Mc Donald’s Marketing Strategy Assignment
Chapter One: Introduction
With the change in time came great innovations, and with great innovations came undeniable freedom. There was a time when the fast-food industry reigned supreme in the lives of people, particularly teenagers and young adults (Hearst et al., 2013). However, the increasing realisations in the matters of health and healthy living have propelled the consumers to think out-of-the-box, not give in to their continual craving for fast food and use their freedom of choice to opt for some healthier alternatives instead (Lesser et al., 2013). While all of this may sound like the perfect thing in the world of food and health, there are also various challenges that come across for the fast-food companies when the ever-loyal masses decide to change their food habits drastically (Manitoba, n.d).
1.1 McDonald’s: A Brief History and Overview
It is quite intriguing to observe how a small fast-food outlet, serving hamburgers at an unbeatable price in the year 1948 grew to be the largest ‘foodservice retailer’ in the global market with outlets in 119 countries across the world (McDonald’s, 2014a). The company attained the multi-national status by catering to around 70 million people each day and employing 1.9 million to assist their ever-expansive business.
The inception of McDonald’s was marked with the opening of a ‘drive-in’ styled eatery in Bernardino, California, in the year 1940. The founders, Dick and Mac McDonald, had already identified some of the key aspects of propagating a successful business in the realm of fast food, some of them being choosing a favourable and accessible location, having a large menu and keeping the prices on a markedly competitive level. These basics came in handy not only in those times for McDonald’s to establish its market presence, but are still followed by the company in a majority of its global outlets.
1.2 Research Question
The main research question that will be investigated in this research work is, “How healthy eating industry is impacting McDonalds?” Apart from this main research question, other sub questions that will be investigated in this research are:
How the healthy living industry of the UK is evolving?
How increasing health consciousness amongst customers is impacting McDonalds?
How McDonalds is adapting its marketing strategy with the increasing health consciousness amongst customers?
1.3 Aims and Objectives
The aim of this paper is to understand the marketing strategies that need to be adopted to meet the ever changing demand of the health conscious customers.
The objectives of the research are as follows.
To carry out a comprehensive literature review on the Healthy Living in the U.K
To analyse how health consciousness in customers is impacting the fast-food company, like McDonald’s
To evaluate how McDonald’s is responding to Healthy Eating Industry with its marketing campaign and how it should adapt it in future
To provide recommendations on marketing techniques to respond to the change in the eating habits of customers and increasing health consciousness
Chapter Two: Literature Review
This section of the study will focus on various factors of healthy eating and how it impacts on the McDonald’s marketing strategy. It will critically review various research papers in the field of fast food restaurants and how to promote healthy eating while dining outside the home. It will also critically analyse McDonald’s marketing strategies to respond to the change in the healthy eating habits of the consumers.
2.1 McDonald’s and its Marketing Strategy
McDonald’s is one of the best-known brands worldwide. McDonald’s is the largest global fast foodservice retailer, with more than 35,000 local restaurants serving 70 million people in more than 100 countries each day. The company is a specialist on serving fast food, like burgers, drinks, desserts, fries, milkshakes, salads, and wraps.
With an interesting marketing mix, comprising of ‘People, Products, Place, Price and Promotion’ (McDonald’s, 2014b), McDonald’s aims to achieve the honour of being the most coveted fast-food brands of all times. The company states that its main agenda is to provide quality food to people of all origins, age and class in a ‘clean and welcome’ environment.
In order to fuels its marketing strategies, McDonald’s continually strives to adhere to its aims and objectives that are not only designed for the company to make profits, but have also been thoughtfully crafted to meet the needs of the changing clientele and create a scope of sustainable growth for the business (McDonald’s, 2014c). By emphasising on areas like ‘Customer Satisfaction’ and ‘Quality Control’, McDonald’s portrays itself as not only an effective brand, but also a responsible one.
