McDonalds Digital Marketing Campaign Analysis

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Abstract

Over the decades of its existence, McDonalds has been demonstrating quite impressive success. Due to its smart use of marketing, particularly, branding, pricing, and product diversification, the company has achieved notable success. However, in the realm of the digital market, the marketing approach had to be changed drastically. The emergence of the pandemic ha also contributed to the development of a crisis situation. By introducing a price bundling approach and the psychological pricing strategy, McDonalds will be able to regain its competitiveness in the digital setting. Specifically, the organization should adopt the influencer marketing strategy as the means of becoming a trend-setter in the digital community and, therefore, become an unquestionable leader. The specified approach will help McDonalds retain its current customer base, simultaneously attracting new audiences, particularly, younger customers.

Indeed, the current approach involving offering customers products at discount prices, while having been quite effective, appears to be waring its welcome. To remain innovative and successful, thus keeping one step ahead of its competitors, McDonalds needs an update in its approach to retaining its digital market presence. For this reason, incorporating the proposed approach of becoming a trend-setter in the global fast food industry will help the organisation maintain its overwhelmingly dominant influence. Furthermore, with the expansion of its customer base, the organisation will become more influential and, therefore, more powerful. The specified outcomes justify a change in the companys current approach to digital marketing and its business strategy, overall. Thus, despite the associated challenges, the company should consider embracing the specified option and attempting at capturing the attention of a new audience.

Introduction

Digital marketing has become popular in the modern business world. The business organisation has adopted modern technology in their operations to enhance their operations and increase customer satisfaction. As business organisations continue to integrate modern technology into their operations, new marketing strategies are cropping up in the business world. McDonalds is one of the modern business organisations that have adopted modern technology. Although the current strategy has worked well for McDonalds and proved to steer the company towards recovering from the setbacks of the Covid-19 pandemic, further adjustments to the online promotional campaign are required. The price bundling combined with psychological pricing strategy can be more beneficial to the company if executed according to the current market needs.

Aims of the Report

This report focuses on the efficacy of the price bundling combined with the psychological pricing strategy used by McDonalds and its viability in helping the company recover from the losses experienced during the Covid-19 pandemic. The key objectives include exploring various relevant digital marketing strategies and identifying how the organisation could improve in relation to best practices and to critique their current practices. For this purpose, the SOSTAC (Situation, Objectives, Strategy, Tactics, Action, Control) model will be applied.

Limitations/Scope

Overall, the research was time-consuming because of the difficulty of reaching out to the intended ten employees. Another limitation entailed the difficulty of accessing published material that contained details about McDonalds (Jilkova, 2018). Accessing relevant books and published materials that explored digital marketing in relation to McDonalds was tiresome and time-consuming.

Critical Evaluation: The SOSTAC Model

The companys strong brand makes it competitive and viable in the market. McDonalds is the worlds largest fast-food company, with over 30,000 restaurants in over 100 countries globally (Pierce et al., 2020). Due to its brand and good reputation in the market, the company generates over $40 billion in yearly sales from all the restaurants globally. Besides, the company has competent employees and good management that are able to formulate reliable marketing and sales strategies that keep the company ahead of its competitors (Chaffey and Smith, 2017). McDonalds observed food safety and implementation of new products in the market, which has helped it increase its customer base in the countries where its restaurants are located. Therefore, the current situation can be defined as containing a range of positive factors.

Similar to other companies in the fast-food industry, McDonalds experienced a sales decline since 2020. The sales decline resulted from the containment measures that the World Health Organisation instituted to have hotels and restaurants closed down to deter the disease from spreading (Tiger-Week et al., 2022; Tien, 2019). The closure of these restaurants affected the sales and profit margins of the company. The company also closed down restaurants in the United Kingdom and Ireland, which introduces a substantial disadvantage to the current situation.

