Few global brands are as highly recognisable as fast-food giants, McDonald's. Universally identifiable by its famous brand imagery, meal names, and mascot, McDonald's is a prime example of a business that has successfully leveraged smart marketing to support impressive growth.
As a result, the global franchise now boasts by far the highest brand value of any fast-food company, estimated at a whopping $130.3bn as of 2019. Runner-up Starbucks' worldwide brand value pales in comparison, at $45.9bn for the same period.
So how did this once modest hamburger restaurant rocket to lucrative international domination – and how does it stay there? And – most importantly of all – what can modern business owners learn from its approach?
McDonald's Marketing Strategy
Initially founded in 1940 at a single location in California, McDonald's quickly became well known locally for its high-quality hamburgers and satisfactory customer service. Eight years later, it became one of the first restaurants to make the transition from traditional sit-down table service to a fast-food business model and added exciting burger variations and milkshakes to its menu. Spurred on by the success of this development, it launched its first franchise agreement in 1952, a decision that would lead to exponential worldwide growth. Indeed, the company now operates almost 40,000 restaurants across the globe and attracted reported international revenues of around $21bn in 2018.
The company focused on broad public awareness from the early stages of its development, aiming to create strong brand recognition and market penetration, upon which to promote its growing franchise business further. As its customer base grew, the company investigated its demographics further, to facilitate targeting.
McDonald's still maintains this approach, investing in online and offline marketing strategies that promote its clear, brand-centric messaging to broad audiences, while using other channels such as its dedicated mobile app to reach and retain loyal customers.
The Customer Profile
As a result of its mass marketing techniques and broad appeal as a fast-serving, affordable eatery, McDonald's has a varied consumer demographic. The chain is most frequented by shoppers under the age of 24, as well as between the ages of 35 and 54. Both male and female, buyers typically have low to average incomes, with an affinity for the fast-food industry in general. They are defined as brand-loyal, casual diners, with the average spend per customer estimated at $7.79.
A large proportion of these customers are parents to young children, attracted by the brand's family-friendly atmosphere and menu offering. This particular segment was first targeted through the launch of the Happy Meal in 1979, the hugely popular children's meal package that includes a free, themed toy.
McDonald's confirms its broad target market, stating on its website that it aims to offer a "friendly, fun environment for everyone... to enjoy. This means appealing to families who love our iconic Happy Meal, to workers grabbing breakfast on-the-go or eating in".
The brand collects primary market research data to guide its marketing strategies, and ensure it reaches its identified audience demographic. Surveys and questionnaires are conducted in-store, across its social media channels, and via the McDonald's mobile app, to determine customer satisfaction regarding food quality, service, delivery, and more. Its forum website, McDonald's Community, and other digital channels are also closely monitored to capture interactions with, and feedback left by, customers.
McDonald's invests heavily in billboard and broadcast marketing, utilising a mammoth advertising budget of over $1.5bn in the US alone in 2018. Digital marketing campaigns work to complement its offline promotional messaging, bringing consistent content to varied audiences not expected to be reached by outdoor, TV and radio advertisements.
McDonald's uses TV and radio to engender general brand awareness, as well as promote new menu items, meal deals, and philanthropic initiatives. Its broadcast channels and timings are chosen specifically for maximum viewership and listenership. In fact, McDonald's is estimated to have spent $52.9m on TV ad airings in the US during November 2018 – the height of the widely-viewed NFL season – offering an indication of the importance the fast-food company places on securing the most prominent broadcast ad spots.
The company confirms its objective to secure large-scale awareness, stating that, "the majority of our campaigns are communicated to everyone to ensure they have a broad reach. You may have seen us on TV or heard us on the radio!"
Traditional billboard advertisements are also widely used by McDonald's, focusing on the same marketing objectives and content as those that underpin its broadcast ads. Ranging from static to digitally interactive billboards, placed in prominent locations with high footfall and visibility, the company endeavours to maintain positive brand perception and affinity among its target audience, as well as associated consumer groups.
