McDonalds: Changing for a New Market

By: Brian Vatkevich

McDonald’s faced the harsh realities of a new business climate in 2014 when they had their worst fiscal performance in over a decade. They had been following their strategy of introducing new items, as well as seasonal items through the year to generate consumer interest. This was a successful strategy a decade ago, but as of January 1, 2015 the menu had over 70 different options alone excluding beverages and sides. Combined with seasonal and limited time offers, the menu simply became to bloated and daunting to consumers. That in conjunction with the rise of fast casual dining like Chipotle and Panera Bread, saw customers leaving McDonalds in large numbers.

In response to a drop of profits of nearly 30%, McDonalds is trying to save their brand by introducing changes with all restaurant locations. Starting with a smaller simpler menu. By shrinking the menu down in test locations McDonald’s saw that customers were able to decide what to eat fast, and were not overwhelmed by so many various options. This movement is being spearheaded by the pay with love marketing campaign which instead of focusing on the food like years past, focuses on the consumer. The goal of this campaign was not to drive sales of new products, but to re-create a bond with customers that may have been lost in years past. Finally, there has been a focus on bringing back the fast and efficient service that has been lost due to the overly complex menu. By cutting the menu down, it is easier for employees to work quickly with fewer errors. I believe that these changes can will be able to stimulate some growth back into the company, the damage cause by their ignorance in the past has been done. I predict it will take many years for McDonalds to get their profit margins back into a growing trend. They will have to continue their efforts in re-capturing the market of people below the age of 30 now, or face a generation of people that avoid their food all together.

Sources:

http://www.businessinsider.com/mcdonalds-us-strategy-for-2015-2014-10

http://www.theatlantic.com/business/archive/2015/01/judging-a-big-mac-by-its-cover/384277/

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11 thoughts on “McDonalds: Changing for a New Market

  1. Yuxuan Wang February 25, 2015 / 11:52 pm

    In 2013 and 2014, McD does have problem about their menu, which cause their market share lower and lower, and only in China, they got the increase situation. Based on this situation, they want to through cutting the menu to make everything more easily, but actually, the menu is not the root problem. They launched so many new products in these two years, but they do not get what they expected. New products could not mean the quality increased or combine with local flavor, it should make customers interested and exciting. What should McD do is not keep launching new products, but rebuild their brand image and follow the pace of society developing.

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  2. Brendan Sullivan February 26, 2015 / 1:14 am

    I think McDonalds will continue to struggle especially with this healthy food movement society is following. McDonalds will have to provide better quality food to their menus if they want a turnaround. I never go to any of these fast food places anymore because the food sucks. I would rather spend a couple extra bucks and go somewhere else for better quality food and bigger portions. Whenever I ate at a fast food place I was always unsatisfied because a burger was never filling. Its probably because the cheap beef had nothing but a lot of grease in it. The article mentioned chipotle its fast, convenient, healthier, and delicious. I think that’s why places like Chipotle and Panera Bread are catching up with McDonalds. The wait time for your meal is about the same depending on the line, but the quality of the food is so much better. I think that’s what McDonald’s main problem is food quality. If the food taste better more people would go even if it isn’t healthy for you. If McDonalds can somehow put beer on their dollar menu I guarantee their profits will shoot right back up.

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  3. Zi Wang February 26, 2015 / 4:30 am

    According to the above of article. Firstl of all, I agree that McDonald should cut down some the types of foods in their menu. As a company supplying fast foods for customers, McDonald should focus on how to increase efficiency of service in order to customer can save time and more convenience. Also, I suggest that McDonald should think out some more particular ways to attract the customers to come back again. At the same time, I believe that this way is very good “This movement is being spearheaded by the pay with love marketing campaign which instead of focusing on the food like years past, focuses on the consumer.” Using “Love” to touch customers, McDonald gets customers’ interest from other aspect. Besides, I think that whether McDonald is able to deliver their foods to customer’s home. While customer consider to pick up the restaurant, they are likely to choose McDonald due to the delivery service.

