McDonald's Marketing Strategy Analysis

This assignment delves into the comprehensive marketing strategy employed by McDonald's. It examines their approach to market penetration, development, and service enhancement, highlighting key strategies like interior promotions and international expansion. The analysis also considers budget allocation, emphasizing the significant portion dedicated to marketing efforts, and explores how McDonald's seeks to gain a competitive advantage in the market.

MARKETING
ESSENTIALS

Table of Content

INTRODUCTION
In the present era where trade has become easier because of the globalization and due to
this business activities has increased. With this it has also brought tough competition and if any
organisation wants to survive in this they have focus on their marketing operations. Business has
concept that only those product will be preferred by the people which are attractive and are well
know. Through marketing, a concept can be delivered to the target audience (Al-Hasan, Thomas
and Mansour, 2016). This all has to deal with promotion and selling of the product & services
through different marketing strategies. Every organisation adopts different marketing concepts
depending upon their conditions. They should preserve resources available to them and try to use
them only when there is crises. These resources acts as the assets to companies. In this report
there will be detailed information about the marketing essentials and defines what all elements
are crucial in this. For the all scenario fast food restaurant chain McDonald's will be taken in
account. It will briefs about the importance of marketing through mentioning its roles and
responsibilities (Banerjee, 2013). There are various ways through which different organisations
apply the marketing mix so that they can achieve their business goals. A marketing plan will be
developed for McDonald and on the behalf of that its operations will be analysed.
TASK 1
P1. Important roles and duties of the marketing function.
Marketing is the process through which products and services moves from concept to the
consumer. Basically it is the study of management of exchanging relationships. This activity
deals with developing, communicating, delivering and exchanging offerings that has value for
the consumer, clients, partners and society in talked in the larger context (Baker and Saren,
2016). The basic aim of all the marketing operations is to satisfy customer and convince him to
buy their goods. In recent business period marketing has become the most essential and
important activity. This gives a company to gain competitive advantage because through it they
can reach to a lot of period in a less time. When a company comes in the market and he launches
it in the market but without its marketing it will not make profits. Any existing brand has to
make people aware about themselves and what all products and services they offer. Through this
they can better convince people and tell them why they should buy their products. They have to
show creativity and uniqueness in their marketing campaign because at the same time they are
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also in race with the other firm who is in the same sector. Marketing is based on thinking about
the business in context to consumer needs and their satisfaction. It does not deal in selling of the
good and services because selling is all about using tricks of getting customer to exchange their
cash for the product. The main role of this is to develop a demand of that particular product in
the business market.
In earlier time marketing was not given much importance by the businesses because the
source of communication, competitors was less and their was no globalization. Today's
marketing has become more customer oriented and companies believes in manufacturing
products according to the needs of consumers (Baines, Fill and Page, 2013). It has succeeded and
preceded the production procedure. Through marketing, firms wants to increase the customers
number and as well the profit margins. Organisations sets the goals & objectives and according
to it they design their marketing strategies.
Marketing can be classified into two concepts based on the traditional and modern
concept. In the traditional marketing activity the products or services directly moves from the
manufactures to customers. Whether in the case of modern approach it is the achievement of the
corporate targets through meeting and exceeding consumer needs better than the competition.
Today's marketing is based on the modern approach and its nature are as follows:-
Human Activity: It is a human activity in which human needs are satisfied by the human
efforts.
Consumer Oriented: Whatever business exists in market their purpose is to satisfy the
human needs so they should know what customer want and what products they are expecting
from the firm.
Art and Science: It is an art and science of choosing target markets and satisfying
consumer through creating, delivering and communicating superior consumer value. They have
to follow the technique in which they are able to deliver right products at right place in right time
to right hands.
Starts and ends with Consumers: Today's marketing is totally focused on customers so
it is necessary to acknowledge the demand of the consumer. This can be done through collecting
information from the individuals regarding the goods and services of the company. It can be
called as starting of the marketing and it ends when the products reach to the right or targeted
customer.
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Creation of Utilities: Marketing activities creates four elements of utilities that is time,
place, possession and form. Through the time utility, a firm ensure that their product are
available to customers when they need them. Form utility is the product or services a
organisation offering to their consumers. With the place utility they make sure that those goods
are available in a location. Possession utility gives consumers ownership of a product or service
and enables them to derive benefits in their own business. McDonald is a world wide famous
American fast food restaurant chain. In the year 1940, it made its debut from California. It sells
hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks,
milkshakes, wraps and different kinds of desserts. It uses Matrix structure because it follows
three structure for different operations. They uses functional structure for for the corporate itself,
divisional structure for the restaurants and geographical structure structure for its global market.