Despite all the positive efforts that McDonald’s invests in its operational and functional activities, including its marketing and strategic planning, there still exists the omnipresent question that somehow affects the brand’s overall growth- ‘Is fast food a healthy option or just a cheap one?’ Over the years, McDonald’s has come up with various healthy alternatives to its current menu as a reaction to the changing trends of food-habits around the world, particularly in the U.K. One example that substantiates the statement, is that the company proudly states on its official website that the food products served in the UK do not contain any MSG (Monosodium Glutamate) or any other ‘artificial flavour enhancers’; ingredients that are much preferred by the taste-buds of consumers but they are also accompanied with the scope of a variety of possible health hazards (McDonald’s, 2014b).
Mcdonald’s has been able to be survived and become successful because it is a convenient restaurant and it is present on every high street and drive through which draw the attention of the consumers. This is the core reason why McDonalds is the most successful fast food franchise in the world McDonalds and makes 23 billion dollars a year. McDonalds is not just convenient, but also appealing when comes to their quality brand and restaurant chain. McDonald’s low prices attracts customers with a restricted income, particularly the company target low income urban areas and cities which is why it is so popular not just in the UK but globally. The convenient pricing and quality makes McDonalds the ultimate choice for starving people worldwide.
2.2 Healthy Living Industry
Healthy living is simple, making healthy choices on a day to day basis; healthy living choices can help individuals to become more mentally, physically and spiritually. In order to stay healthy, be physically active, eating well and no smoking is the three essential things. Staying healthy can help in preventing chronic diseases, such as Asthma, Diabetes mellitus (type 1 and type 2), HIV, and Ulcerative colitis, this can reduce the danger of becoming seriously ill or injured. Healthy Eating is important because it helps the body to gain nutrients in order to perform well its everyday functions.
The significance of a healthy diet and lifestyle cannot be emphasised more. U.K consumers have been exposed to many resources that imply and indicate the multifarious benefits of healthy living, a condition that can be attained by the means of a nutritious diet, aversion to smoking and indulging in favourable physical exercise (Age UK, 2014), opines that, many generations of consumers have been acquainted with the knowledge of the goodness of natural ingredients and the implications of artificial components in their food. However, the need for a change in the overall food industry arose when consumers gradually started to analyse the issue of ‘healthy living’, instead of just acknowledging it (Quinn, 2008).
A reputed website pertaining to health reflects the current characteristics of the modern consumers by stating- “There are many factors that influence the food we eat, such as cost, availability, advertising, lack of time, and our knowledge about foods and what is good and not so good for us. By identifying and then addressing the factors that influence our eating habits the most, we can work on improving these habits and our overall health.” (Age UK, 2014) The point that concerns the fast-food industry the most in the situation in question is the need to acknowledge the fact that not only does it has to cater to a knowledgeable clientele, but also an inquisitive one. Therefore, an effective marketing strategy would be to analyse the proceedings of the health industry to gauge the current trends in field of consumer’s health related concerns in order to be able to serve the conscious clientele in a better way.
On the other hand, the importance of healthy living in the UK is best exemplified by the fact that the government considers it to be one of its key agendas in the overall growth, development and safety of the country and its people (Brindal et al., 2014). The multifarious initiatives formulated towards the enhancement of public health also include the government’s “ability to regulate the development of new fast-food restaurants” amongst other attempts to improve maternal health, self-esteem and many such specific areas related to the health of an individual and the community (HM Government, 2012). The people of the U.K can not only make the best of the benefits offered by the government, but also from other public and private sources that enable them to become ‘conscious consumers’ by making them aware of regular things that make a huge difference, like the proper identification of food labels (Annigan, n.d). The education of children in the UK also includes the ill-effects of relying heavily on fast food which should be avoided (Cooper, 2014).
2.3 Healthy Industry Impact on Fast Food Chains and McDonald’s
The battle of the rising consciousness of health issues and the increasing number of unhealthy people in the U.K. has impacted the fast food industry to a great extent (Cooper, 2014). The current times highlight the contrast by revealing issues like the inclination to eat fast food for convenience and the continual ignorance about factors like calorie intake (Zollinger, 2013). Such nuances indeed have a favourable impact on the revenue-generating abilities of fast-food brands, but do not always support the company’s objective to portray themselves as responsible businesses.
