Market Segmentation of McDonald’s

If your friend asks about the best burgers and fries, most probably McDonald’s will come to your mind as a top choice. There are 7,8 billion people in the world, and most likely, each of them has once heard of McDonald’s. Even if it is a bit of exaggeration, this fast-food company’s success can indeed not be underestimated. The first McDonald’s store was opened in 1948 by two brothers Maurice and Richard, in California. Nowadays, it is undoubtedly one of the largest fast-food chains. To understand the success behind this company, let’s take a look at some segmentation strategies of McDonald’s.

Let’s start by learning about one of the main target audiences of McDonald’s.

In order to do so, let’s watch this commercial and identify the target segment.

The commercial is joyful and energetic with a background music that gives us positive vibes. The advertisement features a guy sitting at McDonald’s and having a bite of a burger, which tastes extraordinary and at the same time incredibly delicious, as can be seen from his facial expression. The exciting tone of a man in the background describes the burger as a combiner of summer with the country’s tang for savory sizzling unexpected flavors.

This advertisement brings joy and shows off that the company is friendly. Through this creative commercial, McDonald’s aims to offer a fun environment for everyone to enjoy, and the people who prefer McDonald’s fill their ordinary lives with joy and happiness.

This leads us to conclude that as a target segment McDonald’s has chosen Sharers.

Now let’s find out more details about this segment.

Lifestyle and Values:

Sharers are adventurous people, which is why they are fond of changes and are risk-takers. These people try to enjoy every moment of their life and can even turn an ordinary day into an energetic party. Sharers are happy with their daily tasks, including the care of family and home. They are usually good with money and can effectively control their budget. However, if they like something, they would buy it, even though it can be expensive.

This target group’s representatives like to escape from reality, so one can usually find them at magazines, cinemas, cafes, wine bars, and even discos. These people like gardening, room painting, ornamental works, etc. While sharers would probably not go to operas, galleries, and other cultural places, they would watch them on TV.

Sharers always take care of themselves, so they try to dress fashionably and exercise to be more healthy and fitter. They are always willing to pay more for environmentally friendly and qualified products.

People belonging to this target segment are media lovers, and they are usually very interested in celebrities’ lives. However, Sharers are not comfortable with using the Internet. They are fond of reading news about lifestyle, entertainment, home, latest trends, films, beauty, etc.

Sharers are strong TV viewers and average radio listeners. According to these people, TVs and Radios are mediums through which they can always be informed.

Brand Usage

As Sharers like changes, they are also ready to explore new brands and magazines. These people like shopping and would mostly go with their family members and friends. People belonging to this target segment prefer using premium brands whenever it is possible.

Positioning Plan of McDonald’s

Product positioning is a crucial tool for each company. Positioning seeks to create an image of the company’s products in consumers’ minds by highlighting some benefits that can differentiate the product from similar products in the market.

Several years ago, McDonald’s focused on its service time; however, over time, people began to view McDonald’s as a company that offers low-priced, quality burgers within quick delivery.

At present, McDonald’s is famous for being a family-friendly, low-cost company. McDonald’s has started to add healthier food to its menu. They seek to cut delivery time and the cost of the food as well.

Besides, McDonald’s has the most modern and technologically advanced equipment that make their workers’ job more manageable. The company does many things differently than other fast-food companies by marketing to the family market.

This is why McDonald’s has become a fast-food company that sets standards for the rest of the industry.

Now, let’s move on to the Marketing Mix of McDonald’s

Marketing Mix is a collection of effective tactics that can help the company attract customers and promote its products. 4Ps of marketing mix defines the different strategies that McDonald’s uses in order to achieve its goals. The company’s marketing mix is one of the huge factors behind company’s success.

Now, let’s discuss 4Ps of marketing mix one by one.

Product

Among the 4Ps, products can determine McDonald’s brand and corporate image. As one of the leading fast-food restaurants, McDonald’s primarily sells hamburgers and sandwiches, breakfast, fries, snacks, chicken and fish, desserts, shakes, salads, and drinks. The company understands that each person has different tastes, thus provides its customers with various options.

While McDonald’s is best known for its burgers, it has added many varieties to its menus, hence expanding the number of consumers. McDonald’s famous meals are Egg McMuffin, Double cheeseburger, Big Mac, French fries, McNuggets, and many more.

