INSTITUTE OF MANAGEMENT TECHNOLOGY - DUBAI

9th December 2018

PROJECT REPORT

Title: Persuading Consumers via Advertising

Company: McDonald's (UAE)

Course: Consumer Behavior (MKT812)

Report By:

Aseem Garg (MBA 172010)

Atharv Chauhan (MBA 172013)

Raghav Aggarwal (MBA 172038)

Name of Faculty: Dr. Vimi Jham

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TABLE OF CONTENTS

1. Company Background...……………………………………………...3

2. Customers....…...…………………………………………....………..4

3. Industry Background……………....………………………..………..5

4. Literature Review………….………………………………………....6

5. Research Design…….………………………………………………10

6. Findings………....…………….…………………..………………...11

7. Secondary Research………………………………………………...11

8. Recommendations………………………………………………......12

9. Exhibits……………………………………………………………...13

10. Works Cited……….…….………………………...………....…….21

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Company Background
McDonald's Corporation began as the first "fast food" restaurant of its kind, in 1940, in
the hands of brothers Richard and Maurice McDonald, in San Bernardino, California. Today it is
the world's largest and most successful food-service retailer with over thirty-four thousand
outlets around the globe. The consumers it caters to are in excess of sixty-nine million, and the
company has a global presence across approximately one hundred and twenty nations.

The main aim of McDonald's as a company is to be the desired place to eat and drink in
the minds of all of its consumers, and its vision is to be the world's best quick service food chain.
McDonald's has a strict policy of local integration, wherein it adheres to the local regulations,
laws and adapts itself to the prevalent culture as well, and in keeping with this stringent belief, it
abides by the same policy in the United Arab Emirates as well.

McDonald's in the United Arab Emirates boasts hundred percent locally owned and
operated restaurants, in the hands of the Emirates Fast Food Company, since 1994. In the United
Arab Emirates, there are an estimated one hundred and sixty McDonald's restaurants with a four
thousand plus strong workforce, and in respect of the local laws and beliefs, the company does
not serve any pork products and only serves one hundred percent Halal meat to its non-
vegetarian consumers.

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Customers (Target Market)
McDonald's target market is pretty uniform globally and is not especially unique in a
given nation. It ideally targets people who are aged between eight and fifty approximately, and
on the basis of occupation/working status, this age range would comprise of students (school,
high school, and college), employees and professionals alike. One of the best aspects about
McDonald's is its meals are priced in such a way that people from all walks of life and belonging
to almost all income levels can grab a meal here, and the company does not target consumers
belonging to a specific income group. In terms of segmentation based on stages of the life-cycle,
McDonald's essentially targets three main phases, which are young bachelors who are living
away from home, newly married couples with no children, and couples with children who are
aged six years or over.

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Industry Background
The fast food industry in the United Arab Emirates has been dynamically growing by
leaps and bounds year-on-year and according to Statista, as of 2015, the fast food industry in the
United Arab Emirates was valued at a whopping six hundred and forty-six million dollars (Refer
to Exhibit - 1). The United Arab Emirates have seen an exponential increase in the purchasing
power parity (PPP) or simply put, spending power of the consumers. This could also have been
aided by the fact that Dubai's positioning as a "tax-free" city has led to a mass immigration of
expats and foreigners into the nation in the past decade, coupled with an ever-growing youth
segment of the population.

Nonetheless, the fast food industry today has become very crowded and highly saturated,
due to the presence of numerous fast food brands and outlets in the United Arab Emirates. This
includes not only the big, international brands such as - Kentucky Fried Chicken, Burger King,
Wendy's, etc., but also includes quite a few local fast food outlets that specialize in the local
cuisine, with some offering a wide range of cuisines as well.

