Case Study Of McDonald's - Marketing Function

UNIT 4 MARKETING PRINCIPLES
SUBJECT NAME: MARKETING
PRINCIPLES
ASSIGNMENT NAME: MARKETING
PRINCIPLES
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TABLE OF CONTENT
TASK 1:................................................................................................................................................3
LO 1: Understanding the notion as well as procedures of Marketing function...........................3
LO 2:............................................................................................................................................7
The notion of STP which stands for segmentation, targeting and positioning............................7
LO 3:..........................................................................................................................................15
Understanding of different element of extended marketing mix...............................................15
TASK 2:..............................................................................................................................................21
LO 4:..........................................................................................................................................21
Using marketing mix in distinct context....................................................................................21
Reference List.....................................................................................................................................25
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TASK 1:
LO 1: Understanding the notion as well as procedures of Marketing function
AC 1.1 Several components of marketing procedure
Marketing function is basically referred to be an administrative procedure in society that
includes individual and organisation. These two drive their wants and need by creation and
exchanging values with each other. Grönroos (2004, p. 102) stated that the marketing process
comprises of advertising, selling and delivering products and services to the consumers. The
process of a market of a company involves identification of potential opportunities in the
environment, development of strategies for effectively utilising the opportunities, formulating
marketing strategies and implementation of the strategies with marketing efforts.
The marketing products vary from marketing services provided by an organisation. The
staffs are involved in performing the services according to the requirement. According to
Czinkota & Ronkainen (2013, p. 42), there is various process in marketing. The first process
involves collection of quantitative and qualitative data and analysis of those data for
identification of potential market for the company's product. The data can be collected by survey,
questionnaire, audits, observations that were previously done. The next process involves
planning. In this phase, the strengths and weakness of the company, competitors, the culture of
the organisation and technological advancement are analysed to get an overall insight of the
organisation. The final process involves implementation of the plan.
Marketing is considered important for an organisation and for the successful running of the
business that depends on the dynamics of marketing. Viio and Grönroos (2014, p. 1090) opined
that marketing process is one of the tools for growth and development of an organisation. The
planning process includes 4Ps of marketing.
McDonald’s is one of the well-known companies in UK and they are developing their business
by following the proper marketing strategies. In their marketing plan, some important marketing
strategies are there like 7p’s of marketing, marketing mix and so on. By following these
marketing strategies, they can be main competitors of other companies. In addition to that, data
collection process will also be important marketing strategy for them because with help of this
the company can produce the product according to the demand of the consumer.
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Segmentation
This process is about the segmentation of customer’s market into various groups. All
these portions will act in a different way with respect to communication, promotion, pricing and
various other variables. It can be considered as the base for McDonald's to develop marketing
plans which will be more efficient and effective. The customer needs according to their segments
can be fulfilled by this process.
For example:
Type of Segmentation Criteria McDonald's Target Segment
Geographic  Density
 Regional
 Urban/rural
 Intentionally/domestically
Behavioural  Personality
 User status
 loyalty
 Benefits
 Very easy going
 Constant fast food eater
 Addicted loyal
 time efficient, cost benefits
Demographic  Gender
 Age
 Income
 Occupation
 Life cycle
 Male and females
 Between 8-40
 middle and low-income
 Students, employees
 Bachelor's, newly married, young
child
Targeting
Target market is the group of different customer's available in the market on which
McDonald's is aiming at. This can be considered as the first element of marketing. The targeted
group will likely to purchase the products and services of the company. Targeting can be of two
types i.e. primary and secondary. For McDonald's the primary target is kids and adults aged
between 5-30. Their secondary target will be the people ageing 30 and above.
For example:
Company's target market includes
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Kids: around 3 to 7 years. For them they are having happy meal offer (healthier choice)
and also giving free toys
Families: For Weekend outings, the company is having driven-thru, Mc delivery,
takeaways, happy meals.
Students: For primary, secondary and college students, they are offering student meals
and making the environment in such a way that it will be a hangout place for them
Working adults: For them they are having grab and go. Like 24-hour service, take away
etc.
AC 1.2 Evaluating the advantages along with the cost of marketing orientation with context
to McDonald's
Marketing orientation is considered a business model that aims to deliver products, which
are designed according to the needs of the customers. McDonald’s undertook the market
orientation approach for developing the products.
The decision is made according to the information obtained from the customers. The
information includes the needs and wants of the customers rather than what the business thinks
that the customer needs. According to Boso et al. (2013, p. 718), the market-oriented approach of
McDonald has needs to focuses on investing in the right direction and invest on the correct
service or products that are in demand. The market-oriented approach of McDonald's is to react
according to customer's needs. It is regarded as the best orientation and can be adopted by
McDonald's. Liozu and Hinterhuber (2013, p. 602) opined that the benefits of the market-
oriented approach are it focuses and meets the needs of customers and it expresses the perception
of marketing where the needs of the customers are the centre of all the activities.
McDonald's marketing orientation will include all the factors like financial, people and
structural cost of the system. This will help in determining the cost of marketing McDonald's
have to pay in order to attract the customer. McDonald’s spent 6% of its total expenditure in
marketing activities and channels against a profit of gradual development in their annual
revenue. The main purpose of marketing orientation is to attract the consumers. McDonald's
increases the market orientation, and their performance also increased in past few years.
By doing this, they gain a competitive advantage over others in the market, because their
products are more attracted and they are fulfilling the needs of the customer's. By doing this
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McDonald's retain its customer's and this helps in establishing their brand name. Due to high
demand, the sales rate increases and the profitability also increased.
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