McDonald's Marketing Mix Analysis

This assignment delves into a detailed analysis of McDonald's marketing mix using the classic 4Ps framework: Product, Price, Place, and Promotion. It explores how McDonald's strategically utilizes each element to achieve its business objectives and maintain its position as a global fast-food leader. The analysis draws upon various sources including academic literature, company websites, and industry reports.

Marketing Essentials
Name of Student
Name of University
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Executive Summary
Development of marketing strategy is the success mantra of any business organization for the
promotion of their products. Marketing Managers need to understand the requirement of the
market to implement the strategies taking note from the giants of the fast food industry like
McDonald's. They are the largest suppliers of the fast foods, originated from America and
spreading their business across the globe. The paper addresses the marketing strategies applied
by McDonald's in attempt to replicate their techniques to ensure the success of fast food in the
United Kingdom.
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Table of Contents
Introduction......................................................................................................................................4
LO1 Explain the role of marketing and how it interrelates with other functional units of an
organization.....................................................................................................................................4
P1 Explain the key roles and responsibilities of the marketing function........................................4
Marketing strategies adopted by McDonald's..........................................................................5
P2 Role and responsibilities of a marketing manager in the context of the organisation................6
LO2 Compare ways in which organizations use elements of the marketing mix (7Ps) to achieve
overall business objectives..............................................................................................................9
P3 Compare how different organisations apply the marketing mix to the marketing planning
process to achieve business objectives............................................................................................9
LO3 Develop and evaluate a basic marketing plan.......................................................................14
P4 Produce and evaluate a basic marketing plan for an organisation............................................14
COMPANY OVERVIEW:............................................................................................................14
CONCLUSION:............................................................................................................................20
References......................................................................................................................................21
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Introduction
McDonald's is the world’s highest grossing revenue collecting company in the food industry.
The American fast food company was set in the 1940s by the brother duo, Richard and Maurice
McDonald, initially as a hamburger outlet. It was only in 1955, when a businessman named Ray
Kroc, purchased the company and operated as a chain of restaurants from the McDonald brothers
(Mcdonalds.com, 2018). The company has outlets in over a hundred countries with
approximately close to 37,000 outlets. The company offers a wide variety fast food items like a
cheeseburger, French fries, breakfast menus, soft drinks, soda, milkshake and wraps with both
vegetarian and non-vegetarian varieties. However, the company is best known for their burgers
and its variations. The company is known for maintaining their quality and techniques that
implement good customer retention. As of late, McDonald has added salads and other healthier
alternatives to match the changing taste of the customer demand and the growing consciousness
regarding health. As authenticated by a report, published by BBC in 2012, McDonald's is the
second largest company for employees across the globe, lying behind Wal-Mart who has over
1.9 million employees (Alexander, 2012).
The aim of this report is to to provide a marketing analysis of the company McDonald's and help
understand the business strategy undertaken by them. The paper addresses the roles and
responsibilities of the marketing function in the food industry domain, and it is related to the
context of organizational hierarchy concerning the market. The paper will reflect on the strategy
of the marketing mix applied by McDonald's which can be replicated by other business
organizations in the domain (Rowley and McMurtrey, 2016). Contemporary examples are also
compared to understand the marketing plan of McDonald's.
LO1 Explain the role of marketing and how it interrelates with other
functional units of an organization.
P1 Explain the key roles and responsibilities of the marketing function.
Introduction to the concept of marketing, including current and future trends
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Marketing strategies are very important to set the foundation for the long-term future of any
company. These strategies help in segmenting the market via promotion of the product along
with the development of renewed products according to the demand-supply of the customers.*
The factors influencing the strategies and taken into consideration for the marketing are customer
relations, human resource management, research and development, financial dependence,
accountability and sales. The promotion of product and services provided by a particular
organization is called marketing. The production and sales of the products are based on the
demand of supply which is defined as want of the public. The need of the industry has based the
requirement of the current trends in the organization. The demand of the industry is defined as
the quantity of the product offered by the business organizations which the customers are willing
to pay. Macdonalds is a one of the biggest food industry in 100 nations with 33000 outlets.
