Prepared by: LIM SEOW YING (A18HA0084)
BACKGROUND
McDonald’s was founded in California in 1937 by two brothers, Richard and Maurice McDonald.
The world's largest fast-food chain arrived in Malaysia 43 years later in December 1980.
History of McDonald’s built its name in Malaysia for the first time in December 1980, McDonald’s Corporation of
United States granted its license to Golden Arches Sdn.Bhd to operate McDonald’s restaurant chains in Malaysia.
Mission: Aim to be the leader in the Quick Service Restaurant (QSR) industry by maximizing Profits and through our
Principles of QSC & V (Quality, Service, Cleanliness & Value) consistent with the needs of our Customer, Employees and
Community.
Vision: To be our customers’ favourite place and way to eat ^_^
With the opening of this restaurant, McDonald’s Malaysia was crowned as the country’s first restaurant with the largest
Muslim population.
This restaurant is still open today and has undergone four renovations to maintain and adapt to changing trends.
McDonald’s Malaysia has 204 restaurants nationwide and opens new restaurants at an annual growth rate of 15-20
restaurants, serving 10 million customers per month.
By opening new restaurants, adding staff, and remodeling restaurants, 1,500 new jobs will be created.
PRODUCTS
À La Carte McValue Meals Breakfast McCafé
Happy Meals Family Meals Dessert & Sides Drink
McDonald's continually innovates its products according to the changing preferences and tastes of its customers.
Seasonally, they supply “Prosperity Burgers" for the Chinese New Year
MCDONALD’S PRICES AND PRICINg StRAtEgy
McDonald’s mission statement emphasizes its pricing policy; the most fundamental element of determining price was “Being in
touch with the price of our competitors allows us to price our products correctly, balancing quality and value.”
They smart at pricing because of their affordable price and their pricing strategies used are good for them to attract more customers.
Purpose: use prices to maximize profit margins and sales.
McDonald's still aims at marketing to consumers and convinces them that their products are of high quality.
McDonald's uses the following pricing strategies in combination and important to encourage customers to purchase more products:
(i) Fixed Price (ii) Price Format (iii) Bundle Pricing Strategy
The price that the seller McDonald’s use prices that look more McDonald's offers meals and other
expects to receive and affordable, such as RM__.99 or RM__.95, product bundles at a discounted price
which is not negotiated instead of rounding to the nearest Ringgit compared to buying each item separately.
with the buyer. Malaysia.
Example: Customers can purchase happy
McDonald’s uses the Helps encourage consumers to buy company meals or premium meals to optimize
fixed price and the price products based on their perceived costs and product value.
that cannot negotiate affordability.
with the buyer.
MCDONALD’S PRICES AND PRICINg StRAtEgy
(iv) Price Segmentation by Location (v) Pricing Strategy that falls
Prices differ in different regions of the world, solely on their many product lines.
countries, or states.
McDonald’s Value Meals fall into the category of
For example, rare values, or places where Product Line Pricing, where there is a range of
transportation costs raise prices. product or services, the pricing reflects the
benefits of parts of the range.
In McDonald's Malaysia, East Malaysia, Langkawi,
Genting Highlands, Kuala Lumpur International You can order a McChicken Value Meal for
Airport, and KLCC terminal prices are different. approximately RM9.95, which includes moderate
drinks and French fries. You can increase your
For instance, price of McChicken Value Meals in meal to spend more RM1.50 on a large drink and
normal places is RM9.95, but in KLIA is RM13.70. French fries.
McDonald’s did well in building a good brand image by giving quality food,
good customer services and affordable prices that everyone can afford to buy.
PRICINg StRAtEgy Of MCDONALD’S
McDonald’s uses skimming strategy McDonald’s pricing objective is to increase market share.
for a new product which to price the (Vignali, 2001)
product higher as a unique advantage
and then lower at a later stage. McDonald’s use customer-based pricing to set the initial price
of its product.
McDonald’s also setting a price close
to Value to the Customer(VTC). McDonald’s set prices based on what customers valued the
most for McDonald’s which is the promotion.
