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In San Bernardino, California, Dick and Mac McDonald launched the first McDonald's restaurant in 1940 as a barbeque-themed carhop drive-in. McDonald's began as a self-service drive-in restaurant in 1948. In 1967, McDonald's opened its first restaurants outside the United States, with sites in Canada and Puerto Rico. McDonald's is focused on collaborating with its franchisees, staff, and suppliers. McDonald's has a global mission of providing exceptional customer service while serving high-quality cuisine in a safe and comfortable environment. McDonald's aims to provide fast, efficient, and effective food at a reasonable price. McDonald's is working on expanding its range of healthy foods and promoting awareness about them.
The total revenue of the company is US$ 21.076 Billion(2019), net income is US$ 6.025 Billion(2019). The number of employees servedworldwide is approximately 200,000 (McDonald, 2021). This makes McDonald's the second-largest private employer company in the world. The company products are Hamburgers, French fries, chicken, Soft drinks, milkshakes, soft serves, salads, Desserts, hotcakes, coffee, breakfast, and wraps. McDonald’s largest restaurant is situated in China, and the company serves approximately 69 million consumers daily in 100 countries (McDonald, 2021). McDonald's outlets worldwide were 37,855 in 2018, and it is the ninth in the brandworldwide.
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(Figure 1: History)
(Source: McDonald, 2022)
The company pays attention tosustainability while packaging its food products in the brown paper warp or box, which is environmentally friendly,instead of packing in polyethene (McDonald's, 2022).This report demonstrates how McDonald's "I am loving it" ad campaign was able to achieve such enormous success, as well as the best practices it has used in the worldwide food sector, as well as international growth and issue patterns, as well as the lessons learned from its expansion into other nations. Finally, the report explains how McDonald's builds an “I’m Loving It” ad campaign as a brand and customer loyalty through digital marketing with the help of communication strategies, targeting, positioning and segmentation. McDonald's worldwide success, as well as its obstacles and initiatives,are taken from the CSRand are the focus of this research. Furthermore, the reports demonstrate the company's CSR and ethical issues with the company and how the company deals with its issues and resolves them.
The company uses different social media platforms for its marketing. The digital marketing platform which the company uses is called the Golden Arches Unlimited, through which users can buy branded goods from this company. The main segment for the company's products is targeted towards the users of age 3-50. Different countries have different eating habits and histories. To preserve its global dominance, McDonald's correctly segments its many regions. McDonald's "I am loving it" ad campaign has a global distribution of its flagship product (burgers) on its menu. Gender, age, stage of life, religious commitment, and other factors are all part of McDonald's demographic strategy. McDonald's splits them into several age groups based on their age. McDonald's" I am lovin’ it" ad campaign has created a unique menu called “Happy Meal” for youngsters. There are different toys included in the happy meal that is displayed in the ad campaign.
McDonald’s is one of the best fast-food chain companies in the world. In the geographic segmentation, that company needs information about the people from the various region which have different choices in the food products (ACM Digital library, 2020).McDonald's is among the most popular chain restaurants across the globe. The problem is that every customer has an individual profile. The profile can include aspects like nationality or more specific factors, such as the preference for meat. To meet these requirements, it's essential to gather information about the customers and create a marketing segmentation to ensure that other departments can start marketing and branding accordingly. In fact, McDonald's marketing team does lots of behind-the-scenes work and among its responsibilities is to create customer segmentation to understand their customers better and identify new customers.The segmentation of the geographic strategy is based on the domestic or international region and the density of the rural or urban area (Mahendru, 2015).
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(Figure 2:Mc Donald across the world)
(Source: The Mc Donald’s revolution, 2022)
The company's ad campaign helps in reaching all types of customers as it is an attractive ad for both children and adults. The slogan “I’m Lovin’It” is the best slogan of McDonald’s, through which it is known in different countries (Luo, 2020).McDonald's launched five advertisements for the "I'm Lovin' It " campaign. They were adapted for specific regions and targeted distinct populations for demographic segmentation. They were translated into eleven languages; McDonald’s announced on September 23, 2003, that these US advertisements would feature Timberlake's talents and production by the Neptunes.
McDonald's demographic approach includes all the age groups, which lie in the ten to fifty. There is no gender preference in the food products, and it serves males, females, and others(An, 2020).
