McDonald’s Brand: Problems and Solutions

Outline

1. Problems:

A. Poor marketing strategies is one of the reasons businesses are failing.

a. Engaging in wrong marketing strategies exposes the business to unnecessary costs that produce no value to the business.

b. Wrong marketing undertakings resulting in a company having unfavorable public perception and long-term loss of market command.

B. McDonald’s faces many challenges.

a. McDonald’s suffers from negative customer perception of the brand. Customers prefer the chains that are considered as healthier (Kane).

b. McDonald’s experiences the unprecedented competition from new entrants in the fast food industry.

c. The company faces reduced market command that have been overtaken by other chains.

d. The greatest challenge McDonald’s endures is that the chain has lost the support of the millennials who count for the largest group of customers in the fast food industry.

e. The company is the condition of major image crisis that has dented its competitive edge in the market.

2. Solutions:

a. McDonald’s needs to have a sensitization campaign on the ingredients used within its chains.

b. There is the need for the realignment of McDonald’s menu in line with the insights provided by the customers.

c. McDonald’s can utilize informative brochures and inquiry.

d. The company should gather information on customers feel uncomfortable with the menu in terms of being regarded as healthy.

e. Improvement of the customer’s experience is the core aspect that may allow the company win back the customers.

f. McDonald need to reduce the turnaround time and to improve the general experience in its stores.

g. The company should start reopening the closed stores but in a cautious and gradual way

Get a price quote

In the current era in the business world, competition is at its peak, with more forms of enterprises finding their way into the market. Customers are now having a ready substitute in case their preference is not in the market or has been superseded by another brand (West, John and Essam 33-35) Moreover, there has been a shift in demand brought by millennials to the industries who are very sensitive to their consumer behavior. Millennials have also brought a new culture that pertains instant gratification; that is why a business needs to familiarize itself with the current trends if it is to remain relevant to the millennials who form the majority of the consumers (Tulgan 27). These are the parameters that have seen McDonald’s, once a giant in the fast food industry, experience a hard time in an environment where high-end competition is the norm of the day. In 2015, the company faced a sales decline of $400 million (Kane). Furthermore, in the same year, the company announced that it intended to close down approximately 350 non-performing restaurants in Japan, China, and the U.S. (Kane). What is important to understand is that the poor performance of McDonald’s is not the result of reduced demand but a company-based challenge that creates the need to realign accordingly. The company has tried to respond to the situation by “test marketing all-day breakfast,” and a 24-hours 24-cities marketing also dubbed as the “day of joy” (Kane). However, not much progress has been made, and the brand continues to lose customers. In respect of these challenges and the unsuccessful steps taken, this report describes how McDonald’s can regain its dominance by improving its image and customer experience. It can be done through an intertwined approach that includes both marketing engagements and changes in the menu as a means of regaining the trust of its customers as a healthy food chain and, above all, capturing the interest of the millennials.

Significance of the Problem

One of the reasons businesses are failing is because of poor marketing strategies that are out of touch with the realities of the market. Moreover, when a company engages in wrong marketing strategies, they are exposed to unnecessary costs that produce no value for the business. It is the case with the McDonald’s choice of using the “test marketing all-day breakfast,” and a 24-hours 24-cities marketing also dubbed as “day of joy,” which brought no results to the business (Kane). On the contrary, it suffered a huge loss in terms of declined sales and the loss of its customer base to its competitors that were more appealing in terms of perception. Therefore, there is a need to ensure that any marketing undertaking is centered upon providing a breakthrough in challenges that the company at hand is facing. It should also be appreciative of the general trends in the market. Following these two demands, a company will make its marketing undertaking more effective in winning customers and retaining the existing ones.

However, the greatest blow is the fact that the chain has lost the support of the millennials, which account for the largest portion of the customers in the fast food industry. It is, therefore, clear that the company is suffering a major image crisis that has dented its competitive edge in the market. The impaired competitive position in the market is the result of more fast food customers being sensitive to what is healthy in the menu provided (Tulgan 39). One of the stereotypes that have appeared in the fast food industry is the fact that the majority of the food available in unhealthy (Schlosser 99). This idea has caused many food chains realign their menu in an attempt to improve its “healthiness” outlook. Therefore, with McDonald’s scoring terribly in this context, a poor result was surely inevitable. Moreover, millennials are now highly influencing the demand pattern in many industries, and with fast food being one of them, it is of high importance to ensure a business captures their loyalty (Tulgan 47). On the contrary, McDonald’s have tried to enact marketing strategies that ended up being ineffective. With poor customers’ perception of the brand and a lost touch in the key market segment, McDonald’s needs a marketing undertaking that will lead to a huge improvement in its brand outlook and competitive edge in the market.

Three Alternative Solutions

Uplifting the Brand’s Image

To any business, having a strong image in the market is as important as having the right product. In this respect, in the line of changing the perception of McDonald’s as an ‘unhealthy’ food chain, there is the need to launch a sensitization campaign on the ingredients used within its restaurants and the quality assurance process that they have to undergo before finding its way to McDonald’s stores. To this end, brochures need to be issued to every customer who visits any of its food outlets worldwide. Moreover, in every location, there should be a helping desk specialist who is conversant enough in the content of the brochures and can avail additional information that the customers might need to clarify. It will be a good start for the company to engage with the clients on the one-to-one basis where more lobbying can be done in the line of eliminating any fear of the menu being unhealthy. To ensure a more successful outcome, the providing of information should be accompanied by inquiries on the areas of the menu that seem the most questionable to the customer in terms of being regarded as healthy. The collected information will be instrumental both in making changes in the menu and at the same time making the customer feel appreciated by the clear demonstration that their perspective can always make a difference at McDonald’s outlets.

