case study 1 mcdonalds

McDonald's Corporation: The World's Leading Fast Food Chain [Case Study]

Devashish Shrivastava , Anik Banerjee

McDonald's Corporation is an American fast-food organization established in 1940 as a café by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a burger stand and later transformed the organization into an establishment; the Golden Arches logo being presented in 1953 at an area in Phoenix, Arizona.

Ray Kroc, a businessperson, joined the organization as an established operator in 1955 and continued to buy the chain from the McDonald's siblings. McDonald's had its base camp in Oak Brook, Illinois, and moved its worldwide base camp to Chicago in mid-2018.

McDonald's is worth $185+ bn today. It is the world's biggest eatery network by revenue. It was last registered to be serving 69+ million customers each day in more than 120 countries across over 39,000 outlets.

Although McDonald's is best known for its burgers, cheeseburgers, and french fries, its menu also includes chicken items, breakfast things, sodas, milkshakes, wraps, and sweets. In light of changing buyer tastes and a negative backfire on account of the wretchedness of its food, the organization has added mixed greens, fish, smoothies, and natural products to its offerings.

McDonald's Corporation's income originates from leases and charges paid by the franchisees. According to two reports distributed in 2018, McDonald's is the world's second-biggest private manager with 1.7 million representatives (behind Walmart with 2.3 million workers).

Here's bringing you the McDonald's company profile that will present to you McDonald's company overview, when was McDonald's founded, McDonald's growth over the years, about McDonald's, McDonald's owner name, founder of McDonald's corporation, McDonald's history and background, McDonald's case study marketing, and more.

McDonald's - Company Highlights

McDonald's - Startup Story and History McDonald's - Mascot/Logo McDonald's - Business Model And Market Strategy McDonald's - Target And Mission McDonald's - Growth McDonald's - Restaurants And Services McDonald's - Future

McDonald's - Startup Story and History

Richard and Maurice McDonald in 1940, opened the primary McDonald's at 1398 North E Street at West fourteenth Street in San Bernardino, California; however, it was not the McDonald's you know today. Ray Kroc made changes to the siblings' business and modernized it.

The siblings presented the "Speedee Service System" in 1948 by extending the standards of cutting-edge drive-thru eatery that their antecedent White Castle had tried over two decades earlier. McDonald's emerged with a delivery model where it made its food on a supply belt and delivered it within 2 minutes.

It looked like a fantastic and impossible eatery that had:

• Only burgers, fries, and shakes on the menu • No plates or waiters to serve the customers

However, when Ray Kroc came, he was astonished by the never-ending waiting lines that were there waiting for their orders from McDonald's.

Kroc was then 50 already and was selling milkshake mixers door to door. Ray Kroc had earlier tried his hand in many things but never had attained success in his whole life. He already worked as a musical director, pianist, and had also worked as a real estate guy, in the paper cup industry, and as a seller of kitchen appliances, but he couldn't hold on to one thing among them all. Thus, Kroc was a person who lived from paycheck to paycheck.

Kroc came to McDonald's to deliver an absurd order of 8 milkshake mixers for just one area. He wondered "why would someone want to make 40 milkshakes at a time?" This is why he drove to California, at McDonald's to see the place himself.

Seeing the huge demand for McDonald's burgers, fries, and shakes, Kroc sensed a huge opportunity. He soon pushed the founders of the store to embrace a franchise model. The McDonald's brothers who owned the business, were living a comfortable life then, getting rich by the day, and buying Cadillacs as they filled their pockets. They didn't have vision nor they were eager to expand. However, Ray convinced them and rushed to work, as soon as he did that.

He assumed the role by taking 2 major steps back to back:

• Mortgaging his house when he was already 52
• Opening 18 new outlets in the very first year

This has helped the company scale big time, and McDonald's now boasts of:

• Serving 2.3+ billion burgers a year
• Serving 39,000+ restaurants across more than 120 countries
• Being the 4th largest employer in the world
• Being the largest toy distributor in the world

Though it was Ray's idea and the expansion was promising, the McDonald's brothers made an unfair deal with him. Kroc was allowed only 2% of the profits. McDonald's being to scale aggressively but the founders of McDonald's wasn't really happy with Ray and his scaling. This is why Ray borrowed and bought them out for $2.7 mn, thereby becoming the 100% owner of McDonald's.

The organization attributes its success to Ray Kroc. Kroc later bought the McDonald siblings' value in the organization and was responsible for McDonald's overall reach. He was seen as a forceful colleague, driving the McDonald siblings out of the business. Kroc and the McDonald's siblings battled for control of the business, as recorded in Kroc's life account.

The San Bernardino eatery was torn down (1971, as indicated by Juan Pollo) and the site was offered to the Juan Pollo chain in 1976. This zone currently fills in as central command for the Juan Pollo chain, and a McDonald's and Route 66 museum.

With the development of McDonald's into numerous universal markets, the organization has turned into an image of globalization and the American lifestyle. Its unmistakable quality has additionally made it a regular point of open discussions about heftiness, corporate morals , and shopper obligation.

McDonald's - Mascot/Logo

The first mascot of McDonald's was a cooking cap over a burger who was alluded to as "Speedee" . In 1962, the Golden Arches supplanted Speedee as the all-inclusive mascot. The image of jokester Ronald McDonald was presented in 1965. Ronald McDonald showed up to promote amongst children.

On May 4, 1961, McDonald's initially petitioned for a U.S. trademark on the name "McDonald's" with the portrayal "Drive-In Restaurant Services". By September 13, McDonald's, under the direction of Ray Kroc, petitioned for a trademark on another logo—a covering, twofold curved "M" image.

Before the twofold curves, McDonald's used a solitary curve for the design of its structures. Even though the "Brilliant Arches" logo showed up in different structures , the present form was not utilized until November 18, 1968, when the organization was given a U.S. trademark.

McDonald's - Business Model And Market Strategy

The business and revenue model of McDonald's includes almost 37000 outlets which spread to more than 120 nations. Today, McDonald's is the biggest eatery network on the planet in terms of income.

Initially launched as a Drive-In Hamburger Bar, the idea was advanced in 1940 by The McDonald Brothers, Richard James (Dick), and Maurice James (Mac) McDonald. It was after the presentation of the Speedee Service System with shakes, fries, and burgers costing as low as 15 pennies that the McDonald Brothers started the establishment of McDonald's Hamburgers.

In 1954, Ray Kroc turned into the establishment operator of the McDonald Brothers. The main McDonald's eatery was opened by Kroc in 1955 in Des Plaines, Illinois, USA. It was in the year 1961 that the rights to the eating joint of the kin were obtained by McDonald's for a powerful total of $2.7 million.

You may likewise be astonished to realize that when the first McDonald's eatery opened, the extremely well-known McD french fries were eaten with no ketchup! The revenue model of McDonald's, the world's quickest developing food chain, is an interesting one.

McDonald's - Target And Mission

McDonald's endeavours hard to be its clients' "most loved spot and approach to eating". McDonald's plan of action is fixated on the ground-breaking strategy "Plan To Win", which is placed into requests around the world.

With the mission of "Quality, Service, Cleanliness, and Value", McDonald's has clung to each of these characteristics. Client experience is improved by the selection of five fundamentals: people, products, place, price, and promotion.

Additionally, McDonald's plans to give high-review nourishment, at effectively reasonable costs to individuals over the globe. The deals at McDonald's are furrowed through an efficient deals channel which guarantees remarkable consumer loyalty on all occasions.

Astounding Vision

When Ray Kroc opened the Original McDonald's in Illinois, he had a dream of expanding the franchise across the globe with more than 1000 outlets in the States itself. Remaining consistent with its guarantee, McDonald's widened its worldwide handle by opening joints outside the US as early as 1967.

The first international outlets were opened in Canada and Peurto Rico. By January 2018, McDonald's was situated in 120 nations and had about 37200 cafés with 1.9 million workers. It was serving more than 69 million individuals every day. At one point in time, McDonald's was opening a new outlet every 14.5 hours!

Significant Growth Strategy

McDonald's has clutched a promising development technique to serve customers and spread its wings. The presentation of the "Speed Growth Plan" in March 2017 enhanced the development of the business.

McDonald's development system depends on retaining, regaining, and converting. McDonald's strives to hold on to its old clients, recapture the lost trust, and convert easygoing clients into ordinary ones.

What's more, it has additionally embraced three quickening agents: digital, food delivery, and experience of things to control its monstrous development. It keeps on reshaping cooperation with clients and raising the level of consumer loyalty and experience through innovation and human endeavours.

Decent Variety

Monetarily, McDonald's has affected the world more significant manner than some other organizations. McDonald's adheres to the conviction "Decent variety is Inclusion" and doesn't leave a solitary opportunity to make each person from every network feel regarded. Its suggestion of "Decent variety is Inclusion" has affirmed its situation at the top position.

The McDonald's way of life revolves around the following: customer-obsessed, better together, and committed to lead. These coupled with its conviction has caused the fast-food chain to exceed expectations in the field of business enterprise and showcasing.

McDonaldization

McDonald's can appropriately be named as one of the best organizations to be involved in the worldwide system. The worldwide broadening of the McDonald's is regularly alluded to as "McDonaldization." Its accomplishment in more than 120 nations can be credited to its hierarchical structure.

The hierarchical structure of McDonald's mulls over expanding localization, and in this way, the entire plan of action of McDonald's is normally redone thinking about the mass intrigue in different nations.

Fruitful Acquisitions

The McDonald's Corporation Mergers and Acquisitions (M&A) have, since its inception, entertained itself with cautious acquisitions. Donato's Pizza which is a Midwestern chain of 143 eateries was obtained by McDonald's on 6 May 1999. Aside from securing Donato's, it acquired the Boston Market on 18 May 2000. Boston Market is a drive-through eatery chain that essentially focuses on home-style sustenance.

Supporting Employees

McDonald's doesn't, in any capacity, hamper the development of its workers. It bolsters its representatives in every possible way and empowers them to set up business systems.

At McDonald's, the work environment is brimming with positivity, connections are advanced, professional openings are supported, and business development is sustained.

Coaches, good examples, and backers are accessible at all times to direct the employees on successful initiatives, professional procedures, and prosperous business.

Engagement Of Community And Education

Aside from being one of the best good-quality fast food options, McDonald's investigates every possibility to endeavour for the network it serves. It effectively takes part in network administration and continues to have a critical effect on assorted networks.

The Global Diversity, Inclusion, and Community Engagement Team alongside its key accomplices have fabricated cherished relations with different network-based associations. McDonald's Hamburger University readies its workforce to maintain the multi-billion dollar business and worldwide initiative improvement programs.

McDonald's - Growth

McDonald's eateries are found in 120 nations and serve 69 million customers each day. McDonald's operates 39,000 restaurants/cafés around the world, utilizing more than 210,000 individuals as part of the arrangement. They help operate 2,770 organization possessed areas and 35,085 diversified areas, which incorporates 21,685 areas diversified to regular franchisees, 7,225 areas authorized to formative licensees, and 6,175 areas authorized to remote affiliates.

Concentrating on its centre image, McDonald's started stripping itself of different chains it had gained during the 1990s. The organization possessed a large stake in Chipotle Mexican Grill until October 2006 when McDonald's was completely stripped from Chipotle through a stock exchange .

Until December 2003, it likewise claimed Donatos Pizza, and it claimed a little portion of Aroma Café from 1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Outstandingly, McDonald's has expanded investor profits for 25 back-to-back years, making it one of the S&P 500 Dividend Aristocrats. The organization is positioned 131st on the Fortune 500 of the biggest United States companies by revenue.

In October 2012, its month-to-month deals fell without precedent for nine years. In 2014, its quarterly deals fell without precedent for a long time, when its deals last dropped for the whole of 1997.

In the United States, McDonald's accounts for 70% of sales in drive-throughs. McDonald's shut down 184 eateries in the United States in 2015, which was 59 more than what they wanted to open.