Mcdonald's frameworks are set by the company’s managers. Short-term and long turn reactions
against the target. Mcdonald tries to perform within its constant and controlled plan. Once their
plan is established, different obligations are given by the market input and market output(Sheth,
and Sisodia, 2015).
Marketing strategies adopted by McDonald's
The noteworthy mention of the McDonalds Company is their ability to focus on the external as
well as internal factors that influence the activity and popularity of the products and brand image
of the company. The company addresses the current trends in the food industry and modify their
variety of products accordingly. Implementing such marketing strategies made McDonald's the
giants of the fast food industry. The company makes an effort to focus on the services provided
to the customers, keeping track of their competitors and providing better products. The company
has always focussed on the advertisement and franchising strategies for which they invest gross
amounts for the promotion of their products (Gerhardt Hazen and Lewis, 2014). The target
demographic of the company is towards the children and family, and the products are directed to
attract such customers. They have been able to produce recognizable icons in their campaigns to
promote their products. The demand of the fast food supply grew with the changing busy
lifestyle of the urban working class, which the company made use of, providing breakfast and
lunch meals to cooperate with the lifestyle (Gerhardt Hazen and Lewis, 2014). This lead to early
development of customer satisfaction and providing clean and cheap meals attracted more people
with time. The company has been successful in producing products as well as maintaining a good
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relationship with the suppliers and addition of Ray Kroc developed the brand image of the
company.
Marketing manager helps the organization to grow the business properly. Mcdonalds has brunch
all over the world, so their marketing strategies also vary from country to country. Their major
aim is analyzing the market as per the competitions and develops new strategies by doing market
research. Also, they help the company to launch product according to the market conditions and
implement them in the market(Bai and Chang, 2015).
P2 Role and responsibilities of a marketing manager in the context of the
organisation
The implementation of such marketing strategies is needed to be performed by the marketing
manager in the United Kingdom. This can be implemented by developing strong analytical
research to evaluate the market. Secondly, developing an appropriate marketing strategy based
on the UK scenario. Thirdly, it is important to develop products based on the demand of the
market. It is also important to attract the target specific demographic concerning the market in
the UK to establish the niche for the foundation of the success of the company.
An overview of the different marketing processes
Marketing can be done by online or offline. By offline marketing means to do any promotion or
advertisement outside the internet. It effectively reaches and grabs the attention of the people.
Offline marketing is effective because if a customer liked or disliked a product, he would tell his
friend or family, that’s how the list will be increased(Tomczak et al., 2018).
Online marketing is set of tools used for promoting the products through the internet. Also,
Online marketing has more channels than the offline marketing, and it’s also very effective in the
marketing strategies.
An explanation of how marketing influences and interrelates with other functional
departments of the organization
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The heart of any business is its marketing strategies. Most aspects of the business depend on its
successful marketing. The overall marketing covers public relationship, company’s profit and
loss margin, sales, promotion etc. Marketing a process by which a product or a service is
introduced and promoted to the customer.
The value and importance of the marketing role in the context of the organization
The marketing department of the organization plays a vital role in promoting the products. It is
their main aim to reach out to the customers and investors or the community by the product and
marketing.
Human Resource
The Human Resource Department of McDonald is responsible for the recruitment of eligible
professionals who could be having the required skills and standards such that they could be able
to conduct the entire marketing process in an effective manner. Moreover, the HR is also
responsible for evaluating the training needs for enhancing their skills in the process.
Finance
The finance department would be responsible for the evaluation of the finance and budget for the
marketing process of the company. The marketing activities of the company are to be financed
by the finance department.
Research & Development
The Research & Development of the company would be responsible for the conduction of the
survey for the evaluation of the needs and requirements of the customers about the food products
of the company. Both the marketing and the research department deal in satisfying the needs of
the customers. Thus, the development of the innovated products and promoting the same to the
customers would be helping in meeting with their demands in the process.
Conclusions that emphasize the significance of having effective interrelationships between
different functional departments
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According to the above discussion, marketing effect the production, profit and loss of any
organization. Every organization is directly related to marketing, and some of the organization
has their marketing team to promote their products. If all the departments are interlinked between
them, the managers will able create or modify the marketing strategies according to the demand
of the organization.
Identifying goals and objectives-
Macdonald's main strategic goal places the customer experience at the core of their satisfaction.
