Analysis of McDonald's Marketing Strategy

This assignment requires the analysis of McDonald's marketing strategy, focusing on the 7 Ps framework. It also involves examining the company's advertising costs from 2014 to 2017. The provided sources include journal articles and a webpage about McDonald's advertising expenses. A suitable title for this assignment is 'Analysis of McDonald's Marketing Strategy.'

Marketing essentials

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key roles and responsibilities of marketing functions...........................................................1
P2 How marketing roles and responsibilities are related with wider organisational context.....5
TASK 2............................................................................................................................................6
P3 Marketing mix of two different business associations...........................................................6
TASK 3..........................................................................................................................................10
P4 Produce a basic marketing plan of McDonald's...................................................................10
REFERENCES..............................................................................................................................15

INTRODUCTION
In ever dynamic nature of environment, it is essential for every business association to
implement effective marketing strategies and policies so as to gain high competitive edge. Thus,
marketing is a vital concept for every business; its a key process of promoting and selling
products of firm to its target audiences. Profits are the bottom line for businesses and it can be
generated only by successful sales. Without an effective marketing firms may fail to exist, hence
they are required to have amazing or unique products which creates value for them (Armstrong
and et. al., 2015). The present coursework is based upon McDonald's is multinational fast food
restaurant by having more than 35000 outlets across 100 countries. The firm has occupied more
than 4 million people and it serves 70 million customers everyday. McDonald's has a largest
share in fast food restaurant industry of 17%; the organisation uses effective marketing tactics
which supports it to gain high competitive edge. Apart from this, the report will describe roles
and responsibilities of marketing functions in contrasts with other departments. There will be a
discussion on marketing mix of two different corporate entities who deals in same sector. A basic
marketing plan is going to be developed to attain firm's goals and objectives in the best possible
manner.
TASK 1
P1 Key roles and responsibilities of marketing functions
Marketing is an indispensable business process which inform, attain and convince people
that firm's products and services are value to them. It is necessary to use effective marketing
tactics in order to promote business, offerings or brands. Without this, management cannot make
higher sales. Marketing helps in increasing sales because through this people get know about
existence of the firm. In addition to this, marketing is a key management process which enables
manufactures to interpret customers' needs wants then exceed them so as to satisfy their needs
and wants. In this ongoing activity, customers are the centre of attraction who affects all aspects
of businesses (Askeland and Wright, 2013). By considering McDonald's, the firm has acquired
various marketing strategies for attracting customers even under credit crunch situation. In order
to improve its marketing strategy, the firm starts to provide home delivery services to its
customers; which motive is to continue the competitiveness of fast food giant.
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This graph shows the amount that McDonald's Corp. spent on advertising worldwide
from 2014 to 2017. Advertising costs included in operating expenses of Company-operated
restaurants primarily consist of contributions to advertising cooperatives and accounted for 532.9
million U.S. dollars in 2017. Production costs for radio and television advertising are expensed
when the commercials are initially aired. These production costs, primarily in the U.S., as well as
other marketing-related expenses included in selling, general & administrative expenses were
100.2 million U.S. dollars in 2017.
Nature of marketing
Increases Awareness – Marketing increases awareness among people, as it builds
potentials customer who know all information about the company, i.e. products and offerings as
well. Most of the time people see advertisements and get recommendations but always do not
buy that products straight away.
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Illustration 1: Marketing investment of McDonalds

It sustains – Marketing is meant to sustain firm's market presence for long term period –
not remedy lack of engagement. In simple words, marketing refers something which a business
should to create and manage so as to manage healthy and positive relationship with customers
(Desai, 2013). Along with this, marketing is significant cause it allows McDonald's to maintain
ever present relationship with its target audiences; its a ongoing plan of action which supports
business advancement.
Customer oriented – Marketing is a customer centric approach as its aim is to drawn
more and more people. Here, business organisations formulate all of their marketing activities by
considering target audiences and satisfying their desires and expectations in the best possible
manner.
It grows – Marketing ensure business growth and success, when a firm gives priority to
its target customers then it is beneficial in raising number of target audiences towards the firm
which improves its viability and market growth. Basically, marketing is a procedure of
transacting products and services from manufactures or retailers to their end users which helps a
business grow and diversify at marketplace (Clow and James, 2013).