At the beginning of 2018 for the very first time, a tax was introduced in Dubai known as
VAT or value added tax, which shook up the economic balance in some industries, while other
industries remained largely unfazed. The fast food industry was one which was unfazed by the
introduction of the value-added taxation, as in this industry only the carbonated soft drinks or
CSD category, along with juices and water were affected. According to MR Raghu, the
Managing Director of Marmore Mena Intelligence, the impact of VAT would be marginal since
drinks are generally quite inexpensive, and the value-added taxation would only see a rise in the
prices of drinks by one or two Dirhams at the most. Furthermore, since food and drinks are
usually bundled and sold as sets or combos in fast food restaurants, and also since demand for
both food and drinks is largely inelastic, MR Raghu predicted that demand in the fast food
industry would still remain sturdy, despite the marginal rise in prices. So, the overall outlook for
the fast food industry in the United Arab Emirates has remained and continues to be decidedly
encouraging.

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Literature Review
Advertising is a means of promotion or tool for creating awareness in the minds of the
consumers about the product and services offered by an organization. It is of two types:

1. Broadcasting Media: this is the traditional media which uses radio, print, outdoor
hoardings etc. to publish an advertisement to large number of audiences having same
message published over all the media a company is using to publish.

2. Narrowcasting Media: this is the media which uses the same tools and techniques for
advertisement, but the content of the ads is more target group-oriented. It is more
addressable, customizable, interactive to specific group of people the ad is targeting too.

In our research, we are measuring the effectiveness of advertisements by McDonald's and

how they persuade/influence the buying habits of consumers. McDonald's aims at three focal
objectives while advertising, which are:

1. Spread awareness about the fast food joint.

2. Make consumers feel positive about the product they are offering.

3. Enable the consumers to remember it as their first priority when thinking to have fast
food for meal.

Consumer Involvement Theory: This theory is a replica of motivation which involves the
consumers internal state of mind and behavior which allows them to act and respond to a specific
advertisement shown to them. It makes the consumers to analyze and rationalize his or her
choice. By seeing advertisement of McDonald’s, one’s involvement with external and internal
environment is their he or she wants go and try the product offered by them or feel hungry by
seeing the advertisement. While choosing the product by seeing the advertisement enables the
consumer to put his time, effort and enjoyment factor that is derived from going to the restaurant
and having a meal. For example, in the case of McDonald’s consumer sees the advertisement and

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applies his or her medium involvement to analyze the ad shown and remembering it as a good
option while going out to have a meal in a fast food joint.

Conditioning Theory - Classical Conditioning: Classical conditioning theory given by Pavlov

is a conditioning theory which is the easy formula whereby consumers get to know about the
connection between unconditional stimuli and external environment that alter their behavior in
relation to that. Likewise, if the environment changes then the consumer will adjust and learn to
change its behavior. There are dozens of examples of classical conditioning. The one that is best
explained by Pavlov in his theory is that a dog who was taught to salivate at the ring of a bell. By
joining an unconditioned stimulus (the bell) with a conditioned stimuli (food) together, once
Pavlov’s dogs had learned that the bell would always be presented with food, Pavlov then took
away the food and his dog had been conditioned to salivate when he only presented or ringed the
bell. According to this he made a theory of classical conditioning in which he explains this
example where Bell = Salivation.

In our project in the case of McDonald’s the familiarity of the golden arches or red and
yellow color combination of McDonald’s which enables everyone to remember that the golden
"M" like arches and the color code symbolizes the McDonalds fast food and then remembering
or thinking about it often makes a person hungry. So, we can notice that McDonald’s has very
strategically made successful use of classical conditioning on all the region in the world it is
present to associate their golden arch logo and restaurant color theme with hunger for food.
We chose McDonald’s as our topic because since ages it is using the same jingle and color theme
it started with having the same mascot. Unlike other fast food joints which go under rebranding
and changing their logo color and things it started with.

