Analyzing McDonald's Market Positioning Strategy

The assignment content discusses the importance of segmentation, targeting, and positioning (STP) in marketing. It highlights the need for a thorough understanding of customers' needs, preferences, and behaviors to develop effective STP strategies. The company must analyze its brand values and market position to position itself correctly in the minds of its target audience. The extended marketing mix, comprising product, price, place, promotion, people, process, and physical evidence, is also crucial for positioning a product or service. Furthermore, the assignment touches on potential challenges organizations may face when repositioning a product or brand, including understanding new market trends, managing costs, and adjusting customer perceptions.

Running Head: Sales management
Task 1: Segmentation, Targeting and Positioning.

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Table of Contents
Task 1: Segmentation, Targeting and Positioning.....................................................................2
Introduction:...........................................................................................................................2
Section A................................................................................................................................2
Definition of market:..........................................................................................................2
How to map a market:........................................................................................................2
Level to segment a market:................................................................................................3
Bases for segmentation in consumer and business markets:..............................................3
Bases for segmentation in business markets:.....................................................................3
Criteria for meaningful and measurable segments:............................................................3
Benefits of segmentation:...................................................................................................4
Section B................................................................................................................................4
Identification of the segments most likely to purchase the products:................................4
Organization’s business strategy and the ways it may affect which segments we would
choose to target:.................................................................................................................5
System to assist targeting based on objective criteria and including a weighting and
scoring mechanism:............................................................................................................5
Positioning in the context of the organisation’s brand values:..........................................6
Section C................................................................................................................................6
Explaining how the elements of the extended marketing mix are used to support product
positioning:.........................................................................................................................6
Positioning problems organisations may / can encounter:.................................................6
Challenges organisations may face when repositioning a product / brand:.......................7
How to de-position competitors:........................................................................................7
Conclusion:................................................................................................................................8
References:.................................................................................................................................9

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Task 1: Segmentation, Targeting and Positioning
Introduction:
The report entails the explanation of segmentation, targeting and positioning. The main aim
of explaining the three important aspects is to identify the ways of applying them in the
organization. According to the briefing provided by the marketing manager of McDonald’s
Bahrain the report has been presented. The report has been divided into three sections and the
explanation has been provided accordingly.
Section A
Definition of market:
Market is a common place where the buyers and sellers meet and commercial trade of the
goods and services take place. The actual buyers and potential purchasers find the market to
be a place where the buyers can satisfy their needs and demands through the purchase of
goods and services. The market for McDonald’s comprises of the actual customers and the
potential customers. The new Sales and Marketing plan will consider the market or the
analysis of the target audience (MacDonald, 2011). The potential customers are those for
whom the deliverables of the company will be produced. The company will target to cater
that segment which forms the market. In the Middle East the company operates in more than
15 countries with its more than 1500 restaurants (Attwood, 2015).
How to map a market:
It is important for the company to understand and analyze the overall grouping of customers.
it will help further help the company with the information regarding the dynamics of the
market. There can be distinct needs in different markets and the company has to access the
needs before it comes up with the suitable sales and marketing plan to persuade the target
customers. It has to define the distribution chain and value added chain connecting the end
users and suppliers of the products of the company. The market map of the company is
consisted of three main components which are the following:
 Final customers: they are the actual consumers.
 Channel of distribution
 Suppliers: here the manufacturer of the foods and the suppliers of the raw materials.

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Level to segment a market:
The evaluation of attractiveness of the segments the company can decide at which level to
segment. The company should consider the most effective route which can connect the
suppliers of the products to the end users. The company can segment a market into some sub-
divisions consisting of enhanced homogeneous sub-groups of consumers. The company can
apply distinct marketing mix for each subgroup of customers depending on the needs and
demands.
Bases for segmentation in consumer and business markets:
The segmentation of the consumer markets can be done on the basis of the following:
 Geographic segmentation: countries, regions, areas, localities etc.
 Demographic segmentation: age of the population, gender, size of family, income etc.
 Geo-demographic segmentation: ACORN or A Classification of Residential
Neighbourhoods
 Psychographic segmentation: personality, social class and lifestyle of people.
 Behavioural segmentation: rate of usage, loyalty, occasions of usage etc.
Bases for segmentation in business markets:
The segmentation of the consumer markets can be done on the basis of the following:
 Geographic segmentation: depending on the location of the business target market
that is the location where the business is located or to be located.
 Segmentation by size: the organization can segment business markets or potential
business customer segment depending on the size of the business.
 Segmentation by industry: the segmentation on the basis of the needs of the products
of the company by the business customers.
 Business need segmentation: the business becomes the base of segmentation
(Richards, 2018).
 Type of business: this implies the segmentation to be done on the basis whether the
business belongs to private or public sector.
Criteria for meaningful and measurable segments:
The major criteria to decide upon the meaningful and measurable segments the management
has to consider validity and attractiveness of the segments. The company must decide
whether it can measure the segment or not. The metrics for the market must be defined. It is