In terms of the Behavioural approach, it is crucial to McDonald's segmentation process. McDonald's segmentation builder focuses on the extent of loyalty toward the restaurant and the benefits sought, according to the "I’m lovin’It" ad campaign. In a study conducted by McDonald’s UK, 36% of customers eat McDonald's meals because of their value. McDonald's cuisine is purchased by 36% of those respondents because they feel McDonald's products offer significant cost savings. Furthermore, they believe that McDonald’s provides lower costs for hamburgers, fries, and drinks than other fast-food restaurants, but that the food servings are also superior to those of other chains (Villaespesa, 2019).
Targeting of the McDonald
Males in the lower and middle classes and females aged 8 to 45 are McDonald's "I’m Lovin’It" ad campaign’s primary Target market. Females and males are addressed equally because they make up most of the rural and urban area’s population. Urban areas are more inclined to explore new menu items and products in comparison to rural areas. People aged 8 to 45 make up the McDonald's market. They are, however, the second-largest fast-food restaurant business; therefore, their reach extends far beyond this group.
McDonald's "I’m Lovin’It" ad campaign also caters to children with Happy Meals and toys and sweet snacks to round out their meal. McDonald's has been exploiting the Internet to attract more young students by providing free Wi-Fi with their meals. Online applications that offergreat free product coupons as well as BOGO deals. McDonald's target income group is lower to the middle class, ranging from less than $48,000 to more than $65,000 per year. On the other hand, McDonald’s attracts consumers from all walks of life, even those with higher tax rates.
The middle and lower classes are more likely to enter McDonald's because of the low-cost $1.23 menu, and they are more likely to use paper and smartphone coupons. Men eat at McDonald's more than women, with 56.3 per cent of men and 43.7 per cent of women eating there.However, this figure comes from Germany, and all evidence suggests that males, rather than women, are the most likely to eat at McDonald's around the world. McDonald’s appeals to both men and women for various reasons, including McCafé salads, drinks, and hamburgers with fries.Because of this, McDonald's has a large market that offers a diverse cuisine, with over 145 items on the menu in 2013. While the exact number may vary at this time, it is a good idea of the diversity of alternatives available at McDonald's for both young and senior consumers. There is full and healthy cuisine as well as lighter snack alternatives on the menu to suit different people at different times of the day for efficient target marketing.
McDonald’s "I’m Lovin’ It" ad campaign,according to Carol Sagers (Director of US Marketing), targets distinct categories of its target audience and then customises or positions its products for that segment(Chaffey, and Ellis-Chadwick, 2019).McDonald’s does not have an official Big Mac manager or a salad area, unlike other large packaged goods corporations that are handled by brand specialists for various brand names. Targeting is the process of marketing products to certain groupsdiscovered through segmentation(James, et al., 2017).Furthermore, McDonald's employees keep a clean workplace and are always looking for ways to deliver your food to you as quickly as possible.
McDonald's primary targeting strategies are based on age and lifestyle. Therefore, the digital marketing target is the company's needto divide its target age groups, aim of use internet, weekly time that the customers spend on the social media and other internet sites where the McDonald's advertises. McDonald's generally focuses on the children, students, and professionals (Schmid, et al., 2016). The incentive programmes have led toincreasing consumer loyalty and frequency of purchases while also providing a direct line of engagement with customers. These initiatives give brands a mobile application and a communications platform that is only a click away. Customers report that joining the loyalty programme encourages them to spend more money on the company (45 per cent) and to suggest it to friends (47 per cent). McDonald's may also strengthen their relationship with customers by promoting good interaction through a loyalty programme. Two out of five McDonald's customers reportfeeling more emotionally connected to brands when they participate in their reward programme (41%) (Dahiya, and Gayatri, 2018).
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Figure 3 McDonald Slogan
The company uses a pull strategy of promotion. The Happy Meal of McDonald’s was promoted through the campaign. This happy Meal consisted of varied food items and also had a small toy that attracted kids (Boelsen-Robinson, et al., 2015). There are some limited times for promotional meals that are pulled from current client segments, such as young adults seeking AFL promotions, and mothers shopping for their children to participate in Kung Fu Panda promotions, which includes motivating the users and consumers to seek out the brand during an active process(Confos, and Davis, 2016).Price- McDonald's uses line machines, which provide faster service than humans, reducing the effort and bringing down the inventory cost(Kraak, et al., 2020).