Almost all present day and old day advertisements use classical conditioning to pair their
product with a certain behavior response. All advertisement that we hear on the radio or see on
any other platform is using and having a touch of classical conditioning in it to make our
preference and behavior change and go and buy their product. They also try to make strong
brand awareness for their beverage partner Coca-Cola. Advertisements in general are made with
the psychological intent of owning a space in the minds of the consumers. So that when we are

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driving down the road and see those golden arches or red and yellow color combinations, our
stomach starts to ring a bell with a little growl to make us want to go and eat at McDonald’s. We
should realize that we are probably being classically conditioned just like Pavlov’s dog.

Learning Theory - Vicarious Learning, Peripheral Route to Persuasion (Repetition, Visual

Cues): Vicarious learning is not something which a consumer learns from doing a physical
activity or toils away time in one. This learning is learned by observing different objects or
things happening around in one’s surrounding. By seeing an advertisement for several times, it
captures a spot in the minds of the consumer and the seller uses this psychology of repetition by
showing the same advertisement on loop so that the consumer remembers the product and the ad
for which it is being done and published. Sometimes visual cues and the color combination of
specific restaurant marks an impression in the minds of the consumer and he/she relates to the
seller’s product when shown that visual cues or color scheme.

In the case of McDonalds, they play with the human psychology in a very smart way by
broadcasting the general advertisement about burgers and fries all over the world and
narrowcasting the culturally specific specialties in that region like “Halal” logo in UAE.

On the other hand, the peripheral route to persuasion is also somewhat used by many
advertisers in which low and medium involvement of consumers are seen while purchasing any
goods or anything related to their buying behavior and cognitive processing.

McDonald’s have a medium and low peripheral route to persuasion involvement when
they advertise. This involvement of low and medium is dealt with use of mascot of Ronald
McDonald which acts like a celebrity figure to the organization and has helped it to persuade
kids and younger children to go and eat at McDonald’s just because of the mascot and get a
picture clicked with it. They also use the highly visual theme in which everything that is offered
in the fast food chain is of red and yellow color, jingle, tag line of “I’m Lovin It” is also used by
them which aims at conquer of hate over a burger or meal at the fast food joint where consumer
come and solve their difference if any over a meal offered by them which is so delicious that
consumer forget everything and enjoy the food.

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Family Branding: Family branding the mode of branding used by McDonald's in which they
call themselves as family fast food joint where consumers with their family come and have their
meal. They target the kids and young children as their core consumers because they influence
any family decision while dining out for a meal. They are the one who possess basic family
communication skill to interact with other family members. McDonald's key top of the mind
action is that they are a wholesome family fast food joint, speed of service of thirty seconds to
serve the food, healthy and tasty food for kids where they have option of juice over soda and
fruits over fries for kid’s happy meal, in which they also give toys/figurines of Disney characters.
Happy meals are their biggest unique selling proposition (USP) for attracting the consumer
which they promote in their ads to let kid know about the new toy in the happy meal so that
consumer have to come and buy it which acts like a brand activation tool. The brand essence in a
whole is a “Trusted Friend” family joint.

It also has many sub brands like Egg McMuffin, Big Mac, McCheese burger, etc., having
the “Mc” or “Mac” moniker in every product offered, which acts like a family branding
association by giving “Mc” or “Mac” in the names of all their product offerings. (Refer to
Exhibit – 2 & 3)

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Research Design

The main objective of the study is to understand the effectiveness of McDonald’s

advertising efforts on its consumers, and how their buying patterns are influenced.

The research methodology chosen for sampling is convenience sampling which is a non-
probability sampling selected because of the convenient accessibility and proximity. The sample
size chosen for the study is fifty.

The primary research is done from survey containing eleven questions to gather direct
information from consumers. The survey was filled by individuals from UAE as well as India.
Secondary research basically consists of data gathered from online sources.

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Findings
We floated a survey for our project to get to know about how advertisements by
McDonald’s helps in persuading consumer to want to go and eat at McDonald’s. We used
different scales and many statements to judge the perception of consumers towards McDonald’s
advertisements.