Roles and responsibilities of marketing functions: -
Gathering and analysing marketing information – Before launching any new product,
marketers are required to collect proper information about market in which they will be
performed. Having enough information of target market help companies to develop their
products and services accordingly. Although, marketing analysis encompasses with
demonstrating internal strength and weaknesses of the firm as well as to get know about politico-
legal, economic and social aspects of external environment. This kind of information can be used
in market segmentations. Therefore, determination of needs and wants of buyers and then
assessing the gathered information helps to make diverse decisions as it is required in successful
implementation of marketing strategies and introducing new products at marketplace.
Marketing planning – The prime aim of marketing planning is to attain organisational
goals and objectives which are associated with raising market presence of the firm, increase
market share and dominate the market. In McDonald's marketing planning covers all aspects of
promotions, operations and further activities which will ensure market growth and success of the
firm. Although, proper plans are required to be made by conducting an effective market research
so as to get entire information about customers and their demands (Blacher-Wilson, Mense and
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Richardson, 2011). Having an appropriate marketing plan, marketers can also forecast their sales
and profitability in upcoming years. But the plan should be modified as per the changes in
market trends and customers' preferences.
Product designing and development - Every manufacture offers a products to people but
what is going to be offered must be planned. It encompasses various decisions regarding what
quality standards should be maintained, packaging, what shape would be used and how it can be
able to provide high competitive advantage to company. The process of product development
and designing aims to keep offering up to date or fresh as well as effectively responding towards
customers' needs and desires. Therefore, after getting information from market it is essential for
management to manage products and services in the best possible manner. In this case, different
modifications have to be done for creating an innovative or attractive product.
Standardising and grading – The term standardising entails managing quality standards
of products and services with an aim to accomplish uniformity. It renders consistency as well as
quality assurance to customers because if people will be assured about the quality of product
then only they will take purchase decision. McDonald is emphasised on generating value added
products and for this it uses fresh food ingredients; it builds individuals' trust towards the firm.
Apart from this, grading means dividing products on the basis of certain specific criteria (Babin
and Zikmund, 2015). It can be on size, price, quality, quantity etc. Grading is needed when firm
is not following standardising. The fast food giant does not require to give grade its products and
services.
Packaging, labelling and branding – Normally, products are delivered to their end users
in labelled form; an effective or attractive packaging helps to attain customers. Packaging refers
packed a product in wrappers, boxes, small packets etc. so as to avoid damages, wastages,
breakage etc. Although, food items get easily vulnerable thus McDonald's uses effective forms of
packaging which resolve this issue. Labelling is a slip which provides proper information about a
product or service. On the other hand, branding refers with giving a special identity to product;
manufacturing companies decide to sell its offerings by using its name. The key of McDonald's
branding is experimentation and segmentation as the firm is more focused on generating new
products as it recently it has launched McPuff which is famous among youngsters.
Promotion – Promoting products and services aids to provide information to target
audiences as get willing to purchase them. There are several methods of promotion, such as –
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personal selling, advertisements, sales promotion etc. Marketers can decide the best one method
according to their marketing budgets and market trends (Enache, 2011). Promotion encourages
people to buy products and services of the firm so as to increase sales revenues and proficiency.
P2 How marketing roles and responsibilities are related with wider organisational context
In this competitive nature of business environment, management is required to implement
cooperation and coordination between all working departments so as to attain goals and
objectives in more flexible manner. If all departments will be worked together then it enhances
productivity and performance level of entire association. In context of marketing, marketers
cannot perform all tasks individually, there is needed support of other department. In simple
words, marketing activities are depended on other functional areas of the company, for example
– R&D department makes study about market so as to gather information about target audiences.
There is defined interrelationship of marketing with wider organisational context, such as - Finance department - It isn't workable for marketing division is to give their exercises
successfully without adequate evaluation of assets. Absence of these assets can influences
the ability of marketing branch of McDonald's regarding adoption of new and innovative
promotional tools resources which brings awareness among more extensive range of
clients about their current and forthcoming offerings (Getnet, Kedir and Yousuf, 2014). It
is the obligation upon financial managers is to figure out the spendings which will be
taken by marketing activities while formulating marketing budget. Research and development department - This unit of McDonald's is considered as sub
arrangement of promoting research activities. The principle capacity of R&D division is
to direct the examination about components which are available in market and influences
their deals. Likewise, about the activities, goods and procedures connected by their rivals
to manufacture their position more solid in advertise. All such data is additionally utilized
by the marketing department to detail their own arrangements which gives chance to play
out their distinctive exercises in more suitable way.
