9 min
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10.04.2022
In 1937, the McDonald brothers, Richard and Maurice, bought a hotdog stand. A little over three years later, they opened the first drive-in McDonald's Bar-B-Que in California. They continued and improved their foodservice business until 1948. That was the year they rebranded their barbeque restaurant as a place for burgers and french fries.
- What Does Product Life Cycle (PLC) Mean?
- Stages in a Product Life Cycle of McDonald's
- How Product Life Cycle Affects a Marketing Strategy
- Sample Essay: McDonald's Products and Their Product Life Cycles
- How McDonald's Uses Marketing Mix to Filter Out Product Ideas
- Learn More About McDonald's Marketing Strategies
The McDonald's brand isn't new to a huge majority of the global population. After all, the brand's Golden Arches have reached over a hundred countries – 119, to be exact – and is still seeking to find a home in many more territories. However, given that it is a popular fast-food chain, many wild theories and accusations have been pointed at the brand.
Today, we'll take a closer look at the product life cycle of the McDonald's brand. Keep reading below to learn more about McDonald's marketing strategy, as well.
What Does Product Life Cycle (PLC) Mean?
Before we dive into the product life cycle of McDonald's products, let's widen our understanding of the term product life cycle first. In business and marketing, when you talk about a product's life cycle, you refer to the length of time it is introduced to consumers in the market segment until it's off the shelves.
The typical product life cycle has four stages.
These different stages include the:
- Introduction
- Growth
- Maturity
- Decline
These concepts are used by management and marketing professionals in their marketing strategies.
Stages in a Product Life Cycle of McDonald's
Below are four main stages that the cycle can be broken down to.
Introduction
Let's say a product is ready to enter its PLC. The first stage of the product life cycle is the introduction stage. In this phase, the business will put out a substantial investment in advertising. The business owner will also begin marketing campaigns that focus on making its target market aware of the product and its benefits.
Growth
The second phase is the growth stage. Before a product reaches this stage, it needs to gain success in the first stage. Otherwise, businesses will terminate it before they lose any more money. If the product is successful in its introduction, you'll see growth in demand. In this stage, you'll also observe an increase in production and expansion in product availability.
Maturity
Maturity is the third and most profitable stage. This is where the costs of producing and marketing the product take a downward turn. The consumer base is already aware of the product. At this point, most of the marketing is done by word of mouth, which is the most cost-effective type of marketing.
Decline
The last phase is the decline stage. In business, expect that your competition will also follow your lead if it is profitable. Other companies will emulate your success by producing the same products with more enhancements and at lower pricing. When they do, you'll start losing market share. This is the time to introduce a new product to stay ahead of the competition and re-interest your loyal customer base.
Do you need to write an essay about McDonald's product life cycles? Aside from the information you can see in this article, we have prepared a sample essay to guide you in your assignment.
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How Product Life Cycle Affects a Marketing Strategy
Marketers and distributors don't just create products out of the blue and hand them to various distribution channels. This risky behavior can cause a business to fail. The smart and modern way of creating and introducing new products to the market is through the product life cycle.
Before the cycle starts, a product begins with an idea. The idea undergoes brainstorming and R&D or market research and development. In this early stage, small experiments and model variations are done. Sometimes, surveys and interviews are conducted instead. Think of this stage as the pre-conception point of a product.
Sometimes, the experiments will lead to failure or non-profitable ends. For example, McDonald's created a Big Mac that has anchovies mixed in it. If this product doesn't prove to be profitable in the R&D step, the researchers will terminate the product or make adjustments.
If in the experiments, the product is found to be feasible and profitable, the product then starts entering the product life cycle.
If you're a marketing student who needs to write a research paper about McDonald's product life cycles, you can find out more about McDonald's at mcdonalds.com and corporate.mcdonalds.com or you can reach out to us. Studybay can help you write a research paper about any topic, including marketing mix and McDonald's.
Sample Essay: McDonald's Products and Their Product Life Cycles
As the most popular quick-service restaurant in the world, with over 39,000 restaurants worldwide in 2020, McDonald's is also a leader in trends. Let's use a popular abroad-based menu item as an example of a McDonald's product inspiring other brands to start innovating.
