McDonalds must ensure they have the right promotional mix, of advertising, sales promotion and publicity to meet the promotional objectives and promote a particular product. They must get all these things right for an effective campaign. Market research is very important and must be continuous throughout the promotion to ensure the promotion is achieving its objectives.
McDonalds tries to persuade their customers to eat and drink more each time they visit, for example McDonalds ‘2 for 1’ offer campaign (2 special meals for the price of one), they offered in January was targeted to the younger generation, because they are more likely to want two burgers. This offers the consumer incentives to increase their loyalty to the company and visit McDonalds more often, or even to bring larger parties. Customers have to be persuaded which restaurant they eat in and sales promotion helps to identify these choices and get the customer into the restaurant. Customers’ views of the restaurant are improved when they are told that they will experience extra value by ‘going in at a certain time, or ‘returning 4 times in the next 6 months’. Advertising can be aimed at a target market through a mass broadcast medium. McDonalds does this by using television and a repetitive message. In the adverts they often show a restaurant with a happy relaxed family atmosphere – reinforcing their objective of being the family restaurant that people enjoy more. Although this is cost efficient the outlay can be very high. This type of advertising can be very expressive and builds a long-term image of the product, but it cannot guarantee that the targeted market pays attention and is less persuasive than personal selling. McDonalds have found that sales promotions are effective because they offer added value and an incentive to buy the product.
Target Market
McDonald's divides its promotions into two target markets: children and adults, but both share the same message: McDonald's is a fun, caring place.
The adult segment have advertising campaigns of familiar images which make McDonalds seem like a source of love and happiness – as a place for being a family. Burger king and Wendy's concentrate their promotions one the product, for example an advertisement in the U.S. said, "Where's the beef?" "Here’s the love." While McDonalds tries to build a sense of community and their promotions takes the emphasis off the food it sells and on to marketing love, a sense of community and good feelings. McDonalds have tried to make a McDonald land image for adults. Their promotions make McDonalds a surrogate family. For example a recent campaign called “Back Home Again”. Was about a family returning to their hometown after many years away. Everything had changed, but a McDonalds remains. The father also met an old friend in the restaurant which brought back happy memories, and then the voice sings over “in the night the welcome sight of an old friend feels so right tonight at McDonald's again”
For children, consumption is linked to having fun. Any consumption that children regard as fun will also appeal to their parents, who do the spending.
Children also like a sense of belonging. They like clubs. McDonalds introduced Ronald McDonald and McDonald land. The main aim of the advertising campaign was that he was a friend to the children and as a fun role model that parents would not object to. He is now a familiar figure and from research done by McDonalds he is a children’s favourite – reinforcing McDonalds image of fun and laughter. This in turn encouraged children to visit the restaurants to meet him and purchase the food. This particular campaign really took off, and is now used in nearly all the advertising program – he even speaks more than 20 languages. McDonalds have added new characters and they all live in McDonald land.
It's a wonderful, magical place where everything's always fun...nothing
in McDonald land is harmful...And everyday is like a holiday, because any
minute Ronald McDonald will show up to make the fun begin. Adults rarely
Come to McDonald land. It is policed by a clown who "...never acts as
a glum, adult authority figure. To Ronald, life is wonderful”.
This promotion is a strong example of McDonalds promotional objectives. McDonald’s brings fantasy while promoting their product into children’s minds. McDonalds youth promotions ensures that children will continue coming to McDonalds even when they are older. McDonalds campaigns take into account all generations, race and gender, so no segment is left out.
To run a successful promotion McDonalds must research the target market. They have found that unlike many businesses, they have a very wide target market, from young children through to senior citizens. The Happy meals promotions are a good example of promotions that are influenced by internal objectives. McDonalds market research shows that children are a large target market. Their research also shows them that adults will also be after the collectible toys that are on offer.
Senior citizens are sometimes offered a discount program and adults by the extra value meals. Teenagers are offered value meals and new additions to the menu are continually bringing in new customers as well as satisfying the ever-changing requirements of their existing customers.
Promotional Budget
To achieve their promotional objectives McDonalds spend over $2 billion a year on advertising. McDonalds spent over £33 million on marketing in the UK in 1992 to reinforce their position as the consumer's favourite quick service restaurant, which in turn satisfies their promotional objective. This included a popular TV and radio advertising campaign featuring the theme line 'There's nothing quite like a McDonald's.' This is therefore not really a constraint but a key feature of the McDonalds brand promoting the whole company.
