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Integrated Marketing Communications MKT2230 McDonalds Corporation Overview The history of McDonalds dates back to its early beginnings in 1940. The first restaurant was opened by 2 brothers Dick and Mac McDonald in San Bernardino California. The first franchised restaurant was later opened by Ray Kroc in Illinois, who later went on to purchase the brothers equity in the company and fuelled the massive worldwide expansion of the company that we see and know today.
The corporate founding of McDonalds took place in 1955. Following the fluid expansion into worldwide markets, McDonalds has been likened with the symbol of globalization. From its initial roots, today McDonalds is a powerhouse of the food service retailer industry. With over 30,000 restaurants spread around the globe, McDonalds serves in excess of more than 52,000,000 people in over 100 countries each day. In the UAE itself, being founded in only 1994, they have 52 operational restaurants spread over the 7 emirates.
In addition to this they hold the leading share in the globally branded quick service segment of the fast food industry. Values & Mission What differentiates one company from another are their values and missions. An understanding of McDonald’s values is one of the vital steps needed to proceed with the research for the proposal. McDonalds have five crucial values that are to: ??? Place the customer experience at the core of the organization, ??? Commitment to the people and customers, ??? Operate the business ethically, Giving back to communities and, ??? Strive continually to improve. Primarily, McDonalds state that the customers are core of the business activities, and their satisfaction is fundamental for the growth of the company and they are moreover the reason for their existence, due to this they place their experience and satisfaction at the central part of the organization, by provision of high quality service, in a clean and friendly environment in an aim to demonstrate appreciation. Secondly, Commitment to people is another crucial role.
It is one of McDonalds beliefs that in order to achieve high satisfaction, first a team of well-trained staff with diverse backgrounds, experiences and knowledge, operate together in an atmosphere that fosters respect to in the long run, attain high satisfaction, not only within the organization, but customer satisfaction and their continual successes. Following this, McDonalds operate ethically, in dealing with customers by providing correct information to ensure, and they get what they are paying for.
McDonalds Respect special needs of ethnic and religious backgrounds. They are proud that each and every team member local and globally, work together to achieve one main goal, which is honesty, fairness and integrity. Fourthly, McDonalds are involved in various community activities to achieve one of their values, which is to give back to communities. One of their main activities is to support Ronald McDonald House Charities and by positively manipulating its size, scope and resources to give back to communities worldwide.
And lastly, strive continually to improve by responding and evolving with the ever changing market of not only the customers and their needs but also that of its employees and the running system of McDonalds. McDonalds’ mission is self explanatory and taken directly from the company itself. McDonald’s brand mission is to “be our customers’ favourite place and way to eat. ” Our worldwide operations have been aligned around a global strategy called the ‘Plan to Win’ centralised on the five basics of an exceptional customer experience — People, Products, Place, Price and Promotion.
We are committed to improving our operations and enhancing our customers’ experience. Our proposed objectives are based and are in line with the five McDonalds values explained above Micro Marketing-SWOT To analyse Mc Donald’s we need to look at the Micro and Macro marketing factors. To look at micro marketing we need to do a ‘SWOT’ analysis which looks at the following internal factors: Strengths, Weaknesses, Opportunities and Threats.
We will begin by looking at the strengths of Mc Donald’s. Mc Donald’s has developed strong brand equity and is rated the number 1 fast food company in terms of sales, with over 31,000 restaurants in almost 120 countries. Mc Donald’s has acquired a positive brand image in terms of its good service and value. The company has steady sales growth and the ability to retain its customers through innovation. Mc Donald’s is also known for having strong management teams and loyalty amongst staff.
The main weakness in Mc Donald’s in Mc Donald’s is that their core product line is focused on hamburgers and hot food. These products do not meet the needs of customers focused on healthier lifestyles, which is a growing trend. Mc Donald’s has the opportunity to respond to the growing trend of focus and concern towards healthier and more active lifestyles. Growth opportunities are present through encouraging customers into Mc Donald’s from coffee shops with the opening of its new Mc Cafe, located on Jumeirah Beach Road.
