Marketing Environment Analysis for McDonalds

Part 1
The report will explore the fast food industry and also examine the McDonalds corporation as a
firm. In addition, the report will appraise mainly on three areas for trends in the macro/market
environment that had an influence on McDonalds corporation, identify the key customers profile
and effect of E Commerce and online shopping towards McDonalds.

The global fast food industry has managed to grow over the past five years. Fast-food industry
includes about 200,000 restaurants with combined annual revenue of about $120 billion. The
industry is highly labor intensive which the average annual revenue per worker is just under $40,000.
Kamalesh Dey (2016) stated the global fast food restaurants industry is highly fragmented, with a
large portion of single-location restaurants providing a diverse range of cuisine and fast food choices
to customers across the globe. The market share of the major global operators is not expected to
grow over the five years through 2021, despite the opening of more stores in high-growth emerging
countries. Fast food restaurants specialize in a few main dishes and operate by national and regional
chains, franchises, or independent businessman. Fast food industry now is developing significantly.
The change of lifestyle leads to the change in people eating habit. In the past, if just workers, drivers
or someone who had to work busily and didnt have enough time for a home meal choose fast food;
nowadays, almost people eat fast food and a major of them like fast food very much. It is a huge
chance for fast food brand to increase their revenues, especially McDonalds. The details of current
trends of fast food industry can be viewed at the IBIS World Where Knowledge is Power website at
<http://www.ibisworld.com/industry/global/global-fast-food-restaurants.html>.

The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,
serving around 68 million customers daily in 119 countries across 36,000 outlets. Headquartered in
the United States, the company began in 1940 as a barbecue restaurant operated by Richard and
Maurice McDonald. In 1948, Richard and Maurice McDonald reorganized their business as a
hamburger stand using production line principles. Peter (2006) discovered the businessman Ray
Kroc joined the company as a franchise agent in 1955. Ray Kroc subsequently purchased the chain
from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated
by a franchisee, an affiliate, or the corporation itself. More than 80% of McDonald's restaurants
worldwide are owned and operated by independent local business men and women.
Part 2
 The first market trend is a new definition of healthy. Once, a simple promise of vitamins and a
lack of calories could be seen as a symbol of nutrition. Now, however, the definition is more
complicated and more in demand. I think that what is really interesting is that traditional definitions
of healthiness are changing, Darby Hughes, an analyst at food and beverage brand-building
company Quench said. (Kate, 2016) While once nutrition was all about cutting calories and adding
salads to the menu. Now, transparency and the production chain are of elevated importance. In an era
when a viral blog post about chemicals in fast food could seriously damage a companys reputation,
chains are eager to take action before they get called out.

Health-minded consumers often gravitate to places like Subway, Panera Bread, and Chipotle
Mexican Grill that allow them to customize their orders, thus choosing their own healthful options.
This extends to vegetarians and vegans, who are not only seeking healthier foods, but also have
animal rights on their minds. (Barney, 2016) There are people heavily into gluten-free, who care
about genetically modified organisms, who want low-fat or organic items, but there is no consensus
about what is a healthy diet, says Rita Negrete, senior editor at market research firm Technomic.
Still, she says, more people really are trying to eat more healthfully, and that becomes an issue for
restaurants in an era of shrinking menus.

McDonald's has been impacted by negative press like the documentary "Supersize Me" by
Morgan Spurlock in which he contributed our societys obesity to McDonald's and other fast food
chains. In fact, each McDonalds dishes provides large amount of calories but not too much nutrition.
Although McDonalds tries to update its menu by healthy criteria, McDonalds meals are still
unbalance. For example, there are many dishes with chicken, bacon, beef, rib or egg. Besides, just
several dishes are salad with vegetable and fruit. Moreover, amount of fruit or vegetable is not much.
Consequently, a number of customers who care about their health stop eating at McDonalds
restaurants. It makes revenue of company decrease.