Figure 4 Brands Logo
(Source: McDonald’s Logo & branding, 2021)
Sell experience - The business's value is merely linked also with services; it will be difficult to really be a best-integrated brand. McDonald’s was disturbed not with the quality of the goods, facilities, and manoeuvres but the quality of itsorganisations in the direction to deliver wonderful involvements. McDonald’s created the shop with the purpose of improving the quality of anything, and everything visitors see, feel, listen to, and taste. Those who remunerated differentconsideration to 'Aroma,' which is crucial towards the shopping experiences. The environment was cleaned regularly. Workers were taught how to work together and communicate in a courteous manner. McDonald's remained a unique environment for clients (Luca, et al., 2016).
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(Figure 3: Mc Donald’s Five-year total return investment)
(Source: ACM Digital library, 2020)
The above graph depicts McDonald’sfive-year total return investment. From 2014 until 2019, when the total return of as well Dow Jones Industrials and the S&P 500 was less than 200$, S&P 500, as well as Dow Jones Industrials failed to exceed 200$; however, the return of McDonald's came within one fraction of the 250dollar mark. It is evident that McDonald's five-year return is higher than the market, which is a clear indication that McDonald’s segmentation strategy is a huge success.
The Ad campaign of McDonald's launched its commercial in 2003 for the effective communication of approaches. The jingle with the "I’m Lovin’It” ad campaign "ba da ba ba ba" by Timberlake becomes more popular in a short amount of time. The commercial has many videos to describe the brand message through reverse engineering forbetter communication (Nadler, and McGuigan, 2018).
The digital platform that McDonald's ad campaign uses is social media sites such as Instagram, Facebook, and YouTube. The ad campaign of McDonald's passes the message that through their foot products, the company can uplift the mood of their customers. The purpose of the communication of McDonald's ad campaign is to highlight the importance of happiness in life (Agrawal, et al., 2018). It is a cause-relatedcampaign because when people are hungry, they would require food items to fulfil their demands. The company’s message has emotional appeal as it conveys happiness to its customers. In the McDonald's ad campaign, the method used is interactive(The McDonald’s revolution, 2022).
Advertising strategy entails trying to coordinate those aspects of advancement, also including ad campaigns, media affairs, price promotions, personal selling, lead generation, digital marketing, and social networking sites, and also other aspects of promotional campaigns (Brand, Location, Cost), even though that most of these factors work together to achieve the same objective. The advertisement slogans of McDonald’s are ‘did somebody day M?’, ‘I’m Lovin it’, ‘Drive-thru’,‘lovin beats hatin’. Since these individual aspects gather and concentrate solely on a single goal, synchronicity and economic benefit for the actions and communicating platforms' effectiveness are crucial in this sort of digital marketing. As a result, the capability improves communication delivery. In accordance with McDonald's strategy and objectives for establishing itself as an ecologically responsible company, a sales promotional program can be prepared using the relevant technology and digital communication (Bhati, and Verma, 2018).
(Figure 4: McDonald's Corporation's advertising costs from 2014 to 2021)
(Source: Statista, 2022)
All marketing & combined communication channels of such promotion are concentrated on sponsored content and natural media, as per McDonald's marketing and brand strategy aims. The brand uses mass advertising such as media platforms, the internet, tv, or newspapers, as well as delivering targeted emails. Social networking, including its significant subscriber base, is essential for network processes and marketing strategy. Social platforms are particularly important since they allow customers or fans to express input and make good understanding contact. Amongst some of the numerous social networking sites, the brand focuses on advertising on Facebook, Google, Instagram, and Twitter (Dobzhanska-Knight, et al., 2018).
The dominance of mainstream social networks like Instagram, tv, and major newspapers, on either side appears to have decreased as a consequence of social media's success already. Yet, they still get a dedicated following. Consumers have used mainstream media in addition to the seven social networking sites, and there are still successful shows on such platforms. Spontaneous communications seem to be very significant in addition to sponsored advertising. Media affairs can generate material for the industry to help identify issues of McDonald's eco-friendly activities via social network coverage of events throughout various tasks, including press briefings and interviews (Davies, 2018).
Figure 5 Digital Marketing
(Source: Cartwright, 2018)
The ad campaign includes the utilisation of a chatbot and instant replying to the customers to increase communication effectiveness. The communication strategy that is used by McDonald’s is direct communication, as it offers different features such as feedback, comments and interactive sessions on online platforms through which the customers can convey their concerns (Busca, and Bertrandias, 2020).