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important the reach to the segment has to be decided upon. The difference in responses of the
potential segment has to be understood. The profitable reach to the segment has to be
evaluated. The scheme of segmentation must be effective and identifiable. It should be
profitable. The accessibility to the target customers is another important criterion towards
meaningful and measurable segments. The strategies of segmentation have to be understood
and analysed. The relationship between the company and the customers also add value and
meaning to the segmentation strategies.
Benefits of segmentation:
 Increases the focus of the company in the particular market segments.
 Enhances the competitiveness of the company in the market.
 Helps in expansion of the market when the segmentation becomes a successful aspect.
 The company can retain its customers if it targets right segment and caters them with
the needful.
 Increases the chances to have better and effective communication with the market
segments. Marketing promotions can help the company in this regard.
 Overall profitability of the company increases with increase in the volume of sales
(Bhasin, 2018).
 New product development opportunities can be identified.
 Customer service can be increased.
 Efforts towards unprofitable markets can be reduced and put to the profitable markets
(MacDonald & Dunbar, 2010).
Section B
Identification of the segments most likely to purchase the products:
Through market research and effective methods of identification the segments which would
most likely purchase the deliverables of the company can be identified. The market research
helps to gather information. The sources of market research include the market reports,
journals on industry, statistics of government, websites of the company, documents of market
research and seminars and conferences. The survey and market research can be conducted to
identify the position of the customers in the industry and to identify their proportions of
spending. The market size can also be identified (Hopps, 2008).

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Organization’s business strategy and the ways it may affect which segments we
would choose to target:
The company can implement focus marketing strategy to produce the products for the
particular segment of the market. It can also come up with the undifferentiated strategy where
it can appeal to many customers with its single deliverable or any particular item of its
product range. It can be successful if it approaches the target segment with its differentiation
strategy where it can approach different segment distinctively with its differentiated products.
The company has to analyse the size and growth of its segments and their structural
attractiveness. Then it can decide for the suitable strategy depending on its objectives and
resources (Upham, 2016).
System to assist targeting based on objective criteria and including a weighting
and scoring mechanism:
The company can make its decisions based on the emotional factors rather than rational ones.
The following table shows the system to support the targeting on the basis of the objective
criteria and with the use of mechanisms of weighting and scoring:
Segment
X Y Z
Criteria Weighting Score Weighted Score Weighted Score Weighted
Level/ degree of
competition
0.2 5 1 2 0.4 5 1
Competitive
advantage
0.1 3 0.3 5 0.5 8 0.8
Segment spending 0.4 2 0.8 3 1.2 3 1.2
Rate of growth 0.1 6 0.6 2 0.2 2 0.2
Number of customers 0.2 3 0.6 1 0.2 2 0.4
1 19 3.3 13 2.5 20 3.6

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Positioning in the context of the organisation’s brand values:
The company has to analyse the attributes which are help high by the customers. The brand
positioning is the tactics through which the company can position itself in the mind of its
customers and target segment (Rouse, 2018). The company can devise specific psychological
advantage by adding value to the products and through prudent marketing communications.
In this was it can position itself in the light of its brand value. The market position of the
competitors is also another important criterion which the company has to analyse and
evaluate (Dudovskiy, 2016).
Section C
Explaining how the elements of the extended marketing mix are used to support
product positioning:
The elements of the marketing mix are to be taken into consideration while developing a
product positioning strategy. There are important seven elements in the marketing mix. They
are given below:
 Product: the deliverable of the company and its features.
 Price: the level of price of the propositions of the company.
 Place: the distribution channel that the company makes for its products to be available
as per the convenience of the customers.
 Promotion: tools used by the company to communicate and sell the products.
 People: human resources responsible for the ultimate sell of the deliverables of the
company.
 Process: different process and procedures used by the company to produce the foods
being its final products.
 Physical evidence: the physical representation of the products which is tangible
(Bhasin, 2016).
The seven important elements of the marketing mix must work together to give rise to a
successful positioning strategy (Lauren, 2018).
Positioning problems organisations may / can encounter:
 Lack of insights to market and information about the customers can pose serious
challenge to the companies deciding for the positioning strategies.

