Introduction to McDonald’s Marketing Strategy
It is safe to say that wherever you are in the world, you will probably find a McDonald’s around the corner. This hyper-local permeation is just one of the many proofs of the brand’s success. Not only are they everywhere, but they are also thriving everywhere too, thanks to the McDonald’s marketing strategy.
From the recent data, it can be concluded that McDonald’s is way ahead of the competition when it comes to sales, revenues, and marketing strategies, even with worthy competition in the likes of Domino’s, Burger King, Wendy’s, and more fast-food joints. Not to mention, McDonald’s is currently ranked as the world’s highest-revenue making fast-food business in the world! Not just that, McDonald’s is ranked 9th in the world’s most powerful brands. These are just a few of the impressive feats they have been able to achieve by deploying smart and modern marketing strategies at McDonald’s.
So, how did a simple pie-and-fries business go so global? Raymond Albert Kroc, the man behind this global legacy, believed it was McDonald’s marketing strategies. During his run with the brand in the 60s and the 70s, he took McDonald’s from the USA to all around the globe. Though he ran the company 40 years ago, he was a pioneer and a far-sighted leader who knew that marketing was more than just billboards.
In his own words, “McDonald’s is a people’s business, and that smile on that counter girl’s face when she takes your order is a vital part of that image.” His agenda and policies continue to shape McDonald’s marketing strategies.
And in true Mickey D’s fashion, the world is lovin’ it!
So, in this article, we take a look at the brand, its history, its legacy, and more importantly, the marketing strategies of McDonald’s that just make it work.
Table of Contents
Now, before we start with the marketing strategies that make McDonald’s a global household name, we have to first understand what it is that McDonald’s actually does. On the surface, it sells junk food. However, as good marketers would tell you: It’s not always about the product, but the need or immediacy that you sell. So, let us understand the core business right from its humble beginnings.
McDonald’s: A Recap
The foundation of McDonald’s goes back to the late 1940s when brothers, Maurice and Richard McDonald (Yes! Hence the name “McDonald’s”), opened a restaurant with affordable yet tasty burgers. These were simple $0.15 burgers, but, what really stood out was the speed and the service.
The focus of their one-store restaurant was to produce large quantities of food at very low prices and to achieve this goal. The McDonald brothers limited the menu to only Hamburgers and Potato chips (which were later replaced by French fries), pie, and beverages. They developed a simple yet efficient service system and named it Speedee Service System. They eliminated the need for waiters by including a self-service system. What started as a humble restaurant in San Bernardino, California soon became a chain of 6 restaurants. However, at even this point, it was beyond fathoming what would eventually become of McDonald’s. And this is where Ray Kroc and his genius marketing prowess start to have an immeasurable impact on the course of the McDonald’s franchise.
The brothers were purchasing shake mixers from Ray Kroc for all of their restaurants. Realizing the potential of the food business, Kroc became the franchise agent of McDonald’s in 1955.
Then, 5 years later, with an amount of $2.7 Million, the Corporation bought the franchise from the brothers. Ray took over the reins as the acting COO.
Now, Ray had ideas. He revolutionized the way people thought about fast food. Generous billboards with bright red McDonald’s packaging became far too common and engrained in the collective social psyche. This marked the early days of what would become the McDonald’s influential marketing strategy.
Ray Kroc understood food that looks good sells better. He also knew, food that feels good sells best. Enter: Ronald McDonald!
Yes, the fan-favorite face of fast food, and McDonald’s inanimate brand ambassador. He chimed in 1963 and instantly became a character that kids could rally behind. This was another genius invention of Ray Kroc, and yet another McDonald’s marketing strategy that paid dividends over the decades. In an instant, kids across America knew and loved Ronald McDonald.
With more than 38,000 locations in more than 100 countries and over 2,00,000 employees, McDonald’s is no longer restricted to being an entity of net worth, but also, a whole ecosystem.
The McDonald’s franchise, however, has remained true to its origin, it is best known for its burgers and fries. But, they don’t stop there, with over 75 items on their menu, they have something for everyone.
But just because they stay true to their core offering, doesn’t mean they haven’t evolved over the years. What started with a dine-in restaurant upgraded itself to a drive-through, order-taking, multi-national, people’s pick, digital fast food joint. Serving over 69 million customers per day, McDonald’s is one of the world’s largest chains of fast-food restaurants.
