Company Background and Key Facts
McDonald’s Corp. (McDonald’s) is the leading foodservice organization in the world. It generates over $40 million in sales in over 31,000 restaurants across 100 countries on six continents (McDonald’s Corporation, 2020). McDonald’s major strength is the large scale and the financial position, in addition to owning one of the world’s most respected and recognized brands. It has an unparalleled international infrastructure and competencies in areas such as real estate, operations, marketing, retailing, and franchising. Additionally, McDonald’s sees itself as a leader in social responsibility. Quality commitment is manifested by the safety procedures while sustainability is reflected in the efforts in environmental protection for future generations. The company operates majorly through franchises in segments namely the United States, International Operated Markets, and International Developmental Licensed markets and Corporate (CNN Business, 2020). The US segment is concerned with all the operations in the United States. The International Operated Markets comprise franchising and operations of restaurants in countries such as Canada, Australia, Germany, Italy, France, Russia, Spain, the Netherlands, and the United Kingdom. Lastly, the International Developmental Licensed Markets and Corporate focus on licensee and affiliate markets in the McDonald’s system.
As a franchisor, about 85% of McDonald’s restaurants are owned and run by independent franchisees. This mode of operations allows the franchisees to be their own employers and to control all matters related to employment, pricing, and marketing. Additionally, they gain by reaping the benefits of the strong McDonald’s global brand, financial resources, and operating system (McDonald’s Corporation, 2016). The major products sold by McDonald’s include cheeseburgers and hamburgers, chicken sandwiches, French fries, oatmeal, Big Mac, sundaes, McFurry desserts, shakes, salads, cones, and soft drinks, pies, coffee, and other beverages.
From a historical background, McDonald’s was founded in 1955 by Ray Kroc who sold multimixer milkshake machines. After learning that two brothers, Richard and Maurice McDonald, were using eight of his mixers, he visited their restaurant and brought about the idea of franchising their business. The first of these opened in April 1955 in Des Plaines, Illinois. McDonald’s was incorporated the same year but the business started growing significantly during the 1960s, an era that coincided with the growth of automobile use in the US. Kroc bought out the McDonald brothers for $2.7 million and embarked on a journey to make the restaurant the leading fast-food chain in the USA. Today, over 46 million people are served at one of the company’s restaurants. About 9,000 of them are owned and operated by the company (McDonald’s Corporation, 2020). As the leading fast-food chain, the company has promised to offer quality and healthy foods at a time when consumer perceptions regarding junk foods are rapidly changing.
McDonald’s is a fast-food business renowned across the globe as the leading producer. This is at a time when consumers’ attitudes towards fast foods and junk foods are changing. There are several studies across the world examining perceptions and attitudes towards, and intentions to purchase fast foods across the world. These studies reveal that several factors determine how customers feel about fast foods and multiple reasons why, despite negative perceptions, they continue to eat these products. According to (Sudiyarto et al., 2019, p. 1), among the major reasons include affordability as compared to other foods, proximity to the clients, reputation from consumer opinions, and the speed at which the foods are served. Additionally, the consumers may continue purchasing from those businesses that have managed to build brand authenticity (Dwivedi and McDonald, 2018, p. 1387). The question of how McDonald’s customers are unaffected by the poor perception of junk foods needs to be addressed.
There are growing stereotypes related to junk food and McDonald’s is one of those companies facing repeated accusations of serving unhealthy foods. However, it has emerged that this bad reputation has not affected the company’s sales as the consumer still exhibits positive attitudes toward the company (Raduzzi and Massey, 2019, p. 26). Additionally, McDonald’s has grown to become one of the favorite places for most families across the world to get fast food, especially in those countries where fast food is seen as a common alternative to homemade meals (Priyono, 2017, p. 2). This presents researchers with an interesting phenomenon because, under normal circumstances, the accusations such as the ones faced by McDonald’s are known to produce the opposite results, that is, a declining customer base. Therefore, the current research seeks to examine this situation to understand why McDonald’s remains a consumer favorite.
The primary research question is to examine how McDonald’s consumers perceive the company’s products, specifically concerning the nutritional value of fast foods. The effect of these perceptions on their consumption frequency is examined as well. Secondly, there is the question of what McDonald’s has done to influence these perfections and achieve greater consumption frequencies among the customers. The two research questions are presented as follows:
- How do McDonald’s consumers’ perceptions vary by consumption frequency of purchasing food based on their perceived nutrition?
- How has McDonald’s achieved the correlation between the consumption frequency of their products and consumers’ perception of the nutritional value?