Starting in 2017, the income was roughly $22.82 billion. The brand estimation of McDonald's is more than $88 billion; outperforming Starbucks with a brand estimation of $43 billion. The total compensation of the organization in 2017 was $5.2 billion; this worth saw an ascent of about 11% from the previous year.

McDonald's is, without a doubt, the quickest developing drive-thru eatery chain on the planet. In 2018, McDonald's developed as the most profitable inexpensive food chain with a brand worth nearing $126.04 billion. Also, the all-out resources of McDonald's were almost $33.8 billion.

The world's quickest developing cheap fast food chain partitions its market into four unique areas: U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate.

According to the report set forth by the organization in the year 2017, the market in the U.S. created the biggest measure of income at $8 billion. The International Leads Markets which includes Australia, Canada, France, Germany, and the U.K. created an income of $7.3 billion.

The High Growth Markets which incorporate China, Italy, Korea, Poland, Russia, Spain, Switzerland, the Netherlands, and comparative brought in about $5.5 billion in revenue.

The Foundational Markets and Corporate incorporate the rest of the business sectors. Furthermore, it additionally incorporates a wide range of corporate exercises. The income created by this section of the market represented roughly $1.9 billion.

McDonald's - Restaurants And Services

In certain nations, "McDrive" areas close to roadways offer no counter administration or seating. interestingly, areas in high-thickness city neighbourhoods frequently preclude pass-through service. There are likewise a couple of areas, found for the most part in the downtown locale, that offer a "Walk-Thru" administration instead of a Drive-Thru.

McCafé is a bistro-style backup to McDonald's cafés and is an idea conceived by McDonald's Australia (likewise known, and promoted, as "Macca's" in Australia), beginning with Melbourne in 1993. As of 2016, most McDonald's outlets in Australia have McCafés situated inside the current McDonald's eatery.

In Tasmania, there are McCafés in each eatery, with the rest of the states rapidly following suit. After moving up to the new McCafé look and feel, some Australian eateries have seen up to a 60% expansion in deals. There were more than 600 McCafés around the world some time back.

Create Your Taste

From 2015–2016, McDonald's attempted another gourmet burger administration and eatery idea dependent on other gourmet cafés, for example, Shake Shack and Grill'd. It was taken off without precedent for Australia in early 2015 and extended to China, Hong Kong, Singapore, Saudi Arabia, and New Zealand with progressing preliminaries in the US showcase.

In committed "Make Your Taste" (CYT) booths, clients could pick all fixings including a kind of bun and meat alongside discretionary additional items. In late 2015, the Australian CYT administration presented CYT servings of mixed greens.

After an individual had requested, McDonald's prompted that hold up times were between 10–15 minutes. At the point when the nourishment was prepared, the prepared group ('has') carried the sustenance to the client's table.

Rather than McDonald's typical cardboard and plastic bundling, CYT nourishment was exhibited on wooden sheets, fries in wire bushels, and servings of mixed greens in china bowls with metal cutlery. A more expensive rate connected. In November 2016, Create Your Taste was supplanted by a "Mark Crafted Recipes" program intended to be increasingly proficient and less expensive.

McDonald's Happy Day

McHappy Day is a yearly occasion at McDonald's during which a portion of the day's deals goes to philanthropy. The collections on this day go to Ronald McDonald House Charities.

In 2007, it was celebrated in 17 nations: Argentina, Australia, Austria, Brazil, Canada, England, Finland, France, Guatemala, Hungary, Ireland, New Zealand, Norway, Sweden, Switzerland, the United States, and Uruguay. As indicated by the Australian McHappy Day site, McHappy Day brought $20.4 million up in 2009. The objective for 2010 was $20.8 million.

McDonald's Monopoly Donation

In 1995, St. Jude Children's Research Hospital got a mysterious letter stamped in Dallas, Texas, containing a $1 million winnings McDonald's Monopoly game piece. McDonald's authorities went to the medical clinic, joined by a delegate from the bookkeeping firm Arthur Andersen, inspected the card under a diamond setter's eyepiece, took care of it with plastic gloves, and checked it as a winner.

Although game guidelines disallowed the exchange of prizes, McDonald's deferred the standard and made the yearly $50,000 annuity instalments for the full 20-year time frame through 2014, even in the wake of discovering that the piece was sent by an individual associated with a theft plan meant to cheat McDonald's.

McRefugees are destitute individuals in Hong Kong, Japan, and China who utilize McDonald's 24-hour cafés as transitory lodging. One out of five of Hong Kong's populace lives underneath the destitution line. The ascent of McRefugees was first archived by picture taker Suraj Katra in 2013.

McDonald's - Future

The reported objective is to source all visitor bundling from inexhaustible, reused, or ensured sources, reuse visitor bundling in 100% of eateries, and overcome framework challenges by 2025.

McDonald's turned into the principal eatery organization on the planet to set an endorsed Science-Based Target to lessen ozone-depleting substance emanations. It also joined the "We Are Still In Leader's Circle", driving activity to relieve environmental change.

McDonald's USA completed five years as the sole worldwide café organization to serve MSC-ensured fish in each U.S. area. It united with Closed Loop Partners to build up a worldwide recyclable and additionally compostable cup arrangement through the NextGen Cup Challenge and Consortium. Official pioneers called for atmosphere activity and offered arrangements at the primary Global Climate Action Summit (GCAS).

McDonald's co-facilitated the "Way to Greenbuild" occasion with Illinois Green Alliance at its new worldwide home office. The structure, a collaboration among Sterling Bay, McDonald's, and Gensler Chicago, got USGBC LEED Platinum accreditation.

McDonald's is establishing the tone for other inexpensive food organizations to pursue. Given the present want by numerous buyers to spend cash on organizations that are doing great on the planet, where McDonald's leads, others will pursue.

Who is the founder of McDonald's?

McDonald's was founded by Richard McDonald and Maurice McDonald on 15 April 1955 in California, United States.

Who is the CEO of Mcdonald's?

Chris Kempczinski is the CEO of Mcdonald's since Nov 2019.

Who is the owner of McDonald's in India?

In India, McDonald's is a joint-venture company managed by two Indians- Amit Jatia (M.D. Hardcastle Restaurants Private Ltd) and Vikram Bakshi ( Connaught Plaza Restaurants Private Ltd).

When was the fast-food chain McDonald's founded?

Mcdonald's was founded in 1940 in San Bernardino, California.

How much does a Mcdonald's franchise owner make?

An average Mcdonald's franchise generates $150,000 annually.

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In-Depth McDonald’s Marketing Case Study – I’m Lovin’ It Already.

By Aditya Shastri

Quick Read   McDonald’s marketing strategy revolves around innovative campaigns, digital presence, and product diversification (Expanding product offerings for variety), aiming to cater to diverse consumer needs globally. The fast-food giant’s approach focuses on customer satisfaction, quality control, and sustainability, driving its continued growth and market dominance.

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Forget fancy ingredients and Michelin stars. McDonald’s has conquered the fast-food world with a different kind of recipe – a patented McDonald’s marketing strategy as crave-worthy as their fries.

This case study dives into the secret sauce behind the Golden Arches’ success, exploring the innovative campaigns, strategic partnerships, and timeless principles that have kept them at the forefront of the fast-food game for decades. So, grab a virtual burger, buckle up, and get ready to uncover the marketing magic that makes McDonald’s a household name (and a billion-dollar brand).

About McDonald’s

Source: Google

McDonald’s Corporation, or simply McDonald’s, is the world’s largest chain of fast-food restaurants, serving around 69 million customers per day.

The company, originally established in 1940 as a restaurant by Richard and Maurice McDonald, initially operated as a hamburger stand when it was reorganised in 1948. Businessman Ray Kroc joined the company in 1955 as a franchise agent, eventually acquiring the chain from the McDonald brothers and overseeing McDonald’s growth strategy and subsequent expansion..

The mission of the company is, “To create delicious feel-good moments for everyone” .

McDonald’s offers its customers a wide variety of menu items, along with drinks and other merchandise. It is known for its employee satisfaction, innovation, and commitment to quality.

McDonald’s Marketing Strategy – What’s New With the Brand?

Here’s everything that was buzzing around McDonalds recently:

• McDonald’s in India ceased including tomatoes in August 2023 due to escalating prices, and they have introduced the new “KARTIK AARYAN Meal,” inspired by the actor’s persona, which we will delve into further in the marketing strategies section below.
• McDonalds in India dropped tomatoes in August of 2023 because of rising prices.
• McDonald’s giving away free NFTs in Singapore.
• In July 2023, McDonald’s announced that they are coming up with a new concept called CosMc – a spinoff restaurant.
• McDonald’s opened their first fully automated restaurant in Texas.
• In 2023, McDonald’s reported a revenue of $23.2 billion (Source: McDonald’s Annual Report 2023).
• McDonald’s operates over 38,000 outlets worldwide (Source: Statista, 2023).
• McDonald’s commands a significant 21.4% stake in the worldwide fast-food market, according to IBISWorld’s 2023 report.

Business News

McDonald’s has announced plans to invest $1 billion in renovating its stores across Europe, focusing on enhancing customer experience through digital kiosks and modernised interiors (Source: BBC News, June 2024).

Product Launch

The brand has introduced the McPlant, a plant-based burger, in collaboration with Beyond Meat, aiming to capture the growing vegan and vegetarian market (Source: The Guardian, May 2024).

Marketing News

One recent McDonald’s marketing strategy titled ‘Famous Orders,’ featured celebrities’ favourite McDonald’s meals, which has garnered significant social media engagement (Source: Marketing Week, April 2024).

Celebrity News

Rapper Travis Scott partnered with McDonald’s to launch a special meal, leading to a 4% increase in sales in the US during the promotion period (Source: Forbes, March 2024).

Sounds like the marketing strategy of McDonald’s was quite the talk of the town all this year and rightfully so. Let’s now move on and discuss the buyer persona of McDonalds.

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Marketing on McDonald’s – Marketing Mix

A marketing mix is a model that an organisation uses to better advance its interest in its image or product. The main components of this model are the 4Ps: Product, Price, Place and Promotion. So let us look at McDonald’s marketing mix strategy in the coming section

We have written a separate blog taking a deeper dive into the marketing mix of McDonald’s if you wish to learn more.

Product Strategy of McDonald’s

As a fast-food company, its main offerings include burgers, French fries, breakfast items, soft drinks, milkshakes, and desserts.

McDonald’s menus are known around the globe, although there are geographic variations to suit the local preferences & tastes of customers. The company continuously improves its products and services based on the changing needs and tastes of consumers.

The core value of what McDonald’s offers has always been fast service which is a huge value addition. Nowhere else can you get such a range of items at even lower prices with such efficiency, convenience and customer service.

Price Strategy of McDonald’s

The pricing strategy of McDonald’s has always been to offer food at low prices. This is what has allowed the restaurant to be successful for many years.

This also has primarily helped McDonald’s build its reputation as one of the top fast-food brands in the world. However, with the costs of living continuing to rise, McDonald’s has begun offering combos and specials to entice customers and churn out profits through economies of scale.

In India, the brand introduced a catchy slogan – “Aap Ke Zamane Mein, Baap Ke Zamane Ke Daam”. This was done back in 2008 to attract lower and middle-class customers to experience the offerings of McDonald’s India and it worked out very well.

Place and Distribution Strategy of McDonald’s

McDonald’s is one of the world’s leading quick-service restaurants (QSR) with over 38,000 restaurants in 100+ countries. It recently opened nearly 1,000 new restaurants globally & also modernised another 900 restaurants in the US.

It has opened different restaurant formats, drive-ins, online ordering, and tying with food delivery partners . These new formats allow the customers to get the desired food at a particular time and place which also helps them to have a better experience overall. The stores themselves are clean unlike others as they always keep their outdoor seating space sanitised while having indoor seating areas for an elegant ambience.

Promotion – McDonald’s Advertising Strategy

McDonald’s uses a lot of promotional techniques as promotional activities help build brand loyalty and interest. It gives people who may not normally go to McDonald’s a reason to go there.

Just like any other company, McDonald’s also sponsors various promotion campaigns to push their brand. Promotions help in creating a sense of community and association between the company and its customers.