The described trend can be aligned with the tenets of the marketing mix theory, namely, the 7Ps of marketing Mix. The theory in question posits that selling a product to the target audience successfully requires a carefully constructed framework that focuses on seven crucial areas, namely, product, price, place, and promotion, [&] people, physical evidence, and process (Kushwaha and Agrawal 85). Applying the specified framework to the digital market context in which McDonalds is currently operating will show that the company has been succeeding at shaping its product branding technique, yet has been struggling with navigating the target environment, thus,. Failing to address the place component. Additionally, the price aspect of the theoretical framework, when applied to the companys performance, demonstrates that McDonalds would benefit from more reasonable prices given a rise in its rivals competitiveness (Chaffey and Smith, 2017). Therefore, a slight change in the specified elements, as swell as the promotion technique, will need to be implemented. Moreover, on a larger scale, McDonalds will need to update each of the specified items in order to remain a leader in the industry and ensure that the companys performance sets the pace for the rest of the organisations in the fast food industry.

SOSTAC: Objectives

Furthermore, the people aspect of the framework should be considered as a potential focus of the organization. Specifically, apart from customers, McDonalds will have to address the needs of its staff members and invest in their development and loyalty. While the company used to be seen as the organization that views its staff as expendable, the current policy of McDonalds appears to have been switched toward a more employee-oriented framework, which is an admittedly positive trend (Jílková, 2018). Given the connection between performance, motivation, employee engagement, and loyalty proven by numerous studies, the emphasis on increasing employee engagement will lead to an increase in quality (Kingsnorth, 2022). Thus, McDonalds will be able to reinforce its digital presence. In other words, applying the SOSTAC model, one can define the current objectives of the organization as increasing its presence in the target market.

The specified approach has been confirmed by several organizations that have already attempted at integrating some aspects of the specified practices into their performance. For instance, KFCs focus on diversification due to the transfer to the digital environment can be considered an example of successful implementation of the required change (Nadanyiova et al., 2020). Similarly, Taco Bell has been exploring the opportunities of digital marketing as the means of enhancing its communication with stakeholders, primarily, its customers (Guedj, 2021). Therefore, McDonalds will have to explore diversification, employee engagement, and customer relations as the core areas that will pave the road to its success.

SOSTAC: Strategy. The Online Promotional Campaign used by McDonalds

Although the hotel restaurant has been reviving since late 2021, most have not yet recovered fully from the backlash of the Covid-19 pandemic. In order to remain relevant in the market and increase its customer base in the market, McDonalds opted for price bundling combined with psychological pricing strategy. The specified component of the SOSTAC model will help McDonalds to build a stronger presence in the market. The price bundling combined with psychological pricing strategy entails placing discounts on specified meals accompanied by other products sold by the company (Wu, 2020; Saini et al., 2019; Nair, 2019). The increment in sales results from the persuasive nature of the pricing strategy that drives customers toward meeting the minimum target that qualifies one for the discounted prices.

McDonalds new pricing strategy helps the company market its products to customers. There are specified products that must accompany certain meals in order to qualify for the discounted prices. Therefore, it becomes easy for the various products sold by the company to be known to its customers (Bala and Verma, 2018). Thirdly, the price bundling combined with psychological pricing strategy has become a competitive advantage for McDonalds because it helps the company attract more customers than its competitors (Guedj, 2021).

SOSTAC: Strategy. Relevant Digital Marketing Strategies

In addition to the outlined strategic approach, an array of marketing approaches should eb examined as the vehicle behind McDonalds performance. Digital marketing has become prevalent in modern society because it helps business organisations reach many customers quickly (Mogaji et al., 2020). There are various digital marketing strategies that can be utilised in the modern business world. The most common digital marketing strategy is the use of social media platforms. Social media platforms have become widely used in modern society, making them a viable way of advertising and reaching many customers quickly (Polanco-Diges and Debasa, 2020). Social media platforms can be used to advertise a new pricing strategy used by a company, which helps the company to attract many customers to purchase its products. Concerning the pricing strategy of McDonalds, using social media platforms can help the company reach many customers from all over the world (Jorge et al., 2018). However, McDonalds has well-established strategies concerning social media use and has become an influential tool of advertisement for its new products and pricing strategies.

The other major digital marketing strategy is influencer marketing. Influencer marketing involves relying on celebrities to advertise a companys brands and products. Influencer marketing helps business organisations to reach many customers because the company relies on the fans of celebrities. As the celebrities post the products manufactured by the various companies, the companies get new customers and increase their sales and profitability (Safanta et al., 2019). The influencers recommend their fans to purchase products from the companies they advertise, making it easy for the companies to attract new customers to their products (Ketter and Avraham, 2021). The other digital marketing strategy is content marketing, which entails formulating questions and answering them to make customers more informed about the goods and products in the market. The question-and-answer method helps consumers to make informed decisions on their preference for goods and products. The strategy ensures that consumers purchase goods that they have gathered enough information from the website.