This is an excellent example of utilising various promotional techniques that reinforce the same goals, thus encouraging greater overall success, compared to campaigns that are delivered via one method alone.
Outdoor Ambient Marketing
McDonald's also executes creative, captivating outdoor ambient marketing. Ambient advertising is described as placing ad material in extremely unusual or unexpected places, on objects that are not usually utilised for promotional purposes.
McDonald's has adopted this sub-category of guerilla marketing to evoke a more significant impact on consumers. The McDonald's Massive McMuffin Breakfast campaign is an example of this. Throughout 2010, the company placed giant paper McDonald's takeaway bags across prominent streets in New Zealand, labelled with the name of its new breakfast menu item. The unmissable, unexpected imagery drew considerable attention from passersby (supported by the many photos of the spectacle that onlookers shared to social media), successfully raising awareness for the McMuffin breakfast.
Other examples include the brand's street markings across pedestrian road crossings, designed to make the typical horizontal crossing lines appear as though they are a portion of fries, protruding out of a McDonald's branded fries' box.
The brand uses online advertising to supports its awareness and demand generation goals. The content utilised online remains consistent with McDonald's TV ad and billboard imagery, though both text and graphics are tailored to ensure maximum performance across the particular social media platforms used, including Twitter, Facebook and Instagram.
Capitalising on the increasing consumer trend of food photography, McDonald's encourages customers to share photos of their meals online, with great success. In fact, McDonald's was the second most pictured brand on Twitter, with 4.9m logo mentions on the social media platform worldwide between September 2018 and February 2019.
The company also embarks on search engine optimisation (SEO) campaigns, though its organic SEO strategy outweighs paid promotion. As of December 2019, 90.7% of its search traffic to mcdonalds.com was organic, with just 9.3% obtained as a result of paid keywords.
McDonald's proudly adopts a combination of traditional and guerilla marketing styles to promote its advertising messaging to mass audiences, as well as its primary customer base. The company invests almost $2bn of ad spend in conducting creative campaigns across delivery methods.
A portion of this funding goes to the advertising agencies hired by the brand to execute major marketing campaigns, as well as support geographic segmentation to tailor the varying marketing styles used across international markets.
Indeed, the brand utilises market research data to make decisions regarding its messaging and menu modification per geographical region. In addition to editing its advertising text to incorporate cultural references, McDonald's seeks to satisfy consumers by offering meals that prominently feature local ingredients favoured by buyers. For example, meals featuring Cypriot cheese halloumi are promoted to the Cyprus and Greece region, benefiting from the familiarity and popularity of this local ingredient among consumers in those countries.
Despite geographic segmentation, McDonald's brand identity remains as valuable and identifiable in its newer markets as anywhere else in the world. Its infallible brand recognition is evidenced by one of its most simple, yet effective, marketing campaigns: the 'Follow the Arches' 2018 billboard campaign.
Executed in Toronto, Canada, the restaurant placed directional billboard ads along busy streets and highways, pointing the ads' audiences towards their nearest McDonald's store using phrases such as "on your right", "next exit", and "just missed us". Each billboard featured just a cropped portion of the brand's logo, showing a small section of the golden arches alongside the direction phrase, and backed upon McDonald's trademark red hue. This clever ad demonstrated that consumers did not need to see the full brand logo to recognise McDonald's imagery and associate this with its fast-food offering and value proposition.
Succeeding in increasing customer footfall in close-by McDonald's stores, the campaign was also heralded internationally for its elegant approach, winning the 2018 Outdoor Grand Prix award at the Cannes Lions Festival.
This campaign serves as a wonderful example, showing business owners that effective marketing does not need to be visually complex, or stray far from core brand identity, to garner favourable results.
McDonald's has exhibited impressive growth since its establishment in 1940, in part thanks to its successful marketing strategies that have equipped the brand to expand to new markets. Now boasting almost 40,000 restaurants worldwide, the company leverages its advertising prowess to maintain valuable brand recognition and affinity.
McDonald's uses both online and offline promotional channels to broadcast its awareness messaging to mass audiences, while also leveraging valuable market research to facilitate regional personalisation, and address its customer base.