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McDonald’s Marketing Case Study – Buyer Persona

A buyer persona generally refers to the detailed information of the ideal customer of a company. When it comes to McDonald’s, people from all countries, ages, and genders enjoy their juicy burgers and fries. Hence, we have focused on the attributes of an ideal buyer at McDonald’s.

Buyer’s Persona

Profession:

Graphic Designer

• Seeks quick, convenient meals
• Values cost-effectiveness
• Enjoys variety and occasional indulgences
• Prefers shareable food options

Interest & Hobbies

• Digital Art & Design
• Socialising with friends
• Watching movies and TV series
• Exploring new cafes and restaurants

Pain Points

• Time-strapped due to work
• Dislikes long wait times
• Concerned about food consistency
• Health-conscious
• Prefers a quieter ambience

Social Media Presence

McDonald’s leverages buyer personas to tailor marketing strategies that resonate with digitally savvy, socially active individuals who value convenience and variety. This approach helps McDonald’s targeted campaigns that engage customers across different platforms while addressing their specific preferences and lifestyle needs.

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McDonald’s Marketing Strategy: An Overview

McDonald’s employs a multi-faceted marketing strategy that includes traditional advertising, digital marketing, and community engagement. Recently, McDonald’s advertising strategy has focused on digital transformation, integrating mobile app promotions, loyalty programs, and online ordering to enhance customer convenience. The ‘Famous Orders’ campaign is a prime example, effectively leveraging celebrity endorsements to drive sales and brand visibility.

With an innovative approach to marketing and consumption patterns through value-added menu improvements, McDonald’s aims to significantly improve market share in key markets through continually improving customer satisfaction and attracting new customers through cost savings, operational efficiencies and improving brand awareness.

So let us look at some of McDonald’s marketing strategies over the past years.

A Detailed Look at McDonald’s Franchise Model

McDonald’s didn’t just revolutionise fast food; they revolutionised franchising. Their model has become the industry gold standard, with countless companies trying to capture a piece of the Golden Arches magic.

But what’s the secret sauce behind their success? Two key ingredients: consistency and customisation. McDonald’s made a massive investment in ensuring all franchises deliver the same high-quality experience, no matter where you are in the world. This meant sourcing ingredients locally and crafting menus that cater to regional tastes.

By prioritising consistency and local flair, McDonald’s unlocked the formula for global domination. They weren’t just selling burgers; they were selling a familiar, reliable experience that transcended borders.

Of course, McDonald’s isn’t the only one with a franchise model that’ll knock your socks off. Check out our list of digital marketing case studies to know more.

Catering to an Audience of All Ages

The company understand that families come in all shapes and sizes, with appetites to match. That’s why McDonald’s has become a master of menu magic, catering to every age group.

Think bright, colourful Happy Meals that turn mealtime into an adventure for the little ones. Parents can grab a satisfying burger and fries, while larger appetites can conquer supersized portions. It’s a win-win for everyone, ensuring no one leaves hungry or disappointed. McDonald’s product strategy is simple: Offer delicious food in convenient packages that fit every family’s needs. It’s a recipe for success that’s kept them at the forefront of the fast-food game for generations

McDonald’s – I’m Lovin’ It… Para Pap Pap Paa:

“I’m Lovin’ It… Para Pap Pap Paa” is a very well-known jingle that has been one of the best McDonald’s marketing tactics for a very long time now.

This jingle highlights the positive experience one can have while dining at McDonald’s. The jingle is memorable because it speaks about how happy consumers are during their meals there, and how helpful and friendly the employees are.

Brand Mascot of McDonald’s

McDonald’s struck gold in 1963 with a character who’d become a pop culture icon: Ronald McDonald. This wasn’t just some painted-on smile. Ronald’s infectious cheer and bright red threads resonated with both kids and adults. He wasn’t just a clown; he was the embodiment of McDonald’s fun, family-friendly vibe. Fast forward to today, and Ronald remains a cornerstone of McDonald’s marketing strategy. He’s a walking, talking symbol of happy meals, birthday parties, and that unmistakable sense of childhood wonder. So next time you see those golden arches, remember the red-haired maestro behind the success: Ronald McDonald, the undisputed king of McDonald’s mascots.

Believe it or not, coming up with the perfect mascot for your brand is pretty easy, provided you know what to consider when doing it. Lucky for you, if you’re based in Gurgaon, there are several options for you to choose from. Check out our blog on the best digital marketing courses in Gurgaon to know more.

Collaborations with McDonald’s

McDonald’s has a long history of collaboration with various companies and artists. The motive behind these collaborations is to maintain its brand reinforcement in the minds of its customers. This goes beyond simply creating advertising campaigns that promote the value of its products.

The company very recently collaborated with BTS – the very popular South Korean Music band where it introduced a special McDonald’s meal called the BTS Meal. Likewise, it has collaborated with artists like Travis Scott, and J Balvin as well as Companies like Coca-Cola. These collaborations are an integral part of McDonald’s growth strategy.

Interestingly, McDonald’s strategy can be a part of the curriculum of several digital marketing classes. Here, students are taught to analyse the impact of such collaborations. Check out our article on the best digital marketing courses in mumbai to know more.

You can also create amazing strategies for your own business or for big brands like McDonald’s, and hence you should enrol for our free top-paying skills course and learn the skills that are demanded in this industry.

Digital Marketing Strategies of McDonald’s

SEO Strategy: Of course, this wouldn’t be McDonald’s SEO case study, without highlighting its optimisation practices in brief. The company optimises its website with relevant keywords such as ‘McDonald’s near me’ and ‘McDonald’s menu’ to attract local traffic (Optimizing for local search results) and improve search engine rankings (Positioning on search engine results page). The company also found that its ‘organic’ practices perform better than “sponsored” promotions. This is a testament to the efficiency of McDonald’s marketing strategy.

SMM Strategy: McDonald’s serves up engaging content, and interactive polls, and even integrates customer feedback on platforms like Twitter and Instagram. Remember the Travis Scott meal campaign? That sizzling collaboration wasn’t just a tasty treat, it was a social media goldmine, boosting online engagement to a whole new level. This focus on interactive and customer-centric content is a key ingredient in McDonald’s marketing strategy, proving that social media is more than just a platform – it’s a powerful tool for building brand loyalty and driving sales. Are you interested in exploring the wonders of social media? You should try out our free Instagram marketing course and learn what this industry is all about.

By encouraging its customers to click pictures of their meals and post them on various social media platforms. This growing food photography trend has helped McDonald’s to lure new customers, in fact, between the period of September 2018 and February 2019, there were 4.9 million McDonald’s logos posted on Twitter globally.

But wait, there’s more! (See what we did there?) If you’re hungry for even more digital marketing insights, check out our free LinkedIn masterclass and unlock the power of this professional platform for your business growth !

E-commerce Strategy: McDonald’s has enhanced its e-commerce presence through partnerships with food delivery services like Uber Eats and DoorDash, facilitating online orders and delivery. The app is a vital part of how McDonald’s markets itself in the digital age.

Mobile App: The McDonald’s mobile app offers exclusive deals, order tracking, and a rewards program, improving customer loyalty and satisfaction.

Influence Marketing Strategy: Collaborations with influencers and celebrities have been a cornerstone of McDonald’s marketing, with the ‘Famous Orders’ campaign exemplifying this approach

By adopting digital marketing practices, McDonald’s has been able to increase its brand awareness and create demand for its offerings. The information promoted is similar to the ones used in traditional marketing platforms such as TV, billboards, newspapers, etc., however, the execution of the same content differs.

Want to learn how to market your products like a pro? Check out our article on the best digital marketing courses in Kolkata.

Marketing & Advertising Campaigns of McDonald’s India

A marketing campaign can have many goals, but at its core, it’s all about getting more customers. An effective and well-timed campaign will create a demand which then supports the product or service.

McDonald’s always has a very strong strategy in place. Right from showcasing its delicious burgers along with bringing out the positive McDonald’s vibe to ending the commercials with slogans like, ‘I’m Lovin’ It… Para Pap Pap Paa’ , very few businesses can keep up with the fast food giant’s marketing campaign game

So let us look at some of the popular campaigns of McDonald’s.

1) Kartik Aaryan Meal by Mcdonald’s India

Mcdonald’s India introduced the new Kartik Aaryan Meal including burgers, fries, and a pizza puff with a different packaging than unusual. The meal also features a QR Code, which upon scanning, fans can take a selfie with him virtually.

2) We Get It – Campaign & Commercial Ad

Another campaign launched by McDonald’s India was titled ‘We Get It”’ and revolved around the craziness of life and how McD continues to make you feel special and give the best experience through that.

3) There’s A McCafe for Every Moment

McDonald’s India introduced the ‘There’s A McCafe for Every Moment’ campaign to spotlight its beverage offerings under McCafe, emphasising their presence in life’s diverse moments, whether positive, challenging, or ordinary. Launched in 2017, the campaign creatively captured everyday nuances through a memorable theme song.

4) Family Time Means McDonald’s #Mealsmakefamilies

McDonald’s India came up with this campaign to highlight how meals bring families together. This campaign which was launched recently showcases some relatable moments people share with families while having a McDonald’s meal.

5) Marketing & Advertising Campaigns of McDonald’s during the Covid-19 Pandemic:

McDonald’s released a series of advertising commercials showcasing how so many things have changed since the pandemic. The basic idea behind the campaign was to highlight how life has changed but McDonald’s is still there, offering the same positive experience with extra hygiene and safety measures.

6) #MatchedByYou – A Marketing Campaign of McDonald’s India

McDonald’s introduced an exciting campaign #MatchedByYou. This campaign highlighted the availability of food combos starting at just ₹45, portraying a love triangle among burgers, fries, and cola.

After reading the McDonald’s marketing strategy, I suggest that you take a deeper look into the SWOT Analysis of McDonald’s.

Top Competitors That Influence McDonald’s Marketing Strategy

Like fast fashion, fast food outlets are also trying to get a share of the monopoly that McDonald’s once enjoyed. Here are a few top competitors of McDonald’s in India as well as internationally:

• Burger King: Known for its flame-grilled burgers and innovative marketing strategies.
• KFC: Specialises in fried chicken and has a strong global presence.
• Subway: Offers a healthier fast-food alternative with its customisable sandwiches.
• Wendy’s: Competes with McDonald’s on quality and customer service.
• Starbucks: Although primarily a coffee chain, it competes in the breakfast and snack segments.

Those interested in learning about McDonald’s and its competitor’s strategy can benefit from enrolling in a PG in digital marketing to understand similar corporate strategies in-depth.

McDonald’s Marketing Strategies – Failed Campaigns

We looked at the campaigns that brought the essence of McDonald’s to everyone’s screen but now let’s look at some of the failed campaigns that didn’t hit a chord with the audience.

1. #McDStories on Twitter

In the late 2010s, McDonald’s introduced a hashtag on Twitter – #McDStories & that encouraged their fans to share their stories revolving around the Happy Meal.

What the brand expected was stories that would inspire people to get together with their friends and family to enjoy a Happy Meal.

Instead, Twitter users started using this hashtag sarcastically and shared their negative experiences with McDonald’s.

Here’s one of the tweets using #McDStories:

Source: Goggle

2) Controversial Ad in India

In 2023, McDonald’s released a commercial ad where a customer was wooing a female staff member. The ad didn’t go well without the viewers and faced a lot of backlash.

McDonald’s is one of the world’s most recognised fast-food restaurants. With annual revenues over $19 billion, there’s no doubt that McDonald’s has a major influence on society in terms of food choices.

Its influence spans numerous nations globally. With a strong presence on both offline and online marketing, and cruise control over production and distribution, McDonald’s looks very well placed to take up industry-changing challenges. This comprehensive overview highlights McDonald’s growth strategy and its impressive ability to adapt to changing market conditions.

Let us know your thoughts on this McDonald’s marketing case study in the comment section below. Thank you for reading, and if you liked our then do share this in your circle.

Learning from Other Brands

In comparison, the marketing strategy of Puma focuses heavily on collaborations with athletes and sports personalities, similar to Spotify’s approach to collaborating with artists.