McDonald's nutritionists face up against a few significant obstacles, as attaining a sustainable widespread beneficial diet plan is a complex and daunting task. Furthermore, for good processes to happen, McDonald's must create healthy communications that attract viewers, give meaning, and urge adjustment in folk's existing thoughts and behaviours in a technically accurate but pragmatic and inspiring way to the potential customers (Boelsen-Robinson, et al., 2015). First, from the standpoints of marketing and cognitive science, McDonald's may be more concerned with how individuals perceive specific media communications and also what kinds of communications are far more efficient among different types of targeted customers (Chaffey, and Smith, 2017).
Figure 6 Integrated Marketing
(Source: Camilleri, 2018)
Teenagers and adults who need a light lunch, as well as people with kids, are McDonald's targeted population (McDonald, and Dominguez, 2015). McDonald's advertising methods rely on these aspects. McDonald's television commercial depicts an intriguing story that attracts reach customers and is tied to relationships, instilling familial emotions, and garnering more parents' attention. Emotional advertising creates favourable emotions in customers, improving their perceptions of the advertiser's believability and potentially influencing overall views towards the product. The appearance of TV commercials ought to be vibrant, expressive, and heartfelt (Dwivedi, and McDonald, 2018).
The McDonald's ad campaign "I’m Lovin’ It"is made to attract customers by assuring them through the slogan. The McDonald's "I am loving it” ad campaign is a popular commercial that is still famous among people because of its catchy lines. McDonald’s campaign focused on Happy Meals,i.e., the product offered to the target audience. The Happy Meal has a variety of food items, including burgers, French Fries, beverages and a toy. The use of toys was the premium strategy of the campaign that helped entice the kids and the youngsters. For instance, the youngsters also seek to purchase the happy Meal to get toys. The overall communication strategy was a massive success as, after the launch of the campaign, the sales of McDonald’sincreased, and the brand image also got improved.
The impact of the company’s CSR on its customers attracts more product loyalty which shows that McDonald’s is working for the social well fair. McDonald’s customers feel good when they buy the products of the MacDonald’s company that their money is invested in the social activities for the environment. The environment challenges with the help of the utilisation of water resources and scarce food. The CSR of McDonald’sis able to get money from customers, stakeholders, and franchises. McDonald’s invests its money in CSR goods for humanity and the environment as McDonald’s pledged to hit net-zero emissions across its entire business in Ireland and The UK. In the year 2020, McDonald initiated Sustainability Framework that laid emphasis upon five pillars:
Ethical Issue
McDonald's was accused of having an adverse impact on the natural environment in many ways that revolve around the fact that they've constructed hundreds of factories across the world to make their products, which leads to pollution. The ethical issue experienced by McDonald’s is in relation to the situation of employees. The personnel of McDonald’s store has to work overtime and do not get fair wages for their extra work. However,McDonald’s good CSR objective depends on the different kinds of ethical issues resolution dependent on how the company’s ethical decisions for the whole community with the target of the company to provide good quality food compared to its competitors (Nguyen, et al., 2018). CSR accepts the framework and approach to get more shareholders and invest their money in the company.
Figure 7 Business Ethics
(Source: Zorzini, et al., 2015)
In reference to the CSR initiative opportunity for McDonald's to manufacture the products with innovation is appropriate as it can reverberate with the mass unit, which will further influence the company positively and for long-term solutions (Freeman, et al., 2021).McDonald’s risk analysis affects the successful evolution and execution of the various business strategies, which will impact the growth of the company's operating income. The recent CSR objectives are to contribute to the sustainable development of the operating income of the company from 2012 to 2017. McDonald's boosted the company's products, and that impacted high on the CSR resultant (Trivellas, et al., 2018).
The power of the design of the McDonald’s franchisees and suppliers is the key to the sustainable success of the company. McDonald’s finds that implementing the new product ideas and changes are requirements of the customers’ choice. The company attracts its customers with different kinds of slogans which are ‘I’m Lovin it’ and ‘lovin beats hatin’in the company advertisement campaign. The company builds competitive advancement of the criteria of the R&D, which has the alignment of the specific diversity in the places where the company sells its products. A multinational company means the opportunities and alternative practices which will operate from the different places, which is the best place for the company's restaurants and franchises (Nguyen, et al., 2018).
