McDonald's market segmentation strategy

Summary

McDonald's employs target marketing by segmenting its audience into specific groups like young adults, women, moms, and various ethnicities. Each segment has a dedicated manager who uses market research to gather consumer insights, focusing on values, needs, and lifestyle. These insights inform the creation of positioning profiles for each product, guiding the development of targeted ads. For instance, the southwest chicken salad is marketed differently to African-American, Hispanic, and Asian consumers, highlighting its hearty nature, cultural ingredients, and variety of tastes, respectively. This strategy has significantly boosted sales.

Takeaways

• 🎯 McDonald's uses target marketing to appeal to specific consumer segments.
• 👥 McDonald's segments are managed by segment managers instead of brand managers.
• 📊 Segment insights are derived from continuous market research and consumer behavior analysis.
• 📈 McDonald's focuses on understanding the values, needs, and lifestyle of each segment.
• 📝 Each product has a positioning profile created based on segment insights.
• 🖌 The creative team uses these profiles to produce targeted ads.
• 🍔 Southwest chicken salad is an example used to illustrate how McDonald's tailors its advertising to different segments.
• 🌐 The general market is attracted by the variety of ingredients in the southwest chicken salad.
• 🖤 African-American consumers are targeted with messages emphasizing the salad as hearty and filling.
• 🌎 Hispanic consumers are attracted by the cultural resonance of the salad's ingredients.
• 🍽 Asian consumers are targeted with the appeal of variety and new tastes.
• 💼 McDonald's has a dedicated team to keep segment information current for effective marketing.

Q & A

What is the central aspect of McDonald's marketing strategy?

The central aspect of McDonald's marketing strategy is target marketing, which involves segmenting the population into specific groups and positioning their products to appeal to those segments.

How does McDonald's organize its marketing department differently from traditional consumer package goods companies?

Instead of organizing by brand with brand managers for each product like Doritos or Lays, McDonald's has segment managers, such as a director of young adults, women moms, African American consumers, Hispanic consumers, etc.

What is the purpose of segment managers at McDonald's?

Segment managers at McDonald's are responsible for maximizing targeting marketing efforts by understanding the needs, values, and lifestyle of each specific consumer segment.

How does McDonald's gather information about different consumer segments?

McDonald's gathers information about different consumer segments through continuous market research, collecting data and insights about the behavior of each segment.

What is the focus of consumer insights at McDonald's?

Consumer insights at McDonald's focus on the values, needs, and lifestyle of each segment, which helps in creating compelling product descriptions and marketing messages.

How does McDonald's use segment insights to create marketing materials?

Using segment insights, each segment team creates a positioning profile for every product, which the creative team then uses to produce targeted ads for relevant segments and the general population.

What is an example of how McDonald's tailors its advertising to the general market?

For the general market, McDonald's emphasizes the variety of fun ingredients in the southwest chicken salad, as it is considered compelling to a broad audience.

How does McDonald's approach advertising to the African American consumer segment?

McDonald's learned that African American consumers are less likely to consider a salad as a substitute for sandwiches, so the advertising message focuses on the salad being hearty, filling, interesting, and exciting.

What resonates with the Hispanic consumer segment in the context of the southwest chicken salad?

The southwest chicken salad resonates with the Hispanic consumer segment due to the ingredients that are culturally and traditionally compelling.

How does McDonald's appeal to the Asian consumer segment with its southwest chicken salad?

McDonald's appeals to the Asian consumer segment by highlighting the variety of ingredients and the new exciting taste, which aligns with their preference for tasting new and different things.

What is the result of McDonald's target marketing strategy?

Target marketing has proven successful for McDonald's, as it has increased overall sales by understanding various consumer segments and positioning products to appeal to each segment.

How many people at McDonald's work full-time to keep marketing information current?

There are a couple hundred people at McDonald's who work full-time to keep the marketing information current and ensure that the insights are used to make compelling marketing efforts.