Additionally, the marketing strategy of Nykaa highlights the importance of influencer partnerships and personalised customer experiences, providing a broad perspective on how beauty brands can excel.

Similarly, the marketing strategy of Spotify leverages data-driven insights and personalized recommendations, showcasing how technology and user data can drive brand loyalty and market leadership.

FAQs About Marketing Strategy of McDonald's

McDonald's marketing strategy focuses on digital transformation, innovative campaigns, and customer-centric approaches to drive growth.

McDonald's markets itself through a mix of traditional advertising, digital marketing, influencer collaborations, and community engagement.

McDonald's growth strategy includes global expansion, menu innovation, and enhancing digital capabilities to meet evolving customer needs.

Famous campaigns include the "Famous Orders" campaign featuring celebrities and the "I'm Lovin' It" global campaign.

McDonald's main competitors are Burger King, KFC, Subway, Wendy's, and Starbucks.

McDonald's employs SEO, social media marketing, e-commerce, mobile app integration, and influencer marketing strategies.

Yes, the #McDStories Twitter campaign in 2012 faced backlash and had to be withdrawn due to negative customer stories.

McDonald's target audience is motivated by convenience, affordability, and familiarity with the brand.

Pain points include health concerns related to fast food, environmental impact, and the need for diverse menu options.

McDonald's is active on platforms like Instagram, Twitter, and TikTok, engaging with users through interactive posts and influencer collaborations.

Author's Note: My name is Aditya Shastri and I have written this case study with the help of my students from IIDE's online digital marketing courses in India . Practical assignments, case studies & simulations helped the students from this course present this analysis. Building on this practical approach, we are now introducing a new dimension for our online digital marketing course learners - the Campus Immersion Experience. If you found this case study helpful, please feel free to leave a comment below.

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Aditya Shastri

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Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]

This is a concise and well written case study of Mc Donald’s. It will be useful for Management students .

One of the best detailed report i have read. Great work, great research.

Very well written blog on mcdonalds marketing strategy which makes us understand how McDonald’s is growing instead of so much competition

McDonald’s leverages nostalgia and innovation, captivating diverse consumer demographics effectively.

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McDonald’s SWOT Analysis & Recommendations

This SWOT analysis of McDonald’s Corporation illustrates the benefits of having a leading industry position and a dominant presence in the global market. However, the fast-food company needs to account for the combined effect of its strengths, weaknesses, opportunities, and threats (SWOT) on its strategies, to optimize success in the face of cutthroat competition. McDonald’s generic strategy for competitive advantage and intensive strategies for growth align with the SWOT factors. Considering the restaurant company’s leading market position, these strategies are suited to the issues raised in the internal analysis (strengths and weaknesses) and external analysis (opportunities and threats) components of this SWOT analysis. Also, these strategies contribute to the fulfillment of business goals based on McDonald’s mission statement and vision statement . The company serves as an example of how a food service business can succeed by developing operations while resolving the issues brought to light through a SWOT analysis.

Insights from this SWOT analysis explain McDonald’s current strategic decisions. The internal factors examined in this case influence the company’s capabilities and growth in its target markets for food and beverage products and for food service. On the other hand, the external factors determine limits and challenges that McDonald’s must overcome to succeed in these markets. Thus, this SWOT analysis describes the business condition and external environment significant to the restaurant company’s strategic management.

McDonald’s Strengths (Internal Factors)

McDonald’s strengths make the fast-food restaurant chain a leading contender in the market. This aspect of the SWOT analysis shows the internal strategic factors that contribute to the fast-food company’s organizational viability. McDonald’s strengths are as follows:

• Internationally recognized brand and name
• High consistency of food, beverages, and services based on standardized processes
• Large network of business locations

McDonald’s brand and name are easily recognized internationally. This internal strategic factor is a strength in this SWOT analysis, indicating the benefits of the brand and name in supporting the company’s success, such as in introducing new food products. McDonald’s also has the strength of high consistency in its products. For example, the ordering process and most of the company’s food and beverage products, like burgers, fries, and carbonated drinks, are highly similar across different regions. McDonald’s corporate culture (business culture) contributes to such consistency, especially in terms of quality. Another strength noted in this SWOT analysis is the company’s large network of locations for its restaurants and kiosks. This internal factor strengthens the food service business in terms of revenues, as well as visibility and brand recall among target consumers. In relation to the network of locations pertinent to this SWOT analysis, McDonald’s applies marketing strategies that maximize the utility of available technologies and third-party services. For example, the company’s mobile apps enhance consumers’ convenience in accessing the company’s fast-food products. Technological efforts are a strategy for strengthening the network of business locations considered in this SWOT analysis of McDonald’s.

Weaknesses (Internal Factors)

McDonald’s weaknesses are linked to market focus, products, and business processes. This aspect of the SWOT analysis indicates the internal strategic factors that limit the restaurant company’s performance and success. McDonald’s weaknesses are as follows:

• Insignificant degree of vertical integration
• Imitable characteristics of processes and food and beverage products
• Limited product design flexibility that comes with standardization

McDonald’s operations and business strategies revolve around the preparation and serving of food and drinks. In this SWOT analysis, such focus comes with the weakness of the insignificant degree of vertical integration. For instance, the company does not produce its own raw ingredients. The SWOT analysis model considers this internal strategic factor as a weakness because it enables suppliers’ leverage over McDonald’s. On the other hand, competitors can imitate the company’s products and business processes, including hamburger meals and drinks, employee training programs, and the food preparation processes at restaurants. This internal factor contributes to competitive pressure on the fast-food chain business. In addition, McDonald’s has the weakness of limited product design flexibility because of standardization, which is one of the strengths noted in this SWOT analysis. For example, the standardized recipes of many of the company’s food products weaken the ability to satisfy regional food preferences. This weakness stands, even though the company has customized its menu for some countries, like India. Addressing this weakness requires corresponding adjustments to McDonald’s operations management programs and approaches for standardization.

Opportunities for McDonald’s (External Factors)

McDonald’s opportunities are linked to its product mix, multinational operations, and connections with other businesses. This aspect of the SWOT analysis points to the external strategic factors that support the food service company’s business growth. McDonald’s opportunities are as follows:

• New programs for suppliers to stabilize supply chains
• Acquisition of firms for vertical integration to include production of materials, especially ingredients
• Growth in consumer goods operations

McDonald’s has the opportunity to implement new programs to ensure the stability of its supply chains. This external strategic factor addresses supply disruption, which is included as a threat in this SWOT analysis of the fast-food business. Also, McDonald’s can gradually achieve vertical integration by acquiring firms related to its current business. For example, the company can acquire firms that process flour or manufacture bread. In this way, the company can increase its control of the supply chain, while reducing risks involving unpredictability in the supply of raw materials or ingredients. This opportunity addresses the weakness of insignificant vertical integration and the threat of supply chain disruption, which are issues identified in this SWOT analysis of McDonald’s Corporation.

Consumer goods represent only a small portion of McDonald’s business, considering that the company focuses mainly on food service. However, growth in consumer goods operations is considered an opportunity in this SWOT analysis. McCafé home-use coffee products are performing well in the market, indicating that the company can further grow its consumer goods business. McDonald’s marketing mix or 4Ps can support consumer goods operations along with product design and development. Also based on such an external factor, this SWOT analysis points to the benefit of strategic partnerships to boost the sales of McCafé at Home coffee products through retailers and e-commerce platforms, like Walmart , Costco , Target, and Amazon . These sellers and platforms currently offer McCafé at Home products and can facilitate the sales of new consumer goods from McDonald’s. The resulting growth in the consumer goods business can increase the company’s revenues while capitalizing on the brand strength identified in this SWOT analysis. The design of McDonald’s business structure (organizational structure) affects the direction of new consumer goods operations.

Threats (External Factors)

The threats to McDonald’s are based on competitive rivalry, sociocultural trends, and economic or ecological conditions. This aspect of the SWOT analysis deals with the external strategic factors that limit the fast-food company’s business development. The main threats to McDonald’s business are as follows:

• Aggressive competition in the market for fast food and consumer goods
• Healthy lifestyle trends
• Food supply disruptions

Aggressive food service competitors threaten McDonald’s and impose a major strategic challenge relevant to this SWOT analysis. The company competes with other fast-food firms, such as Burger King , Wendy’s , and Subway. McDonald’s food and coffee business, McCafé, also competes with Starbucks , Dunkin’, and Tim Hortons. These food service companies maintain the strong external force of competition. Furthermore, PepsiCo ’s caffeinated beverages and Unilever ’s Bru coffee products, which can be bought online in various countries, intensify the competition with McCafé merchandise. The Five Forces analysis of McDonald’s Corporation determines that this competitive force strongly affects the company.

Healthy lifestyle trends are also a threat relevant to this SWOT analysis. This external strategic factor refers to sociocultural movements that discourage consumers from eating fast food, such as McDonald’s. This trend emphasizes the importance of product development to satisfy evolving food preferences. The PESTEL/PESTLE analysis of McDonald’s Corporation reflects such a social trend affecting the food service industry. The company already has some programs testing the business potential of vegetarian burgers, but this SWOT analysis views the external factor as a threat because such programs have a limited rollout scope. Additional efforts for addressing this threat can contribute to the success of McDonald’s CSR and ESG strategies for satisfying stakeholders , including consumers.

This SWOT analysis also includes food supply disruptions as a threat to the fast-food restaurant chain. McDonald’s stability depends on the stability of food supply, which relates to the stability of the agricultural sector. Pandemics and other crises can weaken food supply and, as a result, threaten the food service business. Thus, this SWOT analysis highlights the importance of strategies for ensuring the reliability of the company’s supply chain and its access to input materials for the restaurant business.

Insights and Recommendations – McDonald’s SWOT Analysis

The threats and opportunities shown in this SWOT analysis point to potential improvements to McDonald’s business. The company suffers from the weakness of low or insignificant vertical integration, and faces threats, such as healthy lifestyle trends and supply chain disruptions. However, these issues come with opportunities for improving McDonald’s. For example, this SWOT analysis shows the business opportunity for vertical integration, which can support the stability of the supply of food and raw ingredients. Also, the company can offer improved products, such as better burgers, to satisfy consumers’ concerns about the health effects of fast food. Moreover, this SWOT analysis indicates the recommendation for increasing McDonald’s consumer goods operations with support from the competitive advantage of brand popularity to encourage customers to buy McCafé and new consumer goods from the company.

• Alexander, T. (2023). Unwrapping the McDonald’s model: An introduction to dynamic social theory. The Journal of American Culture, 46 (3), 232-241.
• Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis applications: An integrative literature review. Journal of Global Business Insights, 6 (1), 55-73.
• Mbatha, V. D., Koopman, A., & Chuchu, T. (2023). Examining the Impact of Sensory Marketing on Young Consumers: A McDonald’s Case Study. International Review of Management and Marketing, 13 (3), 16.
• McDonald’s Corporation – Food Quality & Sourcing .
• McDonald’s Corporation – Form 10-K .
• McDonald’s Corporation – Our Commitment to Quality .
• McDonald’s McCafé at Home .
• U.S. Department of Agriculture – Economic Research Service – Food Service Industry Market Segments .
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McDonald's: A Case Study in Glocalization

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The purpose of this research report was to assess McDonald's globalization strategy. We examined McDonald's strategy across six dimensions: menu, promotion, trademarks, restaurants, employees, and service. We also compared the company's performance across these six dimensions in 10 different countries: Saudi Arabia, France, the United Kingdom, Greece, Brazil, Indonesia, India, China, Japan, and New Zealand to measure McDonald's success in capitalizing on globalization and localization. As discussed in this report, McDonald's is a global brand through its worldwide standards and training operations, but the company is also local, with its franchising to local entrepreneurs, locally sourcing food, and targeting specific local consumer market demands. McDonald's is an excellent example of blending global with local - an organization that has glocalized very successfully.

