McDonald's Marketing Strategies

This assignment examines the effective marketing strategies employed by McDonald's. It analyzes their distribution approach, focusing on intensive distribution for mass market products like hamburgers. The assignment delves into their pricing strategy, emphasizing penetration pricing to raise awareness and attract new customers. It also discusses promotional activities like PR campaigns and highlights how marketing principles contribute to maintaining McDonald's strong brand reputation.

MARKETING PRINCIPLES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Elements of marketing process.........................................................................................1
1.2 Benefits and costs of marketing orientation.....................................................................2
TASK 2............................................................................................................................................2
2.1 Micro and Macro environmental factors influencing marketing decisions in McDonald's
................................................................................................................................................2
2.2 Segmentation criteria used by McDonald's......................................................................3
2.3 target strategy used by McDonald's..................................................................................4
2.4 How buying behavior affects marketing activities McDonald's......................................4
2.5 New positioning for a selected service or product of McDonald's...................................5
TASK 3............................................................................................................................................6
3.1 How McDonald's products are developed in order to make sure that competitive
advantage is sustained............................................................................................................6
3.2 Explain distribution strategies used by McDonald’s........................................................6
3.3 Explain pricing strategies used by McDonald..................................................................6
3.4 Promotional activities of McDonald's..............................................................................7
3.5 Elements of the extended marketing mix.........................................................................7
TASK 4............................................................................................................................................8
4.1 Marketing mixes for two different segments in the consumer markets...........................8
4.2 Differences in marketing products and services to business and consumers...................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Marketing principles refers to the principles that are used to frame product, price,
promotion and distribution strategy of the firm,The present report gives a full view of marketing
techniques, processes and principles of McDonald. The main objective behind preparing this
report is to cover various aspects of marketing. In respect to this, an attempt is made to create a
broad understanding about the various concepts of marketing like segmentation, targeting and
positioning. Apart from this in the report strategies like product, price, promotion and
distribution tactics are explained in detail. At the end of this report, difference between
international and domestic marketing is discussed in detail. Along with this, difference between
marketing efforts that are made in relation to general public and business customer's is also
discussed briefly.
TASK 1
1.1 Elements of marketing process
Elements of marketing process are as: Marketing audit- Under marketing audit marketing manager evaluate company
marketing efforts and strategies that it implement at the ground level. Along with
marketing environment is also evaluated by the managers in order to create future
marketing strategy for the company product. Thus, it can be said that marketing audit in a
part of cautious approach under which firm time to time evaluate its marketing efforts in
order to make sure that it will perform well in the market. Integrated marketing- It is another important component of marketing process. Under
this part of marketing process same message is communicated through different channels
of communication. This helps firm in channelizing its marketing efforts in single
direction. In research it has been seen that if different channel of communication
communicate separate message then it would not put positive impression on the target
customer's. Hence, due to this reoasn MC Donald is giving due importance to this
concept of marketing in its business practice.
 SWOT analysis- MC Donald time to time conduct SWOT analysis in order to identify its
strength and weakness related to its marketing efforts. Application of this technique also
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helps in identifying threat and opportunities related to marketing of its product. Hence,
output of this analysis helps firm in crafting sound marketing strategy for its product.
1.2 Benefits and costs of marketing orientation
Marketing orientated concept means a business concern enact to what consumer need.
The decisions interpreted are based on the data about customer’s needs and wants, rather than
what the enterprise consider is right for the consumer.
 Costs: In order to identify customer needs and to innovate its service deleivery methods
MC Donald conduct research on continue basis. For this heavy amount is ivested every
year. Hence this affects company profitability. But main beneift of this effort is that firm
get an information abour the needs of the people. By following needs it launch new
products in order to satisfy customer needs. Due to this reason firm successfully creat a
loyal customer base in past few years(Doole and Lowe, 2008). Hence, it can be said that
marketing orientation has benfits and costs for the firm.
 Relationship marketing- MC Donald time to time conduct many programs in its
restaurant in order to make customer's experience better in its workplace. Hence, by
doing this MC Donald is establishing good relationship with its customer's.