Questionnaire and results for the same can be seen in Exhibit – 4 to 14.
1. In which we were able to find that McDonald’s is the highly preferred fast food joint
among its competitors KFC, Subway etc.
2. This also helped us gain knowledge about how much percentage of consumer agree to the
statement that ads influence their buying behavior in a positive way.
3. Consumers whenever observes or listens to a specific fast food advertisement they feel
hungry and wants go and eat there.
4. In today’s time where everything is revolving around internet consumers prefer digital
medium of advertisement, followed by television and print media.
5. Advertisement related to products are more appealing to consumer of McDonald’s.
6. We also collected data of demographics of consumer in which we were able to tap the
age group, occupation and income group of consumers who visit the McDonald’s the
most.

Secondary Research
McDonald’s has hired Publicis Groupe to manage its consolidated business portfolio in
the GCC region. Publicis Groupe’s team will be managing creative & content development,
marketing, advertising and media strategy and buying, social media, corporate responsibility, PR
and crisis management.1 The Publicis group’s main focus would be to increase focus on digital
ad spends.

1
https://www.communicateonline.me/agency/publicis-groupe-wins-consolidated-mcdonalds-
gcc-business/

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 Khaleej Times stated a “whopping majority (87 per cent) said that TV advertising
impacts children's current food choices" and "23% indicating their child asks for fast food after
watching these ads. According to the survey, two out of five people claim that they are making
unhealthy food choices after watching an ad on TV."

Recommendations
We as a group recommend that there should be more Focus on Digital - print & radio
media which is a declining medium. There should be more promotional offers and discount via
mobile/SMS medium and McDonald’s application. The fast food chain should also target young
adult and working professionals also known as Millennials, rather than just kids.

The company should increase its focus on Health-Conscious Mindsets which demand
nutritional information to be listed on every product they consume. These are basically people
who are conscious towards their eating habits and deviate more of their time in fitness activities.
There should be customization of meals in which juice or water can be offered instead of
carbonated soft drinks. They can also offer an option of variety of fruits instead of fries.
Increased advertising focus on new, innovative products + more veg options.

There can also be increased focus on innovative fast-food products which attract people
from various demographics. After research, it can be noted that McDonald’s doesn’t offer much
variety for vegetarian consumers. GCC being a place of expats must cater to both vegetarians
and non-vegetarians to increase its market share in the industry.

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Exhibits

Exhibit - 1: Fast food industry growth and size (as of 2015)

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Exhibit - 2: Family meal ad

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Exhibit - 3: In-store promotion

Exhibit - 4: Survey Q1

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Exhibit - 5: Survey Q2

Exhibit - 6: Survey Q3

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Exhibit - 7: Survey Q4

Exhibit - 8: Survey Q5

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Exhibit - 9: Survey Q6

Exhibit - 10: Survey Q7

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Exhibit - 11: Survey Q8

Exhibit - 12: Survey Q9

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Exhibit - 13: Survey Q10

Exhibit - 14: Survey Q11

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Works Cited
1. Our History: The McDonald's Brothers. Retrieved from
https://www.mcdonalds.com/us/en-us/about-us/our-history.html

2. Our Company. Retrieved from https://www.mcdonalds.com/ae/en-ae/ourcompany.html

3. Abbas, W. (2018). Gulf food: A Growing Pie. Retrieved from

https://www.khaleejtimes.com/business/local/gulf-food-a-growing-pie

4. Barnhart, N. (2013). Advertisements and Classical Conditioning. Retrieved from

https://sites.ewu.edu/cedp324-sain/2013/08/12/advertisements-and-classical-
conditioning-by-natasha-barnhart/

5. McDonald's. (2013). Retrieved from http://www.integratedbrands.org/brands/mc-

donalds/@@details

6. Lakhpatwala, Z. (2018). Publicis Groupe wins the consolidated McDonald’s GCC

business. Retrieved from https://www.communicateonline.me/agency/publicis-groupe-
wins-consolidated-mcdonalds-gcc-business/

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