Introduction and Purpose

McDonald's has been serving fast food to America since 1955 and has grown into one of the world's leading fast food giants. Today, McDonald's is the leading global foodservice retailer with 1.7 million employees and more than 34,000 restaurants in 119 countries serving nearly 69 million people each day (McDonald's, Annual Report, 2012).

Not too long ago people believed McDonald's would become "a lumbering cash cow in a mature market" (Serwer & Wyatt, 1994). However, its success abroad has offset the maturing market in America. In fact, 65% of McDonald's sales came from international revenues (McDonald's, Annual Report, 2012.) Its worldwide operation concentrates its global strategy, "Plan to Win," and on customer experience, which includes people, products, place, price, and promotion.

This paper will compare McDonald's marketing strategy to determine how well it capitalizes on both globalization and localization. It will look at this strategy by examining ten different countries: Saudi Arabia, France, the United Kingdom, Greece, Brazil, Indonesia, India, China, Japan, and New Zealand, across six different dimensions: menu, promotion, trademarks, restaurants, employees, and service.

McDonald's: The American Standard

The McDonald's American model focuses on fast and convenient service with high purchasing turnover. Its recognizable bright red and yellow colors with the iconic golden arches reaching into the sky offer Americans a piece of the familiar in a foreign country. "Our goal is to become customers' favorite place and way to eat and drink by serving core favorites such as our World Famous Fries, Big Mac,...

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Jun 07, 2023

McDonald’s: Through the Golden Arches to Global Dominance

Case Studies

by Conor Ward

Posted on Jun 07, 2023

In marketing theory and analysis, we often stress that a brand is much more than just a logo. There are many factors involved when it comes to developing one that’s instantly recognizable (product offering, mission, tone, messaging and customer experience ). 

But, McDonald’s is a brand that’s inextricably linked to one particular brand element: its Golden arches logo. It’s a powerful and meaningful image, built up over decades that evokes familiarity and a sense of fun for many customers.

Let’s look at how McDonalds used marketing and innovation to become a leading brand in a competitive market. We’ll also look at some of the challenges faced and consider  how the company continues to modernize and adapt to embrace the changing digital landscape including artificial intelligence .

The Origins of Empire

Brothers Richard and Maurice McDonald  opened the first McDonald’s restaurant in San Bernardino, California in 1940. The restaurant’s early years’ success led the brothers to franchise their concept to further locations, and the Golden Arches logo was first introduced in 1953 in Phoenix, Arizona.

Ray Kroc, a Chicago native and distributor of a milkshake mixing machine, visited the McDonald brothers in 1954, which led to him becoming their franchise agent. Kroc  ended up buying the rights to expand McDonald’s throughout the US.

How McDonald’s Built a Global Brand

Kroc’s ambition was to bring the company to a larger scale which he did largely through clever and creative marketing. 

Kroc - subject of the 2017 film The Founder - established a partnership with Coca-Cola in 1955 to be the McDonald’s beverage supplier, a key alliance which has endured to this day and helped drive both companies to global expansion.

One standout piece of marketing to drive this growth was the “Look for the Golden Arches!” campaign, introduced in 1960. With the logo gaining increased prominence and traction, this message was genius in its simplicity.

Ronald McDonald was introduced in 1965, and the character began appearing in advertising to target their audience of children, adding that all-important element of fun: albeit one that hasn’t continued so well into this century, despite going through a 2012 makeover.

The company ramped up its advertising campaigns during these years, involving major spending on media – TV, radio and newspapers – with billboards and outdoor signage also playing a role in building brand awareness. The emergence of McDonald’s as a major brand coincided with the golden era in TV advertising, and the company leveraged the medium to its advantage.

Another arena for brand exposure is McDonald’s ongoing sponsorship of sporting events, such as the FIFA World Cup, although their 41-year partnership with the Olympic Games ended in 2017 due to heightened competition, the need to fund menu changes and tech improvements along with bad press for selling ‘junk food’.

McDonald’s Braves Stormy Waters

The company has often been the focus of controversy over the years. As its power and prominence have grown, its business practices, environmental record, working conditions, and health issues have come under the microscope.

In 1990, activists from a small group known as London Greenpeace distributed leaflets entitled ‘What’s wrong with McDonald’s?’, criticizing its environmental, health, and labor record. The company sued them for libel and the case turned out to be the longest running legal action of all time in the UK, referred to as the ‘McLibel’ case .

Morgan Spurlock’s 2004 documentary ‘Super Size Me’ claimed that McDonald’s food was contributing to the increase of obesity in society, and the company was failing to provide nutritional information to its customers. Just weeks after the film premiered, McDonald’s announced that it was eliminating the super-size option from its menu, and creating the adult Happy Meal. Aside from nutritional and health issues, McDonald’s has been a key target of the “Fight for $15” movement which started in the U.S in 2012 as a ground-level push from fast-food workers who started to walk off the job in an effort to raise the minimum wage. Their efforts have had some effect, with 22 million workers seeing raises, and the issue is expanding  into other sectors, like the “gig economy” and ride-share workers.

Modernization and Improving Image

Coming into the 21st Century, the company worked on addressing its deficiencies, improving its image and keeping up to speed with technologies. McDonald’s published its first ever Social Responsibility Report in 2002.

The tagline “I’m lovin’ it”, launched in 2003, has been a success, enduring in marketing campaigns ever since. Menu items continue to change according to health and environmental trends. The brand’s charity work is well known, like the ‘McHappy Day’ annual event and the Ronald McDonald House Charities. The corporate website highlights many areas of the company’s corporate and social responsibility , like climate action, beef sustainability, packaging, diversity, recycling and more.

Most recently—under the leadership of current CEO Chris Kempczinski—the brand rolled out its pivotal “Plan For Change”: an engaging and informative piece of content that outlines key objectives surrounding its revamped net zero emissions, sustainable food sourcing, efficiency, and inclusion and diversity initiatives.

Digital Transformation and Investment

" How do you transition from mass marketing to mass personalization? To do that, you’ve really got to unlock the data within that ecosystem in a way that’s useful to a customer. " - McDonald’s CEO Steve Easterbrook

McDonald’s is in the midst of a digital transformation , adapting to new trends and leveraging technology to its advantage.

Pioneering AI decision technology

In 2019, McDonald’s purchased big data start-up Dynamic Yield Ltd, becoming one of the first global restaurant brands to integrate decision technology into its restaurants. 

By leveraging its AI technology, McDonald’s enabled personalization in its drive thru menu and in-store kiosk displays by showing relevant items based on factors such as the weather, time of day or regional preferences. While Dynamic Yield was sold to Mastercard in 2022, McDonald’s will continue to scale and integrate the technology to further enhance customer experience. 

However, some customers were not fans of this new software, Ren Adams (@resinsbiren) made a drive thru order only to have the passenger’s order who pulled up beside her also included! Other users have reported mishaps with the AI technology adding multiple orders or misinterpreting requests. 

Customer Loyalty

Its ‘My Rewards’ app is so successful that in 2021 alone it earned 100% more downloads than its main loyalty competitor, Starbucks.

By developing a cohesive eco-system based on automated technologies, the brand plans to drive extra loyalty from its existing customers while creating a far more bespoke experience by tracking key insights from digital menus, food collection points, and mobile app interaction.

Speaking on the initiatives, McDonald’s President and CEO Chris Kempczinski, explained:

“Digital changes everything. So today, with 90% of the customers coming into my restaurant, I don’t know who they are. I don’t know their prior purchase. I don’t know what their buying pattern is. As I get better and better visibility into that customer, I can actually track and identify their preferences over time.”

The idea here is not only to drive an immense level of personalization , but to also improve operational efficiency in a way that improves output as well as speed of service.

Driving centralization

McDonald’s has centralized its digital strategy for its social media accounts, simplifying their entire social operation, and allowing them to respond to customers in a personalized manner. 

The launch of McDonald’s global brand hubs , a series of offices around the world, employs a ‘follow the sun’ model of engagement to track and interact with customers in real-time, on a constant basis. With thousands of brand mentions a day to deal with, this forms a key part of the digital strategy.

Inspiring communications and campaigns

Recent advertising campaigns have focused on advances in customer experience and digital innovations, highlighting how the brand is making life easier for customers. 

The brand’s most recent forward-thinking campaigns include its artistic ‘McDelivery Pins’ print billboards, its star-studded influencer-led ‘Wanna Go To McDonald’s?’ initiative, and its quirky ‘Raise Your Arches’ campaign.

Spearheaded by British filmmaker, Edgar Wright, this stand-out video ad likens raised eyebrows to the famous Golden Arches.

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Amplified by the hashtag #raiseyoureyebrows, the campaign has earned droves of engagement from various channels.

By partnering up with trending celebrities for its Famous Orders collaborations - including its Travis Scott Meal and J Balvin Meal - McDonald’s has tapped deep into the consciousness of Gen Zers while boosting in-app loyalty exponentially in recent years. In fact, the app installs skyrocketed by 23% during the initial week of its big BTS Meal promotion. No small feat in such a saturated industry.

However, McDonald’s has reprioritized its advertising budget in a bid to get more value and efficiency from its spending. A reduction in overall ad spend (a drop from $98.7 million in 2014 to $63.8 million in 2022) as well as more focused campaigns has proved to be a winning approach.

Tapping into community

The lion’s share of McDonalds’ traffic comes from organic search, direct engagement, and paid advertising—but what’s particularly interesting is the fact that community platform Reddit is one of the brand’s most engaged social channels.

It appears that the colossal impact of its various marketing initiatives, irresistible consumer deals, and commitment to making change has resulted in an ever-growing online community where fans share thoughts, opinions, and insider McD’s hacks. 

This Subreddit provides the brand with access to no end of consumer insight for future marketing initiatives while offering an opportunity to connect with its audience on a personal level.

This video ad showcases McDonald’s ability to tap into memorable everyday moments to position the brand as a fast food purveyor for the people. With a wealth of content, from the funny and inspirational to the enlightening and educational, McDonald’s also earns healthy levels of engagement from its YouTube channel .

McDonald’s: Analysis and Final Thoughts

The digital revolution represents a major challenge for McDonald’s, a brave new world where it needs to adapt to remain strong and profitable. The company is showing that it’s up for that challenge, however, making some smart moves in order to stay ahead of the chasing pack. 

“Long-term vision and commitment to staying the course goes a long way. Too many digital transformation projects are launched with the flawed expectation of jam tomorrow. McDonald’s is chasing the digital secret sauce over a far more pragmatic time frame,” according to digital commentator Stuart Lauchlan.

Millions of people continue to engage with, and buy from, the company daily. It’s an incredible success story, and it will be interesting to see how this powerful brand will continue to evolve.

Published 2019, updated 2023

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Conor is a content producer and writer, and former Membership Content Executive at the Digital Marketing Institute. In that position he played a key role in building and managing an extensive library of specialist digital marketing content for the Membership platform. He is an experienced writer and editor, both for print publications and digital platforms, with a passion for content marketing, major brands and career topics. He can be found on LinkedIn here . 

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McDonald’s Branding Strategy and Marketing Case Study

Analysis and examples of mcdonald’s identity, positioning, key messages, tone of voice, brand archetypes, customer benefits, competitors, and marketing content..

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Brand Overview

• Food Service

Business Type

Physical Products

https://www.mcdonalds.com

Target Customer

Classic Fast Food Consumers

Primary Need ( Job To Be Done )

Eat the same fast comfort food I’ve had my whole life

Brand Visual Identity & Content

Primary brand colors, brand typefaces, hero content.

Hero Content Type

Content features people, brand messaging, key messages, benefit or feature focus, tone of voice, brand archetypes.

( Learn More About Brand Archetypes )

Everyperson

Brand Positioning Strategy ( Elements of Value )

( Learn More About The Elements of Value )

Aspirational

Affiliation / Belonging

Sensory Appeal

Reduces Cost

Brand Benefits

Get nearly the exact same meal from any location around the world

Eat and share the same meals that I’ve had my entire life

Save money on a quick meal that fills me up

Competition

Key competitors.

