Running head: MCDONALDS AND AMERICAN EXPRESS

Unit IV: Case Study

McDonalds and American Express
Le Viet Anh
Columbia Southern University

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Part I: McDonalds Case Study

According to Kotler & Keller (2012), McDonald's Corporation (NYSE: MCD) is the
famous worlds leading fast-food chain operator, with over 32,000 restaurants in 118 countries.
Since established in 1955 up to now, McDonalds worldwide is serving for more than fifty
million people every day. More than 80% of McDonald's restaurants globally are owned and
operated by respective countrys business men and women. McDonald has made remarkable
business successes through their adaptable strategies and quickly responding to the changes and
real situations where they operated the services (McDonald's Corporation, 2016).
McDonalds core brand values
McDonald has strategic vision for its development since established. They are focusing
on the customers and paying efforts to become a modern corporation with progressively growth
throughout many years. They aware of the needs and changes in respond to the increasing
demands and expectation of customers. Since 1960, McDonalds has been consisted with their
business strategy for both domestically and internationally grows plus continuously emphasized
the importance of quality and ensuring the best customers service, cleanliness, and value (Kotler
& Keller, 2012). Throughout the development process, McDonalds has taken appropriately
changes of their core brand values in different phases in order to cope with business situation.
Importantly, as reflected by Kotler & Keller (2012), McDonalds strategy emphasized and
advocated on the 5 Ps: People, Product, Promotions, Price and Place worldwide with the
intentionally allowing their local branched restaurant to be able to adapt with local culture and
habit.
In short, McDonalds has consisted with their core brand value, quality, service,
cleanliness, value but from time to time, they have been creatively adapted their strategies in

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order to timely responding the customers needs not only in USA but also in other countries.
Most importantly, McDonalds has succeeded in letting customers and people know how they
were improved, what value they care about, who are the most focused customer, etc. with the aim
to attract and seek more supports from worldwide customers through marvelous marketing
strategies and campaigns.
Comment on McDonalds strategy
In the year of 2000s, McDonalds has successful passed through the economic downturn
with continual growing. Sales is $23.5 billion in 2008, making McDonalds one of only two
companies in the Dow Jones Industrial Average whose share price rose in 2008 (Kotler & Keller,
2012). With different tactics such as offering the lower price of foods, making more convenience
for customers, upgrading the shops, adding more healthier food in the menus, extend the product
line, promotion, pushing the marketing advertisement, etc. are the main reasons of McDonalds
success during the recession. In my opinion, the sustainable, growth and development of
McDonalds is created by excellent combination of the ideas and innovative through its
development history. Therefore, in the better economic situation, McDonalds should continue
promote, generate and apply the new idea for its development. The innovation is a key of
McDonalds success, they should use the recession as golden lesson learn and experiences for
studying the new ways of creation for example, they may focus more on the quality of food,
adding more traditional healthier foods from local market menu for responding to the best
combination and diversification of local tastes and cultures, integration program between
consumption of healthier foods with fitness and health practices to the customer, support for
local economic development through introduce and apply the strictly quality control of foods and
materials production process, strengthening the corporation social responsibility, pushing more

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marketing and advertisement, etc. By these solutions, the customers will see the tangible value of
McDonalds and be delighted to pay higher prices to McDonalds products rather than retaining
the one dollar menu. On the other hand, McDonalds should continue polish its images with
consistence core values and positioning it as provider of foods for future development.
McDonalds market segmentation, market targeting and brand equity
Under the consisted core brand value, customers service, cleanliness, and value and 5 Ps
strategies (People, Product, Promotions, Price and Place) as well as conducting the appropriated
marketing strategy, McDonalds has been successfully performed their well business with greater
profits worldwide. McDonalds segmentation, targeting and equity positioning is one of the
integral components of its marketing strategy. McDonalds has divided the potential customers
into different population groups who has similarity characteristics such as geographical areas
with urban/rural, domestic/international criteria; demographic with age, gender life key
milestones; occupation/professional and income; behavior with personality, benefit, loyalty;
Psychology with life style and social class for marketing and selling their respective products.
McDonalds has also paid much attention on the constructing and accumulating the value of
brand equity. As branded as a famous standard on fast food with safety and quickly serve the
customer with a reasonable prices, means the McDonalds products can be equitable accepted by
different customer group including lower income person (worker, staff, business customer,
teenagers). In addition, as reflected by Kotler & Keller (2012), McDonalds also focused much
on children and their parent. For example, they created and welcome the children and youth
having the comfortable place that not only for eating but also for enjoying with games and fun or
showed their care by funding the campaign for global charity effort called Ronald McDonald
House Charities.