They uses this structure in order to achieve high quality in their product (Beatty and Samuelson,
2014). According to Charles Handy, they defined organisation culture into four parts i.e., power,
task, person and role culture. In power culture power remains in the hands of only few people
and they are accountable for any decision. Task culture are made to achieve the goals or to
resolve important issues by following task culture. In this people having common interests come
together and achieve the goals. Role culture is a culture where almost each individual is given
certain roles and duties in reference to his capacity and endurances which he has. McDonald's
adopts task culture and make sure that all the employees are aware of their responsibilities.
Through this they are able to bring efficiency in their operations.
Marketing to a business and marketing to a consumer are two terms which does not have
similarity. In the Marketing to Business to business McDonald can emphasises on the concept of
the item. They can do this by emphasizing on the characteristics of item (Berkowitz, 2016).
There is no involvement of personal emotion in the purchasing decision. Marketing to business
to consumer focus on the benefits of the product. Their decision is more emotional and the
customers are different in that they demand a variety of distribution channels for convenience,
not so with the B2B market.
McDonald's has seven marketing roles and responsibilities that they have to do. Below
mentioned are some of them:-
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 Distribution: This briefs about the goods and services which will be sold. How
McDonald's will get those one (Bivins, 2013). For example; McDonald's as just came out
with a new burger but if they don't know how they will market this, the effort will go in
waste.
 Financing: It deals with the budgeting and describes about the funds which are required
to improve business decision making.
 Marketing Information: McDonald's obtain and manage the information about
customer requirement. Through this they will be able to deliver quality service because
they are well aware about the requirements of the customers (Blythe, 2012). For example;
McDonald's can bring twin burgers on Friendship Day. This also brings effective
decision making in the company.
 Pricing: This is a complicated because its try to know what will be the best price at
which they can sell their food items. If the price of the burgers and other items will be
high customers numbers will be decrease and the if the price is low it will affect the profit
margins (Braslow, 2015).
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 Product and Service management: After setting the target market and deciding the
price, now comes the turn of effectively managing the product and services. This will
include knowing the demands of the customers and looking after services (Brooks and
Simkin, 2012). All the service staff should properly attend the consumers and the
housekeeping will make sure that their restaurants are cleaned and hygienic.
 Promotion: It is the activity to make people aware about the new product which has
came in the market or will come. McDonald can use advertising methods for the
promotion of their products and services (Campbell and Martin, 2015). Social media is
the best when through which they can reach a large number of people in few time.
 Selling: Selling and marketing are the two things which are interrelated to each other. It
is the last function of the McDonald and it has to make sure that customers are served
quality food items. What platforms or at what prices they will sell that item is the core
issue.
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P2. Marketing inter-relationship with other department in organization
Marketing department is define organizational tools and techniques which assist in
increasing the productivity and profitability of an organization. Marketing function define
interrelationship with another departments. Basically marketing process define link between
customers and company in appropriate manner to attain higher profitability in marketplace.
McDonald's is a famous brand in the world which provide fast food to their customers. These
organization focused on customers needs and wants (Cua, Reames and Chai, 2013). It set good
image in marketplace and customers mind. Every organization wants to established their
business at a international level to get high return and creating optimistic representation in front
of their competitors. McDonald's use different type of strategies and promotional activities to
enhance their performance at marketplace in appropriate manner. Best promotional activities can
helps in achieving goals and objective in best manner and attract large number of customers in
their business process. There are different function of McDonald's:
Research- it is one of the major element of marketing function. Under this firm conduct
or undertake research activities to study the current trends of market and accordingly decide their
organisational activities (Desai, 2013). Market research helps in identifying all information
regarding the competitors and company also which will set marketing goals and objectives in
appropriate manner. McDonald's needs to put more funds in the research so that they can come
out with the new products and can maintain their market position.
Transportation- It is an essential to McDonald's to shipping goods and service at
another place. For this they can use various device or vehicle to transport their material from one
place to another. The transportation facility has to be improved so that there can be proper
delivery of the raw materials which will be used for the production of the final goods and on the
other side the final products should reach to the distributors on time.
Risk assessment- This function helps in identify the whole issue which is create negative
impact on organization. It is a systematic process to evaluate the risk in best manner. With the
help of risk assessment McDonald's determine uncertainty which is helps in resoled it in
effective way to attain best result.