Burger King , Wendy’s, Jack In The Box, Carl’s Jr., Chipotle , Arby’s, KFC, In-N-Out, Five Guys, The Habit, Taco Bell , Subway

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How McDonald's Became The Benchmark For Fast Food

Table of contents.

The McDonald brothers developed a system to make it all happen. Yet we know them for Ray Kroc, who created one of the world's largest chains of restaurants, real estate and toy retailers, while 'outmaneuvering' the founders. 

Although McDonald's has not been the largest fast-food chain in the world since 2011, it is still the best-known brand. Even in Israel's Negev Desert, 100 kilometers from the nearest city, there is a restaurant, because franchising has given the company such a huge boost worldwide. 

A few key facts about McDonald’s:

• The Kellogg Company was founded in 1940. 
• McDonald’s and its franchise partners employ more than 200,000 people globally.
• McDonald’s reported $8.1 billion in sales by corporate-owned restaurants and $10.7 billion by franchise partners .
• The gross profit in 2020 was $4.7 billion .
• Global comparable sales decreased 7.7% in 2020 , mainly due to the COVID-19 pandemic.
• McDonald’s spent over $100 million on the international markets to boost marketing in hope of recovery. 
• McDonald's operates more than 39,198 restaurants in more than 100 countries around the world .

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You Don’t Sell Burgers! It’s A Real-Estate Business! 

The first burgers.

Richard (Dick) and Maurice (Mac) McDonald opened their first diner together, a hot dog stands in Monrovia, California, in 1937. Later, in 1940, they moved to nearby San Bernardino and opened McDonald's Bar-B-Que. Over time, the eatery became more popular and profitable, but the brothers realized they could cut a lot of costs if they rethought their concept. They developed a series of revolutionary ideas and strategic measures that proved to be closely linked: reducing the range of products, preparing ingredients properly, keeping potatoes warm with an infrared lamp, and building a kitchen where food could be prepared more quickly. They also encourage people to take their orders and target families rather than young people.

In 1948, the McDonald brothers closed a well-established restaurant and reopened it a few months later with a slimmed-down menu - and by then under the McDonald's name. They realized that most of their income came from selling burgers, so they reduced the selection to almost nothing. (To give you the full picture, the fries and milkshakes were replaced with French fries and patties for a short time.)

Effectiveness above all

Kitchen work was sped up by having only two things to bake. Washing up was also kept to a minimum, as the food was served in disposable packaging. In 1952, the restaurant was closed again for several months to remodel the kitchen so that food could be served more quickly and efficiently than before. The new kitchen and associated system allowed all orders to be filled in as little as half a minute. Since the operation was supported by the "fast system," it's not hard to guess where the term "fast food" came from.

McDonald's goal at the time was to get people to store there, but not to eat there, but to take something there. This was achieved not only by the packaging of the products but also by the fact that there was no built-in canteen in the first restaurant; if you did not want to take what you bought home with you, you could either eat your lunch in your car or sit on a bench nearby. For a while, they also experimented with serving drinks in cone-shaped cups that customers could not put down, which encouraged them to eat faster.

Thanks to this incredibly efficient and fast operation, they were able to sell burgers for 15 cents - about half the price of other places. The fast service, consistent quality, and low price amply compensated customers for the inconvenience. Soon, the McDonald brothers wanted to open more restaurants, but they were not nearly as successful as their first location. The reason was simple: they could not be everywhere; they could only be personally responsible for quality assurance at the first restaurant. At the same time, the oldest McDonald's still in operation today opened in Downey, California.

The arrival of Ray Kroc

The brothers realized that they did not necessarily have to open new locations themselves to expand, but that others would do it for them. So in 1948, they began to reform their business model and set up a franchise system. By 1954, they had sold the royalties from 21 franchises. 

1954 marked a turning point in the McDonald brothers' lives. To further speed up service, they ordered a new type of mixer that could ensure the preparation of multiple servings at once. The order put them in contact with Ray Kroc, a travel agent. Kroc was amazed at how efficiently the restaurant operated. He wanted to get into the business and eventually convinced the brothers to make him their franchise representative. From then on, he was in charge of who and where they could open new restaurants.

The new buildings were now built the way the McDonald brothers envisioned their dream restaurant. A clean, red and white exterior with a neon yellow golden arch on either side of the building attracts potential clients (aka bypassers) to the restaurant. The juxtaposition of these two golden arches became the familiar Meki logo, which also forms an "M," a reference to the initials of their name. It took on a similar look to today's image after Ray Kroc became the owner, or rather founder, of the company.

In 1955, Kroc founded the forerunner of today's McDonald's Corporation (McDonald's System, Inc.) and opened its first new restaurant. The first was followed by the second, the third, and within a year, the 18th. Kroc was entitled to 1.9% of gross sales for each of these restaurants, but under his agreement with the brothers, they were entitled to 0.5%. He could barely cover his expenses with the remaining amount. Then he met Harry Sonnenborn, who gave him a new perspective: McDonald's was in fact a huge real estate business.

Turn of events

Sonnenborn encouraged Kroc to buy the land on which he wanted to build restaurants and then lease it to operators. Kroc listened to him and took the biggest step toward owning the entire chain. This way, he received a steady stream of income and did not have to give any of it to the McDonald brothers. The latter, of course, was not happy about this situation. Everything in the restaurants had to continue to be done the way the brothers wanted, although Kroc tried to introduce several innovations. Finally, in 1961, Kroc bought out the brothers for $2.7 million. To raise this sum, he had to take out loans, 14 million of which he was later able to repay.

Years of rapid expansion

As part of the agreement, the brothers would continue to own the restaurant in San Bernardino, but they had to change the name because Kroc already owned the naming rights to McDonald's. So they continued to run the restaurant under the name "The Big M," but Kroc was upset that he could not have it. Soon after, he opened a Meki just around the corner from the M, which allowed the McDonald brothers to close the location in a few years. They probably regretted the deal for life, because, with their 0.5% share at the time, it would have guaranteed them $15 million a year until the late 1970s, while their heirs would have received $305 million in 2012. And Kroc probably got a good deal on that loan.

By 1965, the company was operating more than 700 restaurants. That year, they went public. McDonald's stock started at $22 a share, but within a week the price had risen to $49. By the end of the decade, they had 1,500 restaurants worldwide and has started at Sonnenborn's suggestion, they continued to own the land on which the Meccas operated. Now they are looking for new land with fairly high standards: it should be about 4,600 m2, with the possibility of building on 370 m2, and located on the corner of at least one, but preferably two, busy roads.

Also in 1965, the then very limited offer was expanded: the Filet-O-Fish sandwich was added to the national menu. The fish burger was invented to give Catholic customers a choice during Lent. In 1968, the Big Mac, the iconic double-decker burger, was introduced. The Egg Muffin was introduced in 1975, the Happy Meal in 1979, and Chicken McNuggets in 1983. Of these, the Happy Meal is perhaps the most interesting, as it has made McDonald's one of the largest toy sellers in the world: 1.5 billion toys are sold each year thanks to the Happy Meal.

Ray Kroc never stopped working for McDonald's until he died on January 14, 1984. To this day, McDonald's provides its customers with great-tasting, affordable food, franchisees and crew members with job opportunities, and suppliers with reliable ingredients and products.

Key takeaways

Successful market penetration does not always require a complete upheaval of the rules of the sector. The McDonald brothers did not invent any truly new dishes, but they did let awareness guide the design of their restaurants. So the number-one success factor for McDonald's is professional design and process management.

The second success factor is sales behavior. While other restaurants were slower to offer their products, the excellent policies encouraged employees to sell customers as many extras as possible. Even today, "go big" accounts for a significant portion of restaurant profits (industry rumors say 40%). 

The third approach is the real estate-based approach. The franchising system that Ray Kroc perfected is still used today, and we know from the annual report that the company makes more revenue from franchisees than it can generate itself.

The McDonald’s Products

Core products.

McDonald's core products include burgers, which typically consist of a slice of beef, cheese, and sauce sandwiched between two halves of a bun - in all combinations and sizes. The smallest product is the standard burger, while the largest is the Big Mac. The sandwiches are available with chicken and fish, as well as localized versions in many countries around the world.

Core products include French fries, which also come in a variety of sizes. In addition, the Happy Meal menu specifically for children, as well as shakes and soft drinks, continue to be an integral part of fast food restaurant menus in almost all countries. According to market research , an average McDonald’s menu includes around 145 items. 

Seasonal products

National holidays, Halloween, Christmas, or even Easter - whatever the occasion, McDonald's introduces new seasonal products every month in every country around the world. Some are country- or region-specific (for example, the foie gras sandwiches are made specifically for the European audience), but most products are available in other countries after a limited local testing period. 

Typically, a traditional product, such as a standard burger, is enhanced with additional ingredients (e.g., spices, additional meat, or a special design) to reflect the seasonal event.

Localized products

McDonald’s has achieved this global success through maximizing localization techniques and appealing to local audiences. The company manages the menus to fit culturally and socially accepted norms; tailoring their traditional Big Mac meals to suit a local audience with specific requirements.

• Argentina: McFiesta burgers are available at McDonald's restaurants in Argentina, which are quarter pounders with mayo instead of ketchup. There are typical US sides here like French fries and Coca-Cola. Consider getting ice cream in an Oreo cone for dessert.
• France: Typically, you'd find the McBaguette combo at Mcdonald's in France - a sandwich that is topped with two hash browns and includes breaded chicken, ham, and cheese. The 'Le McWrap' and the 'Le Menu Happy Meal' are also available. Try their apricot and lime macarons for dessert, or their cherry tomatoes as a side dish.
• Hungary: In Hungary, specialized seasonal menus are very common, both in terms of ingredients and appearance. This is also facilitated by the fact that, since 2019, Hungarian McDonald's restaurants have been managed by a centralized, Hungarian-owned company, while the American McDonald's company provides only the brand and franchise rights. Foie gras is a regular item on Hungarian menus, as is "Dotted McFlurry" (a cottage cheese-based ice cream) made in cooperation with a very popular local dairy supplier. ‍
• India: McDonald's has created the Maharaja Mac by substituting chicken patties for the traditional beef patties in its Big Macs. In India, cows are regarded as sacred animals, thus the reasoning behind this change. Indians also enjoy the Vegetable Pizza McPuff, a unique side dish. However, fries and Coca-Cola are just as popular here as they are everywhere else.

• Middle East: Specifically for Middle East dining, Mcdonald's has created the McArabia Pita, which is served with beef or chicken patties (pork is not allowed in the predominantly Muslim diet), onions, and tahini sauce. 
• New Zealand: Despite being removed from the permanent McDonald's menu in New Zealand, the 'Georgie Pie' is still available in some restaurants. With fries and frozen Coke, a square pie topped with steak and cheese is served.
• Sweden: Scandinavian countries tend to favor healthy diets, especially vegetarian food. McDonald's capitalizes on localization with its vegetarian McBean Patty. Served in a bun with lettuce, tomato, and sauce, it has cannellini and kidney beans, onions, green peppers, and carrots.
• Thailand: There is a Samurai Pork Burger on Thailand's national McDonald's menu, which is a pork patty dipped in teriyaki sauce with lettuce, onions, tomato, and mayonnaise. Besides the usual apple pie, you'll also find corn and pineapple pies that aren't available anywhere else.

Partnerships with other companies

• Coca-Cola: The story of McDonald's and Coca-Cola began in 1955 when the fast-food restaurant was looking for a soft drink supplier. The partnership has continued ever since, with Coca-Cola selling not only soda but also other products to the restaurant chain.
• Oreo: Oreo is a worldwide popular dessert brand that mainly produces biscuits. The filled biscuits have become so popular that McDonald's has become a major supplier of Oreo to Mondelez International. In most countries, the biscuit pieces are served with ice cream, but in 2019, McDonald's China team tested the market with a burger with spam and Oreo biscuits . (It was not a global hit.)
• Beyond Meat: The trend toward vegetarian diets is spreading like wildfire around the world, and McDonald's is no stranger to it. According to the BBC , the McPlant burger will be available in British and Irish outlets as early as next year. The beef patty, made with pea protein, is available in 10 restaurants in Coventry, England, in the first round since the end of September, and then throughout the United Kingdom next year. The product's main ingredient is made for McDonald's by Beyond Meat, a publicly-traded startup.
• Local suppliers: Whether we're talking about the US or any other country in the world, one of McDonald's main and most forward-thinking efforts is to source its ingredients from local suppliers. To ensure that the fish, meat, or burger bun is always made to the same standard, McDonald's applies incredibly strict and centralized guidelines. 

