfy. Market opportunities could grow if purchasing power is growing as well.

Marketers track changing age and family structures, geographic population shifts, educational characteristics, and population diversity.

Economic Environment

The economic environment consists of factors that affect consumer purchasing power and spending patterns.

.Nations vary greatly in their levels and distribution of income.

Subsistence economies consume most of their own agricultural and industrial output. They represent few marketing opportunities.

Industrial economies are at the other extreme, and represent rich markets for many kinds of goods.

Incomes change all the time, and marketers need to track those changes.

The 1990s saw a consumption frenzy fueled by income growth, federal tax reductions, rapid increases in housing values, and a boom in borrowing.

The 1990s then saw a recession hit, and consumers started to spend more carefully.

Marketers also need to pay attention to income distribution.

At the top of income distribution in the United States are the upper-class consumers, who are generally not affected by current economic events.

The middle class is comfortable, but is somewhat careful in their spending.

The members of the working class stick to the basics of food, clothing, and shelter

.

Technological Environment

The technological environment is a dramatic force in the marketplace today creating new markets and opportunities.

Many companies are adding marketing people to R&D teams to obtain a stronger marketing orientation.

Safety is an increasing concern as technology becomes more complex.

The U.S. Food and Drug Administration (FDA) has regulations to test new drugs.

The Consumer Product Safety.

Political Environment

1. The political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.

2. Regulation can encourage competition and ensure fair markets.

3. Governments develop public policy to help guide markets.

4. Legislation affecting business has been increasing.

The United States has laws covering competition, fair trade practices, environmental protection, product safety, truth in advertising, consumer privacy, packaging and labeling, pricing, and other issues. Table 3-2 lists many of the most important laws.

The European Commission is also establishing a framework of laws covering many of these same issues.

5. Business legislation is enacted to protect companies from each other; to protect consumers from unfair business practices; and to protect the interests of society.

6. Government agencies have discretion in how they enforce the laws that are passed.

7. Marketers need to track laws at the local, state, national, and international levels.

Cultural Environment

The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.

People are affected by the worldview that their society adheres to that defines their relationships with others.

Cultural swings do take place. Marketers want to predict these shifts in order to react to both opportunities and threats.

The major cultural values of a society are expressed in the following views:

People’s views of themselves.

People’s views of others.

People’s views of organizations.

People’s views of society.

People’s views of nature.

People’s views of the universe.