TASK 2
2.1 Micro and Macro environmental factors influencing marketing decisions in McDonald's
The micro factors are Suppliers: MC Donald is purchasing raw materiel from many suppliers. It makes sure
that suppliers from whom it it purchasing raw material are supplying quality raw material
to its workplace. Firm advertise this thing in its advertisement in order to make sure
people that it is using quality of raw material in producing food items. Hence, by doing
this firm successfully create its good image among the customer's. Customers: MC Donald main aim is to provide quality food at affordable price. Hence,
since its inception it is strictly complying with its objective. Firm also show this thing in
its advertisement. With increase in unemployment rate firm try to control its price. Its
main objective is to increase sale of its product on the basis of price. By taking advantage
of economic condition it is promoting its product on the basis of price at the place of
quality. Hence, customer expectations regarding price from MC Donald due to increase
in unemployment rate affect its marketing decisiosns.
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 Employees: McDonald's employees are intrinsic stakeholders and their aim is to acquire
fair treatment from the mentioned company in terms of wage, rewards, promotions etc. In
this regard, fast food restaurant meets these objectives by improving their skills and
competencies through grooming and improvement programs in order to make them give
improved public presentation and to be capable of acquiring rewards.
Macro factors are: Political environment: The international operations of McDonald’s are highly
influenced by the policies enforced by each government. Travel and tourism is playing a
great role in the company profitability. UK government is fully committed towards
growth of travel and tourism sector. With increase in growth rate of this sector profit of
MC Donald will also increase. Hence, it can be said that political environment is
positively affecting MC Donald. Economical environment: Organizations in the fast food industry are not excused from
any disputes and troubles. Specifically, they do have their individual concerns involving
economic factors. Branches and franchises of fast food chains like McDonald’s has the
tendency to experience hardship in instances where the economy of the respective states
is hit by inflation and changes in the exchange rates. Social environment: McDonald’s is strongly affected by the social environment because
people taste and preferences are different from country to country. Hence, firm is
innovating its existing product line as per people taste and preference. So, it can be said
that social environment is positively affecting MC Donald.
 Technological environment: McDonald’s have significantly been infused with new
technology. Elements like the inventory system and the management of the value chain of
the company allows for easy payments for their suppliers and other vendors which the
individual stores in respective markets deal with. The integration of technology in the
operations of McDonald tends to add value to their products. Due to continue technology
up gradation MC Donald is far ahead of its competitors.
2.2 Segmentation criteria used by McDonald's
The segmentation criteria used by McDonald's demographic segmentation and behavioral
segmentation. These segmentation criteria are explained below.
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Demographic segmentation- It refers to the mode of segmentation in which population is
divided on the basis of income, age and religion etc (Marshall, 2013). In the world people with
different income level and religion are residing and it is necessary to satisfy needs of each and
every type of costumer. Hence, firm is following this mode of segmentation in order to serve
needs of each and every type of customer.
Behavioral segmentation- It is a type of segmentation in which people are divided in several
categories on the basis of their taste and preference. Under this sort of segmentation technique
firm prepare different type of products as per taste of people. MC Donald is following this
segmentation technique since its inception and due to this reason it is able to develop loyal
customer base in a past few years.
2.3 target strategy used by McDonald's
Differentiated
In this startegy fiurm insdtead
of targeting a specifc customer
gropup target multiple catgeory
of people in terms of taste or
income level. By doing this firm
increase sale and wide
acceptability of its product.
McDonald targets families by sending a
promotional message about the new burger
innovated and its good parts.
ConcentratedIn this sort of targeting
method firm focus on specific type of
people for selling its product. By doing
this a company try to create its different
image among the general public.
McDonald targets the adults by
placing ads in magazines and by
providing them discount cards.
UndifferentiatedIn this targeting method
firm do not focus on specific type of
people and it prepare a single product that
suits to requirements of all type of
customers.
In this strategy, McDonald
promotes its hamburgers by
targeting adults by publishing
the ads on in the newsletters.