Healthy or not healthy?

The restaurant chain has made great strides in the area of healthy eating in recent years: think supply chain with only local suppliers or the introduction of gluten-free, lactose-free, and vegetarian options. The calorie content of a hamburger today is much lower than that of a burger from 1980. In addition, the McDonald's team places great emphasis on healthy living - and they are trying to recruit new colleagues who will promote this corporate image. But that's just one side of the big picture.

A very interesting post came to light in 2008 when Karen Hanrahan revealed a shocking picture. Out of curiosity, she had set aside a McDonald's burger she bought in 1996 to see how quickly it would disintegrate (since there were theories about "plastic" foods in the past). After 12 years, the burger looked exactly like the one she had just bought, except it had shrunk a bit.

Although this is not part of the company's strategy, the following sources have been criticized the company:

• Jamie Oliver and his legal battle against the company
• Super Size Me , a movie in which the protagonist eats only McDonald’s products 
• In 1986, Greenpeace distributed flyers against obesity, naming McDonald’s among the ones responsible.
• There are also a lot of myths (most of them already busted) around the company’s procedures and products.

The product portfolio is the company's strength, so it's no wonder McDonald's is constantly improving and perfecting its recipes. Although the company has yet to build its healthy food image, its fast service and delicious, robust flavors win over millions of customers every month. 

The range includes flagship products available in all restaurants (except were banned for religious or legal reasons). These include traditional burgers, fries, and cola.

The company also diversifies its menu with seasonal and localized items. In the latter category, offerings vary from country to country and region to region, usually in partnership with local businesses and brands.

Franchise System

What is a franchise system.

Franchising has spread throughout the world not as a separate form of business, but as a special kind of business.

Franchising is a form of business based on close cooperation in which the franchisor or the owner of the system sells a complex system that has been carefully designed professionally and commercially in every respect and successfully tested in a market environment. The system is handed over to the franchisee with full training, branding, and ongoing support and supervision. Franchisors operate the franchise system to the specifications of the transferor, in the agreed territory, for a fee, for a fixed period.

McDonald’s Franchise Costs & Requirements

When purchasing an existing restaurant or a new restaurant, an initial down payment of 40% is required. Down payments must be made from non-borrowed personal resources, such as:

• cash on hand
• vested profit sharing
• business or real estate equity

The down payment amount will vary depending on the total cost of the restaurant. McDonald's generally requires $500,000 of non-borrowed personal resources before considering a new franchise partner. With less cash available, most opportunities to participate in the program are limited and depending on the transaction's specifics, financial requirements may be much higher. Additional or multi-restaurant opportunities may be more available to those with additional funds.

Franchise financing

To purchase a McDonald's restaurant, the buyer must pay a down payment of at least 25% cash. It is possible to finance the remainder of the purchase price for a period of up to seven years. Although McDonald's does not offer funding the project, McDonald's Owners/Operators benefit from established relationships with many national lenders.

Franchise - Ongoing Fees

• Service fee: Currently, a service fee of 4.0% of monthly sales is based on the restaurant's sales performance. 
• Rent: Rent that is based on a percentage of sales monthly.

Other costs of setting up a new franchise

Costs usually range from $1,2 million to $2,2 million. Most of the costs are related to the construction of the restaurant, such as building and interior design, but the franchisee also pays for equipment, furniture, and kitchen appliances.

General franchising strategy in 2021

McDonald's restaurants provide quality food and beverages in 119 countries, which are franchised and operated by the company. At year-end 2020, McDonald's will have 39,198 restaurants, of which 36,521 are franchised, or 93 percent.

McDonald's franchise restaurants fall into one of the following categories: conventional franchises, development licenses, and affiliates. Optimal ownership structures for restaurants, trading areas, and markets (countries) depend on a variety of factors, including financial resources and entrepreneurial abilities, as well as legal and regulatory frameworks in key areas such as property ownership and franchising. McDonald's business relationship with independent franchisees is governed by standards and policies, which are of fundamental importance to the company's performance as well as its brand protection.

McDonald's franchise partners are not financial investors, but committed partners who not only put up the capital to open a restaurant, but are also willing to participate in the day-to-day operations and running of the restaurant. They know all the ins and outs of the business, but they also reinforce the McDonald's brand through their involvement in the local community.

The potential partner does not have to have a suitable location, as the location of the restaurants is always determined by the company and handed over to the franchisee.

The Company’s Old/New Strategies

Accelerating the Arches is the Company's new growth strategy for 2020. As the leading global omnichannel restaurant brand, McDonald's Strategy encompasses all aspects of the company's business as well as updated values and new growth pillars that leverage the company's competitive advantage.

Growth Pillars

• Marketing: Investing in new, culturally relevant marketing approaches to effectively communicate the brand's story, food, and purpose. Customers will be provided with more personal services through enhanced digital capabilities. 
• Products: Focusing on serving delicious burgers, chicken, and coffee. Chicken and beef will be the company's primary focus as they represent the largest growth opportunities. McCafe’s brand, experience, value, and quality will be leveraged by the markets to drive long-term growth for McDonald's.
• Digital, Delivery, and Drive-Thru: McDonald's plans to accelerate technology innovation to meet the needs of customers as they interact with the company.
• Digital Experience: Known as "MyMcDonald's", the new digital experience platform will transform the company's digital offerings across drive-thru, takeaway, delivery, curbside pickup, and dine-in options. Through the digital tools available on the platform, customers will receive tailored offers, will be able to enroll in a new loyalty program, and will have the option to order and receive McDonald's food using their preferred channel. 
• Delivery expansion: McDonald's has expanded its delivery service to nearly 30,000 restaurants in the last three years and plans to expand further.
• The increasing importance of Drive-Thru: More than 25,000 restaurants globally have drive-thrus, including nearly 95% of the over 13,000 in the U.S. This channel has gained in importance since the COVID-19 outbreak, and leadership expects that it will play an even greater role as customers demand more flexibility and choice. In the U.S. and International Operated Markets, the vast majority of new restaurants will have a drive-thru. In addition to automated order taking, the Company plans to test a drive-thru express pick-up lane for customers with digital orders and a restaurant concept that offers drive-thru, delivery, and takeaway only for customers to enjoy a faster and more convenient experience.

For decades, McDonald's sales efforts focused on the cash register and drive-thru. One of the strongest elements of this was the introduction of the "Go Large" theme. By sizing and pricing the products, even those who had no real need chose the largest product, believing it to be the best and most appropriate offering. 

Today, in addition to physical sales, digital sales have become a priority. An app developed by the company not only speeds up the ordering process but also offers additional discounts that can further increase the cart value per customer.

With the introduction of home delivery, McDonald's has begun working with several partners including UberEats, FoodPanda, and Wolt. For a long time, these online marketplaces did not offer fast food products like McDonald's, but they have now become serious players in the market. The company's offering is particularly strong when it comes to speed: on average, food is delivered in 15-20 minutes, compared to 50-80 minutes for a traditional restaurant.

There are several cornerstones of the company's marketing strategy that have contributed greatly to McDonald's success:

• The Ronald McDonald figure: An owner of a McDonald's franchise introduced Ronald McDonald in 1967. To appeal to children, franchise partners decided to use a clown icon as an advertising tool. 96% of American children knew the name Ronald McDonald by 1973. Ronald McDonald is the second most recognizable fictional character among US schoolchildren, behind Santa Claus.

• The McDonald’s logo: There's no doubt that McDonald's golden arches are one of the most recognizable logos in the world. It was created in 1940. During the '60s, McDonald's decided to simplify their logo and focus on branding the company. A brilliant move was choosing the golden arches as the logo for the fast-food restaurant. The McDonald's logo looks very much like two golden-brown French fries bent into a letter M, and this is one of the most effective design features of the logo. McDonald’s is advertising one of its most popular menu items without viewers even noticing it.

• “Para PaPa Paaaa… I’m lovin’ it”: McDonald's has been using this jingle for a very long time. McDonald's jingle highlights a positive dining experience. The musical theme makes the diners feel at home during their meals there, as well as conveys how friendly and helpful the staff is.
• Promotion campaigns: Television advertising has become a favorite field for all fast-food restaurants with the proliferation of TVs. To this day, McDonald's is a loyal advertiser on channels aimed at children and their parents. Its campaigns focus on delicious food, fun, natural ingredients, and health. 

The company is one of the biggest innovators in the food industry and is credited with inventing or perfecting the following:

• McDonald's put in place order-taking kiosks in 2015, making it one of the first fast-food chains to do so. A touchscreen machine located near the front of restaurants lets customers place their orders without the need for a cashier.
• The introduction of specialty coffee at McDonald's changed McDonald's from a fast-food restaurant to something more. McDonald's introduced its specialty coffee line in mid-2007.
• The company separated a part of larger restaurants and re-branded it as McCaffes, a place where customers can buy coffee and desserts. Now it competes with Starbucks for coffee-lovers.
• McDonald's was one of the first fast-food chains to organize even the smallest details of its operations in a manual. This manual is still being improved today.

The 2020 growth plan contained nothing new compared to the path taken a year earlier. The key elements were digital customer access, which was a key driver of the company's continued growth during the COVID epidemic.

Sales and marketing go hand in hand at McDonald's: over the past 80-plus years, the techniques used have been perfected, all aimed at getting customers to buy. Advertising builds on this image of cheap and healthy food.

Final Thoughts And Key Takeaways

Growth by the numbers.

McDonald's has seen steady growth since its founding. Because of the relative cheapness of its products, it is a truly crisis-proof company, which even COVID could not bring to its knees - unlike millions of small catering businesses.

The company has emerged from the crisis as a winner, thanks in particular to digital developments, drive-thru, and the spread of home delivery.

Key takeaways from the McDonald’s story:

• Real estate business: The McDonald's business model has evolved from a restaurant to a complex system in a relatively short period, with some revenue coming from franchise fees, some from land leases, and some from food sales. 
• Thoughtful processes: While other restaurants are constantly experimenting with food, McDonald's has focused on improving its production technologies from the beginning. In addition to innovative machinery, internal processes have also been organized to ensure that products reach customers as quickly and consistently as possible.
• Franchise system: Behind the amazingly dynamic growth of McDonald's has been a well-constructed franchise system, the foundations of which were laid by the McDonald brothers, but perfected by Ray Kroc. 
• Core, seasonal and localized products: The main feature of the company's product range is that it is extremely consistent, as we can also get fries and cola in the farthest corners of the world. At the same time, local companies, at their discretion, can launch the menu with seasonal and localized products, enabling them to engage their customers even more.
• Strong marketing: Mcdonald’s has consciously built up the dining experience - regardless of whether we’re eating a hamburger in the car, in a restaurant, or at home. The logo, the iconic clown figure, the company’s theme song, the packaging, the internal design, and many other elements add up to become an unforgettable experience.
• Home delivery: Delivery was the largest innovational step from McDonald’s for decades, and partnering with food delivery startups, like UberEats or Wolt helped the company not only to survive the pandemic but get in shape for rapid growth.

Consumer opinion on McDonald's is certainly divided: some say it's plastic, others say it has grown up to meet consumer expectations. As a publicly-traded company, the owner of the golden arch has no choice but to march forward, pioneering innovation as it has throughout its history. What does the future hold for the company? An even broader product range, a stronger home, and digital experience - and, investors expect, continued revenue growth.

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McDonald's Corporation

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Joshua D. Margolis

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Marketing & Branding

• 17 Apr 2020

McDonald’s Marketing Strategy: What Your Company Can Learn

Effy Pafitis

This article is part of our ‘Marketing Strategies’ series, an in-depth look at how some of the world’s most successful companies promote their brand and their products.