Their customers are the main reason for their existence by providing high-quality foods, and
superior service in a warming environment to their customers is essential to their continued
success.
Description of Product and services
As one of the biggest food chain in the world McDonalds offer various types of food items, but it
varies from country to country. Macdonald menu includes hamburgers and cheeseburgers, the
big mac, quarter pounder with cheese and Filet-o-Fish, several chicken sandwiches, chicken
McNuggets and many kinds of beverage. Also, the company sell a variety of limited time
products.
Marketing Budget
Mcdonalds spent more on advertising than any other food and drink brand in 2016. The food
giant spent 85 million dollars on a traditional ad like TV channels. McDonald's reported earnings
of $1.28 billion, or $1.50 per share, on revenue of $6.42 billion. Analysts expected the burger
chain to earn about $1.48 a share on $6.27 billion in revenue, according to a consensus estimate
from Thomson Reuters.
Strategies
Developing proper marketing strategies and plans for the company’s is the primary aim. The
whole management should use the social networking site and digital media to develop their
advertising properly to grow their business worldwide.
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Timing
The management should fix a proper time for their strategic plans so they can improve their
business if necessary. Or they can replace their old marketing strategies by a new one. Every
plan has their expiry dates, so time management is necessary to give place and chance to the new
plan
Evaluations
After developing and studying the plans, the managers estimate that how the plans will work
until the end and how will it work in the short run or the long run in a competitive market.After
the verify the stage the managers will decide if anything has to be added to remove from the
plan.
LO2 Compare ways in which organizations use elements of the marketing mix
(7Ps) to achieve overall business objectives
P3 Compare how different organisations apply the marketing mix to the
marketing planning process to achieve business objectives.
To attain steady growth marketing is an essential part of every company. Without proper
marketing, a company cannot create an impact on the customers’ mind and as well as cannot
motivate them to come to it. The marketing mix has seven components. To know the proper
meaning of marketing we have to discuss these seven components. These components are –
Product, Price, People, Place, Promotion, Process and Physical Evidence. The company
McDonald's is taken here as an example, and the business strategy of them are not independent
of marketing. They do proper marketing to attain steady growth in their business. In this part of
the assignment, we will take a discussion between the two companies’ marketing process and the
use of the seven marketing tools to attain steady growth (Sareshkeh et al., 2016). Two companies
ASDA and McDonalds are taken here for discussion. Out of these two, one is retailer industry,
and other is a fast food service provider company. These seven components or marketing mix
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tools helps the company in doing proper marketing that covers all sectors. Discussions of these
components are as follows –
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Figure 1: 7Ps of the Marketing mix
Source: Created by author
Price:
The first component of the marketing mix is Price, and this is an essential one. This indicates the
amount that customers have to pay to get a product from the specific company. When a company
is fixing the price of a product, there are many things the company have to keep in consideration,
the market value of the product in other companies, the demand of the product in the market and
many more things. If the price of the products is higher than the normal market rate, then the
seller may hamper, and if the price is reasonable with proper quality service, then the company
could get large revenue. McDonald's use the process of low price and high selling method. That
is they keep their product at a reasonable price with a good quality service to the customers, and
by this, they attain a huge profit. According to the recorded data the McDonalds has attained an
annual growth of 2.6% in the past year with 23 billion revenue collection. This is a huge growth
undoubtedly. And on the other hand the ASDA a United Kingdom-based Retailer Company; they
do not have the effective pricing method of business. They believe in fixed pricing condition,
and they are still trying to get a steady business growth (Bahadir et al., 2015).
Products:
Products are the outputs of a company. Customers or people go towards a company for attracted
by its products. The business of a company depends upon its products. The first thing that
attracts people about a company is the variety and quality and quantity of the products of a
company. Customers always want products in good quality and quantity with affordable price.
The balance between the quality, quantity and the price could be difficult maintaining
sometimes, but to get a steady business, a company must take care of this part to full fill the
demands of the customers. McDonald's is a company that has many food options for its
customers. They provide, French fries, Burger, Pizza, Chicken items, Milk Shake, Cold Drinks,
Deserts, Hot Dog, Sandwich and many more things with good quality and affordable price, to its
customers and this scheme attracts more customers to come to McDonald's and the business
territory of the company get increased (Jindal et al., 2018). On the other hand, the ASDA is a
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retailer company and they also have a food sector. But this is not that much popular to the people
as it has lack of variety and high price as well.