Through creating a special meal called “Happy Meal,” the company also pays particular attention to children. This “Happy Meal” contains a burger and fries and a little toy hidden in the box as a surprise. It is fascinating that this strategy has become famous not only among kids but also people of all ages due to the interesting packaging. The company even provides burgers for vegans. McDonald’s has also divided its menu into healthy and unhealthy sections.

So McDonald’s special attention to the choice and the representation of its products to improve its business stability and attract more customers.

Place

McDonald’s is considered to be one of the accessible fast-food companies in the world. This leading company has locations in 100 countries, where more than 38000 restaurants serve almost 70 million people daily.

Place/Distribution is about the locations that give the population access to the products offered by the company. There are several places through which McDonald’s distributes its products:

• Restaurants
• Kiosks
• McDonald’s Mobile Apps
• Postmates website and app

McDonald’s restaurants are the most common places where the company generates revenues. In the United States of America, one can see McDonald’s stores almost everywhere because the company wants everyone to be able to have their products, no matter where they go.

Starting from 2015, McDonald’s has started using kiosks. Kiosks are stand-alone booths that are typically placed in high-traffic areas for business purposes. These are convenient methods for the people who are very busy and cannot sit at stores but can instead order it using the kiosk and take the food with them. It is important to note that this is also one way that cuts labor costs.

The company’s mobile apps are made both for IOS and Android, and the website gives their customers a chance to find more information about the company, such as restaurant locations, products, and even make orders.

Most of the McDonald’s stores are open the whole day, which means that the company tries to make its products available at any time in every possible way.

Promotion

Promotion is about the techniques the company uses to always be in touch with customers. Through the help of different promotion tactics, the company makes people buy their products. McDonald’s mainly uses four techniques in its promotional mix.

• Advertising
• Sales Promotion
• Public Relations
• Direct Marketing

Advertising is the most common among these four options.  The company spends billions of dollars on different advertising methods, such as magazine advertisements, newspapers, TV, Radio, social media, and what more.

Sales promotions are one of the effective ways to attract customers. As a pattern, the company sometimes provides discounts for certain products, sale coupons for their loyal customers. This tricky marketing strategy always creates a connection between McDonald’s and its users.

Through public relations, McDonald’s always keeps its reputation and even enhances it. In the late 1990s, the founder of the company Ronald McDonald became Children’s goodwill ambassador, and due to his thoughtful speeches, the company could gain reputation. Additionally, the company promotes its products through various celebrities and athletes. By doing such things, McDonald’s creates a better brand image and makes more significant revenues.

In addition to this, the company also uses direct marketing, such as for community events and parties, local governments, etc.

It is equally important to note that the company pays particular attention to its slogans, symbols, and co-branding. McDonald’s has a short slogan, “I’m lovin’ it,” which immediately catches one’s attention and easy to remember. This slogan makes it even easier for people to remember the brand’s name.

This leading company also uses co-branding to promote its products. They offer the customers so-called collectibles if they buy some of the products. This is one method that encourages customers to visit the stores more frequently.

Price

Each company uses a wide range of pricing techniques to sell its products. The “Price” strategy’s essential function is to make the products very affordable for every person and every family to go out for having breakfast, lunch, dinner, and so on. While the company uses several pricing strategies, two of them are the most used ones:

• Bundle Pricing Strategy
• Psychological Pricing Strategy

Bundle Pricing Strategy is about buying a meal package that would cost more if they are purchased separately. As a pattern, if people buy Extra Value Meal or Happy Meal, they would pay less. This method strongly encourages people to save some money. 

McDonald’s uses prices that appeal more affordable to its users in the case of psychological pricing strategy. When looking at the company’s menu, one can notice that most of the products’ prices are not round. As a pattern, Daily Double costs $1,99; Chicken McNuggets cost $8,99. In this way, people perceive the products as more affordable and get more motivated to buy them.

In some cases, a fifth P can also be included as well- People.

This mix is about both the company’s customers and its employees because, in many cases, customers would even stop going to the stores because of the lousy service coming from the unqualified employees.

The staff is always encouraged to be friendly and serve with a smile because if the customers do not feel respected, they would more likely not go back to that place. Similarly, McDonald’s continuously tries to motivate its staff by even giving extra money for doing a great job.

All in all, this article focused on the segmentation strategy of McDonald’s. By having excellent commercials, a thoughtful positioning plan, and special attention to the marketing mix, the company is considered one of the fast-food industry leaders. Next time you visit McDonald’s, make sure to pay attention to the details provided in the post.

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