Outlines

00:00

🍔 McDonald's Target Marketing Strategy

McDonald's employs target marketing to cater to diverse consumer groups. Unlike traditional companies that organize marketing by brand, McDonald's uses segment managers for different demographic groups such as young adults, women, and various ethnic consumers. This approach allows McDonald's to tailor its marketing efforts to maximize appeal to each segment. The company continuously gathers consumer behavior data through market research to develop insights about the values, needs, and lifestyle of each segment. These insights are then used to create positioning profiles for each product, which guide the creation of targeted advertisements. For instance, the southwest chicken salad is marketed differently to the general population, African-American, Hispanic, and Asian consumers, highlighting aspects that are most appealing to each group.

Keywords

💡Target marketing

Target marketing is the process of identifying and focusing on specific segments of the population with tailored marketing strategies. In the context of the video, McDonald's uses target marketing to appeal to different consumer segments by positioning their products to meet the needs and preferences of those segments. This approach is central to their marketing strategy and allows them to maximize their efforts to connect with consumers.

💡Segment managers

Segment managers are individuals responsible for overseeing the marketing efforts directed at specific demographic segments. Unlike traditional brand managers who focus on a single product brand, segment managers at McDonald's, such as the director of young adults or women moms, focus on understanding and catering to the needs of their respective consumer groups. This approach helps McDonald's to better target its marketing efforts.

💡Consumer behavior

Consumer behavior refers to how individuals make decisions about purchasing goods and services. The video emphasizes McDonald's constant collection of data and information about different consumer segments to understand their behavior. This understanding is crucial for developing effective marketing strategies that resonate with the target audience.

💡Market research

Market research is the systematic gathering and analyzing of data about consumers and their behavior. In the video, McDonald's uses market research to develop insights about consumer segments, which inform their marketing strategies. This research is ongoing and helps McDonald's stay current with the preferences and needs of their target consumers.

💡Consumer insights

Consumer insights are deep understandings of consumers' values, needs, and lifestyle that come from analyzing market research data. The video mentions that McDonald's pulls insights from their market research to describe their products in a compelling way for each segment. These insights are vital for creating targeted marketing campaigns.

💡Positioning profile

A positioning profile is a document that outlines how a product should be presented to a specific target market. Each segment team at McDonald's creates a positioning profile for every product, which is then used by the creative team to produce targeted ads. The video gives an example of how different positioning profiles are created for the southwest chicken salad to appeal to different segments.

💡General market

The general market refers to the overall population or the broad audience that a company aims to reach with its products. In the video, McDonald's uses consumer intelligence to create ads for the general market that emphasize the variety of ingredients in their southwest chicken salad, making it appealing to a wide range of consumers.

💡African-American consumer

The African-American consumer is one of the specific segments that McDonald's targets with tailored marketing messages. The video explains that African-American consumers are less likely to view a salad as a sandwich substitute, so McDonald's positions the southwest chicken salad as a hearty, filling option for this segment.

💡Hispanic consumer

The Hispanic consumer segment is another demographic that McDonald's targets with specific marketing strategies. According to the video, ingredients in the southwest chicken salad that resonate with Hispanic culture and heritage are highlighted in the advertising to appeal to this segment.

💡Asian consumer

Asian consumers, particularly Chinese and Korean Americans, are targeted by McDonald's with a focus on the variety of tastes and the opportunity to try new and different flavors. The video mentions that the southwest chicken salad is marketed to this segment by emphasizing the variety of ingredients and the exciting taste experience it offers.

💡Business-building marketing

Business-building marketing refers to marketing efforts that are designed to increase sales and build the business. The video concludes by stating that McDonald's employs hundreds of people to keep their market information current, ensuring that their marketing is compelling and results in increased sales, which is the ultimate goal of their marketing efforts.

Highlights

McDonald's uses target marketing to make their products relevant to a variety of consumers.

Marketers identify specific segments of the population and position products to appeal to those segments.

