1. “I’m lovin’ it!” – Critical evaluation of
McDonald’s marketing strategy
By Daniela Schmirler – Marketing Strategy for Managers – Dr. Kohler

2. Executive Summary
McDonald‘s as one of the largest fast food chains in the world, additionally is a strong brand.
Nowadays, almost everyone worldwide knows about McDonald’s or has at least heard
about it. So why is McDonald’s that successful? One factor is its overall marketing strategy.
The company raised strong brand awareness and always seems to be one step ahead in
comparison to its competitors. Furthermore, McDonald’s was able to create a strong brand
by using franchising as a business model and creating a marketing strategy that is superior
to its competitors.
This presentation should give an overview of McDonald’s, its marketing strategy, and the seven
years running campaign “I’m loving it”. This successful campaign runs since 2003 and always
orientates on new trends. McDonald’s tries to combine community issues (Corporate Social
Responsibility) with its overall communication. By providing different topics, and being
modern, funny, and innovative, McDonald’s is able to create high brand awareness.
Furthermore, there will be a short overlook of its two main competitors Burger King and Pizza
Hut (which is part of the umbrella brand Yum!). In comparison to McDonald’s these two
companies lack in their overall marketing strategy. By contrary, McDonald’s always seems to
be one step ahead, and also having always the right topics included. But, what has to be
mentioned is that there are also differences concerning the companies’ target groups and
overall appearance (e.g. Burger Kind tries to attract men, Pizza Hut is for all, and McDonald’s
attracts families, children, young urban, and recently also older people).
Lastly, there will be an evaluation of McDonald’s marketing strategy and measurements of
success, which will lead to an overall conclusion by developing principles for marketing. The
company is successful in comparison to its competition, which is shown in fitting brand
associations, numbers, and its competitive advantage, but McDonald’s has to react in order
to stay competitive. Finally, all this leads to several principles for successful marketing. But
although these principles are success factors for McDonald’s it will never be sure that they
will also work for other countries. They more are some kind of framework.

3. Agenda
1. Facts about McDonald’s
2. Marketing strategy McDonald‘s
2.1 Vision and goals
2.2 Segmentation and positioning
2.3 Marketing mix
2.4 Strategic Plan: “Plan to win”
2.5 Current campaign: I‘m loving it
2.6 Competitor Analysis
3. Measures of success and recommendation
3.1 Competitive Advantage
3.2 Positive Image
3.3 Numbers
3.4 Downside: Current decline
3.5 Recommendations
4. Principles for marketing analysis

4. 1. FACTS ABOUT MCDONALD‘S
Business model
Numbers

5. 1. Presenting the company
 Fast food chain, known by almost every citizen of the world
 Founded in 1948 by Dick and Mac McDonald in San Bernadino
 Today, more than 31,000 restaurants worldwide
 Business model
– Franchise system (15% of restaurants owned by company)
– Product consistency (products are similar all over the world)
– “Act like a retailer - think like a brand” (long term brand
reputation is important for the company

6. 2. MARKETING STRATEGY OF
MCDONALD‘S
Vision and goals
Segmentation and positioning
Marketing mix
Strategic Plan: “Plan to win”
Current campaign: I‘m loving it
Competitor Analysis

7. 2.1 Vision and goals of McDonald’s
Vision and goals
Place the
customer
experience at
the core of
organization
Commitment
to people and
customers
Operate the
business
ethically
Giving back
to
communities
Strive
continually to
improve

8. 2.2 Segmentation and positioning
 Main target segment: young urban family, youth, and children
– Concentrates on environment for children (playing grounds)
– But also tries to be modern and cool (for youth)
– Keeps in mind price sensitivity of targets (low price)
 New ways to address urban and young people
– McCafé
– Wi-Fi access
– Modern marketing campaigns
Demographic segmentation: according to age