Key Research Goals
The major goal of this research is to explain the changes in consumer perception regarding fast food and how McDonald’s influences customers to continue purchasing its products. The research will determine and document the changes in consumption frequency to help explain the behavior pattern and to locate key trends. These patterns and trends help explain the current situation and to lay the foundation for the research. Additionally, the research seeks to find explanations for these patterns and trends. To do so, the researcher needs to examine the factors behind them and how McDonald’s plays a role in the changes observed. Lastly, these explanations will be used to recommend key strategies for the company in its continued customer service.
The expected outcomes of this research include an explanation of why despite the bad reputation the consumers continue to purchase McDonald’s products. As explained above, consumers are growing weary of junk food which should result in declining sales for the fast-food chains. However, the fact that McDonald’s record growing sales means other factors are affecting this phenomenon. This means another outcome of this research is an explanation of what these factors are and what the company does to keep the sales growing.
McDonald’s: Company Analysis
A company analysis of McDonald’s is presented here to help gain an understanding of the market and internal processes within which the company operates. A SWOT analysis has been described as one of the most common strategic planning tools deployed by businesses (Phadermrod, Crowder and Wills, 2019, p. 194; Vlados and Chatzinikolaou, 2019, p. 76). It has been used traditionally as a form of brainstorming where the management can outline the internal and external factors affecting the firm’s practices. An examination of the external environment reveals the major threats and opportunities in the competitive business environment. Additionally, the analysis reveals how competition evolves or is expected to evolve with time and how this evolution affects the opportunities and threats. On the other hand, internal analysis helps determine the weaknesses and strengths of the enterprise. It also helps identify the resources and capabilities deemed as the likely sources of competitiveness.
SWOT is an acronym for strengths, weaknesses, opportunities, and threats. Organizational strengths can be defined as those characteristics that add value and put the firm at an advantage over others in the industry (Gurel, 2017, p. 997). The weaknesses are the opposite in that they refer to those characteristics that are disadvantageous and reduce competitiveness. These two elements are internal to the businesses and the firms can have control over them. The opportunities entail situations and conditions in the industry that are suitable for an activity and can be exploited to benefit an organization. On the other hand, threats jeopardize a corporation and prevent it from pursuing its goals. The table below presents a summary of the strengths, weaknesses, opportunities, and threats facing McDonald’s throughout its global chain:
|Internal||Strengths ||Weaknesses |
|External||Opportunities ||Threats |
A further examination of the external business environment can be achieved using the PESTLE tool, a synonym for political, economic, social, technological, legal, and environmental factors. The PESTLE analysis is described as a tool for situational analysis for evaluating a highly dynamic external environment (Perera, 2017, p. 17). The political factors are those concerned with how the government influences the economy. Elements include tax duties, fiscal policies, and trade tariffs among others (Rastogi and Trivedi, 2016, p. 385). McDonald’s operates in over 100 countries meaning each country presents different political climates. In the western world, it can be argued that the company faces a relatively stable political environment with the United States enjoying good relations with these countries, as manifested by the trade agreements. Economic factors include inflation rates, currency stability, gross domestic product (GDP), investment climate, and market capacity among others (Shtal et al., 2018, p. 24). These are known to influence the economic performance of a company. Different countries present McDonald’s with a different set of economic factors. Growing and emerging markets are particularly critical to the international expansion of McDonald’s because of the rising consumption levels.
From a societal perspective, a company is also affected by the nature and behavior of the communities served. Social factors include cultural expectations, demographics, attitudes towards health, and perceptions of global warming among others (Rastogi and Trivedi, 2016, p. 385). The major concern for McDonald’s is that fast-food chains are globally considered to offer cheap and unhealthy products. This is an image that McDonald’s needs to manage well in the international market to retain and attract more customers. Additionally, these factors may require a company to offer customized products for particular markets due to changes in social preferences, styles, and attitudes towards products. Technological factors include the innovations that alter the operations of businesses and even industries. Automation in the fast-food industry is an issue that multinationals such as McDonald’s need to consider.
The legal factors pertaining to the laws of a country and, as a multinational corporation, international trade laws and domestic legislations for each country affect the company differently. Issues to address include exports and imports, taxes, and labor regulations. In the developing world, many multinationals have been accused of engaging in unethical practices that could damage their reputation and brand image. Lastly, the environmental challenges focus on weather, climate, and global changes in these elements. Business activities and environmental degradation, including pollution, are serious factors that a business has to address. With consumers globally being aware of climate change and exerting pressure on corporations to act responsibly, McDonald’s would be forced in many countries to develop a sustainability plan and strategy that addresses environmental concerns.
