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Case: McDonald’s – Are you lovin’ it?

McDonald’s Ongoing Market Research

Introduction:

It has been a noticeable trend that food consumption pattern of urban Indian families has
changed dramatically with the times owing to the growing influence of Western culture.
Indians have started dining out and moved on to accept different varieties of delicious food
from the world. Further, studies indicate a radical change in the consumption patterns of
Indian consumers, who have traditionally been known for their price consciousness. Instant
food is scoring over traditional food due to influence of Western countries and rise in income
and subsequent standard of living, convenience, etc. As a result, fast food menus are gaining
wider acceptance from the Indian consumers who do not want to spend much time in cooking
in the middle of their hectic lifestyles.

About the Company:

McDonald's Corporation is an American fast food company, founded in 1940 as a restaurant
operated by Richard and Maurice McDonald, in San Bernardino, California, United States.
They rechristened their business as a hamburger stand, and later turned the company into
a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix,
Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise agent and
proceeded to purchase the chain from the McDonald brothers. McDonald's had its original
headquarters in Oak Brook, Illinois, but moved its global headquarters to Chicago in June
2018. McDonald's is the world's largest restaurant chain by revenue, serving over 69 million
customers daily in over 100 countries across 37,855 outlets as of 2018. Although McDonald's
is best known for its hamburgers, cheeseburgers and french fries, they feature chicken
products, breakfast items, soft drinks, milkshakes, wraps, and desserts. In response to
changing consumer tastes and a negative backlash because of the un-healthiness of their
food, the company has added to its menu salads, fish, smoothies, and fruit. The McDonald's
Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well
as sales in company-operated restaurants. According to two reports published in 2018,
McDonald's is the world's second largest private employer with 1.7 million employees.
Research Objective:

The purpose of this research is to study the behaviour of consumers, perception of product
attributes and level of satisfaction with respect to fast foods with special reference to
McDonald’s Restaurant. The following are the objectives:
 To identify and analyse the factors influencing the consumption of fast food.
 To understand the factors motivating the customers to dine at a fast food outlet.
 To evaluate consumers perception and behaviour pertaining to the consumption of
fast food.

Research Design:
The methodology adopted is a qualitative research approach which was limited to
 Collection and distillation of relevant literature on consumer behaviour from leading
texts and relevant journals in order to extract the major themes relevant to the enquiry

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 Extrapolation of different country experiences to understand the cross-cultural issues

 Observation of purchasing behaviour in fast food outlets

Research Problems:
The main problem of the McDonald’s Company is to maintain the trend created by them in
the market. Also to remain the one of the trending restaurant in the market. Their concerns
leads to know the targeted customer behaviour. Where has the company does the research
by putting up few questions to customer to gain their feedback and improvise the standards
and attract more customers.

Question for the research problem:

 What are the factors affecting Customer buying behaviour?
 Which restaurants are most visited?
 What prices are consumers willing to pay?
 What TV programs, newspapers and advertising consumers read and view?

Actions Plans:

Customer buying behaviour factors are:

Cultural Values and Cross-Cultural Influences:

the overarching environmental factor which affects consumer behaviour is culture which is
reflected by the values and norms that society emphasizes. Cultural values are beliefs that a
general state of existence is personally and socially worth striving for, while value systems
are the relative importance cultures place on the values.

Reference Groups and Web Communities Influence on Consumers:

A reference group is a group that “serves as a reference point for individuals in forming their
attitudes and behaviour”. Such reference groups are significant because they are powerful
influences when they are cohesive displaying similar norms and values; frequently interacting
and therefore in regular contact; and distinctive and exclusive which makes membership
appealing to many.

Purchasing Behaviour of Households:

Households are described generally as either traditional or non-traditional. Traditional
households have married couples with children while non-traditional households comprise
married couples without children, single parents with children under 18, unmarried couples,
and individuals living with others. Based on observation of households, younger persons,
whether single or newly married, have significant disposable income and will spend on
clothing, entertainment, and leisure pursuits, while newly married people spend on household
products. The presence of children in a household marks a shift in expenditure towards items
such as home purchase, baby products, and home appliances.

Communications in Consumer Behaviour:

Word-of-mouth communication is the most effective external influencing force on consumer
behaviour and occurs within groups and represents interpersonal interchange between two or
more individuals such as a customer and a salesperson, or members of a reference group.

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Pricing:
Right now the customer are not complaining about the price but as far as the pricing goes it
has complicated procedure to change or set a price.
As the value of currencies varies worldwide, McDonald’s is often forced to change
its pricing strategy in accordance to its target market. For instance, the value of a Big Mac
varies worldwide. In Switzerland, the Big Mac is valued $.60 over the U.S. price base of the
product. However, in China, it is undervalued by $0.60 in comparison to the price of the Big
Mac in the U.S. It seems that the company tries to maintain a price range on all its products
based on the location, income distribution and it is for this purpose that the company opens
up most of its restaurants in major cities such as New Delhi, Shanghai, Beijing, and so on. Its
primary goal is to initially attract middle and upper class citizens, as they can afford
McDonald’s prices. After this, they slowly target the lower middle class citizens. In the
United States, for example, the restaurant chain has appealed equally well to all classes
ranging from the poor to the upper class; however, its popularity continues to be among the
lower, middle and upper middle class.

Most visited restaurants are :

 KFC
 Burger King
 Leon Grills
 Subways

Advertising strategies:

As internet is easily accessible for people, the trend have changed a lot in the media. As there
are very few who watches TV in this times because the internet on the smartphone allows one
person to watch and get updated quicker than the TV. The best advertising strategies would
be in social media such as;
 Instagram
 Facebook
 Snapchat.
In Apps, where after app opens up it takes the user to a short advertisement which is common
nowadays.

Conclusion

As for now the condition of McDonald’s has secured trending places among the fast food
lovers.
Based on the research the company as to focus on the customer behaviour factors and
feedback for setting competition and expanding the Brand. Research concludes that the
company is right now under the market trend.

Data Collection:
 https://www.researchgate.net/publication/228490432_McDonald's_Success_Strategy_
And_Global_Expansion_Through_Customer_And_Brand_Loyalty
 https://www.researchgate.net/publication/289004796_impact_of_fast_food_on_consu
mer_behaviour

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 https://www.researchgate.net/publication/281557117_Consumer_Behavior_and_the_
Growth_of_the_Fast_Food_Industry_in_a_Small_Emerging_Country

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