BACHELOR OF BUSINESS ADMINISTRATION

BBSG 4103
MARKETING MANAGEMENT & STRATEGY
JANUARY SEMESTER 2022

NO. MATRIKULASI : 970516305006001

NAMA : LYA NATASYA BINTI MOHD NOR

NO. KAD PENGENALAN : 970516305006

LEARNING CENTRE : MELAKA LC

Task 1

INTRODUCTION

A fast food restaurant, commonly known as a quick service restaurant (QSR) in the
business, is a type of restaurant that provides fast food cuisine with little table service. Fast food
restaurants generally sell cuisine that is part of a "meat-sweet diet." It is normally served from a
restricted menu, prepared in bulk ahead of time and kept hot, completed and packaged to order,
and mainly available for takeout, however seating may be available in the restaurant. Fast food
restaurants are often part of a restaurant chain or franchise business that distributes standardized
ingredients, partially produced foods, and supplies to each location via controlled supply routes.
Merriam–Webster recognized the word "fast food" in a dictionary in 1951. In the contemporary
history of the fast food industry, it is stated that the first fast food restaurant was called Automat
and opened on July 7, 1912 in New York. Many fast food companies that followed them
embraced this standardization and modified it to their specific needs. In this day and age, there
are over 200,000 fast food firms distributed over the world, yet only a few names spring to mind
when we mention fast food corporations. We can all agree on one of them, and that is
McDonald's or McD, which has become known with its economical burger set and variety
supplement ala carte option.

McDonald's can proudly claim to be the largest and most renowned fast food corporation
in the world, with 38,695 fast food chain restaurants worldwide and a brand worth of 129.3
billion in 2020. On May 15, 1940, the two brothers Richard and Maurice McDonalds opened a
barbecue restaurant in San Bernardino, California, and it has grown since then to what it is today.
During the early days, the company's main issue was overcoming the time it took to make food
because client demand increased every day and they had to wait more than an hour for their food
to be ready. Taking a hint from Henry Ford's vehicle assembly line manufacturing, the brothers
quickly devised their own method known as the 'Speedy Service System,' which focuses on
specific tasks for each worker.

The system's deployment reduced the time it took staff to prepare food while increasing
customer satisfaction. Not long after that, and even today, most franchise businesses use this
method to win and boost client happiness. What began as a barbecue restaurant has evolved into
the world's largest burger fast food retail chain, as recounted by the founder, who noticed an
intriguing statistic that during the early days, 80 percent of their sales came from only selling
hamburgers. Both founders made the decision to limit and slim their menu offerings to
customers. As a consequence, the firm began to take off after a time, with families and
businesses drawn to its menu offering. By the early 1950s, their sales was doubling and
expanding year after year, and the company was generating more than $350,000 each year. At
the moment, the entrepreneur has a handful of franchisees throughout California and Arizona.
McDonald's officially introduces its renowned Ronald McDonald clown character in order to
captivate children's audiences, which garners a lot of attention, especially among the younger
generation. This technique worked because they were able to catch the interest of a younger
audience, as well as a family portion of customers. In terms of food spending, parents frequently
follow where their children prefer to eat because their main client base consists of parents with
small children, teens, and businessmen. As matter of fact, they are the largest toy distributor
worldwide with more than 1.5 billion of toys distribute every year although McDonald’s is not in
toy businesses.

McDonald's has developed some of the most memorable offering menus that we can all
remember, such as the Big Mac, Quarter-Packed, Filet-O-Fish, Egg McMuffin, and many more,
via innovation and comprehensive consumer research. In terms of their retail locations across the
world, they presently operate over 38,000 stores, and that figure is growing by the day. Outside
of the United States, Japan has 2975 shops, China has 2391 stores, Germany has 1470 stores, and
the remainder is spread throughout 120 countries. This country is one of their most important
customers worldwide. To remain relevant in the market, McDonald's Corporation spent around
447.3 million US dollars on advertising worldwide alone in 2019, a decrease from 476.8 million
US dollars the previous year.

With 93 percent of their restaurant network being franchises, McDonald's Corporation

routinely hosted business convention meetings for their franchisees and partners throughout the
world to keep them up to speed on the company's strategy. This is critical for a large corporation
like McDonald's to persuade its partners and investors of the company's mission. McDonald's
success story is quite intriguing, and many aspiring entrepreneurs and future marketers may
undoubtedly benefit from it. As the world is now turned upside down by this worldwide
pandemic, many firms have halted operations, and consumer preferences are changing at a rapid
speed, businesses must stay on the cutting edge and be one step ahead of the game in order to
manage and maintain their clients.