Place:
The location of the company and the company outlet comes under the component, Place. The
position of the company is very much important for the smooth of the company as it influences
more than 25%v of the total sell. The company outlets should be very much available for the
customers. The company outlets should be in every sector of a country. The McDonalds is a
multinational company with more than 35500 outlets in all over the world. These massive
numbers of outlets allow customers to get their desired products with ease. ASDA is also a
multinational retailer shop. But they have only around 600 outlets in all over the World, which is
very less in number compared with McDonald's. This causes difficulty for the customers in
getting products from their stores. So they prefer to choose any other nearby store to get their
commodities (Evans, 2015).
Promotion:
To increase the business territory attracting more people is necessary. And for this promotion in
a regular manner should be done. This includes all kinds of advertisements given by the
company. Now in the digital world, it is very easy to promote the products of a company through
the social media platforms like Facebook, YouTube and many more, along with advertisement
given in the television is also comes under it. McDonald's uses all these methods for their
promotions, and with this, some time they tell about some specific offers about some products
too in their advertisement (Salam et al., 2015). Along with this the mouth to mouth promotion or
the promotion through the satisfied customers also plays a significant role for the company. On
the other hand, ASDA does their promotions through newspaper and local campaigning only,
and which is not enough for the company.
People:
The human power associated with the business growth of a company comes under the
component People. There are two sectors, internal people and external people. The external
people indicate the customers, who are the consumers of the products of the company. And the
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internal people indicate the employees and the workers working for the company. The efficiency
of them affects the business graph of a company a lot as they are the backbone of the company.
The employees of McDonald's are very much professional and humble so they run the store with
ease and their service attracts more people to come to their store. The employees of ASDA are
also professional and have good efficiency, but they have to take some steps to get more external
people (Kapetanaki et al., 2014).
Physical evidence:
Record of the activity of the customers comes under the physical activity. The company must
keep a record of their customers. McDonald's provides a bill which is auto-generated in nature to
the customers after they have taken their food. This indicates the transparency of their actions
and earns goodwill in the account of the company. Along with this, they keep the contact
numbers of their regular customers and aware them about their new offers by sending SMS
(Fujihira et al., 2015). The ASDA also do the same of giving auto-generated computerised bill to
the customers, and they also provide this bill in their email id also. Customers can make any
complaints if they want against the store in the contact number and email id provided in the bill.
Process:
This is another significant component of the mix marketing process. This tells the way of getting
products by the customers. The process of service should be very smooth and user-friendly and
there must not be any hidden clause in the process of service providing. McDonald's offers fast
service to its customers with their more than 35500 stores in all over the World. Along with this
they also have an online order facility with fast home delivery service. The ASDA has less
number of stores compared with McDonald's and their online service providing needs much
more professionalism (Fan et al., 2015).
From the discussion the proper meaning and the role of the seven components in marketing is
clear. Along with this the difference in use of these components by the two companies
McDonalds and ASDA is also discussed thoroughly. The outcome is; McDonald's is able to
providing all over marketing with their huge number of stores comparing to ASDA. The proper
use of all these components can help both the companies in getting steady growth.
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LO3 Develop and evaluate a basic marketing plan
P4 Produce and evaluate a basic marketing plan for an organisation.
COMPANY OVERVIEW:
Now McDonald company is at the peak levels in the global business world. This is due to its
qualities, reputation and well –organized procedures. It is now so large that it has branches
throughout the world like the USA and European nations. It is now in such level which works a
strong organization which have good management and plans.
Situation Analysis- Analysis is a most significant for business to develop. It is basically based
on overall performance and roles played by the members of the company who is either internal
or external part. The production and output must be well examined by the body related to
management. The external risks and the fight in the market musket by examined or analyzed to
serve the customers with betterment.
Market Overview- The market should be assessed in the basis of fight and competitions among
each other, cost and productivity. The proper view of the company and its position in the market
industry should be analyzed, and McDonald holds a bright throne in this field.
