Marketing Plan at McDonald’s Australia Holdings
1. Executive Summary
Health consciousness among people is increasing with time. People all over the world are shifting to healthier and organic foods from fast foods. The agro-food market has seen a shift in the offerings. Healthier products have entered the market. The food industry has developed a variety of products having health-promoting properties. Studies show that healthier options in Australia has increased and thus McDonald’s need to devise right strategy. Families should be the target for the company to increase the overall revenue. However the company needs to plan it carefully as several attempts have not resulted as desired. The company will have to do SWOT analysis thus analyzing the external as well internal opportunities and capabilities. Based on the SWOT, a marketing plan will be built to convey the important messages to the customers which are health and experience. Putting the right message and informing the customers with differential pricing will help the company to better cover the market.
2. Introduction and Background to the Company
Recent food demand shows a radical transformation in the concept of food in the recent years. The changes could be seen in assign to food, sensory and nutritional properties; and its importance can be seen in health maintenance, psycho-physical comfort and free from diseases. Foods are not meant to only satisfying hunger and providing necessary nutrients today, they also improve mental and physical well-being and nutrition related diseases of the consumers (Azzura and Paola, 2009).
McDonald’s is one of the largest food chain giant operating globally. Started in 1955 by two brothers McDonald and Dick, the company now operates in 119 countries with 36,258 restaurants. McDonald’s Australia Holdings is a subsidiary of McDonald’s Corporation founded in 1971 based in Sydney. 90,000 people are employed in McDonald’s in 900 McDonald’s across Australia. The company makes sure about the standard through hard work, honesty and quality, services, cleanliness and value (QSCV) (McDonald, 2015).
The company offers a range of products which include smoothies, breakfasts, favorites, value picks, dinner, drinks, sides and salads and desserts. Other products include freshly baked pastries, coffee, savory snacks and sweet snacks (McDonald, 2015).
The following report attempts to develop a marketing plan for McDonald in Australia. The strengths, weaknesses, opportunities and threats of the company are identified and analyzed. Based on the opportunities, a suitable product is selected and its market is developed. The target market, marketing mix and customer value will also be covered.
3. SWOT Analysis
Source: Jargon, 2014; Dalavagas, 2015
4. Findings
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. SWOT helps a company to understand its capabilities, reduce the weaknesses, identify the available opportunities and eliminate threats (Johnson et al., 2011). The above table is the SWOT for McDonald’s which analyses the external and internal environment of the company and thus to take right decisions by combining its strengths with the opportunities discovered.
The major strength of McDonald is its strong presence globally. The company’s “Golden Arches” are instantly recognized by almost every person. It has gained diversified income with so many locations present all over the world. The consistency in food and its taste is loved by all. It provides cultural diversity offering local products (Dalavagas, 2015). The strong brand presence and diversified income helps the company gain competitive advantage and thus has been ranked at the highest position.
The weakness of the company is the unhealthy food menu loaded with fat, sugar, carbs and salt that has created a perception of negativity towards the offerings of McDonald’s. Many of them don’t consider taking meals at McDonald’s because of its negative publicity. The other major weakness of the company can be seen in its high employee turnover rate. Since the company pays the employees less, they are either doing their jobs for short periods or don’t take their work seriously. Thus the turnover ratio is high and the results in high costs of training (Dalavagas, 2015). People also don’t like the overcrowded menu with the same taste and poor product and service quality (Jargon, 2014). The major weakness is the negative publicity because despite offering the healthier products, the company is unable to change the mindset of the company, thus tarnishing the image of the company. High turnover employees on the other is increasing the cost to the company.
Upgraded menu in terms of healthier food attracting health conscious customers is the foremost opportunity the company should work on. Since people have shifted to healthier food options, it is very important for the company to offer such varieties. Also the company can expand in more regions where the market is still untapped.
Intense competition is seen for McDonald’s in Australia. There are several such food retail business and food restaurants that are major thereat for the company. For example, the brands like KFC, Subway, Hungry Jacks, Domino’s Pizza, Red Rooster and Pizza Hut are similar chain providing similar products. Although the company has the largest share, these companies possess a fierce competition (King, 2014). McDonald failed to be the favorite restaurant chain when it came to healthy customers. Freshii, Maoz, Native Foods Café, Veggie, Grill, Tender Greens are some other loved restaurants by the consumers (Durisin, 2013). Another threat to company is constant change in tastes and preferences that company needs to consider to time to time.
Source: King, 2014.
Thus the company should work on the opportunities to hold its market share. However, the company still lacks in healthier options. So with the help of its strong brand image, it should go for its upgraded menu with healthier food option which will minimize their weakness of negative publicity, thus being ahead of its competitors.
5. Recommendations
5.1 Market Segmentation
McDonald’s segmentation is on demographic and psychographic basis all over the world. Demographic segmentation is done on the basis of age and income while psychographic segmentation is done on the basis of providing the taste and preferences of that particular company. Also behavior of customers and religious beliefs are considered. McDonald’s modifies itself with these beliefs (Khan, 2014).
The company targets several customers. The different types of customers can be grouped into families, a parent with two children, a business customer, children and teenagers (McDonald’s 2015). Every profile has different reason to visit the food outlet. The family normally visits the outlet for their children to give them a treat, and for children it is fun to eat at McDonald.
There are various offering for family profile at McDonald’s in Australia. Apart from the regular offers, Family Value Dinner Box, Family Favorites Dinner Box, Family Feed Value Box, etc. are the various offerings at McDonald. These boxes include cheeseburgers, softdrinks, fries, chicken nuggets, burgers, etc. (McDonald’s Australia, 2015).