Now, for any business to work, it has to have the right mix of price, promotion, product, and place. In the case of McDonald’s, be it a McFlurry or a McTikki Burger, it’s approachable, affordable, and filling, to say the least. Taste, however, remains to be debated. While some are die hard McDoanld’s fans, others resent the brand for their ubiquitous presence and impact on diets across the globe.
For such a polarizing brand often trolled as unhealthy and the exact opposite of eco-friendly, how has McDonald’s remained at the top? Simple! McDonald’s marketing strategy to the rescue!
Does McDonald’s Take its Marketing Seriously?
Well, if we take a closer look at the figures as shared by the brand itself publicly, we come to know: McDonald’s and marketing are truly synonymous.
Not only does McDonald recognize that regardless of a business’ stature, it has to invest in marketing—and invest they do.
How Costly is McDonald’s Marketing Strategy?
Advertising costs were divided into two categories: Contributions to advertising cooperatives, which amounted to $325.5 million and production costs for radio and TV advertising which was $329.2 million in 2020. McDonald’s runs, both, true brand advertising that keeps the brand current and top of mind, as well as retail advertising that is local and menu-driven. And, that’s not all: McDonald’s also takes its online game pretty seriously.
Although figures for the same aren’t out, one must also consider that social media is by far the cheapest marketing channel on the list of resources that any company can use. Needless to say, just having a large offline base isn’t enough anymore. Thanks to the marketing minds at McDonald’s, their social media presence is top-notch as well.
Here’s a diagram on McDonald’s US advertising budget
What’s the result? When you think “fries and burgers,” you think McDonald’s. Though a plethora of other outlets now serve this type of food, McDonald’s marketing strategy has made the brand name and their offering synonymous in the minds of consumers across the globe!
So, how does one translate the expenditure into actionable points at McDonald’s marketing strategies? What are the marketing strategies that are being executed at McDonald’s?
Believe it or not, McDonald’s is pretty darn good at it, they call it “McDonaldization”.
Let us dive in.
McDonald’s Marketing Strategies:
The Product Mix Of McDonald’s Marketing Strategy
McDonald’s menu offers a vast range of products like burgers, salads, wraps, fries, sandwiches, desserts, snacks, coffees, and refreshers. The main components include bread, potatoes, milk, chicken, and beef.
However, what truly makes the product quotient stick out for Mickey D’s is the fact that they are open to change. In more poultry-fan communities such as the Philippines and Mexico, they have been open to introducing chicken-specific items. In more vegetarian communities as in India, they have customized their usually meat-first meals to be perfectly prepped using vegetables and not mellowing down the experience at that.
Their menu is altered on a frequent basis to accommodate changing demands and trends. Before a new product is added, it is thoroughly market-tested to determine if the product has potential.
Some standard products you are likely to find across all Mickey Ds would include the iconic “Big Mac”, Fries, Apple Pie, McMuffin, Happy Meal, and Fillet-O-Fish.
What’s more is that the “Big M” or otherwise known as the “Golden Arches” have become the very face of McDonald’s and still thrives even 50 years later.
Price—The Ultimate McDonald’s Marketing Strategy
With items available as low as $1 in the USA, it makes the franchise accessible for teens, college students, and young adults too.
This highlights a brand that is coming with the geographical and socio-economic briefing. Part of the reason why McDonald’s has worked everywhere is their sensitivity towards the locale and their ability to deploy a marketing strategy that successfully matches the target demographic.
Moreover, McDonald’s has always been a brand that values loyalty, further converting their dormant and passive customers into more active sales by offering rewards and discounts. Here’s an example:
With that, McDonald’s also follows some pricing strategies like “Special Meals” and offers which are at a discounted price as compared to when purchased separately.
The McDonald’s Billboard Marketing Strategy—a Match Made in Heaven
It started back in the 60s when people mocked the brand for having spent a fresh $2 million just for ads. Such budget for marketing! That too, 70% of it going into billboards! That was unheard of.
McDonald’s proudly captivates its offline audience even today on highways, near malls, restops, you name it. Anywhere a billboard could be put up, McDonald’s marketing strategy initially was to buy the space and immediately feature massive high resolution shots of their fries and burgers in their trademark red and yellow hues.