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To be brief, McDonalds has very creative in renovating and adapting their strategies that
timely respond to the need of each customer segments. It was well noted that for succeeding
these strategy McDonalds always recognized the key role of marketing mix in the brandbuilding process. Advertising is certainly not the only cause of success but the two are
inseparable.
McDonalds consumer buying process application
As illustrated by Kotler & Keller (2012), there are five main steps of consumer buying
process which consisted of Problem recognition, Information search, Evaluation of alternative,
Purchase decision and Post-purchase behavior. Knowing well the customers buying process is
not only very important for salespeople, it will also enable company to adjust sales strategy
accordingly as well as planning for effectively marketing and advertisement activities. For
sustaining the continual growth and development, McDonalds has carefully reviewed and
applied this consumer buying process.
Problem recognition: as the first and most important step in the customers decision
process and ready to respond, McDonalds has focused on simple food (hamburger for instance)
with quality, clean, and fast serve that people at different level of income can still afford to
purchase and their primary customer segment is children and their parent.
Information search: customer may search information that enables them to find the best
solution. Catching up with this step, McDonalds has brilliant marketing campaign and
advertisement on their products through different media channels. They emphasized on their
equity brand value and 5 Ps strategies that enable polish their image and core value with quality,
service, cleanliness, and value that made audience, customer getting to know more about their
products

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Evaluation of alternatives: individuals evaluate different products or brands at this stage

on the basis of alternative product attributes. Understanding the step, McDonalds has focus
their business on children and parent as well as charitable activities such as Ronald McDonalds
House Charities that strives to improve childrens lives, health, and well-being through three
major programs: Ronald McDonalds House, Ronald McDonalds Family Room, and Ronald
McDonalds Care Mobile. They tried to offer the most comfortable places for children, young
people with the fun that other rival competitor has not done it before. This factor has influenced
on the customers support for the human being that McDonalds has been made. They have
decided to go with McDonalds products.
Post-purchase behavior: customers will compare products with their previous
expectations and will be either satisfied or dissatisfied. Knowing about this stage, McDonalds
keep continuously improving their product quality and services, strengthening staff capacity and
skills, changed alternative food and drink in their revised menu toward healthier for mom and
customer, offer the USD 1 menu for lower income people and teenagers, adapting the Plan to
Win. With this strategy and through good marketing process McDonalds has reflected a good
image in front of customers and potential one for brand loyalty
Altogether, McDonalds has been very well responded to each stage of customers buying
process that created the enabling environment for customer taking decision and buying their
products through their adaptive business strategy with strongly support from communication,
marketing and advertisement strategy.
Part II: American Express Case Study
As mentioned in the article by Kotler & Keller (2012), American Express is one of
famous brand over the world on financial payment by cards. The American Express appeared in

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the market initially with their mailing express services since 1850 in US and become a huge
global company like today who has largest card holders with a million USD transactions each
day globally and biggest partners of many small lenders business. The company has quite
fascinating history that almost leading the innovation in paying card industry (American Express,
2016).
American Expresss and its competitors evaluation
Since formed in 19th century, the American Express has been very proud with its greatest
and continuity efforts in growing and development as leading global company in the payment
card industry. American Express is trying to deliver more and more values to the customers than
other competitor in order to offer superior value propositions to all of our customers. They well
aware on improving their business management that can sharpen their quality of services as well
growth investment in longer term with principle for operate with best-in-class economics.
Finally, for polishing their brand as the worlds most trusted financial brands, the American
Express always strives for provision of world-class service that each individual customer are
expecting. But most importantly how these values can reach to the market and public. Therefore
it is a fair to say that American Express has been very well done in their marketing campaign to
disseminate the information on their trustful, quality services, promotion and events that made
people surrounding to understand on what American Express is doing and the way that they
promoting people to engage in their business (Kotler & Keller, 2012).
With well described by Kotler & Keller (2012), the most competition that American
Express has been facing is at payment card business segment of which MasterCard and VISA are
the key rivals. To deal with these competitors, American Express had initiated different business

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strategies along with intensively marketing and advertisement based on their core values and
brand. They were very intelligence in clearly identifying the customers segment in the market.
They even collected higher fee from customers than other competitors but through it, they made
customer to understand on the prestige and felling proud to be American Expresss membership.
As result, the one third of its total profit had created through this process in 1967; even more the
visibility of American Expresss symbol is more popular in the market (Kotler & Keller, 2012).
In more details, American Express had been long struggled in competing with MasterCard and
VISA and passed it through number of innovative in changing and adapting its strategies and
marketing campaigns such as Dont Leave Home Without It, Do More, rebranding as
OPEN, Priceless, My Life. My Card. The American Express also got more profits through
the number of interventions such as change its procedure for promoting the flexible payments;
deliver more and more special offers; extending network and partnerships with others (i.e. WalMart, Lehman Brothers Kuhn Loeb Inc. and E. F. Hutton & Co, insurance companies, especially
identifying and extended its lending services to new customers segment - small businesses, with
clear strategy and marketing advertisement (Kotler & Keller, 2012)
American Expresss integration of various businesses evaluation
According to Kotler & Keller (2012), at the beginning of the business, American Express
has already involved in different fields such as express shipping, travel services then becoming
the most popular one in payment cards segment. In addition to that American Express has its all
firmly and suitably strategies for its development on the financial field. They acquired a number
of companies like Lehman Brothers Kuhn Loeb Inc. and E. F. Hutton & Co for diversifying their
business and created several products and business, for example brokerage services, banking,
insurance. They have done great job in integrating their services like charge and credit cards,