Quality of goods- this function is more important to the organization which provide to
their customers. McDonald's offer best qualities of their product to their customers and get
higher satisfaction by them. Product quality is more important to attain high success in

marketplace (Desselle, Zgarrick and Alston, 2016). It is the quality of the products of
McDonalds which has helped them in gaining the market share and made them the top fast food
company. Earlier they were criticised for their unhealthy food but after introducing the new
salads, meats and drinks they have made their brand world wide famous.

Product development- marketing function define product development with the help of doing
appropriate research. Marketing department determine the customers need and demands to
develop product in market place (Dibb and Simkin, 2013). Product development define new
product in market place which focus in customers need and demand.
These are functions define by marketing process of McDonald's to attain higher success
in marketplace. This also provide best service and support to their department to increase
business productivity. There are many function areas which establishes inter-relationship with
various business function:
Marketing with Human resources- Marketing department help to the HR manager
which define involve manpower in their business in future needs. McDonald's attract large
number of customers to increase their sale and attain more profits in market place. It define and
provide important information and data which is related to the human resource in marketplace
(Dioko, 2016). It helps in getting relevant information regarding human resources and provide
information about various resources of getting skilled employed. The main responsibility of this
department is to implement all the strategies and policies which aid in achieving positive end
results in appropriate time period. Main advantage of this sector is to manage overall
performance of the company and products.
Marketing with Customers service- McDonald's focused on customers satisfaction.
They used best tools and data to offer best quality of product to their customers to get higher
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satisfaction by them. Provide best service to customers which will increase company
performance in marketplace and attain best result (Draelos, 2010). They also used survey method
which define needs and taste and product service to developing quality of the product and
service. Marketing department acts as a bridge between the company and the consumer as they
help company in knowing what are the improvement which is required in the products and
services.
Marketing with finance- Finance department of McDonald's provide actual cost and
important data which will define positive action in business organization. Marketing assist in
determine future activities relating to expenditures that can happen in future (Fill, 2011). It
support in preparation of budget for various divisions by doing collective forecasting.
Marketing with Administration- Marketing department is essential for every
organization to offered various factors. Every company define rules and regulation of
government to improve their performance. McDonald's updated government policies and rules in
continuously basis to aware about all changes of government. This departments are high level
execute which assist in a team to ensure about its profits in appropriate manner. The manager of
company promote their products in creative way so that large number of customers but its
products.
Research and development with Marketing- McDonald's define research and
development department which increase the fresh and new method to enhance their quality of
products and productivity in appropriate manner (Hauer, 2011). In company marketing
department provide whole information regarding customers needs and demand which define
development or product in marketplace. Customers needs and wants change rapidly so that
organization also changed their process according to changes to improve performance in
marketplace. In this department involve collecting, recording and more process which related to
available information which assist for organization to capture larger market share and also aid in
understanding marketing process ion effective manner.
Marketing with Production- Marketing production define product and service which
sale in a market place to earn profitability. Production of the product based on customers needs
and wants and also focused on taste of costumes which is change continuously (Hoványi, 2013).
It include information regarding the customers and product after that they produce and offer
product in market. It refers to production price of the company in order to sale quality products
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to its customers at money price at marketplace. This departs assist for organization in order to
attract large number of customers and attain higher profitability.
All these function of marketing which define interrelationship with different business
function that assist in achieving success in marketplace. Distribution management and sale
department is also essential for McDonald's which provide different type of products and service
to their customers to attain higher satisfaction and increase company performance level.
Marketing department is more important to established relation with customers (Jackson, 2011).
They conduct research process to define target customers and promote their business process in
appropriate manner to attain success and maintain their performance in marketplace.
TASK 2
P3. Comparing marketing mix elements of McDonald's and Aldi.
The set of actions and elements or tactics used by organisation to sell its products and
services or for the promotion of its brand is known as marketing mix. It includes seven
components which are product, price, place, promotion, people, process and physical evidence.
This seven elements of marketing mix are discussed briefly for two different organisation i.e.
McDonald's and Aldi. Both business are working in different sectors.
McDonald's: -
It is fast food chain restaurant founded in year 1940 by Richard and Maurice McDonald.
It is largest fast food industry which operates its business in almost 120 countries across the
world and have approximately 30,000 stores (Jain, Ahuja and Medury, 2013). This organisation
serves almost 53 million customers daily.
Product: - McDonald's is large chain fast food chain which provides large range of food
items to its customers. The organisation offers both non-veg and veg fast food items such as
cheese burgers, chicken MC nuggets, hamburgers and French fries (Jones and Rowley, 2011). It
focuses on providing better quality food products which assist organisation in increasing
customers and develops brand image. The food items served by taking effective care related to
religions and customers cultures.
