McDonald's Strategic Marketing Mix

Introduction

When the Dick and Mac McDonald opened their first restaurant in San Bernardino, California in 1948, they never could have imagined the extraordinary growth their company would experience (McDonald's Corporation FAQ, 2005; Armstrong, D., Hemphill, C., Saeed, M., & Methvin-Terry, J , 2004; Murray, B., n.d.). From modest beginnings, they found a winning formula selling high quality products quickly and low-cost. It was not until 1955 when Ray Kroc, a salesman from Chicago, became involved in the business that McDonald's really began to flourish. Kroc realized the same successful McDonald's formula could be exploited throughout the United States and beyond with the use of franchising (www.mcdonalds.com, n.d.; Murray, B., n.d.). A franchise is an agreement or license to sell a company's products exclusively in a particular area, or to operate a business that carries that company's name.

In 1955, Kroc knew that the key to success was through rapid expansion; thus, the best way to achieve this was through offering franchises. Today, over 70 percent of McDonald's Restaurants are franchises. In 1986, the first franchised McDonald's opened in the United Kingdom. Now, there are over 1,150 restaurants, employing more than 49,000 people, of which 34 percent are operated by franchisees (Armstrong, D. et. al., 2004; Nelson, J., 2003; www.mcdonalds.com, n.d.). Moreover, there are over 30,000 these restaurants in more than 119 countries, serving over 47 million customers around the world. In 2000 alone, McDonald's served over 16 billion customers. For perspective, that number is equivalent to providing a lunch and dinner for every man, woman, and child in the world! McDonald's global sales were over $40 billion, making it by far the largest food service company in the world (Armstrong, D., et. al., 2004; Nelson, J., 2003; www.mcdonalds.com, n.d.; Murray, B., n.d.).