Timescale Of Promotion
McDonalds promotions attempts to change peoples buying behavior and often use AIDA (attention, interest, desire and action).
The length campaigns last are an important decision for McDonalds and are time limited and usually based on McDonalds previous experience. It is important that customers do not get bored with a campaign and every campaign makes an impact. For example, Happy Meals are usually launched to coincide with a new film or video, e.g., the Lion King Promotion.
To celebrate the Lion King’s film release, McDonalds created a set of 8 soft toy premiums, which were representative of the main characters. Simba’s pride was an adventure focusing on the next generation. It told the story of Kiara's (Simba and Nala's cub) journey into adulthood and her quest to bring peace to the Pridelands.
The Happy Meal ran for 4 weeks, with 2 premiums available each week. These were –
McDonalds hope that if a customer visits the restaurant every week for a month, they will develop a regular eating habit and these visits will continue after the promotion has finished. Further promotions then reinforce this pattern as well as attracting new customers.
Types of Promotion
The golden arch symbol was the most important promotion for McDonalds. This was an important first step in achieving their objectives – people must be able to have a quick and easy way to recognise their restaurants. The logo represents golden arches, which was meant to represent a place to hide under or to escape to. The protection of the "golden arches" is where one should have their "break today." Due to its success, "McDonald's is perhaps the world's most recognized retail trademark". The first adverts were “look for the Golden Arches”.
This logo is now a familiar site on the high streets and alongside major roads, and has become easily recognizable.
In the UK, McDonald’s use a co-ordinated marketing policy. In order to be successful they must find out what the customers want, develop products to satisfy them, charge them the right price and make the existence of the products known through .
Television and Cinema
Cinema and television advertising have played a major part in McDonald’s . McDonald’s is now the biggest single brand advertiser on British television. The types of McDonalds promotions and marketing vary depending on the country they are operating in. Television commercials are used as often as possible. But in some countries where commercial television is limited other media’s are used, like cinema, radio, billboards, newspapers, magazines and direct mail. Each country has its own marketing team which develops promotions to address local needs. McDonalds advertising tends to focus on their image rather than on the traditional food company way of selling products and prices. Television and media campaigns meet their promotional objectives by promoting a family image. Burger King, their main rival, often uses television advertising to promote a particular burger meal at a special price.
Obtaining good returns from television advertising has been made harder by the splitting of television audiences. When only one UK television channel showed advertisements, advertisers knew that their efforts would be seen by a huge audience and might well become a talking point nationwide. Today with multi channel advertising it is very expensive to reach a high proportion of potential customers.
Radio and Press
Radio and press advertisements are used to get specific messages across emphasising the quality of product ingredients. Promotional activities, especially within the restaurant, have a special role to play in getting people to return to the restaurants regularly. All franchisees benefit from any national marketing and contribute to its cost, currently a fee of 4.9 per cent of sales.
Sponsorship
Massive investment in is also a large part of their promotional objective of building a good image. Sponsorship of the 1998 football World Cup, the Premier League, the European Championships and Champions’ League increases awareness of McDonald’s brand and are good for their promotional objectives of family fun. . McDonalds also sponsors many courses and conferences, including an International Marketing Conference. They have a long history of supporting local children’s football teams with slogans “McDonalds and football go together like a Big Mac and fries”. Their promotions have to appeal to a wide range of customers, from young children to the elderly, different cultures and backgrounds, and different classes.
McDonalds promote their training and employment practices. Many students earn extra money by McDonalds having a flexible schedule. This obviously has an immediate effect with young people having more money in their pockets to spend within their local community. McDonalds also promote that working in their restaurants is fun and rewarding, although many staff feel that it is very hardwork and that they are underpaid. They are however gaining working experience and skills.
This promotion is a strong example of McDonalds promotional objectives. McDonald's brings fantasy while promoting their product into children’s minds. McDonald's youth promotions ensure that children will continue coming to McDonald's even when they are older.
Local Promotions
As well as national promotions, individual restaurants sometimes offer local promotions by supporting local schools, athletic teams, and fund raising. Advertising cooperatives have also been formed which allows them to pool the advertising resources.