The second market trend is mobile technology innovations. Mobile and automated ordering
offer a big opportunity for restaurants, both in terms of customer service and behind the scenes. New
developments can be seen in ordering, marketing, loyalty programs, and payment. (Kate,
2016)Developers are increasingly combining these applications into a single solution, adding an
additional layer of convenience that is important to limited-service restaurants. At this point, its
easier to count major chains that havent launched or at least tested mobile ordering that those that
have. (Barney, 2016) Ordering via mobile app gives restaurants new ways to get customer data, tends
to increase the average bill, and delivers orders directly to the kitchen, cutting out the middle man.
 McDonalds is keeping at the forefront of technology around the globe. For example, In Brazil
McDonalds is currently studying the installation of Internet access terminals in some outlets as well
as enabling customers to order online. This will create a more efficient process that will reduce the
amount of lag time between a customers orders and pick up of the order.(Kate, 2014) While in
Malaysia, when passing by McDonalds outlet, customer mobile might detect the outlet and posting
advertisement on customers mobile apps such as on the navigation apps.

The third market trend is expanding delivery. The biggest barrier to delivery in the fast-food
business is that the costs of delivery can easily double how much the customer is spending on his or
her meal. (Kate, 2016)However, with new models for delivery and increasing demand, that may not
be a problem for long. Amazon Prime Now, for example, is now delivering from select restaurants in
certain cities free of charge. Both fast-food chains and their entrepreneurial partners have a lot to
gain from creating new delivery options.

McDonalds online ordering is now available in a growing number of countries, including

China, Singapore, Australia and Malaysia. In Malaysia, customers can use mobile apps to order
meals before reaching the restaurant so that can save the time of waiting and easier to pay online.
Customers can use a range of payment options, including credit card, debit card and net banking
when ordering meals.

Part 3

McDonald's marketing targets everyone and does not have a select audience. (Justin, 2014) The
company claims that their restaurants offer meals for children, a place to relax with free Wi-Fi for
adults, and a quick breakfast for those in a hurry in the morning.

The company employs different marketing strategies during different seasons of the year. They
are constantly investigating what their customers enjoy, how their lives are changing and what they
can offer them as a result, in order to better maintain their business. As of 2014, McDonald's offers
value-priced meals and has seen a tremendous amount of success from its "Happy Meals." (Kate,
2016)The Happy Meal represents one area where market demand changed the company's product, as
it began offering fruit and other healthier choices for kids due to a raised awareness of nutritional
needs. For teenagers and adults, McDonalds prepared free WIFI and Mc Cafe for them to enjoy the
time in the outlet. And for the elders, McDonalds prepared some special menu such as porridge and
salad for them.

The emerging use of E commerce and online shopping and purchase affected McDonalds
positively. By using E-Commerce, McDonalds can expand their market to national and international
markets with minimum capital investment. (Dave, 2008)They can easily locate more customers, best
suppliers and suitable business partners across the globe. E-Commerce can helps McDonalds to
provide better customer services and helps simplify the business processes and make them faster and
efficient.

For an example, In Malaysia McDonalds officially announced the service of McDelivery started
on 1st July 2016. Customers can make their McDonalds McDelivery orders
via www.mcdelivery.com.my or simply by downloading the McDelivery mobile application from
Google Play or App Store. McDonalds McDelivery is available 24-hours a day, 7 days a week at
selected restaurants nationwide. Currently, 30% of McDonalds restaurants offer McDelivery service
and the coverage area expected to grow periodically.

Rather than that, E-commerce let McDonalds save more time and cost on advertising and
promoting their products. By using e-commerce site, McDonalds can change your product offerings,
display, and marketing materials almost instantly. (Kate, 2016) In a brick-and-mortar store,
McDonalds have to physically move things around and it just takes longer. An e-commerce site is
extremely flexible and lets McDonalds adapt to the changes needs of their customers and the
changing demands of the business environment. Example is McDonalds can change their display of
meal menu according to season in the website so that customers can get more detail information
about products that McDonalds are selling.

E-commerce also can help McDonalds communicate directly with customers and gain
information from customers easily. By using social media such as Facebook, Twitter and Instagram
as platforms, McDonalds can reduce transaction costs, understand customers from their comments
and thus may improve their quality of operations. E-commerce makes relation between McDonalds
and customers more convenience and more directly. From the comments by customers such as in
Facebook, McDonalds can improve their performance or services using customers opinion and
understand customers need.
 From this report, the McDonald's Corporation is the world's largest chain of hamburger fast food
restaurants, serving around 68 million customers daily in 119 countries across 35,000 outlets. Three
trends in the macro/market environment that influenced McDonald's are a new definition of healthy,
mobile technology innovations and expanding delivery. The emerging use of E commerce and online
shopping and purchase affected McDonalds positively.

References
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