Here an example:
McDonald’s marketing strategy was to not just buy the billboard space, but maximize it with a flair for the creative.
McDonald’s Exceptional Digital Marketing Strategy
Most businesses have gone digital, in the sense that you can reach them via social media at anytime. Such is the case with McDonald’s too.
The brand enjoys over 80M+ followers on Facebook, 4.2M+ followers on Instagram, 4.4M followers on twitter, and 600k+ subscribers on YouTube. In addition, keeping true to the McDonald’s localization marketing strategy, they have dedicated country-specific handles too, where one could browse through new launches, employee appreciation posts, advertisements, client stories, or quirky posts like these by country.
Not averse to going digital at all, McDonald’s has in fact, continually beaten their competition to maximize their impact in digital.
This comparison dates back to 2014, however, not much has changed in the lead. And McDonald’s investment in their digital marketing strategy has just grown since.
But what really makes the McDonald’s marketing strategy a true force of nature you may ask at this point? Here are a few elements that make their marketing strategy so special.
Innovate. Innovate. And did McDonald’s mention Innovate?!
The purpose of a good marketing strategy is to attract new customers and keep them coming back for more.
With so many franchises now serving the same burger and fries, how has McDonald’s managed to stay on top of the heap?
Innovation and customer experience as a marketing strategy answers it.
They call it the “Experience of the Future” or EOTF, a mission at McDonald’s to make present dining futuristic. Examples of this include their digital drive-through menus, kiosks that enable customers to order with minimal human contact. In 2020, McDonald’s also started working on a voice-activation setup as well as AI-backed orders.
These innovations have helped McDonald’s cut its drive-through times by a good 30 seconds for each client. On an estimate, 95% of Mickey D’s in the US alone have a drive-through facility.
The company also facilitates orders via its own app and customers can reach out to McDonald’s via WhatsApp too. Digital sales have accounted for over $10 billion in just the past year in their top 6 markets.
Not just that, did you know McDonald’s isn’t behind on the NFT train as well? They launched their own McRib NFT as 2021 came to an end. While many see it as a continuation of a trend, it goes on to show the McDonald’s Marketing Strategy doesn’t miss a beat when new opportunities arise to stay current.
Hyper-localization and Personalization: McDonald’s Marketing Strategy Since the Start
As they say, a tree that grows tall bends too. McDonald’s knows that well! Most marketers are afraid to experiment, and hence, they stick to the same recipe and eventually get surpassed by a leaner, more innovative company. McDonald’s however, relies on their hyper-localization marketing strategy to constantly evolve and better serve the needs of their target markets.
For Japan, they introduced Teriyaki burgers. For India, they invented the Maharaja Burgers. For a more health-conscious Australia, McDonald’s marketing strategy is purely focused on the choicest and healthy ingredients.
Germany is more meat-focused, and so, naturally they get more meat in their hamburgers. While being a singular brand, they have managed to create diverse products for each topography.
However, their localization doesn’t stop there. McDonald’s works with translation service providers to ensure the messaging is done as per the tastes of the local audience they’re trying to attract.
Adaptability: A Key to McDonald’s Evolving Marketing Strategy
When the pandemic hit, it shook the food and hospitality industry. Not so much at McDonald’s! The company had been preparing for such disruption for long, it would seem. Their kiosks, app, drive-throughs, all made for a seamless McDonald’s customer experience regardless of the external climate.
Not just that, McDonald’s understood a very emotional side to such times, going so far as to even offering 20% off to NHS workers in England as an opportunistic Marketing Strategy to raise awareness of their brand and do a good deed at the same time.
Not surprisingly, McDonald’s grew its profits in 2020’s as we will dive into later in this article.
Brand: The Ultimate Differentiator in McDonald’s Marketing Strategy
Ronald Donald, that iconic bright yellow double-arched M over a stark red background: That’s McDonald’s. Also, how does the jingle go?
“Ba Da BA BA BA… I’m lovin’ it!” Simple, effortless, and memorable. It has been around for 50 years and it has worked for 50 years!
Needless to say, McDonald’s has evolved in terms of color palettes and typefaces even. Here’s how the logo changed over the years:
Since the 60s, one thing has stayed a constant: those magnificent golden arches!
Branding doesn’t just stop with a logo…McDonald’s is often the butt of the joke on Twitter. It’s all good trolling material: A frosty machine that doesn’t work in any McDonald’s or the Sprite that hits different! Or trains of “McDonald’s made me fat” jokes.