As we can see in Malaysia, McDonald's management is always coming up with unique

commercials and offers customized to the requirements and preferences of Malaysian consumers
in order to stay ahead of its competitors. They also rigorously tailored their product to the culture
and social habits of Malaysians. For example, every year on Chinese New Year's Eve,
McDonald's releases its beloved "Prosperity Burger" set, which is only available for a limited
time. Aside from that, the management has tried a few new things, such as establishing a "Nasi
Lemak Burger" menu to comply with Malaysian culture. Despite the fact that it garnered a lot of
conflicting response from its consumers, it still gives McDonald's an insight into its customers'
reactions and preferences in the market. This demonstrates that even large corporations, such as
McDonald's, must experiment with novel ideas in order to get market knowledge and suit
customers' ever-changing preferences. Through ups and downs, we've seen McDonald's
constantly adapt and change their marketing strategy. Later, we'll go into detail about how
McDonald's management analyses consumer insights and makes effective management decisions
to meet market demands. We will begin the investigation by looking at how they categorize their
product markets, target them, and position them to meet the demands of local consumers.

McDonald's segmentation, targeting, and positioning is an important part of their

marketing strategy. Segmentation is splitting a population into categories based on particular
traits, whereas targeting entails selecting specific groups found through segmentation to offer
things to. Positioning refers to the choosing of the best marketing mix for the target client
category. McDonald's employs adaptive product positioning, and as a result, the corporation
engages in frequent re-positioning of products and services in response to changes in the
segment.
Market Segmentation

Buyers differ in every business in terms of their wants, finances, locations, purchasing
behaviors, and purchasing patterns. Companies divide large, fragmented markets into smaller
segments, which allows them to do so more efficiently and effectively by providing goods and
services that satisfy their specific demands. Geographic segmentation, demographic
segmentation, behavioral segmentation, and psychographic segmentation are all types of market
segmentation.

Segmentation, targeting, and positioning are critical components of McDonald's

marketing strategy. Segmentation is the division of the population into categories based on
certain characteristics, whereas targeting is the selection of specific groups formed to sell goods
as a result of segmentation.
 TYPE OF SEGMENTATION MCDONALD’S TARGET SEGMENT
SEGMENTATION CRITERIA
Geographic Region Domestic/international
Density Urban/rural
Demographic Age 8-45 years
Gender Male & female
Life-cycle stage Young people, single and not living at home.
Newly married couples that young and no
children.
Full Nest II: youngest child six or over.
Income Low and middle
Occupation Students, employees, professionals
Behavioral Degree of loyalty ‘hard core royals’ and switchers
Benefit sought Cost benefits, time efficiency
Personality Easygoing & careless
User status Potential and regular fast food eaters
Psychographic Social class Lower, working and middle classes
Lifestyle McDonald’s targets Resigned, Struggler and
Mainstreamer individuals according to Cross
Cultural Consumer Characterization
developed by Young & Rubicon
Table 1: McDonald’s Market Segmentation

McDonald's is the world's largest restaurant chain in terms of geographic segmentation,

with over 37,000 outlets in more than 120 countries. The fast-food company separates its target
markets into categories based on nation, region, and city, and then customizes the menu based on
local preferences. These numerous customer groups have a wide range of tastes, and McDonald's
performs an excellent job of localizing its goods.

Instead of attempting to advertise a Big Mac (a beef burger) in India and influencing
local attitude, they introduced the Maharaja Mac. The Maharaja Mac is a vegetarian variation of
the Big Mac. In addition, McDonald's produces seasonal flavors in Japan, such as the TeriTama
Burger in the spring and the Tsukimi Burger in the fall. Similarly, we may buy a McD chicken
with spaghetti in the Philippines, and Russian McDonald's has a daily breakfast item on the
menu that is loaded with cottage cheese, raisins, and dried apricots in the form of blini-like
bread. McDonald's changes their product offering based on geographical and cultural factors.
This not only demonstrates respect and understanding for local customs and beliefs, but it also
improves their company's reputation and bottom line.

McDonald's demographic segmentation has done well in a variety of global countries.

McDonald's was a perfect escape for kids after school, on weekends, and on holidays, offering
great features such as "Happy Meals" served with children's favorite toys, and the company also
developed playgrounds in their restaurants for kids, which causes children to love McDonald's
and want to come McDonald's more often.

Behavioral segmentation is associated with special occasions, such as children's birthday

celebrations. Local youth groups visit McDonald's not just for the inexpensive prices, but also
for the ease of accommodation. McDonald's will be able to handle a large number of people
while also appealing to younger audiences. Their cuisine and ads are unmistakably aimed
towards keeping a young customer base.