Price: - The determination of prices for products served is an significant matter. It is
necessary for business to set effective price level which should not be too high which declines
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customers nor too low which leads to losses (Lamb, Hair and McDaniel, 2011). Cost leadership
strategy is used by McDonald's which supports in offering products and services at competitive
price level. It servers many food items at reasonable prices and also serves combos.
Place: - McDonald's operates its business on larger scale which includes almost 120
countries and holds approximately 30000 restaurants in these countries. It have used aggressive
business strategy which aims at establishment of restaurants in urban and rural areas. It have
good store location which supports in customers convenience (Joshi, 2014). It operates
restaurants in significant areas such as shopping malls, airports and nearby highways.
Promotion: - It is significant element for communicating with people in its target market
and supports in developing brand image. It assist organisation in increasing number of customers
by creating awareness of product offered by it. McDonald's uses different tools for promoting its
products and developing brand image (Kennedy and Parsons, 2014). Radio, television, social
media broadcasting and advertising campaign are some of the tools used in promotion by cited
firm.
People: - It is new element of marketing mix which includes organisations employees
and customers. This focuses on building good relations with customers and provide effective
products in order to earn profits out of it (Lane, 2014). McDonald's recruit good employees who
can serve customers effectively. This supports in satisfying its users and develops brand image.
Process: - It is an functional activity of business which focuses on effective delivery of
products and services with good quality. The effective process supports organisation in providing
convenience to its customers in receiving services (Laucaster and Massingham, 2010). For
delivery of food items effectively McDonald's uses new methods of distribution and packaging.
It also allows its customers to check ingredients used in food items offered to them.
Physical evidence: - The services provided by business are intangible in nature which
means it cannot be seen or touched. However, users depends upon organisations layout before
buying any thing from it. In simple terms it is refereed to physical appearance of store.
McDonald's have kept attractive appearance of its restaurants which assist in attracting customers
towards its products offered (Lipsman and et. al., 2012). It uses attractive furnitures and
maintains cleanness within it and have common themes for all restaurants operating in different
countries.
Aldi: -
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It is largest grocery retail store incorporated in the year 1913. In earlier year it was generally well
know for selling of customised products. It is forth largest business organisation operating in
United Kingdom. The organisation have main objective to provide high quality of products at
lower cost to its customers (Malhotra, Birks and Wills, 2013). It is main aim is to provide day to
day products at a reasonable prices range with higher quality.
Product: - It is the main element of business by which it tries to earn income. Aldi aims
in providing high quality of products to its customers with lowest prices possible. For this
organisation purchase high quality of product form selected suppliers which maintains quality as
well as price (Marshall and Johnston, 2011). It modifies its non food item to attract new
customers but do not make any changes in food items. This helps in retaining business in
competing with its competitors through its products.
Price: - It is important term which creates demands for products and services in the
target market. Firm must determine significant price level for products which supports in
increasing customers and sale at determined price level. Competitive pricing strategies is used by
Aldi to for its products. It tries to deliver products at low price level as it may be possible. For
maintaining price it purchases product in bulk which cuts per unit cost.
Place: - Aldi organisation is currently operates its business in approximately 18
countries and have 8000 stores (Martin and Reed, 2015). It normally establish new store every
week in Britain. It have selected effective place for stores such as main city and in high
populated areas.
Promotion: - Aldi have used two methods for promotion i.e. advertising and distribution
of leaflets. This helps in creating awareness within the target market and increases customers for
organisation. Television and social media broadcasting is also used for promoting its business
and this assist in developing its brand image.
People: - The brand value of organisation is highly dependent on its employees who are
involved in rendering services to customers. Aldi provides heavy discounts to its staff members
on purchase of goods from the store (McDaniel and Gates, 2013). It also provides training to its
members which supports in providing services effectively and assist in satisfying service users.
Process: - Aldi have set layout of its store which supports customers to find products
easily as per their requirements. In helps in reducing the wastage of time required to get the items
offered by it. It display information within store which helps customer in finding products.
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Physical evidence: - Aldi retail store is well known for its simple process of business, its
standard and effective pricing (Mittal, 2014). Organisation have kept its store layout very
simple and attractive which supports in seeking attention of consumers towards it.
TASK 3
P4. Produce and evaluate a marketing plan for McDonald.
For maintaining its performance in the market every company has to regularly come out
with a new products, business and marketing plan. Marketing plan is a document which outlines
the efforts which will be done to promote the product and services of McDonald's. It briefs about
the business operations which will be carried in order to achieve business goals in a particular
time period (Nguyen and Simkin, 2012). If McDonald have to develop a marketing plan it has to
analyse its internal and external environment. Following are the marketing plan proposed for
McDonald.