Customers could also be attracted if the company were to build more play areas and parks, especially those focused on more active lifestyles. Opportunities are also available to improve the company’s image, by focusing on social responsibility and reducing the impact made on the environment. Threats to Mc Donald’s include the previously mentioned fact that there are an increasing number of customers who are beginning to focus on healthier and more active lifestyles.
Mc Donald’s is also receiving increased pressure from the government and various other groups, concerning the environmental impact made by the company. The current global economic crisis has led to a rise in the price of raw materials. There is also increased competition in the market. Macro Marketing-PEST This is a scan of the external macro factors in which McDonalds operates, and is expressed in the following terms: Political Economical Social Technological
Political: these factors include government regulations, legal issues and define both the internal and external issues that McDonalds must operate. One of the concerns that the firm faces is business conduct; McDonalds is an international cooperation, it functions in a complex and continuously evolving world. So as to cooperate with procedures they only address issues of concern to their business which involves working with the government agencies both directly and indirectly through trade associations.
Another subject they engage in is with policymakers at international, national and local levels; they provide education and guidance for their franchisees involved in the public policymaking process. Another major concern is food safety regulation, McDonalds have been actively monitoring and improving their food regulation to subsist equivalently and share those similar of the technical expertise with the government agencies in several countries they operate in.
The last and final concern McDonalds have stated clearly is that they do not involve themselves in political issues; they believe it should be resolved either by governments or the United Nation. Economy: these factors affect the purchasing power of potential customers and McDonalds cost of capital. The economy concerns for this firm are; the current global economic depression, though it has affected many of McDonalds competitors it has been reported in Gulf News that McDonalds has been having a rise in sales despite the global depression, which proves there is a positive side to the recession.
Other economic issues are taxation on specific products; in the UAE there are indirect tax plus tariffs on imported products which could raise the cost of the final product. Some economical issues on yearly bases are seasonal and weather concerns, it has been reported that in the UAE Ramadan season is evidently a high-spending period, Gulf News claims that this campaign attributes a major sales growth every year. Some economic effects include market routes and trends, McDonalds have partnered with diverse suppliers to accelerate development and lower cost.
A major effect of economic factors are interest and exchange rate, with the current recession there are fluctuation in the trading rates which effects McDonalds locally and globally. Lastly are international trade and monetary issues. McDonalds must follow the rules and regulation as well as cope with the financial issue of the environment it functions in. Social: these factors include the demographic and cultural aspects of the external macroenviroment; it can affect the customers need and size of potential market.
McDonalds have use a number of techniques to improve its social factors with its consumers; such as Greener chapters: Sustainable Ronald McDonald Houses, according to McDonalds they are using their expertise in architecture design and development, and company experts guide the RMHC with guidelines for site selection, design development, material selection and construction methods that incorporate green strategies. Another method that McDonalds have implemented to improve their social cause is participating in the Olympic Games: for over 40 years McDonalds have been a proud supporter of the Olympic Movement.
McDonalds claim that as a System, they believe in the spirit of the Games and their unique ability to engage the world in a way that is constructive and inspirational. Lastly is their social commitment to providing aid one of their recent campaign is the Coming to the aide of Earthquake victims in China: McDonalds System recently mobilized to respond to a recent disaster – the May 12 earthquake in China. They served almost 40,000 meals to earthquake victims, relief workers, military personnel, hospitals and police and fire department officer.
Technological: this factor can lower barriers to entry, reduce minimum efficient production level and influence outsourcing decision. McDonalds have come up with a number of global technological factors to help improve their company some of which are McDonald’s Canada and McDonald’s USA is testing high-efficiency LED lot lights. Introductory findings indicate that installing high-efficiency lights saves up to 50% of lot light energy. Savings include not only energy costs, but also replacement costs because the LED lights have a longer bulb life than existing lights.
Another matter was in 2006, McDonald’s France commissioned a specially-designed interactive software program, EcoProgress, to help monitor and reduce energy consumption in restaurants, which will also reduce their electricity consumption by 8-12%. And lastly a present a novel technological factor that McDonald’s has begun is pilot testing a new ATM-style device called the Blaze Net, which allows customers to buy music, ring tones, print photos and surf the Web at the restaurant; this is a bid to draw the young and tech-savvy into its restaurants.