On McDonald’s attitude towards healthy eating, it has been observed that the company has adapted to a positive approach towards the benefits of a healthy lifestyle. Commercially, the battle has proved to be a favourable one for the brand. This is derived from the fact that the recent recession could not mar the company’s ability to earn revenue even in the hardest of times (Boyland and Halford, 2013; Gregerson, 2014).
While many pioneers of the corporate world lamented the occurrence of ‘negative sales’, McDonald’s on the other hand was enjoying quite a comfortable position financially, with like-for-like sales in the U.K. rising by 7.8PC (Quinn, 2008). The company attributed their success to the popularity of the brand as not only an economic ne, but aonalds-corporation/lso the healthiest ones during the hard times. The commitment of the brand towards serving healthy food at competent prices is reflected in its marketing strategies that include investing abundant resources in the health industry and the consumer market in order to continually come up with better and healthier innovations.
McDonalds has reacted to healthy eating by introducing a menu which makes the chain healthy. McDonalds has launched a new McWrap sandwich, which has created by keeping healthy eating as a top priority at the franchise of McDonald’s Corp. McDonalds has been increasing their effort by offering new menu offerings as the company struggles to grow sales in the challenging economy.
2.4 Impact of Recession on Healthy Food and McDonald’s
McDonald’s as a brand has exhibited impeccable marketing and strategic planning in its operational activities for an impressive span of time. During the economic downfall caused by the recession, McDonald’s braced the situation with strategies like ‘revamping its menu’ and focusing on ‘breakfast’ items to be able to serve healthier meals at affordable prices (Gregerson, 2014). The marketing philosophy of McDonald’s is seen to rely appropriately on its brand values and company objectives that strongly indicate the adversities of compromising on health factors for the attainment of corporate profits.
The engagement with the brand in various research modules and communicative pursuits towards its customers speak of the intent to perpetuate the habit of healthy eating and a healthy lifestyle. Even today, any outlet of McDonald’s in any part of the world takes pride in the unshakable adherence to the motto of serving customers equally, impeccably and economical at all times (Anderson and Mirosa, 2014). The quality control of the brand is not limited to any of its particular outlet in any specific part of the world, but stands true for all of its global operations.
Chapter Three: Research Methods
3.1 Research Methods/Philosophy of Research
This section comprises of a sequence of steps that the researcher will follow in order to collect raw data and then changing into meaningful information. The research methodology chapter is basically important because it will aid in collecting data and dealing with the aims and objectives of the research (Guba, Lincoln, 1994). It is notable that this chapter of the research study is entirely based on techniques that will be referred for the purpose of amassing the data related to the research. The research method used for this research study is both qualitative and method and quantitative method as they are found relevant to assess the subsist stipulation and to evaluate the outcome of that particular situation (Cohen, Manion, 1994). However, the qualitative research method also has a limitation that it does not include any mathematical variables, and hence, no research framework is involved in this research method.
There are mainly two research; deductive and inductive and for this research deductive approach is found appropriate. This research approach will help the researcher in examining the pre-subsisting insinuations and allegations regarding the impact of the health food industry on fast food company McDonalds and consumer behaviour and consequently, conclusions will be drawn (Collins, 2010). In addition, this research work will follow the exploratory research design as it is concentrated on finding the relationship between existing variables. The exploratory research design has been selected because it will aid in collecting facts that how and why the increase in health consciousness amongst consumers impact McDonalds and the fast food industry.
Interpretivism and positivism both research philosophies are apt for this study as it will emphasise on comprehending the research issues in a dynamic manner (Belk, 2006). Interpretivism, as the name indicated, will allow the researcher to construe the different components of the study, and therefore interpretivism will also incorporate a human interest into the study. While, positivism is a scientific approach and will use methods that will be very much controlled, measured and will be based on approaches espoused by the scientific community.