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  4. Jeff Marcoux February 26, 2015 / 7:32 pm

    Was the McDonald’s menu really ever complicated- significantly increasing the order time? I highly doubt that’s the driving factor behind McDonald’s decreasing market share. More likely, their dwindling profit margins can be attributed to increased consumer knowledge of McDonald’s products. Instead of a simplified menu and a new, awkward promotional campaign, McDonald’s should read the writing on the wall and shift to healthier products that consumers clearly want.

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  5. Amanda McKenzie February 27, 2015 / 4:01 am

    I never really thought the menu was ever super complicated for customers, but no matter what, mcdonalds will probably continue to loose customers and business. I think there have been so many documentaries and articles about how bad and unhealthy mcdonalds is, that it will be very hard for them to make a comeback with the way society has been trying to become healthier and healthier. Mcdonalds is a restaurant for fast food and seems to have a target market for families and busy workers or late night snacks. Newer moms try to make their kids’ diets as healthy as possible and I just think Mcdonalds does not measure up.

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  6. Billy Muldoon March 3, 2015 / 3:04 am

    I honestly feel as though the menu was pretty self-explainable, and say to comprehend. Never once did I feel overwhelmed by it, however I understand how some people can feel that way, with new items being added continuously. But I do agree with the fact that McDonalds sales may continue to decline as the years continue. As new fast food restaurants begin to open up, especially one’s that are more centered around being “organic” and more healthy for you than McDonalds, more people will continue to go there. More people are transitioning their lifestyles to be more healthy, and eating less unhealthy fast food. Chipotle is a healthy fast-food option, serving fresh salads and burrito bowls, with guaranteed-fresh ingredients. As there sales have grown within the last five years, we have also seen McDonalds decline. I feel that if McDonalds really wanted to increase sales, then they should begin offering more fresh and organic options on their menu for the health-conscious people looking to get a fast meal during their day.

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  7. William Cavalier March 3, 2015 / 5:18 pm

    I feel like McDonalds complex menu was not the reason their sales declined by a significant amount. McDonalds is trying to sell to a newer age market where people are avoiding their meals for a healthier substitute. The idea of McDonalds is a fast cheap meal that leaves you feeling disgusting after. the longer McDonalds takes to try and get their customer base back the harder it will be to reach a new customer base because society is and changing and becoming healthier. Even though McDonalds is trying to change up their current menu, making it easier to understand and healthier they have a new market to compete with; the fast casual food market. There are a lot of problems McDonalds has to deal with in order to gain back their old customers and reach a new customer base.

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  8. David Cravotta March 18, 2015 / 9:03 pm

    When I used to go to Mcdonalds, the menu never came off to me as complicated. I usually could figure out what I wanted and place the order in a timely fashion. What really drove me away from their establishment was the poor health facts of their food. It’s no secret how unhealthy their food is. Also now with all of the other, better options such as Chipotle, Panera, etc. it drove me away for a somewhat healthier option with better quality. The menu isn’t the problem, the competition is just getting better.

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  9. keelyn crowe April 27, 2015 / 11:33 pm

    i personally don’t think Mcdonald’s problem is their “long” menu or fast enough service. I have been to Mcdonald’s multiple times and i never had a problem with the menu being to long, it really doesn’t much simpler than a Mcdonald’s menu. People maybe lacking interest because in todays society people are trying to eat healthier especially with obesity being a huge problem now. I think Mcdonald’s needs to make their items healthier or add in healthier options. Recently though i think their new ad campaigns about happiness and positivity really payed off and raised their sales in the past few months.

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  10. Brian Vatkevich April 28, 2015 / 8:45 pm

    An update to this article. Mcondonalds is going to continue to close another 700 restaurants. The once super giant of fast food is facing serious financial concers and down sizing. This will be interesting to follow over the next few years and may become an example of how not to answer to customers wants and needs.

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  11. John Parrish April 29, 2015 / 6:46 pm

    McDonalds has been doing a lot to try to create an upturn in profits once again. I think their main problem however is the quality of their food. McDonalds was at the peak of the fast food business, and with that comes a target on their back. They got hit hard with rumors and facts about where their meat and chicken comes from and how healthy it is for people. The generation is quickly turning into people that are very conscious about what they are eating, so unless McDonalds changes their quality of food, they will continue to downsize in my opinion.

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