McDonald’s could be one of the largest fast-food chains globally but not the only company to offer the same products and services. In the United States, it faces direct competition from Papa John’s International, Inc., Starbucks, Yum! Brands, KFC, the Subway Group, and Dunkin doughnuts among others (Globe Newswire, 2020). In 2018, McDonald’s emerged as the leading brand with a market share estimated at 21.4%. This was followed by Starbucks (7.52%), KFC (2.82%), the Subway group (2.8%), Domino’s Pizza (1.57%) Pizza Hut (1.24%), Burger King (1.16%), Tim Hortons (1.09%), and Chipotle (1.02%) (T4, 2020). These figures indicate that McDonald’s is almost three times as strong as the second-largest fast-food brand in the country. However, other smaller fast-food restaurants account for over 58% of the market share meaning that McDonald’s largest competitors are not the American multinationals but the smaller stores that have managed to capture customers.
On a global scale, McDonald’s is also among the leading brands in the fast-food industry. However, the company is behind others such as KFC in countries like China. KFC has over 5000 restaurants in the country making it the largest and the market leader in China (David, 2020; Jacobs, 2019). Smaller restaurants all over the world tend to serve the majority of fast-food customers. This could be due to proximity to the consumers and the perceptions regarding the large chains and their malpractices. However, McDonald’s leads in other countries, for example, in Germany. Even in these countries, direct competition from Burger King, Nordsee, and the Subway Group threatens McDonald’s dominance.
Change in the number of customers
The changes in the number of customers at McDonald’s is hard to effectively determine. This is because there is hardly any available data indicating how many customers each of the restaurants serve per day. However, there have been some efforts to determine these fluctuations for certain products, for example, Big Mac. The graph below shows customer traffic at dinner, lunch, and breakfast between February and September 2020 (Gonzalez and Tartar, 2020):
From the above graph, it is apparent that it is hard to track the customers unless actual statistics are provided by the company. The graph is developed from smartphone location data, which can only be an assumption that all those people whose locations indicate McDonald’s are consumers purchasing the company’s products. Considering the number of customers served per day per restaurant, the other alternative to determining these changes is by considering the sales revenues, assuming that the prices of the products remain constant over the period of investigation. Additionally, news reports can explain the extent to which McDonald’s experiences rising and declining consumer traffic in any given period. According to Light (2020), for example, 2019 recorded a significant decline in consumer traffic. With the point of reference being March 2017, Light (2020) reports an estimated loss of half a billion consumers.
It is important to explain that the changes in 2020 cannot be credible indicators of the overall consumer trends. This is because most of the changes have been necessitated by the COVID-19 pandemic. The second-quarter financial results indicate that the revenues fell by 30% (Lucas, 2020). Traffic cannot be used as an indicator due to the quarantine and social distancing measures. However, 2019 statistics can be the most credible figures to use because they were unaffected by the pandemic and the factors affecting the changes can be considered to be market forces. Some trends observed during the crisis, for example, deliveries and online orders, may persist in the future, and this would require an examination of these dynamics to explain potential changes in consumer perceptions and purchasing frequencies.
Behavior patterns and eating habits of customers
behavior patterns and eating habits of consumers differ across the world with differences caused by multiple factors. Much of the current examination of eating habits focuses on the COVID-19 pandemic and the effects it has had on people and their purchasing behaviors. In 2020, therefore, the eating habits are the result of the economic slowdown and the resulting price effects forcing customers to eat only what they can afford (Cranfield, 2020). High food prices and stock-outs have occurred across the world with only strict regulations helping sustain lower costs. Restrains on household budgets have also meant that people have been eating diets without certain food products such as fruits (Mattioli et al., 2020, p. 1409). The low prices and delivery options by fast-food companies may indeed see a rise in sales revenues as most customers revert to more affordable products.
Without focusing on the effects of the COVID-19 pandemic, other factors are responsible for the behavior patterns and eating habits of the consumers. According to Valeria, Sina, and Emanuele (2020), sustainability issues have led to some consumers changing food purchasing patterns. They understand that their food consumption behaviors play a vital role in food sustainability. Additionally, they are the final link in the food supply chain meaning that their choices affect those of the producers and manufacturers among other actors in the supply chain. The concept of low carbon-emission diets has emerged with buyers believing that such decisions result in higher nutritional quality and other positive health outcomes (Payne, Carborough, and Cobiac, 2016, p. 2654). Climate change is, in this case, considered to be a public health issue where the general population has a major role to play. Besides the environment, diet is associated with illnesses and health problems. The sustainability concerns affecting food choices and patterns among consumers are a result of heightened awareness regarding healthy eating.