3.2 Project Approach
After taking into account the aims and objectives of this research it has been observed that secondary data is requisite for this research. In order to gather information in context to the Impact has the Healthy Eating Industry had on McDonald’s, both qualitative and quantitative secondary data will be gathered in this research from the existing sources available. The secondary data accessed in this research will help the researcher to acknowledge the trend in the food industry and how people are inclining towards healthy eating from fast food or junk food.
Moreover, considering the benefits of secondary data, such as it is time and cost effective, this data will be also be used in this research and will be collected from journals articles, books, newspapers and magazine analysis. However, the limitation of the selected research method is that only the available data will be accessed and conclusions will be made on the basis of data collected from the secondary sources and not on the basis of any primary information (Jackson, 2008).
Chapter Four: Findings
4.1 Findings related to Healthy living in the U.K
The sixth Consumer Attitudes to Food survey of the Food Standards Agency’s demonstrated that consumers in the UK are taking more active interest in the food and diet and many of them are checking labels and endeavouring to consume more fruit and vegetables. It is notable that 67% of the people in the country are now conscious that they should eat at minimum five portions of fruit and vegetables every day. Besides this, most of the people are also checking the nutritional information available on food products as the figure shows:
53% of consumers now look for labels for salt/sodium content
48% mentioned that they verify the sugar content
60% state that they test out labels for fat content (Food Standards Agency, 2006)
There has been increase in the number of consumers who assert to eat more vegetables, fruits and salads, and also an increase in the number of people who claim that they are not eating ready-made meals. It is apparent from the presented information that people are becoming more concerned about the quality before buying fast food products. Consumers are concerned about the quality of fast food a lot and taken into account the quality of products before buying it and if they found the quality of fast-food unsatisfactory in terms of health level, state, processing and any other factor then they do not buy products (McDonalds and Armour, 2014).
Customers highly feel that taste influences them to buy fast food as they found fast food immensely tasty and tempting due to which they prefer it over any other food product and likes to have it for their meals. Advertisement is another factor that impacts them to buy fast food products from McDonalds or from other fast food outlets, but consumers do believe that health level of fast food is significant and thus, healthy living is present in the UK. As per the Leather Head Food Research, health has been a leading trend in the UK since last few years, impacting the food and beverage industry by the re-formulation and overture of novel ‘healthy(ier) form of products in a wide range of categories. As per a new report from Leatherhead Food Research, the trend of rising healthy living in the UK demonstrates no signs of deteriorating with an escalating number of consumers representing a higher consciousness of health and well-being (Leather Head Food Research, 2012).
4.2 Findings related to the way Health Consciousness in Customers is Impacting the Fast Food Company, like McDonald’s
The research study also aimed to find out the extent to which consumers are becoming health conscious and increasing health food industry is impacting the fast food industry, consequently data was collected in this regard. In the viewpoint of Zollinger-Read (2013), consumers in the UK are critically undervaluing the number of calories they are eating at fast food restaurants.
In particular, teenagers are ignorant towards their calorie intake, underrating their consumption by an approximate of 259 calories, which is about a one third fewer as compared to the calories they consume earlier. Moreover, adults also underrate their calorie use by an approximate of 175 calories. When customers choose fast food for meals, its level of healthiness affects them in a pertinent manner, customers are getting health conscious and consider the level of healthiness while purchasing fast food products.
In harmony with the objectives of the study, it is extensive to depict about the health level of fast food and with this regard data was investigated about the healthiness of fast food. In spite of towering obesity figures all around the globe, fast food chains are constantly serving meals that are related to serious health risks. Advertising campaigns and branding often make fast food appear to be more tempting and sound interesting. Cheap prices and meal deals persuade people a lot, while leaving out any citation of calorie substance or warning tag. The key fact is that a lot of fast food meals are unbelievably calorific and can dangerously impact the health if consumed regularly over an enduring period of time (Patterson, 2001).
Therefore, it is clear that heath consciousness amongst consumers in the UK market is increasing and they believe that fast food is unhealthy for them and health factor does not influence them to buy fast food products. It is clear from the above analysis that of the secondary data that health consciousness amongst consumers is increasing and this is impacting the fast food industry in a significant manner (Mcdonalds and Armour, 2014).