In 2017, the company created the Bacon, Macaroni, and Cheese Toastie. While it was only served in Hong Kong McDonald's, it became one of the most sought-after menu items. In its introduction stage, the Toastie likely cost the company a lot to create. As an unconventional Toastie, it also likely had little competition. As for the advertising part, you can find several articles online featuring McDonald's Hong Kong-exclusive Toastie.
As more people became aware of the Toastie and started eating it, the demand for it grew. They didn't mind that it was one of the unhealthiest food creations. The consumers wanted more of it, and Hong Kong McDonald's restaurants obliged.
McDonald's understands that new food items like the Toasties aren't going to last. Despite its success, the Toastie was only going to be a seasonal or a short-term item. Seasonal items helped bring in new business and gave loyal customers new options. After a while, the brand stopped making Toasties.
The Toastie became a seasonal item for a reason, and that reason is that it's a trend. Most consumers stop buying a trending item after a set time. Many consumers eat trendy food to get a taste of it. Others eat as much as they can while it's available — but that is if they enjoy and love the item so much, which is rare. Even competitors like Wendy's or Burger King does the same thing with their seasonal menu items.
Unlike Big Mac or cheeseburgers, McDonald's had been innovating a traditional toastie or sandwich recipe. Also, at that point, many local restaurants and smaller businesses began serving the same options at much lower pricing. It made the McDonald-branded Toasties lose sales. It's the same as a McDonald's restaurant adopting a new coffee drink recipe from a trendy Starbucks seasonal drink.
What Makes It a Good Essay?
1. It includes a thesis statement.
A thesis statement clearly shows what the essay is all about. In this case, the subject is:
"McDonald's is a leader in trends, therefore, their products inspire other brands to start innovating."
2. It contains proper research.
The essay started with statistics that support the thesis statement. It also continued to use existing research about McDonald's previous product, the Toastie and explained its life cycle.
3. It has a clear outline.
The essay discussed the product life cycle in an easy-to-understand manner, following the Introduction, Growth, Maturity, and Decline of the product.
How McDonald's Uses Marketing Mix to Filter Out Product Ideas
Sometimes, even if a product proceeds to the maturity stage, it may not always give back as much success as intended. With worldwide revenue of US$19.21 billion, McDonald's is one of the top fast-food chains in the world. Despite this success, it's only natural that McDonald's executives work hard to avoid failed product launches.
How does a business like McDonald's figure out if a food concept will work in their favor? The answer is that McDonald's uses the SWOT analysis model, which is a step in the marketing mix. Below, we'll talk more about what SWOT stands for and why it's effective in businesses like McDonald's.
What Is SWOT?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and it helps a business analyze such aspects of a potential product. Let's use the example of the Chicken McDo with Spaghetti, a Philippines-only McDonald's product.
How Does SWOT Benefit McDonald's?
As an American, when you think of fried chicken, spaghetti, and coca-cola put together, you may see them as similar products to KFC's. However, Filipinos will think otherwise. Why did McDonald's agree to put the two things together in its Philippine restaurants? You can even get a Happy Meal with the item set.
When you use the SWOT analysis, you'll understand why.
Let's start with the Strengths. The Philippines, like many other Asian countries, is a big consumer of rice. Filipinos eat rice with everything. Other than that, it's also one of the few Southeast Asian countries that have western influences. Thus, the spaghetti and soft drinks.
This is also where Opportunity enters the picture. Put them together, and you've got a mixed variety of two popular Filipino-loved foods.
Weaknesses: When McDonald's placed the chicken and spaghetti combo as a major menu item, it limits the menu more. Many American expats live in the Philippines. They'll have to deal with the available but more limited burgers in Philippine McDonald's.
SWOT also works to help McDonald's keep unpopular menu items from production. Another example includes the fast-food giant's apple pies and breakfast burritos as the least-ordered menu items. The difference is that these items are still in production.
Learn More About McDonald's Marketing Strategies
In summary, product life cycles have four different stages: introduction, growth, maturity, and decline. The product life cycles of McDonald's seasonal products often don't last very long. They're often used as a means to add variety to the menu and to earn more during certain seasons.
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