 Production and operations department - The significant part of operational department
in association is to give their last items to their end clients. The four noteworthy capacity
which helps in accomplishment of their foreordained target incorporates distinguishing
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proof, choice and advancement of item, assurance of value, determination of fitting
circulation channel and execution of the compelling limited time system.
TASK 2
P3 Marketing mix of two different business associations
The core concept of marketing mix is acquired by marketers in order to define necessary
components of marketing strategy. Its significance lies upon its ability to aids a business so as to
identify appropriateness of product or service towards a targeted client base. Marketing mix put a
vast impact on purchasing decisions of customers whether to buy or not to buy these products. If
an organisation wants to expand its product line, then minor changes are required to make in
marketing mix by considering pricing and promotional strategies (Gordon, 2012). Therefore
studying marketing mix of a specific product begin by grasping the nuances of the 7Ps, such as –
product, price, place, promotion, physical evidence, process and people.
Marketing mix of McDonald's and Burger King: -
Basis McDonald's Burger King
Product Products entails with firm's offerings
which sells in market in order to satisfy
the needs and wants of customers in the
best possible manner (Griffitts, 2016).
McDonald's is a growing organisation
which deals in fast food industry, its
main products are – burgers, coke,
French Fries, deserts, snacks & sides,
salads, chicken, sandwiches etc.
Although, it also provides people many
other options, like – Egg white delight
McMuffin, Hash browns, Quarter
Pounder with cheese, Baked apple pie,
Vanila cone, Double cheese burger,
McCafe, choclate shake etc. are the
Among all fast food chains, Burger
King is known as fast delivery service
chain which is mainly focused on
burgers. The main product portfolio of
the company is – burgers, sides, salads,
veggies, chicken, fish, beverages,
sweets/deserts etc. Beside from its
product line, the fast food industry also
deliver other alternatives of chicken
and fish. Its sides involves nuggets,
fries, hash browns, onion rings.
Recently, Burger king adds French
toast sticks and mini muffins in its
menu (.Huang and Sarigöllü, 2014).
Furthermore, product mix of the
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main products which are offered by the
firm. In present scenario, needs and
wants of customers are rapidly change,
thus competition is tough in this
industry cause many rivals sell same
food in different taste.
company supports generic strategy by
which economies of scale from higher
production of minimum range of
product line.
Price It entails with charges which are taken
by firm to deliver its services to its end
users. Prices of products can be
estimated from the point that
McDonald's mostly sells fast food
which has a close relation with leisure.
In order to recall clients business
associations are required to sets an
effective pricing strategy.
The main objective of fast food chain is
to provide products at competitive value
driven prices. Although, prices in
McDonald's outlets are sightly different
according to effectiveness of the areas.
Beside this, it sets prices on the basis of
demand, also the firm ain't prescribe
pricing to franchisees who can set their
own price structure as they see fit in
their local market (Jones and Rowley,
2011).
Burger King uses competitive pricing
policy as there is higher market
competition with McDonald's and other
rivals. The firm monitor its pricing
policy very closely by considering all
aspects of customers. It means prices of
products should be affordable by each
people. Rather than assessing the
amount people can pay, marketers need
to determine pricing strategy of
competitors.
Although, customers belongs from
different income group thus prices are
vary from low to high. High prices can
eliminate doubt about quality whereas
low prices so that buyers can easily pay
it.
Place Place refers with surrounding from
where a firm operates or serves. Most of
the outlets of McDonald's are situated at
malls, airports, highways, markets etc.
At present, outlets of Burger King are
situated everywhere across the world.
Approximately, the firm has 13000
restaurants in which 95% are being
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The reason behind choosing such places
is that people can easily reach these
places. Along with this, McDonald's
also uses various distribution strategies
in different nations. The firm also
renders' home delivery services in some
developing countries. Some of its
outlets are opened 24 hours in a day so
as to provide food facilities to people at
the time of requirement. Therefore,
McDonald's has an intensive
distribution strategy which aims to make
products available by using all possible
channels of distribution.
owned by it privately. In addition to
this, Burger King has classified its
international operations into three parts.
The industry has also implemented
diverse subsidiaries and create strategic
alliances which sounds profitability. In
order to extend its functional areas, the
firm adopted various franchising
options in all regions.
Promotion It insists with how an organisation
interact with its target and potential
customers. In other words, it shows that
how firms influence people to buy its
products and services. McDonald's uses
heavy promotional strategies while
football matches, it also has football
sponsorships. UK population love
football and it heavily affects
McDonald's market.