In psychographic segmentation, McDonald's has established a new and fresh product line
based on the comfort and lifestyle of its customers, including goods such as the McVeggie
Burger for nations with a big vegetarian population. In Malaysia, they created the "Ayam Goreng
McD" since most Malaysians enjoy eating fried chicken. They also developed McDonald's as a
location for its customers to unwind and even have fun.

Market Targeting
 Target market identification is deciding on one or more market segments or client groups
to target in your marketing mix. The assumption is that adjusting that mix to meet the specific
requirements and aspirations of your target market would eventually be more lucrative for the
company than mass marketing to every potential consumer in the market. Target market
identification is determining why a client would want to buy from you, segmenting the total
market based on common qualities, and then selecting the most practicable, lucrative market
segment or segments as the target market for your marketing mix.

McDonald's Malaysia serves around 13.5 million guests every month in 300 outlets
across the country. According to their Brand Promise, "to deliver Simple Easy Enjoyment to
every consumer at every visit," they have performed a lot of research before launching a
campaign for a new product. If, as McDonald's has always done, the campaign is not too lengthy,
for example, if they run a promotion on Hello Kitty Happy Meal "their aim is from the group of
females who are interested in the cartoon and the fit they supply will vary every week."

According to the Brand Mission "Becoming our customers' favorite place and method of
dining," it can be seen that they take great care of the place of business to guarantee all
customers are happy with the surrounding environment and it is rich in pricing and food that has
been paid for by consumers. Our Principles "McDonald's® objective is to be our customers'
favourite location and way to eat - with inspired employees who surprise each customer every
time with unrivalled quality, service, cleanliness, and value."

Market Positioning

Positioning is the process of arranging for a product to hold a distinct, unique, and
desired position in the thoughts of target consumers compared to rival items. Marketers devise
positioning strategies that separate their goods from rival brands and provide them a competitive
edge in their target markets. Positioning is inextricably linked to the idea of perceived worth. In
marketing, value is defined as the difference between a prospective customer's assessment of the
advantages and costs of one product against others. Value may be communicated in a variety of
ways, such as product advantages, features, style, and value for money.
 Market position in marketing and business strategy refers to a consumer's impression of a
brand or product in comparison to rival brands or goods. Market positioning is the process of
establishing a brand's or product's image or identity so that consumers perceive it in a specific
way. A fast-food restaurant business, for example, may promote itself as a source of low-cost,
standardized meals. A coffee firm may promote itself as a provider of high-end, luxury coffee
drinks. A shop, for example, may present itself as a location to acquire household basics at
affordable costs, while a computer firm could position itself as selling hip, inventive, and user-
friendly technological items.

McDonald's has consistently positioned itself as the largest and most well-known fast-
food brand. This brand is no longer unusual in society since it has created quick food that is
popular with people of all ages all around the world. If a consumer is asked to name a fast food
restaurant, the first name that comes to mind is McDonald's. It is because they suit the
consumer's wants at any time and in any scenario. Furthermore, they have faith in the items
manufactured by this firm because the majority of them have been using it for a long time. This
company's advancements have also led to consumers constantly trying out either old or newly
launched items.

The customer cannot analyze the product every time they make a purchasing choice, but
they have a wealth of knowledge about a brand's product and service. As a result, the customer
will categorize items, services, and companies and position them in their brains during the
purchasing process. According to our research, many consumers believe that McDonald's items,
such as burgers, fries, fried chicken, desserts, and others, are more delectable than those of other
firms. As we all know, the product position is critical in conveying a complex collection of
views, impressions, and sentiments that customers have about the product. People choose
McDonald's brand over other fast food companies because of the high quality of its items and
inexpensive rates.

The value proposition is the entire set of advantages that distinguishes and positions a
brand. McDonald's founder, who is one of the McDonald brothers, studied their clients who
frequented their restaurant and tried to figure out why. McDonald's value proposition is rapid and
efficient service, lean process, pricing, product quality, and selling experience. The brothers had
thought that by providing value to their clients, they would become more loyal to the items and
services that they offered. McDonald's can differentiate them at every consumer touch point by
using the value proposition. Initially, McDonald's plan was to become one of the fastest
hamburger services, but their attempts to reduce time led to the evolution of the positioning
approach. Significantly, people start to see and believed that McDonald's as “Low-Priced,
Quality Hamburger with Quicker Delivery”. (Mohammed, 2019)

McDonald's is also well-known for its iconic catchphrase, "I'm lovin it." They reject the
oversimplified idea of "brand positioning" and no longer employ obsolete marketing tactics and
philosophies. 2020 (Light). They also developed their logo in the shape of the letter M, using
Golden and Red as primary colours. The originality of this company's motto and logo has piqued
the interest of users all around the world.