Other consumption patterns and eating behaviors are shaped by the producers of food products. A study by Guèvremont (2019, p. 885) explains that brands tend to influence eating behavior changes, especially with their marketing strategies. sensory marketing, for example, is an emerging tactic among restaurants that seek to appeal through aspects such as scent, sound, vision, and texture (Ifeanyichukwu and Peter, 2018). Certain brands may encourage healthy eating and even make an effort to sell products with these qualities. The relationship between the brands and the consumers determines the extent to which companies can change eating patterns. Aspects such as service quality and customer loyalty in the fast-food industry have been examined by (Liu, Lee, and Hung, 2017, p. 1). These researchers argue that where buyers experience quality services, they remain loyal and adapt their eating habits as a result of consumer satisfaction.
Changes in McDonald’s approach toward food manufacturing and product quality
Consistency is one of the elements that allows McDonald’s to sustain its quality. That means that regardless of the restaurant a customer visits, the experience will remain the same (Bailey, 2020). However, the growth of the company has been facilitated by continuous innovations that have revolutionized both production and product quality. Technology improvements have helped McDonald’s deliver foods faster. As a fast-food restaurant, the company has always focused on making sure that the consumers do not wait for too long to be served. This speed of service has been associated with lower-quality products like burgers. According to Kline (2017), McDonald’s is faced with a situation where competitors such as Shake Shack, BurgerFi, and Five Guys among others offer better burgers while retaining speed and convenience. As a response, McDonald’s has offered premium burgers across the global chains which include features such as more customization and the use of higher-end ingredients (Bailey, 2020). This change reflects how the company addresses shortcomings in production and product quality.
Company’s marketing strategy
As mentioned above, McDonald’s is a company that keeps innovating, and the marketing strategy has been subject to this nature. Since its establishment, the company has adopted different marketing strategies to help create new and better customer experiences. The company moved from campaigns such as “I’m loving it” to “supersize me” (Lemon, 2020). Currently, the main marketing strategy is the standardization of products and customer experience across all restaurants. However, this strategy is slowly shifting to localization in regions such as India (Panwar and Patra, 2017). This innovative marketing strategy is intended to appeal to local consumers by offering them products aligned with their cultures. Additionally, the company is not going alone in this strategy but rather through a strategic partnership with local food companies. The adoption of this marketing strategy is majorly in response to the observation that smaller firms remain more appealing to consumers because of offering local means in their respective markets.
McDonald’s customer communication framework
For decades, the main communication framework for McDonald’s has been marketing campaigns each conveying messages regarding new products and customer experiences. Recently, however, the company has reorganized its global public relations agency roster to pursue a new approach to marketing communication. This change involves decentralization from one PR partner, Golin, and the addition of two more firms, WE Communications, and Purple Strategies. These firms will now handle specific storytelling areas of food, experience, and people respectively (Bradley, 2018). This has been seen as an effort to modernize how it communicates to the consumers and to allow it more control of the message.
Focus on the story means that Golin will seek to tell about the positive changes that McDonald’s is making on its menu, including the removal of artificial preservatives, flavors, high-fructose corn syrup, and shifting to cage-free hens among others. It is important to note that fast-food restaurants have come under pressure because of certain production methods and practices that are seen as harmful to consumers. Therefore, it can be understood that McDonald’s intends to use the new communication framework to allow consumers to know and appreciate the efforts the company is making to improve both food nutrition and address other issues.
Present Knowledge Gaps
The current knowledge gaps pertain mostly to how the consumers respond to the marketing efforts of fast-food companies despite the allegations of malpractices. It can be argued that the focus of these restaurants is to serve as many customers as possible in a day. Additionally, the time taken to serve a client is critical and the efforts to reduce wait times mean some quality concerns are likely to emerge. fast food is largely considered junk and unhealthy means contributing to problems such as obesity (Mohammadbeigi et al., 2018; Burgoine et al., 2016). The fact that consumers are still purchasing these products, some more frequently than others, means either the company has successful marketing strategies or that there are ofter factors explaining the phenomenon. Buying behaviors are based on individual values and it can be argued that these values can explain the frequency of purchase. Additionally, there is a knowledge gap regarding how frequently individual consumers eat at McDonald’s. This can be used to explain consumer experiences and preferences which are arguably the company’s major success factors.
The term research methods have been defined differently across various publications. This is a term that divided the opinions of scholars, especially regarding what can be considered a research method and what criteria are used to categorize different methods. According to Chu and Ke (2017, p. 285), research methodology is a term whose definition has included the type of research, data collection, and data analysis approaches. Other definitions include the research strategy, type of investigation, and type of data analysis among others. For this research, research methods are categorized into qualitative, quantitative, and mixed methods. Qualitative research focuses on a deeper understanding of the problem being investigated (Queirós, Faria, and Almeida, 2017; Atmowardoyo, 2018). In-depth and illustrative information is produced to help comprehend certain dimensions of the phenomenon. On the other hand, quantitative research deals with quantifiable data from huge samples that are deemed representative of the entire population (Apuke, 2017, p. 40; Patten and Newhart, 2018, p. 23). The results from these studies are used to generalize the study population. They are also objective and tend to adopt structural procedures and formal data collection instruments.