5.2 Market in Australia
The food industry is ever-growing market. The food industry still shows a boom in future, Restaurants and cafes have stronger growth than grocery stores. Annual growth in the service industry in 2012-12 was 3.7% in the food service sector. Long term boom can be seen as patterns over the past years show the big spending on eating out (Ting, 2013).
Sales in 2014 for the healthy fast casual chains stood at $506 million with a rise of almost 30 percent (News.com, 2014). Reports confirm that organically produced food is consumed by Australians. Around 65% in a survey conducted prefer to intake organic food in their diet (Oates et al., 2012).
Thus the company can focus more on the healthier options to be competitive in the market. By innovating products which are healthier for a family will help the company to maintain its market share.
5.3 Sales and Marketing Plan
5.3.1 Product
McDonald’s Fruit & Yogurt Parfait w/ Granola, adding vegetable, fruit or salad choice as a substitute for French fries, low fat fruit yoghurts, are various innovative and healthy products that McDonald’s Australia can add in its menu. A family will be concerned for everything thus such options can be good for the company. Other additions the company may think of is the addition of healthier happy meals focused on children, thus focusing the family.
5.3.2 Place
The products should be made available to each outlet of McDonald in Australia. This will help consumers in easy access of the products and services. Whether they live in a town or big city, the customers should always have better and healthy options.
5.3.3 Price
Multiple price points can be developed at McDonald. Mass pricing strategy would be useful for the company for popular product lines so that it is affordable by the majority. Exclusive pricing policy can be made for selected products like low fat fruit yoghurts, etc. Thus wider segment will be covered. At special occasions and festivals, special pricing policies can be done. This will help the company to widen its market.
5.3.4 Promotion
Despite of several healthy offerings earlier, the company could not set the mind of the consumers that they are offering healthier food. Hence, promotion of such messages should be done effectively. Messages that inform them about the product and show benefits of the food will help the company. TV, cinema, radio and online ads with a message of provoking families to dine at McDonald will be useful. Other promotional measures that can be adopted include sales promotion, direct mail, door drops, demonstrations, etc.
5.4 Customer Value
The healthier options available at competitive prices will provide customer value to the families. The spouse and children would be seen healthy as the products provided by the company will be low in fat, salt, sugar and carbs. Moreover the promotions with the right message will help the customers to understand the new offers made by the company. However it is important for the company to be fully prepared as previous attempts had failed. So following the marketing mix properly will help the company targeting the families easily.
5.5 S-O and W-O Strategy
With the above new product added in the company’s menu, the weakness-opportunity relation could be seen. One of the major weaknesses of the company is that it offers unhealthy food while the opportunity is to grow into the healthier market segment. McDonald by launching these healthier options will utilize the opportunity and remove its weakness. Once the healthy food is understood and accepted by the market, the weakness of negative marketing will automatically be removed. A strength-opportunity relation could also be judged here. Opportunity of offering healthy food helps to strengthen the image of the company. Moreover, since the company already has brand name, the plans undertaken would be trusted by the families.
6. References
Azzura, A. and Paola, P. (2009). “Consumers’ behaviours and attitudes toward healthy food products: The case of Organic and Functional foods.” University of Naples, September 3-6, pp. 1-14.
Dalavagas, I. (2015). “McDonald’s Corp.: A Short SWOT Analysis.” Value Line, May 11. Available at: http://www.valueline.com/Stocks/Highlights/McDonalds_Corp___A_Short_SWOT_Analysis.aspx#.VlGucXYrLIU
Dursin, M. (2013). “10 Fast Food Chains That Serve Fresh and Healthy Cuisine.” Business Insider Australia, May 1. Available at: http://www.businessinsider.com.au/healthy-fast-food-chains-2013-4#just-salad-8
Jargon, J. (2014). “McDonald’s Faces ‘Millennial’ Challenge.” The Wall Street Journal, August 24, Available at: http://online.wsje.com
Johnson, G., Whittington, R., and Scholes, K. (2011). Exploring Strategy, 9th Edition, Prentice Hall.
Khan, B. (2014). “Segmentation, targeting and positioning of McDonalds.” Slide Share, November 23. Available at: http://www.slideshare.net/sammyZAMMY/segmentation-targeting-and-positioning-of-mcdonalds-by-bilal-khan
Family Value Dinner Box (2015). McDonald Australia. Available at: https://mcdonalds.com.au/menu/family-value-dinner-box
King, M. (2014). “Australia’s Top ten Fast Food Restaurants.” Fool Australia, April 4. Available at: http://www.fool.com.au/2014/04/04/australias-top-ten-fast-food-franchises/
Macca’s® Story: Where we’ve come from, (2015). McDonalds. Available at: https://mcdonalds.com.au/about-maccas/maccas-story
Marketing at McDonald (2015). McDonald UK. Available at: http://www.mcdonalds.co.uk/content/dam/McDonaldsUK/People/Schools-and-students/mcd_marketing.pdf
Oates, L., Cohen, M. & Braun, L. (2012). “Characteristics and consumption patterns of Australian organic consumers.” J Sci Food Agriculture, Nov, 92(14), pp.2782-7.
Ting, I (2013). “How Australia eats: The ultimate pie chart.” Good Food, November 5. Available at: http://www.goodfood.com.au/good-food/food-news/how-australia-eats-the-ultimate-pie-chart-20131102-2wstm.html
Veggies take centre plate as healthy fast food chains expand (2014). News.com. Available at: http://www.news.com.au/finance/business/retail/veggies-take-centre-plate-as-healthy-fast-food-chains-expand/news-story/4853eed264271acecc6930ef48ff7b80