Corporate Objectives Looking at Mc Donald’s corporate objectives, we can split them up into three important sections: children’s objectives, future goals and objectives in the U. A. E. Mc Donald’s aims to Provide balanced food choices for children to fit their nutritional needs. They want to encourage children to be active and make balanced food choices such as fruit and vegetables by using their licensed characters and properties. They wish to communicate positive messages to children that support their well ??? being, mind, body and spirit.
Lastly, they want to guide their efforts for children and families worldwide by receiving support from subject matter experts and informed third parties. Mc Donald’s future goals are to provide children with greater choices of food and beverages. They wish to continue their programs and initiatives that provide “fun with a purpose” and improve children’s health and well being. The UAE operation is, first and foremost, a multicultural company which employs diverse nationalities and places great importance on an active ole in multicultural society and business. For management purposes they divide themselves into seven operating regions ??? which are the seven emirates. Their objectives in the UAE are to invest and create greater expansion in the market, and they wish to offer franchises in the region. Lastly, Mc Donald’s aims to increase their product development, and develop their marketing in the region. Marketing Communication Objectives Marketing Objective-UAE 1. Improve the public image through repositioning.
In recent times McDonalds has been seen as a company that didn’t really promote healthy eating and living. They now feel the need to reposition their company as one that does promote the above. 2. Increase sales by 10% In the dwindling economy due to the recession, an increase in overall sales is seen as a cornerstone for survival and growth. Sales will however increase automatically if the product is successfully repositioned. Hence these 2 objectives go virtually hand in hand with each other.
Marketing Strategy ??? Increase brand awareness ??? Increase awareness of new food menu ??? Move into new market position, e. g. Mc Cafe Communication Objectives ??? Increase awareness of new food menu by 15% Communication Strategy ??? Develop an advertising campaign to promote the new healthy menu. The advertising campaign will include Newspaper, Magazines and Billboards. This is the most cost efficient way to target the UAE market. Newspapers and billboards; being the most effective.
The radio campaigning will only be used for the Promotion of the proposed fun run for a specific time period as evens are better digested via the radio. Communication Tactics ??? Organise sports days at various schools within the UAE. (Serve water and healthier menu items). ??? Introduce a new healthier menu; include healthier options to the children’s ‘Happy Meals’. ??? Setup a McDonalds’ Fun Run’ for families in Dubai and Abu Dhabi. ??? Introduce new product packaging which contains the nutritional facts of the food items. Budget The Budget for the proposal is as follows:
A total of AED 450,000 for the sports day events, carried out in 40 schools across the United Arab Emirates is Divided as AED 10,000 for 10 schools in each on the major emirates, Dubai, Sharjah, and Abu Dhabi, giving a total of AED 300,000, adding to this another AED10,000 for 10 schools for the remaining schools in smaller emirates. Another AED 50,000 is included for the prizes and awards to won at each of the events. For the fun run, the total budget is AED 410,000, also included, is AED 1 million for new packaging, And AED 600,000 for the new happy meal items.
The budget for the advertising campaign is 1,300,000, giving a total amount of AED 3,600,000. Evaluation & Control To evaluate the effectiveness of our campaign we will carry out customer surveys to get feedback and opinions which can be used for future improvement. The customer surveys will test the effectiveness of our campaign with respect to our repositioning goal and the promotion of the healthier menu. Sales figures will be collected and analysed to observe the effectiveness of the new campaign.
Sales figures would be the most telling and measurable scale for us to evaluate the overall success or failure of the campaign. Campaign begins in January 2009 and evaluation dates are structured every quarter: ??? January 2009 ??? April 2009 ??? August 2009 ??? December 2009 Conclusion Statement Our group consisted of 4 Members each with individual responsibilities for this group report Grant Welsh: Corporate Objectives & Micro Marketing Jennifer Jane: Values & Mission & Budget Hiba Ali: Macro Marketing Craig D’silva: Overview, Marketing Communication Objectives & Evaluation & Control