Next is the pricing placement. It should be mentioned that there has been a significant
amount of study conducted on the psychology of price in marketing. Simply said, the price of an
item reveals more about the thing to the customer than most people understand. Many people
equate a greater price with higher quality, whereas the converse is true for a cheaper price.
Furthermore, if a product is being positioned as a decent alternative to high-priced goods, the
marketing department must price it in the center of the market to prevent being compared to the
cheapest end of the spectrum.

To summarize, the marketing idea is the notion that each organization should analyze its
consumers' needs and make effective judgments in order to serve those wants. This can also help
to strengthen consumer relationships. The appropriate positioning strategy implemented at the
right moment may assist a company in creating a compelling image in the minds of customers.
The present positioning approach occasionally fails to resonate. This might be due to new market
entrants, changing consumer preferences, structural changes within the target market (such as
ageing and segment creep), or simply because customers have forgotten about a brand and its
position. Positioning determines where you are and where you want to be as a result of your
strategic marketing efforts. It develops a brand notion that marketing uses to implant in the
brains of the target client. Marketing does this through methods that are founded on a deep grasp
of the psychographics and demography of the market group chosen as the target audience.
Task 2

Recommendations

McDonald's is widely regarded as one of the most eminent modest food brands in the
world, with more than 30,000 distinctive stores in 120 countries serving more than 47 million
people every day. This is owing to its well-known and diverse menu, as well as the act of top-
notch administration in serving its customers. They have revolutionized the low-cost food sector,
directly altering the lives of those who prepare the food as well as those who consume it.

The rise in the number of overweight people, together with the prevalence of obesity, has
resulted in the emergence of a market sector comprised of health-conscious clients. To appeal to
this demographic, McDonald's must make considerable changes to its menu. To demonstrate its
dedication to offering healthy meals, the firm should lower the quantity of sugar, fat, and salt in
its burgers. Furthermore, the company's "Happy Meal" campaign should offer juice, milk, and
water as alternatives to soda. McDonald's participates in efforts to combat childhood obesity in
order to demonstrate its commitment to supporting healthy eating.

Initially, families were McDonald's primary target market. Children were the centerpiece
of the company's advertising activities. Today, the corporation must attract millennial, who
account for the majority of the population. To entice millennial, McDonald's must redesign the
bulk of its locations. Furthermore, the majority of its advertising initiatives must be aimed
towards teenagers. McDonald's should provide a choice of spicy foods to appeal to young adults.
McDonald's recognizes that the majority of millennial have limited discretionary income. As a
result, the company must make an effort to promote low-cost meals in order to attract more
consumers. Many young people go to eateries to meet up with pals and use the free internet. To
attract young people, McDonald's must provide free Wi-Fi in the majority of its outlets.

For brand promotions, McDonald's can use an integrated marketing mix that incorporates
both classic and new digital media. McDonald's must realize the relevance of digital media in the
promotional mix for businesses and develop digital marketing strategies to communicate with
their online customers. In the digital era, the marketers need to take this opportunity to target
marketing to digital media users such as Instagram, Twitter, Facebook and more. This platform
can be said to provide a good reaction and welcomed by the public. Most of these digital media
have successfully persuaded customers to buy the products offered.

In order to establish the restaurant as a superior service restaurant in the minds of the
target consumers, McDonald's must focus on service differentiation approach. According to the
service differentiation approach, McDonald's must provide outstanding services at all consumer
touch points, from order placing through product delivery.

McDonald's appears to not vary its offerings on a regular basis, although competitors are
stronger and are steadily introducing new products. As a result, McDonald's should invest more
in R&D in order to develop new goods and services while also increasing operational efficiency.
First and foremost, McDonald should concentrate on the play area for children. McDonald's has
play areas, although not in every location. If you eat at a McDonald's restaurant, you may go out
and party while your children play at the play area. Customers will appreciate this service. As a
result, if it is implemented at all of the company's restaurants, consumers will be more satisfied,
and they will want to return on a frequent basis. Furthermore, with many new and intriguing toys
on the market, as well as safety, toys must be taken much more seriously.