9. 2.3 Marketing-mix: Think global, act local
 Product:
– Little product depth and width
– Standardized products worldwide, but there are national
different products to apply to the different customer wishes
– Continuous innovation to adapt to changing preferences
– Quality Assurance teams (monitoring restaurants, products,
and suppliers)
 Place: at the right place, at right time, in the right quantity
– Especially in the USA: you need almost less than 3 Minutes
to get to an McDonald’s restaurant
– In almost all big cities, and important places (airports,
shopping malls, etc.)
– Restaurants: hygienic environment, good ambience, great
services, and areas for children

10. 2.3 Marketing-mix
 Price: Low price and value pricing
– Attracts middle and lower class
(also seen in consumer base)
– Sort of “value pricing” (Happy meal)
– Different prices in different countries
(see table of Big Mac)
 Promotion: Use of “Marketing Communication Mix”
– Advertising: wide range in different countries (localization)
– Personal selling: Employees at counter serve customers best
– Public relations: tries to interact with customers, stays in
media, community relations (addresses community
problems: like “Ronald McDonald Houses”)
– Direct Marketing: Person
– Sales promotion: sport sponsoring (to get healthy image)

11. 2.3 Marketing-mix
 People: Value of employees and customer
– If employees are motivated and work well, customers will be
satisfied
– Internal Marketing: hiring, training, motivation
– External Marketing: current campaign (I’m loving it)
– Adaption to different laws, conditions in different countries
to serve its employees best
 Process:
– Identical processes for food worldwide (even size of meat
balls, or French fries)
– Suppliers have to meet specifications to meet standards
– Also point of purchase is standardized
 Physicals:
– Message worldwide: Family environment, cleanliness, and
service

12. 2.4 Strategic Plan: “Plan to win”
Service Marketing
Brand Transparency
Ethnic Insights
Social Media Strategy
Customer and
supplier integration
Different products for
different life cycles
McDonaldizing of
suppliers
“Moments of Truth”: each process of interaction
between McDonald’s and customers
Be transparent to get trust and influence
marketing efforts
Also concentration on minorities and differences.
Can become trendsetters for white America
Presence in social media to raise awareness
Integrating in product development to create
relationship, satisfaction, and loyalty
To increase profits (e.g. French Fries at decline
stage – Shake Fries (spicy) at maturity stage)
To get a huge AND controlled network for
guaranteeing McDonald’s standards

13. 2.5 Current campaign: I‘m loving it
 Press releases: Many press releases about
different topics (new campaigns, events,
economical performance, job offers, awards,
product information, health, engagement
(environment, Ronald McDonald Houses,
special offers). McDonald’s tries to be strongly
present in the media to keep brand
awareness
 Annual report: About corporate strategy, business facts, jobs,
franchise system, product origin, health, children’s donation,
sports, employees. Seems to be very professional and
transparent
 Internet presence: about food, health, promotions, company,
and links to different websites (e.g. CRM, children’s donation).
Concentrates on McDonald’s engagement an health issues
Public Relations:

14. 2.5 Current campaign: I‘m loving it
Image campaigns
 Several image campaigns
 Main: I’m loving it (started in 2003)
 Additional campaign: “corporate responsibility” (company’s
engagement in community and other critical issues like
environmental protection , which shows new trend of customer
demands for responsible companies)
 Seasonal campaigns: relate to special seasonal conditions (e.g.
“Hüttngaudi” in Germany with skiing environment in winter)

15. 2.5 Current campaign: I‘m loving it
Classical Advertising: Banners, clips, etc.
 Different issues from campaigns
 New: Animated spots, attracts gay men, “There is a McDonald’s
for everyone”
 Combines:
(1) Responsible Citizen; (2) Health consciousness, (3) “We buy local”, (4)
Families, (5) Be modern (Wi-Fi), (6) Be humorous, (7) Testimonials (e.g.
Heidi Klum), (8) Promotion of products, (9) Including minorities (e.g.
offers low prices for African-Americans & Hispanics)
„We buy local“ banner
Spot: Animated
Spot: For everyone
Spot: Gay customers