It seems the brand has always kept a cool and refined composure to such instances. Brand is ultimately what people will say about your company when you’re not in the room…and McDonald’s manages to always take the route that spreads positive sentiment across all of their brand assets, even if they’re broken (almost) all the time.
McDonald’s has learned how to successfully use internet chatter as a major brand marketing strategy. When loads of users asked why does the McDonald’s sprite hit different:
The Company issued an unanimous response explaining the ice volumes may have a role to play, and McDonald’s thicker straws too somehow change the flavor.
But, it isn’t always fun and sarcastic, McDonald’s does introduce stuff to warm its customers with an emotional free sample!
Customer Service: The not-so-Missing piece of the Marketing Strategy at McDonald’s!
Remember how we told you right at the start that Ray Kroc was a fan of marketing, and he didn’t see customer support or front desk as foreign entities. He counted it all as critical in the overall McDonald’s marketing strategy.
The training process at McDonald’s ensures that each employee is in line with the brand’s values and reputation. Apart from a uniform and manuscript, they also get an orientation into the brand’s values: quality, speed, cleanliness, and friendliness.
In fact, it is said that McDonald’s has never left a single employee mail unanswered, so much so that some of the McDonald’s flagship Marketing Strategies weren’t even Ray’s ideas! McFlurry, Big Mac, and even Ronald are all suggestions that came from workers.
Standardization and McDonald’s Marketing Strategy
No matter what McDonald’s you go to across the country or even world for that matter, they all essentially look and feel the same. You can get the exact same cheeseburger in taste, presentation, and flavor 20,000 miles across the globe in a bustling metropolis like Tokyo as you can in a tiny mid-west American town with 100 residents. The straws are the same, the ketchup, the uniforms, the fries, my god the fries!
This induces a sense of comfort, belonging, and homeliness that can comfort you no matter where in the world you may be—the instant you bite into a cheeseburger, you’re taken back to being a kid and getting a happy meal. Even as we travel around the world, we are on the lookout for a McDonald’s nearby, aren’t we? That same old trust and well-acquainted customer experience is a huge part of the McDonald’s marketing strategy.
Collaborations as a Modern McDonald’s Marketing Strategy
Collaboration has been an essential element in the McDonald’s marketing strategy for decades. Just look at the happy meal. What’s the first thing your kids ask for when those iconic red and yellow cardboard boxes enter through the window with golden yellow arches as handles? That’s right, the toy!!
McDonald’s has been collaborating with major movie houses for decades bringing to life the latest kid-focused offering and driving profits from their parents as a result.
Recently however, McDonald’s has modernized their approach to collaboration.
Here’s a recent collaboration they had with Travis Scott. For every Quarter Pounder and fries with a McFlurry or the Travis McDonald’s order, the user could feel more connected with their favorite pop star. Along with the meal, they also launched a clothing line in collaboration with the star. Result: Their sales for the given quarter of 2020 rose by 4.6%!
The Competitive Edge of McDonald’s Marketing Strategies
As the saying goes, ‘‘only the strongest survive,’’ and McDonald’s has been using its marketing strategies to stay ahead of its competition and on top. But, what is it that the franchise does, which is better than its competitors?
This goes without saying that no other food outlet has a global territory as wide as McDonald’s. Being present in over 175 markets opens the business up to a higher density of the crowd.
If we were to compare the prices of a burger at Wendy’s, McDonald’s, and Subway, it would appear that McDonald’s is the most reasonable. This again benefits the pricing strategy of McDonald’s overall marketing mix.
The above graph also shows McDonald’s has a higher ad-viewership.
Most of these fast food joints are self-servicing with people behind the counters. However, McDonald’s comes with kiosks, digital menus, and an easier-to-use application (Sorry, Domino’s!). If digital is the future, McDonald’s has won in the present. Also, let’s not forget, McDonald’s has far more rewarding rewards. How?
Recently, McDonald’s in Great Britain announced a new plan, where buyers get 100 reward points for every pound spent. Customers also get an option to donate these rewards to BBC Children in Need, and this program encapsulates over 56 stores in the region. This is just an example of the many rewards offers McDonald’s carries out in a larger marketing strategy.