McDonald's has a unique approach to segmenting compared to traditional consumer package goods companies.

Instead of brand managers, McDonald's has segment managers for different consumer groups.

Segment managers include a director of young adults, women moms, African American consumers, and Hispanic consumers.

This structure allows McDonald's to maximize targeting marketing efforts.

McDonald's uses segment insights, which are information about consumer behavior developed through market research.

Marketers are constantly collecting data about different segments to understand consumer behavior.

Consumer insights focus on the values, needs, and lifestyle of each segment.

Segment teams create a positioning profile for every product based on insights.

Creative teams use these profiles to produce targeted ads for relevant segments and the general population.

Southwest chicken salad ads emphasize variety for the general market.

For African American consumers, ads focus on the salad as hearty and filling.

Hispanic consumers are targeted with ads highlighting ingredients resonating with their culture and heritage.

Asian consumers are targeted with ads emphasizing variety of taste and new experiences.

Target marketing has been very successful for McDonald's, increasing overall sales.

Hundreds of people work full-time to keep McDonald's information current for compelling marketing.

Transcripts

in order to make their products relevant

to a variety of consumers companies use

Target marketing marketers identify

specific segments of the population and

position their products to appeal

specifically to that segment at

McDonald's segmenting is Central to

their marketing strategy but the burger

giant takes a different approach to

segmenting than most companies

traditional consumer package Goods

companies such as Fredo L organize their

marketing department by brand

and so you will have a brand manager on

Doritos or a brand manager on lays etc

etc at McDonald's instead of having a

brand manager on Big Mac and a brand

manager on french fries what we have are

segment managers and so at McDonald's

you will find a director of young adults

a director of women moms a director of

africanamerican consumers is a director

of Hispanic consumers Etc so that

structure all by

itself puts McDonald's in a position to

really maximize targeting marketing

efforts in order to Target markets

accurately McDonald's uses segment

insights insights are information about

consumer behavior that are developed

through market research we're constantly

every day all week long collecting

information and data about the different

segments that each of our marketing

people are responsible um you know are

responsible for understanding and what

we pull from these segments are insights

pieces of information that help us

understand how to describe our products

in a way that will be most compelling

for the particular segment consumer

insights focus on the values needs and

lifestyle of each segment using these

insights each segment team creates a

positioning profile for every product

then their creative team uses these

profiles to produce ads targeted to

relevant segments as well as to the

general

population in the case of our southwest

chicken salad we learned from our

consumer uh intelligence that this salad

presented such a cool variety of

ingredients that the General market

would find that compelling so if you

look at our ads that were targeted to

the General Market you'll see the

emphasis on the variety of fun things in

the southwest chicken salad hi can I get

a southwest salad with Crispy Chicken

and I want that new thing with the

grilled chicken and tortilla strips you

know it has that real creamy dressing oh

and I think some lettuce on the other

hand if you look at the African American

Consumer advertising we learned from

marketing intelligence that the

African-American consumer is less

inclined to uh consider a salad as a

substitute for almost any of the

sandwiches we have at McDonald's and so

uh instead we needed to develop our

message in a way that said to this

segment this is a hearty

filling interesting and exciting salad

if you look at our Hispanic consumer

segment the southwest chicken salad is

full of ingredients that are that

resonate with with culture and Heritage

and are compelling ingredients to

Hispanic segment for a whole different

reason the Asian consumer's requirement

includes variety of taste and tasting

new and different things and so what we

presented in our advertising that was

targeted to Chinese and Korean Americans

was the whole notion of this variety of

ingredients and a new exciting taste

Target marketing has proven to be very

successful for McDonald's by

understanding the various consumer

segments and positioning their products

to appeal to each segment McDonald's has

been able to increase overall sales at

McDonald's there are a couple hundred

people who work full-time just keeping

the information current and keeping the

information coming so that we can use

insights to make certain our marketing

is compelling and that our marketing

efforts do in fact result in business

building

marketing