This study adopts a mixed research methods approach to help the research comprehensively address the research questions. This approach has been described by (Alavi and Habek, 2016, p. 62) as one in which there are elements of both quantitative and qualitative methods used to collect numbers and words respectively. As explained in the research questions, one of the objectives is to determine the consumption frequencies interpreted as the number of times in a given period that a customer buys McDonald’s products. These frequencies are numerically represented and quantitatively analyzed which means the research will have to use quantitative methods. On the other hand, the research needs to understand the factors behind the changes in McDonald’s sales. These will be explained by the respondents and past studies in the form of expressed opinions. These will be qualitative forcing the researcher to deploy qualitative approaches to achieve the desired outcomes.
The strategy or design for this study will be a systematic review. This can be defined as a type of research synthesis intended to identify and retrieve data for a particular topic to analyze the results and inform either policy, practice, or further research (Munn et al., 2018, p. 2). A systematic review is deemed to be a priority for decision-making (Elliot et al., 2017, p. 24). The purpose of this study is to inform practice at McDonald’s as will be seen in the recommendation section. The systematic review will involve the collection of both primary and secondary data which will be analyzed to explain the situation and help develop the appropriate strategies for the company.
A sample of 25 consumers of McDonald’s fast-food will be selected for the survey using a systematic sampling strategy. This approach works by selecting a random unit from the first predetermined number (Sharma, 2017, p. 750; Taherdoost, 2016, p. 21). To select the 25 participants, the researcher will pick every 20th customer to be served at the selected McDonald’s restaurants until a total of 25 is reached. The participation will be voluntary meaning the selected respondents will give their consent to participate. Those who are unwilling will be dropped and the researcher will continue the process until 25 consumers have agreed to take part in the survey. It is important to highlight that this probabilistic sampling may not balance the respondents along the lines of gender and age. Therefore, the major exclusion criteria will be the age where those below the age of 18 are dropped.
The major advantage of this strategy is that it allows the sample to be more evenly spread over the population. It is also regarded to be convenient and free of bias also because the selection of the restaurants is also random. To spread the population across a larger population, five restaurants in different states in the United States are selected each producing five participants. This way, a broader scope is achieved and the results can be generalized across a larger population as the opinions expressed by the respondents are spread over a large geographical area.
Data Collection Strategy
A survey will be used to collect primary data from McDonald’s customers. This survey comprises 10 questions structured to cover all the aspects of the study. Most importantly, the survey estimates the consumption within a period of one year for each respondent and their reasoning behind these patterns. For further clarification on the subject matter, secondary data is obtained from previous studies and other secondary sources that help explain the phenomenon. The main concern will be the information regarding the changes in consumer perception of the nutritional value of fast food and other factors helping McDonald’s increase sales despite the poor reputation from accusations of poor practices. Such information will help determine what the company does to influence positive responses from the customers.
Data Analysis Framework
As a systematic review, the data will be analyzed through a thematic analysis. This is a process that involved determining the themes or patterns in qualitative data (Maguire and Delahunt, 2017, p. 2). Majorly used in qualitative studies, thematic analysis works by “identifying, analyzing, describing, and reporting themes within a data set” (Nowell et al., 2017, p. 2). Thematic analysis is considered to have theoretical freedom that allows flexibility where it can be modified to suit different studies. The focus of this research and the basic ideas needed has been outlined as identifying consumption patterns and finding the factors influencing them. The thematic analysis will, therefore, present the result that first explains the consumption behaviors and frequencies and then offer an explanation for these frequencies.
The major limitation of this research is the small sample used to make generalizations regarding a population comprising millions of consumers. 25 respondents across 5 states in the US are used to help paint a picture of the consumption frequencies across a global fast-food chain. However, the effects of this limitation are reduced through the use of secondary data from multiple sources to support the primary data. The second limitation is the time frame within which the research collects and analyses the data. As mentioned above, the period within which the frequencies are estimated is one year meaning there will be inadequate historical data to present the findings more accurately. The company does not keep a database for individual consumers which could ease this research. Therefore, consumers can only be requested to estimate how many times they have consumed the products in the past year.
Key Changes Observed
The problem statement has been expressed as consumers continued purchase of McDonald’s despite junk food stereotypes. It has been expressed that McDonald’s remains commonplace for families. The researcher has not reported any changes despite reports of declining sales in 2019 and 2020. These declines have not been massive indicating that only a small percentage of consumers are bothered by the stereotypes meaning a few have changed their consumption patterns because of perceived nutritional value. This aspect has been reflected in the survey where 92% (n=23) indicate they are indifferent to the nutritional composition of McDonald’s foods. The rest indicate that they would change from McDonald’s if they believed that the foods had declined in nutritional quality. The declining traffic at the restaurants, as inferred from the secondary data, has been affected by several factors.
