The nostalgia created by McDonald’s foods is waning for most Americans as millennials' tastes and preferences have significantly changed. Yet, they form the majority of outdoor food consumption, estimated at 44% (Hennessy, 2017). However, since the new CEO Steve Easterbrook took over the giant food company operations, McDonald's moved its headquarters to Chicago. It introduced all-day breakfast in its outlets to facilitate continuous sales volumes across its chain stores. Nevertheless, the company’s sales reveal significant concerns on recovering and keeping the customers it has lost to its competitors such as Wendy’s, Burger King, and KFC. Secondly, they are concerned with meal delivery options that are convenient for customers, and how the company can address the impact of consumers who decide to stay and eat more from home. As the company battles these challenges, McDonald's is poised to take drastic measures such as integration of technology into its marketing and brand perception strategies.
The Problem
McDonald’s U.S sales for 2016 dropped 1.3% in the first quarter, yet it has been recording an overall improvement in its global sales since 2011, indicating that the growth in sales of its stores abroad is its current boost (Singireddy, 2020). Furthermore, McDonald’s customer base has drastically reduced over the last five years, necessitating rigorous management and marketing measures within its stores. The 4P marketing mix which include Products, place, promotion, and price are used by McDonald’s in a variety of ways, including implementation of corporate productivity standards in the management of each store owned by the company and their franchised location. In addition, it employs the 4Ps to meet its local and regional market needs (Hennessy, 2017). For example, in countries with extensive print media use, McDonald's focuses on print media for its promotional strategies. In contrast, it prioritizes television for markets with comprehensive television coverage. According to Shcherbakova (2020), these marketing strategies have encouraged the company's growth while diminishing its power in America.
Delegate your assignment to our experts and they will do the rest.
Most importantly, the diminishing sales of McDonald's in America has been termed a brand problem. Jason Moser, an analyst for Motley Fool, notes that even if the company were to work on its product quality, "there is a brand problem at this point" (Hennessy, 2017). However, he continues that the problem does not necessarily suggest that the McDonald's brand is getting weak. Instead, the company should refrain from using past notions of product marketing in its product value chain and embrace a future that is consistent with change. Its competitors are getting ahead in the industry because they resonate with the demands of their younger consumers. According to Hennessy (2017), Mcdonald's biggest problem is that they have younger customers who have formed prejudiced opinions on the brand as a fast-food restaurant. To capture a fraction of the 44% of young millennials that love dining out, McDonald's needs to embrace better strategies to remain relevant in the industry.
Analysis of Issues
The new company Chief Executive Officer has been progressively innovative in his approach to dealing with McDonald's challenges. Since he stepped into the position, the CEO moved unwanted items from the menu and has experimented with other new food varieties such as fresh instead of frozen beef. Furthermore, his administration has seen the adoption of self-ordering and self-service stores. Analysts have applauded the CEO's efforts towards achieving his goals at McDonald which is to compete with more prominent brands such as Five Guys and Shake Shack. On the same note, technology has also played an essential role in helping achieve some of the milestones set up by the company. For example, Mcdonald's has armed close top five hundred of its stores with digital-ordering machines with enhanced customer experience. Ordering of burgers through the touchscreen devices generates a digital location used by the servers to provide precise deliveries (Tien, 2019). It is also important to note that McDonald's resorted to its previous mechanisms of attracting customers, such as reintroducing all-day breakfast throughout its outlets in a move aimed at rejuvenating customers’ perception of the brand.
Analysis of Findings
The study's findings suggest that McDonald's has been on a downward spiral with a distorted brand perception among the millennials. Inasmuch as the company has innovative marketing and redesign strategies put in place by the CEO to recover the company’s fading image, the attempt to reverse consumer perception has compelled the firm to employ transparent marketing strategies to regain its former and potential customers (Singh & Crisafulli, 2020). These include revealing and communicating uncomfortable products and operation details to clean the public image and enhance the company’s sustainability. Ceil (2019) reports that the transparency marketing strategies used by the firm include the launch of Frequently Asked Questions (FAQs) that addresses client questions regarding McDonald food products, use of influencer advertising, and initiation of marketing and advertising campaigns tailored to address the changes from the traditional way of doing things to the modern methods.
Recommendations and Conclusion
The decline in McDonald's' customer base should be sealed by increased investment in digital technologies. These technologies should include the entire process of ordering, preparing, packaging, and dispatching customer orders. Otherwise, the company has made crucial efforts to ensure it can engage its customers and critics along its journey to recovering its brand perception and meeting its customer expectations.
References
Ceil, C. (2019). Advertising Objectives and Communication Strategies of McDonald and Dove. Available at SSRN 3521066.
Hennessy, M. (2021). At McDonald's, Are Customers Still Lovin’ It? | QSR magazine. QSR magazine. Retrieved 9 April 2021, from https://www.qsrmagazine.com/growth/mcdonalds-are-customers-still-lovin-it .
Lemon, M. (2020). McDonald’s Marketing Strategy: Staying Transparent While Under Fire. PostFunnel By Optimove. https://postfunnel.com/mcdonalds-marketing-strategy-staying-transparent-while-under-fire/
Meyer, P. (2020). McDonald’s Marketing Mix (4Ps) Analysis. Panmore Institute. http://panmore.com/mcdonalds-marketing-mix-4ps-analysis#:~:text=The%20marketing%20mix%20defines%20the,its%20marketing%20mix%20applies%20globally .
Shcherbakova, E. (2020). Importance of Diversified Marketing Strategies for Fast Food Restaurant Chains. Available at SSRN 3738461.
Singh, J., & Crisafulli, B. (2020). ‘Corporate image at stake’: The impact of crises and response strategies on consumer perceptions of corporate brand alliances. Journal of Business Research, 117, 839-849.
Singireddy, M. (2020). Mcdonald's: Global Marketing. International Journal of Health and Economic Development, 6(2), 16-27.
Tien, N. H. (2019). Customization and Standardization of the Business Strategy of Foreign Enterprises in Vietnam–the McDonald’s Case and the Fast Food Sector.“. International Journal of Research in Marketing Management and Sales, 1(2), 44-50.