The company can use Carrol’s CSR model to enhance its effectiveness. The discussion about the relationship between society and business has been debated for many years. Archie Carroll suggested the approach that would bring together the two sides of society and business. This strategy encompasses four social responsibilities that include legal, economic and ethical, as well as philanthropic obligations of business to the community. It is recommended that McDonald’sprovide a stress-free working environment to the workforce. Another recommendation for McDonald’s is to offerfair wages to the employees and comply with the Wages Act.
Carroll's four areas of responsibility are explained in the following paragraphs:
Economic responsibility- The bottom of the pyramid is a business's first obligation to be profitable. Without earning money, the business is unable to pay its employees. The employees could lose their jobs before the company begins CSR initiatives. Profitability is the only way for a business to last in the long run and help society. Furthermore, this implies that it is the company's responsibility to make products, as well as services, wanted or needed by its customers at a fair price.
Legal responsibility- Anotherstep in the hierarchy is its legal obligation to follow the law. This is the most crucial obligation of all the four levels because it will demonstrate how businesses operate in the market. Employment laws and competition with other businesses, as well as tax regulations and the security and health of employees, are just a few examples of legal obligations a business must follow. In the absence of legal responsibility, it could be detrimental to companies.
(Figure 8: Carrols CSR model)
(Source: Author)
Ethical responsibility- The ethical part of the pyramid can be described as doing what is right by doing the right thing in every situation and taking care to avoid any harm. A business should not just follow laws but must also conduct its business ethically. Being eco-friendly and making sure employees and suppliers are treated with respect are just some examples of ethically responsible behaviour.
The philanthropic responsibility-The highest point of the pyramid, taking up the least space, is the field of philanthropy. Companies have been long criticised because of their impact on the environment, role in causing pollution, use of natural resources, and many more. Philanthropic Responsibility goes beyond just doing the right thing; however, it's something that is true to the business’s values and contributes to society.
Some general recommendations
McDonald’s is a famous brand in the world, and its business ideas are good enough, but there are still ethically based recommendations for McDonald’s. The first is the mix of strategies that could be used by the company. The company faces the issues of the big cities, which are highly populated areas where franchisees are the best options for the company(Masoud, 2017).
Figure 5 Ethical Factors
(Source: Agus, et al., 2020)
McDonald’s needs to invest money in the research and development department for its competitor. R&D provides the data of customers' choice and launches new products with different flavours of hamburgers and various products of the company. McDonald's restaurants need to improve the location for the kids, which will bring customers regular visits with families. The last and foremost is customerservice. The programs should professionally train all the restaurant's management team and workers for customers' best service with the hospitality. The customers play a vital role in establishing the restaurant as a quality service establishment. McDonald's must concentrate on customers in separate sections. McDonald's' operational strategy indicates that the company would provide exceptional service at multiple consumer touchpoints, including placing orders to deliver materials. The presence of good personnel is crucial to providingexcellentconsumer service. To achieve superb quality of service, McDonald's must continue investing in the training and development of employees. Training courses that are well will assure the company's high success (Kolk, 2016).
The main purpose of this report was to highlight the importance of the ad campaign for McDonald's. The campaign of McDonald`s was a massive success as the target market was acquired. The market segmentation for the campaign was appropriate, as it helped in enticing the potential customers. The use of digital media in the campaign was a huge success. The digital media assisted in acquiring market growth and business objectives such as profit-making, enhancing sales, and developing a large customer base. The digital campaign promoted through advertisement and promotional strategies helped in dispersing the information about the products offered by McDonald’s. It can be concluded from the report that the targeting strategy of McDonald’s, i.e. differentiated targeting approach, also played a vital role in targeting the potential audience. Earlier,McDonald’s approached mass marketing by the means of mass media through mass messages. This approach did not help in bringing success to the business. However, the differentiate targeting strategy landed a hand in targeting the market segment.
The communication strategy of McDonald’s for the "I`m Loving It" was also effective. It helped in escalating the marketing presence, and the jingle used in the promotion of the campaign also created a brand image of the company. The overall CSR practices of the company would lead it to attain sustainability; however, the ethical issues may create hurdles for the company. Hence the recommendations suggested to McDonald’s should be followed to overcome from the issues.
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