McDonalds Distribution Channel

Distribution Channel

Another ‘P’ in marketing strategies is Place. Place is also known as distribution channel. It focuses on how the company can plan so the product reaches the consumer. Now day’s companies concentrate more in the vertical marketing system for their marketing strategies. In vertical marketing system, it is divided in terms of administered system, contractual system and corporate system. Starting its franchise business in 1938, Mc Donald has been known to be the pioneer in the contractual system in fast food business. Mc Donald has start in U.S.A and now has been able to expand their business to the world.

From the case, Mc Donald through its franchise has open Mc Café.  The idea of Mc Café is to capture sales from customer which loves coffee. Mc Café it’s an expansion of the existing Mc Donald restaurant where another 32 seat where built in 900 square foot to promote gourmet coffee shop.

The company did not take a big implementation throughout all is franchise but has first evaluated the market by only focusing in one of their franchise. After obtaining a success, the company expand the Mc Café concept in Australia. It has targeted that the company will manage to boost up sales by 15 percent.  

This market strategy is taken by a company that has been in the market for a while. They even manage to make a stand in the fast food business. But for them to reach the customer, they did their own survey and research before investing to reached a new market.

Recommendation for Place or Distribution Channel

Mc Donald has a strong contractual system in its business. It manage to control their ingredient and supply chain for all of its franchise. Therefore, in order to expand Mc Donald need to open new franchise nearer to their target market or maybe open new target segment.

In Malaysia, they have done a good job as they manage to open it in almost every shopping mall. Focusing on fast preparation of food, they target the shopper which is in hurry to do their shopping. Mc Donald also open kiosk in small shopping centre to sell ice cream and milk shake. This is to focus on different target market when opening a kiosk of ice cream and milk shake.

It is recommended that Mc Donald should also focus more on drive thru channel. As people is always on the run, Mc Donald has start to focus on this market segment. But it is still not enough as the customer tend to go to Start Buck or other drive thru if they are in a hurry. In order to really capture this market segment, Mc Donald has to open new restaurant that have drive thru or encourage the existing franchise in open up drive thru. The company can also propose to give an incentive for franchise which like to have a drive thru to expand their distribution channel.