16. 2.5 Current campaign: I‘m loving it
Product Placement
 To raise brand awareness
 1988 restaurant as setting for scene in “Mac and Me”
 Movies like “Spider Man”, “Bridget Jones”, “The day the earth
stood still”, “Spy Kids”, “The fifth element”
 Other formats like “American Idol”, late night shows, reality
shows, and even news formats (serious coffee cubs)
“Mac and me”
News format
“The fifth element”
Videogame

17. 2.5 Current campaign: I‘m loving it
Sales Promotion
 Games: additionally to campaigns, well-known “Monopoly”
 Coupons: in newspapers, backside of cinema tickets
Sponsoring
 Many sports: Olympic games, German Football Association
 Other events like Fashion Week New York
 Local franchise companies: local clubs and events
CONCLUSION
Much information about community issues – McDonald‘s as
a responsible citizen pared with funny and lovable company
Continuously tries to raise brand
awareness

18. 2.6 Competitor analysis
Main rivals: Burger King, Pizza Hut (and many others like KFC, Denny,
Wendy’s, etc.) – but also restaurants, supermarkets, etc.
Positioning of the three main companies
High value
Low value
High price Low price

19. 2.6 Competitor analysis
Target group: family,
youth, urban people
Main topic: products
Characteristic: fun .
Media activity: little in
comparison, reserved
Corporate
Responsibility:
Umbrella brand Yum!
but little activity and
little information
Target group: men
Main topic: products
Characteristics: Macho,
playful
Media activity:
aggressive, more on
mass channels
Corporate
Responsibility: Tries to
follow McDonald‘s but
is in its beginnings
Target group: family,
youth, children, urban,
health conscious
women
Main topic: stories
Characteristics: Mix of
humor, responsibility,
and children
Media activity: strong,
but not disturbing
Corporate
Responsibility:
McDonald‘s as good
citizen

20. 3. MEASUREMENTS OF SUCCESS
AND RECOMMENDATION
Competitive Advantage
Image
Numbers
Current decline
Recommendations

21. 3.1 Competitive Advantage
Measurement of Competitive Advantage: Strength of McDonald’s
 For people with little time to (fast, quality, clean, service for
satisfied customers)
 Strong in its structure, technology , marketing, and finance
 No overexposure: Advertising stays fresh, modern, etc.
Strengths
Financial
resources
Market
leadership
Buyer
supplier
relation-
ships
Strong
image
Company
logo and
campaigns
Product
value
Emphasis
on HR to

22. 3.2 Positive Image
Measurement of image: Fits to self-image except “healthy image”
Brand
Knowledge
Brand
Awareness
Brand
Awareness
Easy Brand
Recognition
Easy Brand
Recall
Types of
associations
Favorable,
strong, unique
associations
Attributes
Benefits
Evaluation
(attitude)
Non-product related (cheap,
bags & boxes, families, fast
food)
Product-related (yellow & red,
golden arch, Ronald
McDonald)
Functional (eat fast, save time,
good food)
Symbolic (smell of burgers and
fries, childhood)
Experiential (remember
earlier times with families, fun
with friends)
(Shimp, 2008, p. 39)
“loving it”, fast food, not that
healthy, good, easy,

23. 3.3 Numbers
Own design: http://businessmodelinstitute.com/wp-
content/uploads/2010/05/Fast_Food_Industry_Market
s.jpg
http://brandautopsy.typepad.com/brandautopsy/images/sbux
_adage_chain.jpg

24. 3.3 Numbers
http://retailsails.com/2009/07/

25. 3.4 Downside: current decline
There is current decline in sales and services
 Customer trends and their decisions change
 People could get tired of the same brands (people see
McDonalds everywhere
 If one restaurant lacks in its actions, it effects the whole brand
 Difficulties in choosing target audience (kids, health conscious
women and senior citizen comprise the major population but
kids soon grow out to become adults)
 Choice of distributors, wholesalers and jobbers is extremely
important (to guarantee time aspect, quality, health standards,
etc.)
 Discussion about issue of gay men (conservative vs. progressive)