PORTER’S FIVE FORCES:
The threat of New Entry- McDonald is now known as a big branded food company. It has its
branches and chains throughout the planet. They have their consumer base and marketing plans
which is very powerful and successful. A new entry in this market is a very hard task you have
overcome many hurdles like selling of low price food items by local brands slightly hampers the
McDonald company.
The threat of sunshine- There is many risks due fight among companies in the marketing
industries. There are many brands like KFC, Subway, etc who provides same food to the market.
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All these brands compete to show their best and accumulate better profits. Increasing qualities of
the products will avoid this risk.
Bargaining power of customer- Due to huge competition in UK market the customers get
possibilities to sort out companies which give a better value. In such alarming case McDonald’s
need to concentrate on their quality and ingredients of their food products. They have to maintain
betterment by going parallel with the needs and choices of customers (Armstrong et al., 2015).
Bargaining power -of suppliers- McDonald’s maintain their quality and style of their products
and services. They invest huge in their raw materials which they consume from all over the
world. Due to this suppliers do not have much power to switch to other brands due to large
chunks of money transactions occurring every year.
Existing Rivalry- KFC, Subway, ASDA and many more the main competitors of the McDonald
brand. They have their company image and patent customers. Different offers are also placed in
the market regularly by the competitors and peoples to get the best fame and profits. McDonald
needs to focus basically on their business systematic plan and strategies.
PESTLE ANALYSIS:
Political
The political scenario in UK is unstable but still they have normal marketing atmosphere.
Several rules and laws regarding food security act have been imposed by the nation head to
provide hygienic possibilities and check diseases from food.
Economic
After the economic collapse UK moving forward at low speed. In such conditions the
government also forwarded the assistance to small business. But McDonald’s have their own
financial backup and support because of lower consuming power of customers they adopted the
low price high swelling strategy (Sachdeva, 2015).
Social
In order to preserve the social factors McDonald’s provide capital in terms of CSR to develop the
city. Beside this they are trying to introduce eco-friendly packs and systems to support and assist
the beings of society.
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Technological
Technology is a major factor in recent marketing and business context. McDonald brand had
also adopted several advancement in science. They need to start mobile applications and more
wireless technology to get their best results.
Legal
Nation head of UK increases the Vat from 17.5to 20%. This sudden rising of tax affected the
marketing and business industries in an negative way.
Environmental
Several campaigns and awareness had been spread on environmental and eco-friendly matters.
Besides this eco-friendly systems is also in consideration to support and heal our environment.
AIMS AND OBJECTIVES:
The ultimate goals and objective should be rigid and strong with a large insight and foresight.
Regulating the fund and materials in the most good way have to be found out to cast a good
reputation and fame on the consumers. The main objectives of the brand would increase the sales
by 12% by the year 2019. It also aims at increasing its market share by 5% within 2019.
SWOT Analysis:
The deliberate and important plans lead a company to be unique and better. SWOT stands for
Strengths, Weakness, Opportunities and Threats. It is most important required analysis.
STRENGHT- Different product variety, There are more than 700 shops in the UK, Quality
products at a lower and reasonable cost.
WEAKNESS-Inefficient and unconfident in selling some products, Digital and wireless
technology are not used efficiently, The debts have cast bad image.
OPPORTUNITIES- Digital base is being used more. Marketing through online takes place and
give better feedback.
THREATS-There is much fight and competition from other brands and companies who sell
similar products (Meyer, 2015).
MARKETING STRATEGY:
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Proper goals and objectives need to be identified. To mitigate the customers’ satisfaction is the
ultimate aim to be reached. Relation with the customers should be maintained well. The
customers should be aware of the description of products, their characteristics, and the process of
producing.
ANSOFF MATRIX:
MARKET PENETRATOR-Burger, French fries, Breakfast items, Desserts, soft drinks and
salads.
NEW PRODUCTS- Innovation of products.
MARKET DEVELOPMENT- Identify the potential products for the existing market and
introduce new products based on the demands of the customers.
DIVERSIFICATION- Grilled innovation in the existing products.
MARKETING MIX:
PRICE
McDonald’s obtain the low price high selling policy but in future they need to aware and
cautious about it due to several other brands offering same product at low price. So to maintain
and preserve their qualities by fixing amounts of products.
