McDonald's

By Tania Haleem

Introduction• The company• The history of Mc Donald’s• Products• Price• location• Target market• Promotions and adverts• Competition• Financial data• SWOT Analysis• summary

McDonald’s – The Company

American fast food take away restaurant, which is now Global!

1st McDonald's restaurant opened in 1967

Currently there are 1,300 restaurants in 120 countries world wide, 465,000 employees and serving 50,000,0000 customers daily

Owns 41% of the market share in the fast food market

Oligopoly market structure

Biggest target market – children

Slogan – ‘I’m lovin’ it’

Ray Kroc – The cooperate founder of the McDonalds Franchise based his business on Q.S.C & V

McDonald’s History1948 –Richard and Maurice McDonald opened the first

McDonalds restaurant in California Ray Kroc- invested all his time and money selling multi-

mixes until 1954. Ray Kroc decided to help the McDonald brothers,

Richard and Maurice, with their business ensuring more stores will be opened if his multi-mixers were sold to their customers.

Ray Kroc opened his first McDonald franchise store in 1955.

1960 – 1st slogan ‘ look for the golden arches’

1961 – Ray Kroc buys out the McDonald brothers for $2.2 million

Ray Kroc

De Plaines, Illinois - 1955

McDonalds Poster1955

McDonald’s History In 1965 McDonalds went public – selling on the stock

exchange. 1968 - Jim Delligatti designed the ‘Big Mac’ and

opened 12 stores in Pittsburg 1973 - Herb Peterson designed the ‘egg McMuffin’ 1974 - Fred Hill partnered with McDonalds to create

the clown, Ronald McDonald which means ‘FUN’. He also opened a charity house for terminally ill children.

1975 – first McDonalds ‘drive thru’ was opened 1979 - June, the kids ‘Happy Meal’ was started by St

Louis Missouri 1984 – Ray Kroc died 1986 – ‘Drive thru’ restaurants opened in UK 1996 – McDonalds was on the W.W.W

‘Big Mac’

‘Happy meal’ 1979 ‘Egg McMuffin’

McDonald’s Products1. What are McDonald’s products 5 main

ingredients?

- Beef, Chicken, Bread, Potatoes & Milk

2. What is McDonald’s biggest seller?

- ‘chips’

3. What is McDonald’s latest product?

- The ‘Legend’

4. What other brand products do McDonald’s uses?

- Cadbury’s, Coca Cola, Danone, Heinz, Mc Cane, Minute Maid, Mother Parkers, Nestle’, Quaker, Saputo

McDonald’s Products

The product – features, quality, quantity

Product features – ‘think global, act local’

Muslim community – ‘Halal’ McDonaldsJewish community – ‘Kosha’ McDonaldsHindu community – vegetarian McDonalds

Product Quality & safety checks are taken from all stages of production from the farm to the restaurant ensuring the right quantity and quality is produced.

McDonald’s Price

Pri

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f p

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Product quantity

100

1000

This law of ‘supply & demand’helped the company to grow and expand rapidly

This law of ‘supply & demand’helped the company to grow and expand rapidly

Toasted Deli Sandwich £2.79p

Studies show customers will not pay more than £2.50 for a burger, but McDonalds can charge £2.79 – they are a ‘top brand’

How does McDonald choose the right price for the right market?

-Selecting price objective-Determining demand-Estimating cost-Analysing competitors cost prices and offers-Selecting a pricing method-Selecting a final price Value pricing & psychological pricing

McDonald's location

McDonald's restaurants are placed in 120 countries around the world. The picture shows an example of where they are situated and the dates of when they where opened.

McDonald’s Target Market

McDonalds has a multi-faceted target audience.

Targets:

-Families

-Single people

-Older people

-Children

-Teenagers

Since Ronald McDonald was invented

The biggest target audience - Children!

Vegetarians, their newest target audience – since the vegetarian menu started

McDonald’s Adverts & Promotions

McDonalds has a £35 million marketing budget in the UK alone

- Kids Advertising – internet games featuring Ronald McDonalds- ‘Happy meal’ Toys – Disney has a strong

relationship with the Happy meal

- Monopoly board game – collect a certain amount of vouchers to win a prize!- Alan Shearer – use his on adverts to sell a

burger

(http://www.youtube.com/watch?v=ZwkZHSbvBIY&feature=related)

- McDonalds Advert -

McDonald’s Competitors

Wendy's

2% market share

Pizza Hut

5% market share

Burger King

3.6% market share

Taco Bell

5% market shareK.F.C

5% market share

McDonalds has 41% of the fast food market share

McDonald’s Financial Data

                                             

2005Highlights(Millions)

2006Highlights(Millions)

% increase / decrease

SalesRevenue

$19,823 /£9,911.5

$21,586 / £10,763

8.8% +

Operating profit

$3,992.5 /£1996.25

$4,445.1 / £2,222.55

11.3% +

Profit after tax

$2,602.2 / £1,301.1

$3,544.2 / £1,772.1

36.2% +

Share price $33.72 / £16.8

$44.33 / £22.17

Earnings per share

$2.04 / £1.02

$2.38 / £1.19

McDonald’s SWOT Analysis

• Strengths-Global brand power and Fast food giant-Sell the majority of consumer’s food preferences-Knowledge of change in culture-Affordable priced food

• Weaknesses-Easy targets for health freaks because food is generally

unhealthy -Media attack on their children target market

• Opportunities-Image improvement-Increase in late night opening hours

• Threats-Rise in competition-Vulnerability to the disease BSE and Blue tongue scare

Summary

McDonalds is fast food, global and has the largest market share (41%) within the consumer fast food market.

McDonalds slogan is ‘I’m Lovin’ it’.Low price, high volume stock- encourages consumers to

buy more of their products.McDonalds uses the marketing strategy of ‘think global, act

local’ to promote the product to every market place culturally.

McDonalds has increased profit within the last few years.McDonalds spends £35 million a year in the UK chains

alone and spends a whopping $2.2 billion a year advertising globally, no wonder their biggest target audience has always been the children.

Thank you for listening!

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