Instructions for Individual Assignment #1
McDonald’s is in trouble: Its sales and profits have been declining and its CEO, Don Thompson, just resigned because of it. In your first individual assignment, your task is to analyze McDonald’s current situation (i.e., marketing environment, both micro and macro) to identify the main problems, evaluate some of the marketing strategies/activities McDonald’s has taken to try to revive its brand and increase sales and profits, and make some recommendations for McDonald’s. Below are several brief articles discussing McDonald’s problems and its recent marketing strategies/actions? In three double-spaced pages or less, answer the following questions:
Q1) What are the problems McDonald’s is facing? (Analyze McDonald’s marketing environment and discuss the components in the marketing environment that you think have contributed to McDonald’s declining sales)
Q2) Which problems do you think are less serious and likely to be short-term, and which problems do you think are more serious and likely to be long-term? Explain your reasoning.
Q3) How effective do you think each of McDonald’s recent marketing strategies/actions is in addressing its problems and reviving its brand and sales? Explain your reasoning.
There are a variety of articles that can be found online: Please have a works cited page as well.
In the recent years, McDonald’s has been facing a decline in the sales in the current markets. The marketing environment for McDonald’s extends to both the micro and macro environmental factors affecting the operation of the company worldwide. The understanding of the marketing factors is useful in explaining the success of the company. Firstly, the McDonalds are facing a perception problem in overcoming the current problem. Initially, McDonalds was known for its ability to provide fast foods in a convenience manner. However, the company seems to have affected the perception about adjusting the consumer preferences (Mourdoukoutas, 2013). Its competitors have gained more popularity with the young customers while McDonald’s menu has rarely remained the same, perceived to be unhealthy and old. The focus on fresh and local sources of ingredients is a radical shift in its operations.
Secondly, the operational complexity of the company makes it difficult to appeal to new customers. Over the years, McDonalds has collected the huge amount of baggage including complex menu, which confuses the customers. McDonalds also adopted multiple customer segments, which lead to a complex menu, which leads to internal operational concerns, and longer wait times (Takano, 2013). Regarding marketing campaigns, McDonalds marketing aspects have not been able to attract low-income customers and thus, losing its loyal customers to Burger King. Its rival has been able to market its products well through its pricing and menu range.
Based on my understanding of the marketing concerns, I think the marketing perception problem is a more serious problem compared to other problems. Since, it is tough to change the customer’s perception about McDonald’s offerings and products. McDonalds will have to invest highly in its rebranding and marketing campaigns to change the customer’s perception of the company as old fashioned. However, I think the operational complexity problem is short term as it can be dealt with through improvements of the company’s functional design and technologies (Ayrapetova, 2014). For instance, the adoption of innovative technologies and programs would be useful in reducing the operational complexities faced by the company. The inability of the existing marketing campaigns to attract all customer segments including the young generation is a short-term problem. McDonalds can be able to come up with new and more interesting marketing campaigns, which appeals to all customer segments.
The McDonald’s recent marketing strategies are very effective in reviving its brand and sales level. The launching of the “Fast and Convenient” campaign has been important in supporting radical adjustment of the company’s portfolio. The radical transformation of the company’s focus has been useful in meeting the trends of food growth and expectations. The refurbishing of the company’s stores has also worked well in achieving more branded, updated and a natural dining climate (Mourdoukoutas, 2013). The elements of the fast and convenient campaign are argued to be healthier and more natural characteristics through adding new items to the menu including fruits, and healthy drinks.
Additionally, the ability of the company to leverage on franchising and logistics is important in expanding the company’s core capabilities. Since, it helps in creating two separate units, which seeks to meet the needs of the low-calorie consumers and another unit to meet the global segments within the world economy. In spite of all, it would be recommendable for the company to change its name. It would be costly because the company obtains benefits from its strong global brand. The rearranging of the value proposition would change the image of consumers about the McDonalds towards an understanding of more healthy items (Takano, 2013). Therefore, these recent marketing strategies and actions are more effective in trying to revive the decline sale problems facing McDonalds.
Ayrapetova, T. (2014). Report on the financial evaluation: McDonald’s corporation and Yum! brands. CRIS-Bulletin of the Centre for Research and Interdisciplinary Study, 2014(1), 33-60.
Mourdoukoutas, P. (2013, November 23rd). McDonald’s: Three strategies to reignite sales growth. Forbes.com. Retrieved from http://www.forbes.com/sites/panosmourdoukoutas/2013/11/23/mcdonalds-three-strategies-to-re-ignite-sales-growth/.
Takano, K. (2013). McDonald’s Japan: A case study of effective public relations. Public Relations Review, 39(1), 60-62.