Firstly, the current COVID-19 pandemic reduces affordability and people have the time to prepare meals at home as they self-isolate. With delivery programs, some customers have persisted in eating McDonald’s foods. Customers are ordering more and coming to restaurants less often (Maze, 2019). This is a change that may persist in the future.
Another significant change is menu improvements in certain products. In general, the company has tried to remove certain ingredients from its foods, including artificial preservatives, flavours, high-fructose corn syrup, and caged chicken (Bradley, 2018). Premium burgers have been offered across the global chains which include features such as more customization and the use of higher-end ingredients (Bailey, 2020). These improvements in quality have been intended to eliminate the stereotypes of junk food and to convince the customers that high nutritional value is on offer. The survey revealed that 96% of the respondents (n=24) have frequently purchased the premium burger in the past one year.
Lastly, there have been significant changes in consumer perception of fast-food as chains. This change has been observed through the secondary data with primary studies such as Thakkar and Thatte (2015) used the case study of KFC and McDonald’s. These studies show that perceived changes in product quality, speed, and accuracy of service, price, tastes, and attitude of staff members affect the frequency of consumption. At McDonald’s, consistency in product quality across all restaurants has saved the company from these fluctuations. Americans are becoming more conscious about their health and they tend to choose organic food free of antibiotics and preservatives. As such, McDonald’s has implemented a major change in operations and practices manifested by a shift from chicken raised with antibiotics (Knowledge @ Wharton, 2016). These changes have sustained consumption frequencies, with other factors such as price changes being the ones responsible for fluctuations in sales volumes.
Key Trends in Behavior Changes
The major behavioral changes observed include the tendency to order food online, especially during the COVID-19 pandemic where movements were restricted. The company has created the concept of McDelivery in response to this change in consumer behavior. In addition, “stay at home combos” is a combination of McDonald’s means packaged to be delivered to the homes of consumers to solicit consumption among those customers staying at home. Quarantine and isolation have become a norm during the pandemic, and the company has had to sustain its sales by offering its products to consumers in their homes. Even without the effects of the pandemic, the consumers are attracted to the prospect of having their meals delivered to them rather than visiting the restaurants. The company’s website has been updated to incorporate these emerging trends in fast-food consumption.
Besides deliveries, there is also the option of ordering food online and picking it up at the convenience of the customer. The company has been faced with a backlash associated with delayed services, especially among the drive-through clients. As an innovative company, the company has opted to take advantage of online shopping trends among millennials to ease the congestion and reduce wait times. This concept involves the development of an app that allows customers to order and pay online using credit cards or other forms of payment. Upon arriving at the restaurants, their orders are ready for pick-up, and hence no delays. Additionally, the meals can be delivered to the customers in the curbsides. Besides McDelivery, Uber eats is another means that the food gets to the customers conveniently. These trends are spearheaded by both the consumers and the company in response to situational changes.
Lastly, people are eating less junk food and are preferring to eat more healthy foods. This is a finding supported mostly by secondary data as the survey indicated that most people choose convenience and affordability over nutrition. 72% of the respondents (n=18) indicated that their frequencies of purchasing food at McDonald’s are affordability and convenience. The remaining 28% (n=7) indicate that they are conscious about the nutritional value and would purchase more if they perceive nutritional composition to improve and eat less when they feel the nutrition has been compromised. It is argued here that 28% is a significant statistic showing that the consumers’ perceptions regarding junk food are changing dramatically.
Studies have shown that some instances where behavioral changes have occurred in opposition to junk food have been the result of regulatory changes. This means that studies have shown junk food to be detrimental to human health, a finding that has influenced some policymakers to implement bans on these products. In Canada, for example, a study by Leonard (2017) indicates that six provinces have banned junk foods on school property to improve student health. These studies on the detriments of junk foods have affected how people consume their foods. The preference changes towards more sustainably produced foods have also forced companies to modify their practices and methods to retain their appeal to these consumers.
Connection to Frequency
The changes highlighted above have a direct impact on the frequency with which consumers purchase food at McDonald’s. It is important to distinguish between the frequency of purchase and the traffic at the restaurants. This research finds that traffic is declining due to online orders and deliveries. Upon the introduction of new products perceived to be of higher quality, the frequency of purchase among the individual customers’ increases. This frequency is associated with those who are conscious about their diet and health and tend to avoid junk food. The same does not apply to those who prefer affordability and convenience as their frequencies remain unchanged.