Few global brands are as highly recognisable as fast-food giants, McDonald's. Universally identifiable by its famous brand imagery , meal names, and mascot, McDonald's is a prime example of a business that has successfully leveraged smart marketing to support impressive growth.

As a result, the global franchise now boasts by far the highest brand value of any fast-food company, estimated at a  whopping $130.3bn  as of 2019. Runner-up Starbucks' worldwide brand value pales in comparison, at $45.9bn for the same period.

So how did this once modest hamburger restaurant rocket to lucrative international domination – and how does it stay there? And – most importantly of all – what can modern business owners learn from its approach?

McDonald's Marketing Strategy

Initially founded in 1940 at a single location in California, McDonald's quickly became well known locally for its high-quality hamburgers and satisfactory customer service. Eight years later, it became one of the first restaurants to make the transition from traditional sit-down table service to a fast-food business model and added exciting burger variations and milkshakes to its menu. Spurred on by the success of this development, it launched its first franchise agreement in 1952, a decision that would lead to exponential worldwide growth . Indeed, the company now operates almost 40,000 restaurants across the globe and attracted reported international revenues of  around $21bn  in 2018.

The company focused on broad public awareness from the early stages of its development, aiming to create strong brand recognition and market penetration, upon which to promote its growing franchise business further. As its customer base grew, the company investigated its demographics further, to facilitate targeting.

McDonald's still maintains this approach, investing in online and offline marketing strategies that promote its clear, brand-centric messaging to broad audiences, while using other channels such as its dedicated mobile app to reach and retain loyal customers.

Customer Profile

As a result of its mass marketing techniques and broad appeal as a fast-serving, affordable eatery, McDonald's has a varied consumer demographic . The chain is most frequented by shoppers under the age of 24, as well as between the ages of 35 and 54. Both male and female, buyers typically have low to average incomes, with an affinity for the fast-food industry in general. They are defined as brand-loyal, casual diners, with the average spend per customer estimated at $7.79.

A large proportion of these customers are parents to young children, attracted by the brand's family-friendly atmosphere and menu offering. This particular segment was first targeted through the launch of the Happy Meal in 1979, the hugely popular children's meal package that includes a free, themed toy.

McDonald's confirms its broad target market, stating on its website that it aims to offer a "friendly, fun environment for everyone... to enjoy. This means appealing to families who love our iconic Happy Meal, to workers grabbing breakfast on-the-go or eating in".

The brand collects primary market research data to guide its marketing strategies, and ensure it reaches its identified audience demographic. Surveys and questionnaires are conducted in-store, across its social media channels, and via the McDonald's mobile app, to determine customer satisfaction regarding food quality, service, delivery, and more. Its forum website, McDonald's Community, and other digital channels are also closely monitored to capture interactions with, and feedback left by, customers.

McDonald's invests heavily in billboard and broadcast marketing, utilising a mammoth advertising budget of  over $1.5bn  in the US alone in 2018. Digital marketing campaigns work to complement its offline promotional messaging, bringing consistent content to varied audiences not expected to be reached by outdoor, TV and radio advertisements.

Broadcast Marketing

McDonald's uses TV and radio to engender general brand awareness, as well as promote new menu items, meal deals, and philanthropic initiatives . Its broadcast channels and timings are chosen specifically for maximum viewership and listenership. In fact, McDonald's is estimated to  have spent $52.9m  on TV ad airings in the US during November 2018 – the height of the widely-viewed NFL season – offering an indication of the importance the fast-food company places on securing the most prominent broadcast ad spots.

The company confirms its objective to secure large-scale awareness, stating that, "the majority of our campaigns are communicated to everyone to ensure they have a broad reach. You may have seen us on TV or heard us on the radio!"

Billboard Ads

Traditional billboard advertisements are also widely used by McDonald's, focusing on the same marketing objectives and content as those that underpin its broadcast ads. Ranging from static to digitally interactive billboards, placed in prominent locations with high footfall and visibility, the company endeavours to maintain positive brand perception and affinity among its target audience, as well as associated consumer groups.

This is an excellent example of utilising various promotional techniques that reinforce the same goals, thus encouraging greater overall success, compared to campaigns that are delivered via one method alone.

Outdoor Ambient Marketing

McDonald's also executes creative, captivating outdoor ambient marketing. Ambient advertising is described as placing ad material in extremely unusual or unexpected places, on objects that are not usually utilised for promotional purposes.

McDonald's has adopted this sub-category of guerilla marketing to evoke a more significant impact on consumers. The McDonald's Massive McMuffin Breakfast campaign is an example of this. Throughout 2010, the company placed giant paper McDonald's takeaway bags across prominent streets in New Zealand, labelled with the name of its new breakfast menu item. The unmissable, unexpected imagery drew considerable attention from passersby (supported by the many photos of the spectacle that onlookers shared to social media), successfully raising awareness for the McMuffin breakfast.

Other examples include the brand's street markings across pedestrian road crossings, designed to make the typical horizontal crossing lines appear as though they are a portion of fries, protruding out of a McDonald's branded fries' box.

Digital Marketing

The brand uses online advertising to supports its awareness and demand generation goals. The content utilised online remains consistent with McDonald's TV ad and billboard imagery, though both text and graphics are tailored to ensure maximum performance across the particular social media platforms used, including Twitter, Facebook and Instagram .

Capitalising on the increasing consumer trend of food photography, McDonald's encourages customers to share photos of their meals online, with great success. In fact, McDonald's was the second most pictured brand on Twitter, with  4.9m logo mentions  on the social media platform worldwide between September 2018 and February 2019.

The company also embarks on search engine optimisation (SEO) campaigns, though its organic SEO strategy outweighs paid promotion. As of December 2019, 90.7% of its search traffic to mcdonalds.com was organic, with just 9.3% obtained as a result of paid keywords.

McDonald's proudly adopts a combination of traditional and guerilla marketing styles to promote its advertising messaging to mass audiences, as well as its primary customer base. The company invests almost $2bn of ad spend in conducting creative campaigns across delivery methods. 

A portion of this funding goes to the advertising agencies hired by the brand to execute major marketing campaigns, as well as support geographic segmentation to tailor the varying marketing styles used across international markets. 

Indeed, the brand utilises market research data to make decisions regarding its messaging and menu modification per geographical region. In addition to editing its advertising text to incorporate cultural references, McDonald's seeks to satisfy consumers by offering meals that prominently feature local ingredients favoured by buyers. For example, meals featuring Cypriot cheese halloumi are promoted to the Cyprus and Greece region, benefiting from the familiarity and popularity of this local ingredient among consumers in those countries.

Key Campaign

Despite geographic segmentation, McDonald's brand identity remains as valuable and identifiable in its newer markets as anywhere else in the world. Its infallible brand recognition is evidenced by one of its most simple, yet effective, marketing campaigns: the 'Follow the Arches' 2018 billboard campaign. 

Executed in Toronto, Canada, the restaurant placed directional billboard ads along busy streets and highways, pointing the ads' audiences towards their nearest McDonald's store using phrases such as "on your right", "next exit", and "just missed us". Each billboard featured just a cropped portion of the brand's logo, showing a small section of the golden arches alongside the direction phrase, and backed upon McDonald's trademark red hue. This clever ad demonstrated that consumers did not need to see the full brand logo to recognise McDonald's imagery and associate this with its fast-food offering and value proposition.

Succeeding in increasing customer footfall in close-by McDonald's stores, the campaign was also heralded internationally for its elegant approach, winning the 2018 Outdoor Grand Prix award at the Cannes Lions Festival.

This campaign serves as a wonderful example, showing business owners that effective marketing does not need to be visually complex, or stray far from core brand identity, to garner favourable results.

McDonald's has exhibited impressive growth since its establishment in 1940, in part thanks to its successful marketing strategies that have equipped the brand to expand to new markets. Now boasting almost 40,000 restaurants worldwide, the company leverages its advertising prowess to maintain valuable brand recognition and affinity.

McDonald's uses both online and offline promotional channels to broadcast its awareness messaging to mass audiences, while also leveraging valuable market research to facilitate regional personalisation, and address its customer base.

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Case Study: McDonalds Marketing Strategies

McDonald’s is the world’s largest fast-food restaurant chain. It has more than 30,000 restaurants in over 100 countries. Over one billion more customers were served in 2007 than in 2006. Although net income was down by $1.1 billion in 2007, McDonald’s sales were up 6.8%, and revenue was a record high of $23 billion. “The unique business relationship among the company, its franchisees and suppliers (collectively referred to as the System) has been key to McDonald’s success over the years. The business model enables McDonald’s to play an integral role in the communities we serve and consistently deliver relevant restaurant experiences to customers.”

McDonald’s overall strategic plan is called Plan to Win. Their focus is not so much on being the biggest fast-food restaurant chain, rather it is more focused on being the best fast-food restaurant chain. McDonald’s “ strategic alignment behind this plan has created better McDonald’s experiences through the execution of multiple initiatives surrounding the five factors of exceptional customer experiences — people, products, place, price and promotion”. McDonald’s also incorporates geographical strategic plans. In the U.S., McDonald’s strategic plan continues to focus on breakfast, chicken, beverages and convenience. These are the core areas in the United States. McDonald’s has launched the Southern Style Chicken Biscuit for breakfast and the Southern Style Chicken Sandwich for lunch and dinner. In the beverage business, McDonald’s starting introducing new hot specialty coffee offerings on a market-by-market basis. In Europe, McDonald’s uses a tiered menu approach. This menu features premium selections, classic menu, and everyday affordable offerings. They also “complement these with new products and limited-time food promotions”. In the Asia-Pacific, Middle East, and Africa markets, McDonald’s strategic plan is focused around convenience, breakfast, core menu extensions and value. With McDonald’s overall strategic plan and its geographical strategic plan, the company should start to see more positive financial results.

McDonald’s strategic plan is influencing their marketing efforts by building better brand transparency. They want their image to be recognized globally. They are enhancing the customer’s experience. “Across their markets, they are making is easier for customers to enjoy a great McDonald’s experience. They are introducing drive-thrus to the increasingly mobile populations in China and Russia, while in the U.S. and Canada, greater drive-thru efficiency and double drive-thru lanes enable them to serve even more customers quickly”. In Germany, McDonald’s has a reimaging program that includes adding about 100 McCafes. They are also installing new kitchen operating systems so that they can continue to deliver high food quality . McDonald’s has already renovated about 10,000 restaurants world wide. They want their restaurants to be an expression of their brand. The company is also delivering greater value to the customer with new menu selections. “By serving a locally relevant balance of new products, premium salads and sandwiches, classic menu favorites and everyday affordable offerings around the world, they create value for customers and satisfy their demand for choice and variety”.

Types of marketing mix that McDonald’s use to achieve their marketing goals are longer operating hours, everyday value meals, and optimizing efficiency in the drive-thru. McDonald’s also uses marketing campaigns. In 2007, McDonald’s used the Shrek movie to give children a choice between milk, fruit, or vegetables as part of their Happy Meal. In addition to their commitment with children, McDonald’s is building their brand image “with innovated marketing transporting ideas across borders and using i’m lovin’ it to deepen their connection with customers who love their food and the unique McDonald’s experience”. In the 2008 Olympics held in Beijing, McDonalds offered the Beijing Burger, Carmel and Banana Sundae, and Rice Sticks. They featured nine Olympic and Paralympic athletes on their packaging. In Australia, McDonald’s held a marketing campaign where the people could decide what name to give its new hamburger. The name that won was Backyard Burger. With marketing campaigns like these, McDonald’s is trying to create a better brand image.

With McDonald’s growing global brand image and its emphasis on the five factors of exceptional customer service, this should help them increase sales and net income. With the initiative of remodeling and upgrading existing franchises, this will give the customer a more pleasant and friendly place to dine out at. With McDonald’s marketing campaign for the 2008 Olympics, they were an integral part of the games and this only enhanced McDonald’s brand image in a positive way. With the recruitment and training initiatives for current employees or future prospects, this will allow McDonald’s to achieve less of an already high turnover ratio.

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