26. 3.5 Recommendations
Should it stay with: I‘m Loving it?“ – yes!
 People trust brand and know slogan
 Change is expensive (e.g. for all countries and languages)
 Only if market research shows new trends and demands of
customers
Adaptation to customer trends as another factor of success
 Loyalty program
 Customer integration
 Social media
 Direct marketing

27. 4. PRICIPLES FOR MARKETING
ANALYSIS

28. Principles for marketing analysis
This is just a framework!
Ask
Look at the long term
Be open to feedback
Look at competition
Corporate Social
Responsibility
Be flexible and adapt
to customer trends
Integrate customers
If you should do something new, or how you
could improve your appearance
Develop the right strategy for your brand
Listen to complains and feedback – it can
improve your brand, products, and performance
Always be one step ahead by creating a USP
Engagement in this field gets more and more
important to also win customers
Always watch out for new trends (e.g. use social
communities, etc. if appropriate
To create relationship, satisfaction, and loyalty.
Even more, to get new insights
Adapt to new
customer trends
To gain and win customers
Do not overexposure Too much could lead to switch of customers
Use networking
Creating networks makes your “life” more easier
(e.g. having right suppliers, big customers, etc.)

29. Bibliography
 Burger King Corp (2008): Annual report
 Burger King corporate Homepage (2010): http://www.bk.com
 Helm, B. (2010): “Ethnic Marketing: McDonald’s Is Lovin’ it”, Business Week, online available
at: http://www.businessweek.com/magazine/content/10_29/b4187022876832.htm
[accessed 30 October 2010]
 Hlavinka, K. (2010): Lovin‘ it, Journal of Marketing, Colloquy, online available at:
http://www.cgarena.com/archives/news/mcdonald_campaign.php [accessed 29 October
2010]
 http://www.marketingpower.com/ResourceLibrary/Pages/Content%20Partner%20Article%2
0Pages/COLLOQUY/2010/lovin_it.aspx [accessed 29 October 2010]
 McDonald‘s corporate Homepage (2010): http://www.mcdonalds.com
 McDonald‘s Corpt (2008): Annual report
 Metekohv, M. (2009): “McDonald’s Social Media Marketing Strategy”, online available at:
http://www.viralblog.com/social-media/mcdonalds-social-media-marketing-strategy/
[accessed 29 October 2010]
 N.n. (2010): “New McDonald’s Campaign”, online available at
 N.n (2009): ”There’s a McDonald’s for everyone”, online available at:
http://www.funnycommercialsworld.com/mcdonalds-campaign-favourites-theres-a-
mcdonalds-for-everyone-2367.html [accessed 30 October 2010]

30. Bibliography
 N.n (2010): “Lovely McDonald’s campaign”, online available at:
http://almostalwaysthinking.com/2010/10/14/lovely-mcdonalds-campaign/ [accessed 28
October 2010]
 Peter, J. P., Donnelly, J. H.Jr. (2007): Marketing Management (8th ed.). New York: McGraw-
Hill Irwin
 Pizza Hut corporate Homepage (2010): http://pizzahut.com
 Shimp, T.A. (2008): “Advertising Promotion, and other aspects of Integrated Marketing”, 8th
edition, 2008
 Sparks, I. (2010): “McDonald’s launches TV ad campaign targeting gay men”, Daily Mail,
online available at: http://www.dailymail.co.uk/news/worldnews/article-
1283148/McDonalds-launches-TV-advertising-campaign-targeting-gay-men.html [accessed
29 October 2010]
 Tice, C. (2010): “Why McDonald’s New “We-buy-local” ad campaign could backfire, online
available at: http://www.bnet.com/blog/retail-stores/why-mcdonald-8217s-new-8220we-
buy-local-8221-ad-campaign-could-backfire/932 [accessed 29 October 2010]
 Vignali, C. (2010): McDonald‘s: Think global, act local – the marketing mix“, British Food
Journal, Volume 103, Nr. 2, 2001, pp. 97-111
 York, E. B. (2010): “McDonald’s unveils “I’m Lovin’ it 2.0”, online available at:
http://adage.com/article?article_id=143453 [accessed 28 October 2010]
 Yum Corp. (2008): Annual report