PRODUCTS
McDonald’s has huge products variety and ranges of food products with vibrant tastes and
qualities. They need to evaluate the market for other products which the competitors are
providing in the market. Example: launching chicken based items frequently to resists
competitors (Harrington etal, 2017)
PLACE
McDonald's has more than 36,000 store all over the world. People can get the products whenever
they want (Mcdonalds.com, 2018). Now McDonald's need to concentrate on emerging market
like asia, africa wherte they need to open more stores. Besid ethis they can also open more
flexible home delivery system.
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PROMOTIONS
McDonald's is very much active in the market and people love and enjoy their advertisement
when they see it. More email and mobile applications will increase their betterment in
promotional field.
PEOPLE
McDonald's have skilledemployees in their every store but still they have some issues regarding
the behaviour. McDonald's need to train theiremployees more significantly so that they can
maintain the good relation with the customers.
PROCESS
McDonald's store can offer direct food to the customers. But they need to open more store in
citysides and rural lands to get more customer crowd. Beside this online delivery system can be
agile and strong. (Armstrong et al., 2015).
PHISICAL EVIDENCE
McDonald's can provideauto generated and SMS notification process and systems so that
customers can also get their proper billing status frequently without having errors.
OPERATIONAL PLAN
Creativity is needed to make an association of the business and marketing plans and policies
taken up by organizational heads and managers of McDonald. The management should be strong
and flexible at identifying the materials and implementing them in marketing
industries(Harrington et al .,2017).
CONTROL MEASURES
Timing- Being punctual and delivery on time is required to run a successful business. Lunching
of different products at an appropriate time is also significant.
Evaluation-- An good evaluation of the plans, strategies, activities, product quality leads the
famous company like make the MACDONALD put forward in the field of the industry.
MARKETING BUDGET
A proper budget is very important. It may provide the estimation about the cost of the products
and investment that can be spent for marketing of those products(Meyer, 2017).
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MARKETING BUDGET PLAN OF MCDONALDS
CATEGORIES QUANTITIES UNIT COST SUBTOTAL
RESEARCH
Web based 2 $ 2,000.00 $ 4,000.00
Other research 1 $ 500.00 $ 500.00
TOTAL $ 4,500.00
ADVERTISEMENTS
Radio 3 $ 250.00 $ 750.00
Web 2 $ 350.00 $ 700.00
TV 3 $ 2,000.00 $ 6,000.00
Brochures 500 $ 3.00 $ 1,500.00
TOTAL $ 8,950.00
PROMOTIONS
Celebrity fees 1 $ 25,000.00 $ 25,000.00
Product discounts 210 $ 25.00 $ 5,250.00
PROMOTIONAL COSTS
TOTAL
$ 30,250.00
PUBLIC RELATIONS
Sponsorship 5 $ 500.00 $ 2,500.00
Advertisement 3 $ 1,000 $ 3,000.00
Promotion of employees 6 $ 500.00 $ 3,000.00
PUBLIC RELATIONAL
COSTS TOTAL
$ 8,500.00
TOTAL MARKETING
BUDGET
$ 52,200.00
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Table 4: Marketing budget for McDonald's
Source: Created by author
CONCLUSION:
McDonald brand is being concluded that the marketing is a major significant factor that needs to
be considered on a large scale of growth of the company. In this detailed project role of the
marketing has been based on McDonald's marketing strategy and policy. The whole brand is
under a proper systematic order. In this project, the struggle and competition of McDonald
company are described in detail manners. Few recommendations are also provided for the better
development of the company. Competitors of this brand are KFC, ASDA, etc reflected as a resist
to this brand. McDonald brand is at the peak levels in the global business world. This is due to its
qualities, reputation and well –organized procedures. It is now so large that it has branches
throughout the world like the USA and European nations. It is now in such level which works a
strong organization which have good management and plan.
From the above discussion, we can conclude that marketing is one of the important and
necessary fact for any organization to properly grow in any competitive market. In this project,
Mcdonald's marketing strategies are thoroughly discussed. In Mcdonald, all departments are
systematically interconnected with each other. The marketing manager of the organization also
does market research before a product launch. The basic marketing plan for the company is
developing a future outline for the company to spread more its business worldwide.
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