Strategic Framework Model

Although many of the current digital marketing strategies can work effectively with the price bundling combined with the psychological pricing strategy used by McDonalds, the most effective is the influencer marketing strategy. Therefore, following the SOSTAC model, one should introduce several changes to the existing strategic approach. The influencer marketing strategy entails brands opting to partner with social media celebrities and signing business contracts so that the social media influencers can market the brands products on social media (Ponirah, 2020). Social media influencers have a mammoth following and can easily lure their followers into purchasing products of the companies they advertise their goods and products (Kannan, 2017; Kadekova and Holien
inova, 2018). Concerning McDonalds use of the influencer marketing strategy can work excellently with its price bundling combined with its psychological pricing strategy.

The rationale behind the proposed marketing strategy is quite simple. Rooted in the necessity for an organization to attract an increasing number and range of customers, it is linked to the continuous development of a company as its main organizational philosophy. With the principles of incremental innovation at the top of McDonalds value system, the firm will be able not only to progress continuously but also to remain one step ahead of its competitors. Since McDonalds is currently in need to compensate for the delay in the development of a functional digital marketing framework, which has already been established in most of its competitors, the focus on incremental innovation is presently vital as the main means of diversifying McDonalds product and increasing its customer base. Additionally, the change in the pricing strategy will help McDonalds become more visible among its rivals, therefore, creating premises for attracting a portion of the competitors clientele and, thus, gaining greater traction in the digital market.

SOSTAC: Tactic. Developing a Media Presence

To measure the success that McDonalds will achieve with its new strategy, several techniques will have to be incorporated. Specifically, the organization will need to reinforce its media presence, which can be achieved by becoming more active on social media. Specifically, platforms such as Facebook, Twitter, and especially Instagram will have to be utilized actively to announce changes regarding the companys products and performance. The specified approach will allow increasing engagement with the target audiences, especially new ones, such as Generation Z (Vrontis et al., 2021). Given that the specified populations digital involvement is significantly more pronounced, embracing the social media is a vital step in attracting the attention of the specified demographics. Therefore, a rise in the number of social media followers, as well as an increase in their participation in the companys digital community, will be used as the key measure for success along with a rise in sales.

SOSTAC: Action: Content Promotion Plan

Aligning the proposed solution with the SOSTAC model, one should introduce the Action part into the offered approach to boosting McDonalds performance. Currently, the content promotion calendar includes the established brands, as well as several new products that will be included to diversify the range of the companys options. As Table 1 below shows, the content promotion calendar sets the schedule for the end of the year and actively targets Christmas as the event that will be used to market new products.

Content Promotion Calendar
Table 1. Content Promotion Calendar

In the specified context, marketing campaign assets currently used in McDonalds, including booklets and brochures, will have to be transformed into digital ones. Specifically, virtual bonus cards, discount cards, and similar assets will be utilized. Additionally, McDonalds will have to consider discount points that will be added for specific actions, such as purchasing a certain range of products, as the marketing campaign assets that will encourage customers to purchase a greater range and number of McDonalds products.

Implementation of the Influencer Marketing Strategy

The implementation of the influencer marketing strategy involves three main stages. The first stage involves documenting the companys goals and what the company intends to achieve through utilising the influencer marketing strategy. McDonalds should set clear goals and targets that it must achieve within a specified time and evaluate how the influencer marketing strategy will help it to achieve the set goals and targets (Chaffey and Ellis-Chadwick, 2020). The second stage entails understanding the influencer landscape.

SOSTAC: Control

To ensure that the strategy remains viable, control mechanisms must be introduced. Specifically, tools for calculating changes in the companys number of media subscribers, commentaries, and likes will have to be included into the framework. Additionally, assessment of the general feedback provided via social media will have to be carried out. Finally, McDonalds will need to develop tools for responding promptly to the provided feedback and introducing the necessary changes (Vrontis et al., 2021). Thus, the levels of the companys social media influence will be controlled.