4.3 Findings related to the Way McDonalds is Responding to Healthy Eating Industry with its Marketing Campaign
The company is launching products of new varieties, which are tasty and healthy too. For instance, the new McWraps of the company will utilise the similar form of flour tortillas and chicken as its snack wraps, but they will also have cucumbers. In this manner, for the first time McDonalds will use vegetables in its core menu. Moreover, for the adults other healthier substitutes, such as yogurt parfait, salads and oatmeal are also added in the menu and are marketed vigorously. The company is also seeking to integrate carrots in its menu for children. This will not only make the brand more health conscious, but will also allow the company to act in response to consumer demand (Mail Online, 2013). It is fundamental to conclude that the products of McDonalds have become healthier and are attaining goals of high customer satisfaction or not. In the viewpoint of Deng (2009), McDonald’s makes it superior efforts to adapt communication strategies as per the altering situation and lifestyle of coursers.
The company is adopting a lot of attractive strategies, such as Healthy Meal Package where the notion is to offer packages which include salad in cheaper price. The reason for the cheap price of salad is to pull towards the existing consumers to control their behaviour of becoming healthier and the lower price is the method to strengthen the consumer to eat more healthy food. In addition, the company also offers Free Sport Coupon for customers who want to have healthy food in McDonald. This free coupon provides consumers an ability to exercise themselves and modify their behaviour towards exercising (Deng, 2009).
Effectively and tempting advertisement campaigns by McDonalds influences customers to buy its products, and thus, the company has pertinently adapted its marketing. Therefore, it can be analysed from the above mentioned interpretation that marketing campaigns are actively used by McDonalds for marketing and advertising its products and they effectively attract consumers. Besides this, in order to address the research title it is essential to examine whether McDonalds have significantly adapted to the increasing health food industry or not. McDonald’s products are healthy as compared to before due to which they prefer buying them and consuming them (Mcdonalds and Armour, 2014). It is significant that from this research finding that McDonalds is adapting to the changing fast food industry and modifying itself to the changing needs and wants of consumers.
Chapter five: Analysis of the Findings / Discussion
From the above stated research findings, it has come to light that the healthy eating industry is expanding and impacting McDonald’s in a considerable manner. The assessment of the both the primary and secondary research findings have made it apparent that since the inclination of customers towards healthy eating is increasing and consumers are becoming more conscious about healthy products, the health food industry is growing and is impacting the fast food industry. The primary findings made it clear that consumer concern about the quality of fast food products before buying and also worry about its level of healthiness, and thus, it is apparent that the fast food industry is impacting McDonalds.
The primary research findings are in correspondence with the secondary research findings as the secondary research findings have also highlighted that an effective marketing strategy is essential to analyse the proceedings of the health industry to gauge the current trends in the field of the consumer’s health related concerns for serving the conscious customers in a better way. The secondary findings have made it clear that there is a need for a change in the overall food industry as consumers have gradually started to analyse the issue of healthy living, rather than just recognizing it (Alonso, O’Neill, Zizza, 2012). Thus, the main research question has been addressed here that health food industry is impacting McDonalds and fast food industry in a considerable manner as it demands them to change their marketing strategies, products and services.
Moreover, to address the research objective that how health consciousness in customers is impacting McDonald’s, customers were enquired accordingly and it has been found that the level of healthiness in fast food products impact customers while buying fast food from McDonalds. This primary research finding is also in line with the secondary research finding as secondary findings made it clear that the combat of the increasing consciousness for health issues and the escalating number of unhealthy people in the country is influencing the fast food industry to a great extent (Bassett, et al., 2008).
Besides this, to assess the response of McDonalds and to find out how the company is adapting customers were also investigated about it and it has been observed that McDonald’s attitude towards healthy eating is positive, and the company has taken a company has adapted to a positive approach towards the consequences of a healthy lifestyle due to which it has made its products more health as compared to before. In this context, secondary findings also reveal that McDonalds has counter back to healthy eating by introducing a range of new products, which are healthy and tasty, as well. McDonalds has initiated a lot of new products, which have developed by keeping healthiness as a top priority at the company (Driskell, Schake, Detter, 2008).