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 Funding constraints can be encountered by the company while deciding for the
positioning strategies.
 The company might end up in under-positioning. In this case the image of the brand
can get affected in the new market segment.
 If the company tries to claim many aspects as a time then the positioning can become
a confused one.
 The company has to be careful as it might end up with doubtful positioning and it
affects its credibility to its target segment and its actual consumers.
Challenges organisations may face when repositioning a product / brand:
Positioning is the strategy of placing the brand in a desired way in the minds of the customers
and in the target markets. It plays an important role in the marketing plan. It helps the
marketing plan to become an effective blueprint for the new marketing strategies (Lauren,
2018). The company can go for repositioning when the first positioning becomes a wrong
one. In the market there is highly intense competition and the brand has to be responsive to its
position to be in a better place in the market compared to that of its rivals. In the new markets
it can have to reposition itself to expand its business. The personality of the brand can be
reconfigured. The major challenges of repositioning are the following:
 There can be challenges in understanding the most suitable and new positioning. Here
the company has to conduct more researches to gather more feedbacks of the
customers.
 The cost of re-positioning is another challenge to the company.
 The customers might take some time to accept the new positioning statement over the
old one which has already placed itself in the minds of the customers.
 The desired positioning of the company might be occupied by any of the competitor
companies. In that case there can be a challenge for the brand to place itself in the
desired positioning.
How to de-position competitors:
The company has to understand the successful propositions of the competitor and the
reactions or the responses of the customers on them. The company can change the
perceptions of the customers regarding the quality or other attributes of the competitors. If in
any market the company finds that the brand attributes of its rivals are perceived to be higher
by the customers’ mindset then the de-positioning becomes very essential. The company has

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to understand the successful attributes of the competitor companies. Then the company can
devise a communication strategy which includes the spread of the message to motivate the
consumers’ appeal towards the brand. De-positioning challenges particular areas of appeal of
the customers.
Conclusion:
It is obvious that the marketing manager of such a big and reputed organization will be
concerned in bringing out more effectiveness in the benefits and significance to the
improvements on the occasion when the Sales and Marketing plan is to be prepared for the
coming five years. The analysis of the different aspects of the segmentation, targeting and
positioning will be beneficial for the company.

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References:
Attwood, E. (2015, Decemeber 4 ). McDonald's generates over $6m in sales every day in the
MidEast. Yousef Abdulghani outlines his plan to increase it by 60% by 2020.
Retrieved from arabianbusiness: http://www.arabianbusiness.com/mcdonald-s-
generates-over-6m-in-sales-every-day-in-mideast-yousef-abdulghani-outlines-his-
plan-increase-it-by-60-by-2020-614212.html
Bhasin. (2016). Service Marketing Mix – 7 P’s of marketing. Retrieved from marketing91:
http://www.marketing91.com/service-marketing-mix/
Bhasin, H. (2018, March 2). 6 Advantages of Segmentation. Retrieved from marketing91:
https://www.marketing91.com/6-advantages-segmentation/
Dudovskiy, J. (2016, february 9). McDonalds Segmentation, Targeting and Positioning.
Retrieved from research-methodology: https://research-methodology.net/mcdonalds-
segmentation-targeting-and-positioning/
Hopps, J. (2008, august 6). Target Market Selection Segmentation and Positioning. Retrieved
from demandmetric: https://blog.demandmetric.com/2008/08/06/target-market-
selection-segmentation-and-positioning
Lauren, L. (2018). What Is Positioning in a Marketing Plan? Retrieved from chron:
http://smallbusiness.chron.com/positioning-marketing-plan-22983.html
MacDonald. (2011). Marketing Plans: How to Prepare Them, How to Use Them. John Wiley
& Sons; 7th edition.
MacDonald, M., & Dunbar, I. (2010). Market Segmentation: How to Do it, How to Profit
from it. Goodfellow Publishers Limited; 4th revised edition 978-1906884185.
Richards, L. (2018). Examples of Business Market Segmentation. Retrieved from chron:
http://smallbusiness.chron.com/examples-business-market-segmentation-24278.html
Rouse, M. (2018). positioning. Retrieved from techtarget:
http://whatis.techtarget.com/definition/positioning

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Upham, S. (2016, April 29). Properly Identifying Your Target Audience Through
Segmentation. Retrieved from valientmarketresearch:
https://valientmarketresearch.com/uncategorized/properly-identifying-target-
audience/