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Travelers Cheques, travel services, and select banking and financial services through number of
succeeded partnership and merchants for accepting their cards including co-branded cards with
Wal-Mart. With regard to the equity, American Express spread their services and created a new
product for helping many small businesses with financial lending (business to business credit
card), targeted service to younger, promotion and reward for card holder, redeeming points for
free of charge for travel, gift, voucher, etc. In short, American Express has made well integration
of its various businesses that can complement and enhancing each others for sustainable and
profitable of their investment.
With such great achievements so far, I would propose that American Express should
continue their contribution to equity agenda by supporting more and more businesses or
extending its financial assistance to the formal production groups, small corporate or new
entrepreneurs that not only help them development of services with new customers segment and
profits but also strengthening their bright image in social and economic development
responsibility. In addition, since American Express is focusing on middle and high class
customers, it is possible that they could design new products that could serve lower income
customers financial services should be commonly available and accessible by anyone who has
demand as well as applying the suitable security controlling measurements for minimizing any
risk. All these solutions can help American Express having comprehensive business and
development with coherent brand.
American Expresss decision to grow beyond its core affluent consumer base
First of all, through analyzing the historical achievement of American Express, it is quite
clear that they have passed many different struggles for sustainable, growth and development as
today. In more detail, their achievement were built by many factors such as consistent core

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value, brand, principles, adaptable strategies, creativeness operations, expanding

partnership/network and importantly the excellence marketing and advertisement activities.
According to Kotler & Keller (2012), American Express has revised their strategy and focus on
wealthier and lower risk customers segment but still attracting for increasing the number of card
members by promoting the valuable rewarding. However, as my understanding, this is a god
tactic but for short term and situation-based one especially in the context of global economic
crises was happening. It is innovation but really help them to find their niche in the difficult
situation, keeping their stable and earning profits that other companies cannot do at the same
time. However, for long term development, as mentioned earlier, American Express has it vast
knowledge, experiences, capacity and resources on the card payment field, so the adventure in
creating new innovative products are worth for company like American Express. Surely they can
do more as in the pass they have done, for example they had successfully expanded their services
to small business payment card, so why not other innovation for development. By doing so, their
brand even more popularized if they could expand cooperation internationally, offering the
affordable products that suited with local countrys culture and behavior, providing more support
to small corporate, reaching more potential customers and finally innovation in marketing and
advertisement. As in the pass, that work can be done in parallel with strengthening and
providing the higher quality services that certainly will help to enrich their value and brand not
only in US but also in other countries where they are working (Kotler & Keller, 2012)
Differ Organizational buying process and Consumer buying process
The buying process for organizations is much more structured and formal in comparison
to the individual buying process (Reid & Bojanic, 2010). The business to business approach
considered as lengthy and complex sales cycles with more tasks oriented that can build stronger

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and long-term relationship between buyer and seller in comparison with business to consumer
approach. Additionally, the business to consumer is depending much on the customers
emotional in making their decision to buy the product or not. In the case of American Express,
understanding the situation, they had changed their strategy to expand their services by making
the special offers and partnerships as well as resources for small businesses in addition
maintaining the quality services to individual consumer. As cited by Kotler & Keller, 2012,
Hayes J. said Small business owners are fundamentally different from people who work for
large companiesWe think its important for this area to have its own identity. So it is clear
that American Express had great innovation in getting more profits from business to business
approach while independent from the risk of business to customer type. In addition, through this
support, the value and brand of American Express are brighter with equity focus when they
provide a good chance and opportunity for small business development.

Conclusion
Marketing and advertising have always played an important role in the success of the
organization. The case study of McDonald's and American Express show the significance of
branding for the organization. After analyze above two cases, we get an overview and better
understanding about marketing strategy and macro market development.

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References:
American Express. (2016). Who We Are. Retrieved December 2016, from American Express:
http://about.americanexpress.com/oc/whoweare/
Kotler, P., & Keller, K. L. (2012). Marketing Management. NJ: Upper Saddle River.
McDonald's Corporation. (2016). About Us. Retrieved December 2016, from McDonald's:
https://www.mcdonalds.com/us/en-us/about-us.html
Reid, R. D., & Bojanic, D. C. (2010). Hospitality Marketing Management. Hoboken, NJ: John
Wiley & Sons, Inc.

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