The promotional strategy of Burger
King is rely upon revitalizing and
reorganising the brand at distinct
periods (Menegaki, 2012). As per the
time, the firm overhauled its policies
linked them with menu, new agencies,
advertisements, refurbishment of
restaurants; recently it has introduce
unique concept of restaurants, i.e. “BK
Whopper Bar”.
Physical
evidence
This element of marketing mix involves
the physical environment which is
provided to visitors and gain customer
experience after visiting firm's outlets.
Although, interior of McDonald's is
quite attractive and peaceful here people
By having presence over 15000
locations in more than 60 countries,
Burger King has global vitality in
developed nations.
The firm always consider a perceptual
plan so as to meet expectations of
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can easily do other important works
with eating. Its restaurant also provide
free wi-fi facility to clients as they can
easily access interest by enjoying eating.
buyers with vision and mission of BK.
When people entered into its outlets,
they feel a clean, hygienic and eco-
friendly environment; staff members
also welcomed people in well being
manner.
Process It refers with course of activities to
achieve firm's goals and objectives.
McDonald's focuses on adopting an
effective process so as to products to its
end users. Here, food preparation is a
fundamental activity; McDonald's
completely transparent its food
manufacturing process, i.e. the entire
process is upload on its official websites
and visible to all people (Pomering,
Noble and Johnson, 2011). Other
aspects of process involves, customers
do not wait for long time after
processing their orders.
In a month, Burger King produces
more than 33000 sandwiches ; it means
on an average 198 sandwiches per
hour. Apart from thus, the firm is also
focused on satisfying customers' needs
rather than improving its operations.
People McDonald's has regulated a standard
uniform for all of its employees which
must be wear by all people who works
at there. The industry is highly focused
on spreading prompt and friendly
services to people. At global context,
there are over 97000 workers are
currently working in McDonald's and
70% of its outlets are owned and
controlled by local entrepreneurs.
Customers in Burger King are treated
in well being manner by customer care
assistance.
Thus, customer satisfaction ratio of the
company is higher than other
competitors. Innovate dining and high
quality of food by quick availability of
services makes Burger King more
customer oriented.
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Along with this, the fast food giant has
invested £45million to provide training
and development assistance to
employees. Although, staff members
and customers both should be
considered in a marketing mix as if
workers are not happy then they deliver
poor customer services; it results
reduction the number of customers.
TASK 3
P4 Produce a basic marketing plan of McDonald's
With having systematic planning, a firm's operations are totally meaningless and
worthless because management has no procedure to pursuit objectives. Thus, marketing planning
has become of the most important aspect of modern marketing as it provides guidance to
individuals regarding completion of all working activities (.Leonidou, Katsikeas and Morgan,
2013). In this relation, McDonald's also has developed its marketing plan so as to minimise
future risks or uncertainties. Following are the main steps which involves in marketing planning
process of the company, such are stated as under: -
Introduction of the company – McDonald's provides an uniform menu which includes
fries, chicken sandwiches, Big Mac, Hamburgers, wraps, deserts etc. Its a world's leading global
food service retailer with over 36,000 locations serving nearly 69 million customers in over 100
countries each day. The overall revenue of McDonald's is US$24.622 billion whereas its current
operating income is US$7.745 billion. The fast food chain focus to deliver an experience to
customers by trademarks, quality services, values, cleanlinesses so as to attain and retain people
for long term period. The main competitors of McDonald's are Just Eat, Burger King Yum!! and
Deliveroo etc. in which Burger King is its major competitor by having a share of 11%.
furthermore, the market segmentation of the company includes, i.e. international lead markets,
corporate, foundational markets and high growth markets.
Mission and vision of the company – The brand's mission is to become customers'
favourite place when they feel requirement of eat and drink. In this relation, McDonald's has
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aligned its business operations over a global strategy which is known as plan to win. Marketing
manager of the company stated that they are committed towards making continuous
improvements in its functions and raising customer experience. Apart from this, the vision
statement of the company is to become world's largest fast food industry by delivering high
qualitative and value added food items to customers. It promised to provide simple easy
enjoyment to every customer at every visit (Kennedy and Parsons, 2014). Thus, by formulating
effective mission and vision statement every business organisation can easily gain high market
growth and success in a certain time period.
Situational analysis – After assessing goals and objectives, marketers need to conduct
situational analysis; it encompasses assessment of internal and external environment of the firm.