The frequency of purchase has also been affected by the COVID-19 pandemic as people staying at home have the time to prepare home meals. This applied largely to those who seek convenience in the form of fast services on their way to work or during lunch breaks. Staying at home eliminates the need for this convenience and the customers who prefer better nutritional value have the option of cooking their own food. The most important changes in the frequency of purchase, however, involve customers seeking nutritional value. The survey revealed that 28% (n=7) prefer more nutritional value and would purchase more if more value was offered and less of the nutrition was compromised. With the study sample of 25, however, these frequencies are hard to generalize to the global population of consumers. However, secondary data shows that most consumers eat at fast-food restaurants for change as opposed to nutritional superiority over homemade meals. These studies have also concluded that adding more nutritional value may increase the frequency at which consumers purchase fast food.
Assessment of Research Results
The research was designed to answer two questions: how the customers’ perception of McDonald’s affects their frequency of purchasing and how McDonald’s stimulates buying frequency by influencing consumer perception. One of the key themes in this research is the nutritional value of fast food in general where previous studies have been successful in convincing consumers that junk food is bad for their health. This information has been received and acted upon by both consumers and policy-makers. The perfect example presented here is the six provinces of Canada that banned junk foods from school premises to promote student health (Leonard, 2017). The secondary data from previous studies have revealed that most fast foods are not only considered junk food but also products that are associated with health problems such as obesity (Mohammadbeigi et al., 2018; Burgoine et al., 2016). With this information reaching the consumers, their purchasing behaviors are gradually changing.
Regarding the shifts in buying behavior associated with fast foods, the research has established that people are becoming more conscious about their health and diet. Researchers such as Valeria, Sina, and Emanuele (2020) present findings that the concept of sustainability has had a major influence. Many consumers are now known to prefer those products deemed as produced sustainably. In the food industry, low carbon-emission diets have emerged with buyers believing that such decisions result in higher nutritional quality and other positive health outcomes (Payne, Carborough, and Cobiac, 2016, p. 2654). To illustrate that these concerns have had an impact on the industry, McDonald’s has implemented a major change in operations and practices manifested by a shift from chicken raised with antibiotics (Knowledge @ Wharton, 2016). Preservatives and other materials considered inorganic are discouraging consumption and forcing companies to adopt better practices.
The perceptions regarding the nutritional value of foods are seen as a major determinant of consumption frequencies and patterns. However, the percentage of those consumers influenced by perceptions of nutrition is lower than that of consumers influenced by other factors such as affordability and convenience. The primary research revealed that only 28% (n=7) claim to be conscious of the nutritional value and would purchase more if they perceive nutritional composition to improve and eat less when they feel the nutrition has been compromised. However, this is a significant percentage because the data was collected from people already visiting the restaurants. It is argued that if the general population was sampled to include those consuming and not consuming McDonald’s foods, then this percentage would have been greater than 28%. An assumption is made here that 28% of consumers may have been purchasing those products that McDonald’s markets as premium and of high nutritional value.
Another major finding is associated with the second research question regarding how McDonald’s influences consumer perception regarding nutritional value to trigger higher consumption frequencies. This research finds that McDonald’s has been using innovative marketing strategies to appeal to consumers. However, the most important aspect is that McDonald’s has developed into a popular and trusted brand meaning the company has for a long time not had to improve nutrition to improve sales. As shown in the previous chapter, technology improvements have helped McDonald’s deliver foods faster. As a fast-food restaurant, the company has always focused on making sure that the consumers do not wait for too long to be served. The quality of service has been the priority as opposed to the quality of the products. It is for this reason that McDonald’s competitors have succeeded in attracting customers by developing better quality products in addition to quality and faster services (Kline, 2017). However, this is something to which McDonald’s has responded recently.
The response to the competitors’ advances can be seen as an effort to improve consumer perception regarding the nutritional value of McDonald’s products. The company has developed premium burgers across the global chains which include features such as more customization and the use of higher-end ingredients (Bailey, 2020). Additionally, this research finds that additional commitments to nutritional quality by McDonald’s include the removal of artificial preservatives, flavors, high-fructose corn syrup, and shifting to cage-free hens. The company has also ceased offering chicken produced using antibiotics due to consumer concerns. To illustrate that these changes in nutrition are intended to change the perceptions of the customers, the researcher finds that the marketing framework recently implemented allows one PR partner to focus exclusively on the story of how the company has improved quality (Bradley, 2018). This message is intended to convince the buyers that they can trust the food offered by McDonald’s.