One thing all their promotions have in common is portraying a feeling of warmth and everyday life. With the result that almost every household is aware of McDonalds.
Happy Meals Promotions
These are promotional campaigns, which offer a special value meal with a gift of a toy that is part of a set. They are targeted towards children and encourage repeat visits. As the Happy Meals have become very popular with customers they continually increase sales. Further information of this can be found on page 24.
Main Media Advertising Expenditure
In 1998, an estimated 74% of main media advertising expenditure from McDonald’s was devoted to television exposure and another 20% to outdoor advertising. These charts highlight that McDonalds is the leading fast-food restaurant, but to achieve this goal they spend huge amounts of money on advertising and promotions. According to these figures, McDonalds have spent approximately over £32.000 more than their main competitors, Burger King (1998 figures).
The following charts highlights McDonalds advertising expenditure compared to their competitors -
External Constraints
External Influences
McDonalds must take into account external influences such as social, ethical and environmental as well as listening to competitor activities and continually upgrading technology.
One of these external influences is adverse publicity, which is often created by pressure groups, e.g. Greenpeace, Viva and McSpotlight, suggest that McDonalds are pretending to support the local communities and just seeking more publicity. Although records show that many communities have received financial assistance from McDonalds support, such as money and sponsorship for local play centres. McDonalds are trying to change this image and have set up Ronald McDonald Children’s Charities. Hundreds of child-related causes around the country receive assistance from McDonald's through the help of Ronald McDonald Children's Charities Ltd.
Recently a leaflet was published stating the Ronald lies to them because McDonalds food is not healthy. They call their food “junk and that McDonalds are damaging the earth by cutting down trees to make paper for packaging. Although McDonalds argue that they have purchased more than 3 billion dollars of recycled products and recycled more than one million tons of cardboard in the US.
A recent court case that was brought by London Greenpeace accused McDonalds of exploiting children with advertising, promoting an unhealthy diet, exploiting staff and being responsible for environmental damage and ill-treatment to animals This is a constraint because it is adverse publicity for McDonalds. Some of their customers will begin to have doubts about what they are eating etc, and can prevent McDonalds from achieving all their promotional objectives.
Environmental Issues
McDonalds have also been accused by pressure groups of causing an incredible amount of litter around their restaurants, although a recent court case ruled that the customers were responsible for the litter – not McDonalds, and it is their policy to send staff outside their restaurants to continually empty bins and sweep up rubbish. They also promote helping the environment by trying to use rail for transporting goods rather than roads therefore helping to reduce pollution. McDonalds try to ensure safety and quality in every country where they do business. This builds up a good image when doing their promotional activities. McDonalds have also hit back with a £1.5million investment programme of 90% of their restaurants to have coca cola delivered in 75 gallon tanks to save packaging and saving waste. The other soft drinks are now delivered in a bag in box system, which has saved 55% of waste.
This constraint could affect their promotional objective of having consistent quality, service and cleanliness in the restaurants.
Strengths, weaknesses, opportunities & Threats
When launching a promotion it is advisable to study a SWOT analyse, so that these can be looked at to help their objectives to be met. The following is an example of my SWOT analyse.
Strengths
- McDonalds are extremely well known in the UK and to run an affective marketing campaign, planning is essential due to a competitive environment and must reflect and respond to change. The strengths, weaknesses, opportunities and threats (SWOT analysis) are helpful to this.
- Burgers are a popular fast food, often the first dining choice for families with children
- McDonalds occupies some of the best prize locations in the UK
Opportunities
- McDonalds have huge experience and expertise in opening new markets.
- There are always new places where McDonalds can open their restaurants.
Weaknesses
- Consumer choice is limited and there is usually competition in every town/city with Burger King.
- McDonalds rely on people to keep eating fast foods – but it is possible that this could always change.
- Competitors in other markets e.g. KFC and Pizza Hut
Threats
- McDonalds are vulnerable to price wars from their competitors.
- Current food scares e.g. BSE and foot and mouth disease could turn their customers away from eating meat, although there are always vegetarian alternatives – McDonalds rely heavily on their meat sales.
- Protest groups are always a common threat to McDonalds.
The impact of interest rate changes and foreign currency fluctuations affect McDonalds. Although they try to minimise this by diversifying between a lot of different currencies.
www.mcdonalds.com, March 1992