SOSTAC: Control. Determining Benefits of the Influencer Marketing Strategy

One of the benefits of the influencer marketing strategy for McDonalds is that it will help the company to reach highly specified customers directly (Leung et al., 2022). The reliance on social media influencers will help McDonalds to advertise its pricing strategy to many people globally, thus, increasing its chances of expanding its customer base (Coll and Mico, 2019). Social media influencers will influence their followers to consider purchasing products from McDonalds, thus, assisting the company in attracting more customers (Zhou et al., 2021). If the company increases its customer base, it will become more competitive in the industry.

SOSTAC: Control. Measures for Success of the New Strategy

Every new marketing strategy adopted by a business organisation should positively impact the organisation. There should be clear measurement strategies to evaluate the efficacy of the new marketing strategy adopted. Concerning the influencer marketing strategy, the success measurement period should be set at six months. The company should set a percentage of customer increment that the company should have in a period of six months. Depending on the social media influencer selected by the company, the company can set a minimum customer increment of 20% within a period of six months (Jílková, 2018). If the company succeeds in increasing its customer base by 20% in six months, the influencer marketing strategy will have succeeded (Jílková, 2018). However, if the company does not achieve the 20% customer increment, the influencer marketing strategy will have failed (Jílková, 2018). Generally, the customer increment should be measured monthly to ascertain the progress towards achieving the targeted client rise.

The monthly evaluation will help the company and the social media influencer to identify any loopholes that might deter them from achieving their goals and targets, thus, rectifying them to ensure success is attained. McDonalds should allow the social media influencer to post the combination of products that qualify for the discounted prices in order to make them known to customers (Nadanyiova et al., 2020). The social media influencers should use the various social media platforms to advertise the pricing strategy of McDonalds so that it may become widely known among the customers.

Conclusion

McDonalds is one of the contemporary commercial firms that has embraced modern technology. McDonalds currently relies on a price reduction promotional campaign online, a tactic that has helped the business grow its consumer base. McDonalds, in particular, focuses on the psychological pricing technique of price bundling, which lowers the price of meals when they are purchased with other corporate products. Although this approach has been successful for McDonalds and shows that the corporation is on the right track to rebounding from the Covid-19 pandemics setbacks, additional tweaks to the web promotional effort are needed. If price bundling and psychological pricing are used in accordance with the markets demands, the company may benefit more. Influencer marketing is the most successful marketing approach. For social media influencers to promote a brands products through social media, brands must collaborate with social media celebrities and execute commercial agreements. The social media influencers have enormous followings and may easily persuade their fans to buy the goods and products of the businesses they promote.

The influencer marketing method was only used by a few celebrities a decade ago because social media usage was not as widespread as it is now. However, technology has advanced due to growing social media use and an increase in social media influencers. The ability to directly engage highly targeted customers is one of the advantages of McDonalds influencer marketing strategy. McDonalds will increase its prospects of growing its customer base by using social media influencers to publicise its pricing plan to a large worldwide audience. Influencers on social media will persuade their followers to think about buying McDonalds items, helping the business get more clients. The business will be more competitive in the market if it grows its consumer base (Chaffey and Smith, 2017). Therefore, if the influencer marketing strategy is effectively utilised, McDonalds can increase its customer base, productivity, and profitability in the market. With clear strategies to evaluate the efficacy of the influencer marketing strategy, McDonalds will have a competitive advantage over its main business rivals in the industry.

Recommendations

In order to effectively implement the new marketing strategy in their operations, McDonalds ought to implement appropriate strategies concerning the new strategy. First, the company should outsource to the markets most relevant social media influencers. Social media use has become prevalent in modern society, which makes it easy to identify them and assess their efficacy in the advertisement industry. After identifying the relevant social media influencers that the company can rely on, they should evaluate the social media influencers reputation among their customers. Evaluating the reputation of the influencers will enable the company to settle for only the social media influencers with an excellent reputation and can help the company attract more customers for its products.

Marketing Implementation Plan
Figure 1. Marketing Implementation Plan

The company should also have well-formulated goals and targets and make them known to the influencers. The companys goals and targets act as a guideline for the company, and social media influences achieving the set goals and targets. Before signing any contracts with social media influencers, McDonalds should ensure that the selected social media influencers have the capability to attract the number of customers targeted by the company. After signing a contract, the company should set success measurement timeframes and procedures to ensure its goals and targets are achieved within the specified time.

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