Key Conclusions and Implications
The research has accomplished an investigation of a phenomenon involving continued consumption of McDonald’s foods despite the stereotypes surrounding junk food. There are three major conclusions drawn from this research. First, many customers purchase McDonald’s products multiple times a week implying that McDonald’s has become their mainstay and a trusted food source. This conclusion is backed by the findings regarding consumption frequencies recorded in the survey. Second, a significant number of customers are fully aware of the nutritional value of the food they consume and have made changes to their food consumption behavior. The research illustrates that the consumption frequencies are partly because of consumer perception regarding the quality of the food, often measured in terms of the nutritional value. These buyers have expressed that they would purchase more from McDonald’s if the company was to improve food nutrition and avoid the products if the opposite happens. This conclusion is also backed by secondary data that shows many consumers prefer food products produced sustainably and without ingredients deemed harmful to their health.
The third conclusion is that McDonald’s has made deliberate efforts to influence consumer perceptions regarding its products. These efforts are manifested by the marketing strategies and, most importantly, the message the company conveys to the public. The company understands that the customers are keen on their diet and health and has made changes to their menus to improve their nutritional value. The results have included new products attracting more customers to sustain sales.
The key implication for McDonald’s is the future of the business due to the changes and trends in consumer behavior. When consumers start demanding products manufactured more sustainably, the company finds itself in a situation the loyalty will be determined by its ability to meet these emerging needs. Organic foods are becoming more desirable meaning that McDonald’s should start considering procuring food supplies from organic farmers. These are changes that will have great impacts on the future of the company.
Research Limitations and Their Effects
The major limitation of the research is the limited sample used for the collection of primary data. A sample of 25 has been used to inform the perceptions and purchasing frequencies. The effect of such a small sample is that it makes it harder to generalize over a population comprising millions of consumers. However, the secondary data has offered an adequate backup to prove that these perceptions have been found in previous studies. The trends in consumer behavior are dynamic and it means that those observed now will be different from those recorded in the future. In other words, the current research may not have major implications for the future of both the consumers and the company. With continuous monitoring, however, long-term trends can be observed over a larger sample to make better generalizations.
The importance of this research is that it helps paint a clear picture of the consumer dynamics in the fast-food industry and offers an insight into factors affecting consumption frequencies. The conclusions drawn from this research include that consumers are aware of their health and diet concerns and are actively seeking products that have better nutritional value. Additionally, these issues have a direct and significant effect on their consumption patterns and frequencies. The consumer response to improvements in nutritional value has also been seen to be positive. With these conclusions, therefore, two key recommendations can be offered to McDonald’s to help it sustain sales.
The first recommendation is to implement product localization across various countries to keep up with the smaller restaurants. Such efforts have been witnesses in India and the success in this country should lay a foundation for further localization across the world. The local dishes are often perceived to have great nutritional value because they are founded on the local cultures. Additionally, these products will have greater acceptance in some countries and cultures and should offer McDonald’s with another path for growth. In western countries, food products such as burgers and pizzas have become commonplace. In others, especially African and Asian countries, these may be perceived as exotic and will hardly become the mainstay for the consumers. Revenue growth and international expansion in such countries may be limited. Localization, therefore, becomes the best strategy for McDonald’s to follow.
The second recommendation is that McDonald’s should start overhauling its supply chain in response to the observed trends and changes in consumer behavior. Most importantly, organic food and other sustainable practices are becoming more desirable to consumers. It is argued that in the future consumers will completely change from unsustainably produced food. At this time, the smaller companies will have more power over the large ones because their flexibility can allow them to change quickly. Additionally, the small scale of production means that smaller restaurants can effectively source from smaller farmers organically producing their food. The new-look of McDonald’s supply chain should include sustainable suppliers for the food produces. In Western countries, including the US and Canada, consumer perceptions regarding junk food cannot be expected to improve. To serve these markets better, the company has to assure the buyers that the foods are sustainably produced and have high nutritional value. Without these changes in the supply, McDonald’s may find it hard to accelerate or sustain its growth projection. Competitors with the capability to produce greater quality will continue to grow.
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Appendix: Survey Questions
- Approximately how many times a day do you eat or buy food at McDonald’s restaurants?
- In the past one year how many times a week have you eaten or bought food at McDonald’s restaurants?
- How many food items have you bought at McDonald’s for the past one year?
- How has your perception regarding the McDonald’s and its food products changed since your first experience with the company?
- On a scale of 1 of five (1 being very disappointed and 5 being very satisfied) can you rate McDonald’s foods?
- On a scale of 1 of five (1 being very disappointed and 5 being very satisfied) can you rate McDonald’s services at the restaurants?
- Are you aware of the nutritional composition of the food products you purchase at McDonald’s?
- What is the main reason for your continued purchase of food at McDonald’s? Choose between affordability, convenience, and nutrition.
- If the nutritional value of McDonald’s food was to improve, would you purchase more food from its restaurants?
- If the nutritional value of McDonald’s food products was to decline, would you buy less or stop consuming its products?