The data interpretation has highlighted that health eating is an essential part of consumers’ eating behaviour, but many of them are still not aware about its and are attracted to fast food products due to several other reasons, such as cost, time, changing lifestyle, attractive advertisements, etc. It is therefore; considerable that fast food companies that are looking for generating, and at the same time widening their relationships with consumers should rely on healthy eating and healthy fast food products in a considerable manner as it will bring advantages to both the parties (Elbel, Gyamfi, Kersh, 2011).
On the whole the analysis sheds light on the information that majority of the consumers are concerned about health eating, but at the same time many of them are still not aware it due to which it is if not highly significant, then also a significant influencing factor, which fast food companies need to consider. It has come under consideration from the aforementioned analysed findings that healthy eating should be the uppermost effective mode of marketing for fast food companies. The interpretation of the collected data that plentiful of customers are concerned about healthy eating, but many of them also gave neutral responses due to which the influence of healthy eating on fast food industry cannot be ignored at all and McDonalds should effectively consider (French, et al., 2001).
Corresponded to this, the analysis of data from secondary research also makes it clear that fast food companies have a higher probability to increase customer satisfaction by relying on health food products and adapting their marketing accordingly (Mackison, Wrieden, Anderson, 2010). Even though, companies can rely on conventional forms of marketing, products and services, but since the majority of respondents inclined towards healthy eating, fast food companies should accelerate their marketing in this regard and accordingly bring changes in their menu. For the purpose of putting the analysis succinctly, it can be elucidated that ample of evidences have proved and substantiated the fact that health food industry is rising and impacting the fast food industry in a considerable manner.
Chapter Six: Conclusion and Recommendations
It can be concluded from the findings of this research study that health attitude and consciousness observed to have an influence on consumer behaviour towards the fast food industry and consumption of the fast food. Consumers like to consider about the quality of the fast food before buying it and if consider that the fast food is healthier then only they consume it. It has been found that consumers are trying to make the comparatively healthier selections while purchasing fast food, and is more interested in plans and marketing campaigns that are attempting to make fast food healthier.
The research question which was under investigation in this research study, “How healthy eating industry is impacting McDonalds, has been successfully addressed and it can be concluded that healthy eating industry is impacting McDonalds and the overall fast food industry in a vital manner forcing them to adopt healthy eating and their marketing strategies accordingly. Moreover, the research objectives of this study have also been attained and it can be concluded that healthier choices do impact consumers while buying fast food products and thus increasing health food industry is impacting the fast food industry. Therefore, fast food companies are required to change their regular menu and add more healthy options in it to maintain the satisfaction level of consumers.
The below mentioned are the recommendations regarding techniques, which McDonalds must adapt in response the changing eating habits of consumers and increasing health consciousness amongst them:
McDonalds should time to time come up with healthy food products and should advertise these products thoroughly with the help of different marketing channels so that the company will gain the attention of health conscious consumers.
It is recommended to McDonalds that it should effectively publicize about the level of healthiness and nutritional value of its products. The company should market how products are manufactured keeping health as top priority and how the company is fulfilling the dual needs of customers of tasty and healthy products.
Further, it is suggested that McDonald’s should demonstrate effectively in its marketing campaigns that the products of the company are not only healthy for young consumers, but also for young adolescents and children so that the customer base of the company will increase.
6.3 Further Research
It is notable that data through questionnaires can be collected from a larger group of participants and can also be assessed in several different ways than the one chosen in this research. Therefore, future research can be done by segmenting respondents into the ones who consume fast food frequently and those who do not consume to find out how their responses differ. It would also be beneficial to perform more in‐store experiments to investigate the impact of healthy eating on customers buying behaviour of fast food. Moreover, comparisons can also be made between different fast food companies considering their responses to the increasing health consciousness amongst consumers.
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