Introduction: It is an fast food restaurant chain which was founded on May 15, 1940. It deals
with providing food items like Hamburgers, chicken, French fries, soft drinks, milkshakes, salads
and coffee.
Marketing Objectives:
 To gaining highest market share
 To present products of McDonald's on almost every platform.
Marketing Mix:
 Product: It has different food products and normally deals in fast food.
 Price: They exists in almost all countries so they believe in delivering these items at
relevant prices.
 Promotion: McDonald's use advertisement and PR as a paid form of promotion. They
have also changed their policies by targeting social media.
 Process: It believes in delivering product according to the needs of people.
 People: They are producing products for all age groups from children to adults.
 Physical Environment: McDonald's normally opens their outlets at urban areas because
there are more opportunities in those areas.
Market Analysis:
Competitors: Burger King, Wendy's International, KFC, Pizza Hut and etc.
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PEST Analysis: Its functions does not face much trouble through political factors because it had
been serving to many countries, so they are well aware of the market condition. Economic crises
may badly hit them and with this they will cut the employees numbers and will limit their
operations. They make sure that they deliver products whose recipes matches the area where they
are operating. With the help of technology McDonald can increase their sales and efficiency in
their work. At the billing counter they can use software's will be increase the speed of the billing
counters. They are also taking orders through online medium.
Mission of the firm: To provide world class food items with best services to the
customers which aims at generating more profits.
Analysis of the situation: It is done to know the current status of the company and what
are the factors which can impact its operations. For this SWOT analysis of McDonald can be
done.
Strengths
 Largest restaurant chain and serving in
more than 110 countries.
 Most recognizable brand in this sector
and has highest brand value.
 Uses economics of scale to achieve its
cost reduction strategies.
 Have an ability to generate high
revenues and sales.
Weaknesses
 Marketing saturation has made the
expansion difficult for it.
 It does not have pace in the procedure
of product innovation.
Opportunities
 Through introducing more added
values in at the outlets can attract more
customers. For example; they can setup
Wi-Fi systems.
 Product innovation is can be called as
dream opportunity for McDonald
which they have to crab.
Threats
 There are lots of competitive to it and
can act as its alternative.
 Variations in the foreign currency can
affect its business.
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Objectives of the Marketing: They are constantly working on improving their service
delivering time because fast the delivery better the profits. For this they will use social media for
promotion.
Overall Objective: To make sure that their products are easily accessible.
Easy negative feedback handling procedure (Parsons, 2013).
To reach all the target market or consumers.
Business Objective: To increase the sales by approx. 30 percent.
Making people aware about the its various brands.
To expand the business in 15 new places by opening new outlines.
Strategic Objective: Its emphasis on satisfying its consumer by delivering them world class
services. Looking through organisational point of view, the goal is to expand the business
through opening new stores.
Target Market Segments: McDonald is using demographic segmentation approach and it is
focusing on the age factors for segmentation. They are more emphasizing on the youth, children
and young urban families.
Strategies
 Market Penetration: By including interior market promotions so that they can expand
their market share by drawing the attention of rivals customers. They are focusing on the
needs of the domestic clients, so on the basis of this they are designing marketing
campaigns.
 Market Development: It has set examples in the food retail sector through its market
development plan. Through expanding their services in the market of various countries
they are in constant development process (Peter and Donnelly, 2011). By focusing on
promotions, opening sales offices and collaborating with small firms.
 Service Development: The main focus is on the service development because they have
the mission of giving world class service. It is the easiest way to satisfy the customer and
they have introduced feedback system. Through this they will know what area needs to
be improved.
Budget: For implementation of the marketing plan, budget is a necessary element. Through
budgeting strategies they will try to distribute the amount in the proper manner. As it is the
largest company so expansion requires huge expenses (Pike, 2016). After analysing the
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important activities they decides the budget and handover it to the finance department. It is
observed that almost 50 percent from all overall budget are allocated to the marketing
department. This can vary as change in the marketing conditions.
CONCLUSION
From the above report it has been concluded that McDonald can increase their profits
through expanding their market share. It has made its brand value by focusing on developing
quality services to their target customer. They have to analyse their market and needs to adapt in
that so that they can gain competitive advantage. McDonald's have to produce different strategies
and plans which can enhance their market. A comparison was made between McDonald's & Aldi
and was briefed about the marketing mix. Through a marketing plan they can implement
different strategy and would bring efficiency in their operations.
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REFERENCES
Books and Journals
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