In 2009, McDonald’s provided this
McValue Lunch and McValue Dinner Therefore, compared with KFC and Burger King,
for the customer. McDonald's have more price reduction.
This McValue are affordable for low They provide very competitive food prices.
income of consumers and even McDonald's offers the best fast food prices.
middle and high income of
consumers. They own “Value Mc Savers” and “Mc Value Meal”.
You only need to spend a few ringgits to get a variety of
products from its menu. It is effective and practical.
WhAt COMPANy ShOuLD fOLLOW thE PRICINg StRAtEgy Of MCDONALD’S?
• A&W is a multinational fast food restaurant headquartered in California, named after the surnames of its founders Roy
Allen and Frank Wright.
• In 1963, Mr and Mrs Lie Boff opened the first A&W store in Malaysia.
• Later in 2001, it was acquired by KUB Malaysia Berhard.
• There are approximately 43 outlets of A&W across Malaysia and plans to increase.
WHY? What Wrong with their Current Pricing Practice?
Eventually, A&W lost its popularity in the market. The company's market position is weakening, and the customer’s
awareness of the company’s existence is drying out.
A&W's pricing is higher than its competitors. For example, A&W's chicken burger is priced at RM11.95, while in
McDonald’s, it is RM9.95.
Although the price difference is only slightly different, ordinary customers tend to be price sensitive, so they choose
cheaper alternatives.
Malaysians have almost forgotten A&W due to insufficient advertising on social media, reduced number of stores in
strategic locations, and poor meal innovation.
A&W's market share is very small. They do not have many customers due to their price, advertising, and other factors.
INSIghtS thAt A&W CAN DRAW fROM MCDONALD’S
A&W can have more price reduction same as McDonald’s. This is because even if the price is slightly
higher, consumers may not feel comfortable. If customers want to buy products every day, they may be
price sensitive.
For instance, A&W can provide more Value Meals and Family Meals with affordable prices for the
customers.
We recommend that A&W can introduce the "A&W Nutritious Meal Set", whose purpose is to serve the
market share of all ages and demographics.
Once the product reaches breakeven, A&W should open new outlets to increase product availability,
thereby increasing demand and reducing production costs and selling prices.
In the long run, in order to go beyond survival, A&W should invest in the latest information system that
manages website advertising, food ordering, and customer feedback to continuously improve meals and
increase customer satisfaction.
A&W should innovate more products regularly to attract more customers.
A&W should more focus on customer satisfaction by giving quality food, good customer services, and
affordable prices for its customers.
Conclusion
In conclusion, McDonald’s is the largest fast-food chain in the world and they are so successful for so long
in Malaysia.
We are proud of McDonald’s important role in continuing to provide affordable price with convenience
foods to those who need to continue working, such as healthcare workers and other important workers
during this Covid-19 pandemic.
McDonald’s always focus on customer satisfaction.
They always find ways to make customers more satisfied with their fast services, cleanliness of the
environment, higher quality products, and affordable prices.
McDonald’s likes to innovate, so they continually innovate its products according to the changing
preferences and tastes of its customers over the years.
McDonald’s always trying new ways to provide food effectively to the public, looking toward the future and
use technology to its advantage such as using the self-order kiosk systems.
Keys to its present and future success is their agile pricing and innovation.
REFERENCES
1. History of McDonald’s. Retrieved from https://www.mcdonalds.com.my/company/history
2. Mcdonald’s 4ps. (2017, Jan 14). Retrieved from https://phdessay.com/mcdonalds-4ps/.
3. McDonald’s in Malaysia. (2016, Dec 5). Retrieved from
https://www.ukessays.com/essays/communications/mcdonalds-in-malaysia.php
4. McDonald’s menu. Retrieved from https://www.mcdonalds.com.my/menu
5. McDonald’s Corporation. 2007. Marketing at McDonald’s. Retrieved form
http://www.mcdonalds.co.uk/content/dam/McDonaldsUK/People/Schools-and-
students/mcd_marketing.pdf .
6. Doshi, Harisai & Chella, R & Moiz, Ariba. (2017). An Application of Marketing Mix Strategy for
Multinational Company A&W. International Journal of Marketing Studies. vol. 1, pp. 2-20.
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