A customer-oriented company is better placed in luring more customers as it becomes easily relatable. When visitors feel that a business is going beyond the call of duty to implement strategies that are aimed at improving their experience or meeting their demands, it becomes possible not to just retain the existing clients but also lure more through active customers’ referrals. Therefore, engaging the clients in matters that have to do with how healthy the chain’s menu is will be essential. It is sending a big statement that despite the current predicaments, McDonald’s is still striving to guarantee that its services are guided by the demands of the customers. It is of importance to ensure that the information availed in the brochure passes the readability test to affirm that most people can understand the content and the purpose of the campaign. The more people can understand the purpose and the content of the marketing engagement, the bigger audience the marketing undertaking will reach through referrals (Popky 51). Utilizing this platform will ensure that the crucial information needed in gaining the assurance of the customers in the food chain’s ability to provide healthy dishes will be availed to the public. Moreover, the approach allows delivering the facts in a manner that is effective, cost-effective, and, above all, customer-oriented since there is an opportunity for the customer to be empowered further in its locations around the world.

Our outstanding writers are mostly educated to MA and PhD level

Winning of the Millennials

The intention at hand will be to ensure that the brand is in a position to improve its perception among the millennials. One of the principal undertakings will be to guarantee that McDonald’s has the ability to attract more young people into their outlets. It demands that the company improve the experience of the people in their restaurants. The tool to exploit in this regard is the product aspect of the 4Ps marketing mix. However, there is the need to appreciate that the company at hand is suffering from continued loss of customers to their competitors. This situation demands a tailor-made utilization of the product-based marketing in a manner that will reinvent McDonald’s products in a way that best conforms to the requirements of the millennials.

Product

One way of improving the business’ ability to capture the interest of the millennials is providing products that seem to satisfy their needs in terms of instant gratification. Under the current circumstances, McDonald’s needs to either change its menu to be at par with its competitors or improve its level of differentiation to help strengthen its market competitive edge. Through the information availed in the interaction between the company’s agents and during empowering sessions, the McDonald’s menu need to be upgraded to best comply with the demands of the millennials and the general public. It will entail bringing in new ways of preparing the meals through the use of ingredients that the society is requesting due to their element of being healthy to consume. It is a feature that will not only win the millennials’ support but will also be in line with improving the general perception of the brand in the market. Moreover, the realignment of its menu according to the insights provided by the customers will allow McDonald’s to expand its assortment in a diligent manner that cautions the company from unnecessary costs but, at the same time, have a menu that captures the different demands of its diverse customers.

Experience

Improvement of the client’s experience is the core aspect that many companies have utilized as a means of winning over the loyal clients. Instant gratification heavily depends on how well the need is satisfied and the turnaround time taken to meet the expectation of the demand (Tulgan 48). There is the need to ensure that services are availed in an efficient manner that meets both the request of being of high-quality and the demand for instant gratification of the millennials. One of the ways this can be done is by making the McDonald’s restaurants more customer-friendly by reducing the queuing time the customers spend waiting to be served. It is one of the fundamental ways the culture of instant gratification is created. There is, therefore, the need to install ordering machines where customers would place their order and be served quicker. The company must also come up with a checkout through an online platform where the customer can order and pay for their food or drinks before reaching the outlet. This option, in turn, will ensure that the restaurants are in a position to serve its customers proactively. It will go far in improving the customers’ experience through reduced delays in the food outlets. Another way that McDonald’s can improve the customer’s experience is by integrating the visitors into the preparation of the meals offered by allowing them to have tailor-made drinks. It will request a selection of common foods according to the demand based on market research, in which the clients can be allowed to choose what to include in their soft drinks and meals. These are approaches that will guarantee that McDonald’s will improve its ability to rule more millennials into their restaurants by giving them more control, which is one of the most common attributes of the consumption behavior of millennials.

Gradual Reintroduction of Closed Restaurants

Customers’ trust is won with a clear illustration that the venture will meet the current and future demands. In the line of winning the loyalty of the public, McDonald’s needs to demonstrate that it can compete with others in the market. Therefore, the closure of non-performing outlets was a huge blow to the image of the company. To the customers, it was an illustration of the presence of uncertainty in the perpetuity of the business. It is due to this uncertainty of its financial health that the customers may have doubted the brand’s ability to produce healthy food like its competitors, which were outperforming in financial terms. Therefore, in the line of winning back the trust of the public, the company should start reopening the closed restaurants. However, it should be done in a cautious and gradual way to ensure that the action does not expose the company to more financial challenges. Moreover, the reopened locations should include the new menu and the new customer experience to guarantee a more productive undertaking in these ventures.

Conclusion

It is clear that McDonald’s low sales are the result of poor perception in the market, where it is not recognized as a source of a healthy menu in the fast food chain industry. Moreover, the loss of support of the millennials has also played a huge role in the company losing ground in terms of market command. Therefore, the company needs to enact tailor-made actions on the marketing front and make changes in its menu that should be accompanied by an improved customer experience. Besides, it is evident that in the line of winning the trust of the public, there is a need for McDonald’s to reopen its closed restaurants in a gradual manner to ensure that it has a better opportunity for gaining its original market share. Furthermore, it is clear that a combined effort in marketing, customer experience, and regaining of trust will provide crucial points of strengths that will help the company in improving its brand outlook. It will also be valuable in winning the support of millennials and provide the much-need competitive edge in the market.