SWOT analysis of McDonald's
STRENGTH
The major strength of McDonald's is it always
focuses on providing new and innovative food
items to people. Recently, the firm has added
some items in its menu, such as – coffees,
augus burgers, smoothies, shakes etc. so as to
expand product portfolio.
Operations are extended over the globe, it
means the firm is not exposed with a single
economy or currency.
At the time of credit crunches, the firm is able
to grow its income cause of world wide market
presence.
WEAKNESSES
Sometime it is difficult to determine prime
locations in order to build a set of golden
arches.
Disgruntled franchisees
Weak product development and declining
market share
Slow revenue and income growth.
OPPORTUNITIES
There is great opportunity of fast food
restaurants cause of emerging markets; it
results they can easily expand their business in
other developed countries through franchisees
and strategic alliances.
Menu modifications is not only limited by
THREATS
Implementation of strict laws and regulations
by government bodies regarding fast food.
McDonald's is facing tough competition from
its peers like – Yum Brands, burger King,
Deliveroo etc.
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imaginations.
Cheap interest rates will contribute to higher
capital for growth. McDonald's has become
first international firm which issue yuan-
denominated bonds in Hong Kong.
rollouts of new products also increases intense
competition with existing players like –
Starbucks.
PEST analysis of McDonald's
Political factors
Political situation of UK is stable; it is the
reason that many multinational corporations
easily survive at there. Beside this, variations
in government laws and regulations put a vast
impact on business activities and processes.
British government has regulated healthy food
act so as to deliver fresh food items to people
(Sheth, 2011).
Economic factors
Due to economic recession in 2008, UK's
economy get highly affected, many of
corporations were forced to shut down their
business due to lower spending power of
customers.
Beside this, there are several economic factors,
like – disposable income of people, poverty,
unemployment, interest rates, saving rates,
inflation rates etc. all these aspects put a vast
impact on success or failure of business
associations.
Social factors
In this modern era, needs and wants of people
are getting changed day by day. Having global
market presence, McDonald's deals with
numerous customers, thus sometimes it is quite
difficult to meet all expectations of people in
the best possible manner.
Technological factors
Due to technological advancement, business
organisations are willing to modify its working
processes so as to gain high competitive edge.
In context of McDonald's, the firm starts to
take order and payments online; so as to
facilitate whole process.
Identification of marketing strategies
In this stage, marketers are required to determine an effective marketing strategy which
deliver high market growth and long term sustainability to firm in future. In this relation, Ansoff
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Matrix is acquired by McDonald's so as to sell products in market and improve client base as
well. Although, the strategy encompasses four elements, such as – market penetration, market
development, product development and diversification (Wilson, 2014). For instance – in 2001
McDonald penetrate its market by using effective promotional channels, i.e. social media,
internet websites, television etc. This marketing strategy aims is to sell existing products in
existing markets by promoting goods and services. In context of diversification, McDonald's had
launched McStops and McCafe in Swizerland and other countries; here the firm had never been
sells its products and services.
Formulation of marketing budget
Marketing budget is created so as to assess the amount which will be spend on all
marketing activities. Below is described marketing budget of McDonald's: -
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year 5th year
Initial money 75000 25000 20000 15000 20000
Investment 25000 14000 15000 18000
Total 75000 50000 34000 30000 38000
Marketing
expenditures
Advertisement 10000 9000 7000 6000 6000
sales promotion 7000 4000 3000 7500 9000
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Direct marketing 8000 2000 5000 7200 2000
Total 25000 15000 15000 20700 17000
Available balance 50000 45000 19000 12300 21000
CONCLUSION
According to the above study, it carried out that marketing is a vital concept for every
business organisation as it supports in booming up sales and profitability. As it built brand
awareness which increases customers' loyalty towards the products and services of the company.
The report has stated that there are several roles and responsibilities of marketing functions, such
as – gathering and assessing information, marketing planning, product designing and
development, branding, labelling and packaging etc. It is essential for marketing department of
McDonald's to work with other functional units so as to gain high competitive edge in a certain
time period. Apart from this, marketing mix involves four major elements, such as – product,
price, place and promotion. While developing marketing plan for firm, management is required
to identify its vision and mission; it results accomplishment of working activities or actions in
the best possible way.
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Online
McDonald's Corporation's advertising costs from 2014 to 2017, 2018. [Online]. Available
through: <file:///home/user711/Desktop/%E2%80%A2%20McDonald's_%20ad
%20spend%202017%20_%20Statistic.html>
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