Memorable Marketing Strategies: The Tagline
Most of these competitors don’t have a face (ok, maybe Wendy’s) and lack a voice too. What’s the tagline of Five Guys? or Domino’s?
But, you won’t forget McDonald’s. Ba Da Ba Ba Ba, I’m Lovin’ it. And this tagline did not come out of nowhere. Back in 2001, McDonald’s was looking to revamp its image and modernize their marketing strategies to appeal to a changing audience. As a result, they put out a call for ad agencies around the world to submit their best proposal for a new tagline. They received hundreds of proposals, but a German agency called Heye & Partner won out with “I’m Lovin’ it.”
But in true McDonald’s fashion, they maximized the impact of this marketing strategy by hiring Butch Stewart, a famous jingle writer to polish the jingle up a bit for a mass audience. But they didn’t even stop there—next up, they hired pharrell to write a pop song around the new jingle, then paid Justin Timberlake $6million to perform it. Again, another great example of how McDonald’s successfully leverages their collaboration capabilities to maximize their marketing strategies.
Tonality as a Marketing Strategy
A look at the social media feed of Subway and KFC shows the gap. Their posts are more centered around discounts and upsells.
However, McDonald’s keeps the product info at a bare minimum, while focusing more on customer engagement and genuine, interesting communication. McDonald’s has an edgy, quirky, funny, and witty spoken manner—even if it means they’re the butt of the joke. This translates well with their target audience, which is Gen Z and the millennials.
Colors inspire different moods. Blues and Greens may inspire a notion of healthy food (Good point, Subway!), however, red and yellow stick out. Warmer colors excite the mind and prompt a purchase decision, which again helps! Colder colors like Browns and Blues lack that. But ultimately, there’s no denying when you see a McDonald’s billboard ad in their striking yellow and red palettes—it has almost a pavlovian response on most drivers…you can practically taste the cheeseburger in your mouth simply by seeing their iconic color combo. If ever McDonald’s had a secret marketing strategy, colors are it.
Something for Everyone!
Vegan, vegetarian, non-vegetarian, dieting, foodie, into a specific type of meat, not looking for salty, maybe just looking for fries – Whatever is your ask, you would find it with McDonald’s.
Is The McDonald’s Marketing Strategy Working?
2 Metrics to Prove McDonald’s Marketing Strategies are Genius!
We can surely say that the franchise has been constantly growing and becoming better over the years with updated and effective marketing strategies, but, if we are to measure McDonald’s success at present times, we need to look at some metrics.
Sales Revenue as a Result of McDonald’s Marketing Strategy
Sales revenue is the income of a company which it earns exclusively from the sale of its goods or services. It is generally calculated over a constant period, like a financial year. This allows a business to compare its sales from time to time on a yearly basis.
|ANNUAL REVENUE of MCDONALD’S
As we can see that the revenue generated from sales show a major decline in FY19 to FY20, which was the time when the COVID-19 pandemic hit us all and the major industries felt an impact, some positive but most of them negative. But soon enough in the next financial year, the company stood back up with more than 14% increase in its sales which is indeed a positive sign.
The McDonald’s Net Promoter Score
NPS is a metric used to calculate the loyalty of the customers to a company. For example, how is their overall experience, would they recommend your brand to a friend or colleague or are they a detractor of your brand and spread negative word of mouth?
Promoters are those customers that spread a good review about a company, chat about the amazing burger they had recently, or suggest everyone eat at McDonald’s when it’s up for debate.
Passives are customers who aren’t enthusiastic about recommending the company, but not necessarily unhappy. They’re indifferent.
Detractors are customers who won’t revisit, recommend, or reconsider purchasing at McDonald’s ever again.
These metrics hint at a brand that’s successful, but what really hits home the impact of McDonald’s many successful marketing strategies over the years is this chart:
That total returns McDonald’s has produced for its franchisees over a 15 year period as a result of effective marketing strategies is staggering when compared to major market indexes.
McDonald’s would not be the brand we know and love today without a massive investment in effective marketing strategies. As detailed above, McDonald’s has successfully diversified their marketing strategies over the years and evolved with changing market preferences to stay the top fast food brand in the world.
McDonald’s owes this lofty title in large part to their constant investment in effective and impactful marketing strategies that ultimately raise the status of the brand. And let there be no doubt, McDonald’s stock owners are truly “lovin” the results…