Furthermore, with many new and intriguing toys on the market, as well as safety, toys
must be taken much more seriously. Jolly Bee is one brand that has had great success with this
method. McDonald's may benefit from Jolly Bee's development of this service in order to
strengthen its market position. Next, even if the company's menu is still reasonably affordable in
comparison to that of its competitors, it is insufficient. Because apart from pricing, customers
also make decision rely on menu. There is no new one like that after bringing a fresh menu with
tuna sandwich and salad at several restaurants, particularly in Britain, and receiving a lot of
praise from consumers. McDonald's menu is overly focused on cheese, beef, or chicken, rather
than vegetables. McDonald's, for example, offers fruit slices on their menu. It is, however, only
offered once a week. McDonalds should alter as a result of the recent change in eating habits of a
substantial portion of its consumers. The company should add additional vegetarian items to the
restaurant's menu. An organic cuisine is essential. This would provide customers with a choice
while allowing McDonald's to keep its global market share.

Suggestions 4Ps strategies

1. Product

McDonald's must consider cultural considerations while servicing Malaysian customers.

The cuisine served is halal and also has a local flavour. They must have a diverse meal selection.
For an instance, Chinese New Year, they offer the 'prosperity burger.' McDonald's must also
supply nutritious and healthy meals, like vegetables and fruits. However this will have an impact
on the flavour and dining experience of customers. For example, saturated oil, which has
recently been replaced with trans-fat oils, has changed the taste of McDonald's famous fries.
 In addition, to promote convenience to consumers, McDonald's can provide extra product
and service options such as meals on demand and home delivery. Fresh ingredients can improve
product quality even more. To attract and engage with target customers in varied geographical
regions, McDonald's should continue to invest in menu personalization and menu standardization
methods.

2. Price

McDonald's had more price cuts than KFC and Burger King. They have very reasonable
meal costs. There are "Value McSavers" and "McValue Meals." KFC and Burger King both
feature value meals dubbed "Jom Jimat Every day," yet McDonald's has the greatest price for
fast food. However, McDonald's only sold it for a limited time, raising the issue of its availability
such as during breakfast and lunchtime. For Chinese New Year, they serve the 'Prosperity
Burger.' McDonald's serves Ayam Goreng, which is exclusively available in Malaysia, and
McCurry Pan, which is only available in India. McDonald's also provided 24-hour delivery
services, allowing customers to eat at any time of day or night. This is one of McDonald's key
advantages over its competitors, since KFC, Subway, Burger King, and others do not provide 24-
hour delivery. So the suggestion is instead of selling the meals with limited time, why not
McDonald’s just add on the value meals in their menu. This will absolutely makes people choose
McDonald’s rather than other fast food restaurants.

3. Place

McDonald's has more than 185 outlets around the country. They are created or opened in
retail areas such as shopping malls because to the habit of all Malaysians who prefer to shop in
malls. They also open in certain rural areas; however KFC has more restaurants in rural areas.
McDonald's has also opened at a number of local petrol stations, including PETRONAS Mesra,
in strategic locations. They create an express café that serves popular items. This can fulfill the
hunger of consumers such as working executives on the go and motorists. My suggestion is
McDonald does can build or opens their restaurants in university or campus area as McDonald's
keeps it affordable for teenagers to hang out with their friends. Students will definitely go to
McDonald’s to grab some food if they in hurry as McDonald’s serve grab and go kind of food.
Furthermore, we know that university life is full of celebration or farewell, so students can go to
McDonald’s if they wanted to do any kind of celebrations.

4. Promotion

One of the most important components in achieving strong profit and great customer
happiness is advertising. Before visiting a fast food establishment, fast food purchasers seek
price deals and promotions, according to Kara, Kaynak, and Kucukemiroglu (1997).

Events and sponsorship by McDonalds is mainly to coordinate with their social

responsibility. They usually organize events for their Ronald McDonald Charity House.
McDonald's television advertisements are placed on a seasonal basis, and they are only shown
during holiday seasons and during movies. Typically, their advertisements target youngsters
rather than adults. KFC uses a similar approach to McDonald's in their television advertisements.
KFC, on the other hand, has its own television show called "Chicky Hour," which airs every
Saturday few years ago.

For brand promotions, McDonald's can use an integrated marketing mix that incorporates
both classic and new digital media. McDonald's must realize the relevance of digital media in the
promotional mix for businesses and develop digital marketing strategies to communicate with
their online customers. McDonald's need to take this opportunity to target marketing to digital
media users such as Instagram, Twitter, Facebook. As we can see, McDonalds has already had
their own social media account to attract customers. They also can try the new platform which is
Tik Tok that is famous among youngsters. This platform can be said to provide a good reaction
and welcomed by the public. Customers can easily check out their new menu or promotion
online. Moreover, this also offer McDelivery for delivery of its products to consumer homes and
McDonald’s Drive-Thru can make it easier for its customers to purchase their products.
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