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2.4 How buying behavior affects marketing activities McDonald's
The buying behavior of customers affects marketing activities McDonald's
 Cultural: this factor includes a consumer’s culture, subculture and social class. People
preference and taste are largely affected by the culture and value system. MC Donald
understand this thing and whenever it enters in to new market it do thorough analysis of
people taste and culture. After that as per people people taste it launch its product in tot
new market. Hence, it can be siad that cultural factor affects markting activities of the
firm.
 Social: this behavioural factor includes groups (reference groups, inspirational groups
and member groups), family, roles and status affects people buying behaviour. By doing
analysis of these factors firm prepare its advertisements that are advertised on television
and internet Thus, it can be said that social factor affects marketing efforts of an
organization.
 Personal: These are those behaviour that are personal that include such variables as age
and life cycle stage, occupation, economic circumstances, lifestyle, personality and self
concept. All these factor affects people demand for the specific factor. MC Donald
identify the personal factors that are stimulating demand for the company product. Pn the
basis of that factor MC Donald done a marketing of its product. Hence, it can be said that
personal factors affects marketing activities of the firms
 Psychological: these are psychological behaviour that affects McDonald purchase
decision include motivation perception, learning, beliefs and attitudes. Firm do a deep
research on these factor and accordingly it customize its existing product. Due to this
reason, firm product is gaining wide acceptability across the world.
2.5 New positioning for a selected service or product of McDonald's
Product positioning is the process in which firm on the basis of speciality of the product
try to create its specific image among the general public.
Positioning of hamburger is done on the basis of demographic and behavioural.
Positioning is done demographically where market segmentation according to age, race,
religion, gender, family size, ethnicity, income, and education. Demographics can be segmented
into several markets to help an organization target its consumers. According to demographic
segmentation, McDonald keep their prices low to high for their burgers as different income
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groups can enjoy eating in the restaurant and can buy food according to their budget. Hence, it
can be said that firm is positioning its product on the basis of price.
TASK 3
3.1 How McDonald's products are developed in order to make sure that competitive advantage is
sustained
Competitive advantage refers to the factors related to the product which are acting as core
strength for same.
. MC Donald since its inception makes an attempt to develop core competency of its
product, Quality, price and way of preparation are three pillars that form a core competency of
the MC Donald product, these can also be termed as unique selling proposition.It has been
successful because of its cheap food. It has offered nutritional value while raising awareness
about health. In summation to this, it has expanded into different markets through the use of
innovative and creative strategies. Burger King has also been a major player in the fast food
industry. Its success is its ability to target niche markets in a proficient manner. McDonald’s
brand value and healthy food have provided high number of customer base. The trust of the
customers has made it on the best fast food chain in the world.
3.2 Explain distribution strategies used by McDonald’s
For product-oriented companies like McDonald, should establish the most befitting
distribution strategies (Hassan and Craft, 2012). MC Donald is following a franchisee model in
to ordfer to sell its product. Under this it open its own shop which is operated by the person who
is not employee of the MC Donald. Under this model the person who take franchisee of the firm
would exclusively sale product of MC Donald. Means that through franchisee of MC Donald
products of companies like KFC can not be sold. This strategy is appropriate for the firm because
by opening own store firm is creating its special image among the general public. Moreover, it is
able to widely doing advertising of its own product this model helps firm in creating its specific
brand identity, hence, it can be said that this distribution model helps firm in populaisizing itsa
product among general public. T
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3.3 Explain pricing strategies used by McDonald
McDonald uses Penetration pricing where the strategy is designed in such a way that the
company enters in the market to take market share. In the starting it keeps the price of the
product low to attract buyers (Dibb and Simkin, 2013). The idea is that the business will be able
to raise awareness and get people to try the new products. Even though penetration pricing may
initially create a loss for the McDonald, the hope is that it will promote word of moth marketing
among the people. For example: Prices for its extra-value meals like McVeggie and McChicken
were decreased. Typically a meal consists of burger, French fries and soft drinks. This strategy
was extremely great, as it came at a time when food prices were elevatingday by day. Hence,
firm maintain sale of its product even unemployment trate in UK were high.
3.4 Promotional activities of McDonald's
Promotional activities used by McDonald's through PR activities: It refers to the activities through which a firm come in contact with its end
customers. By implementing these activities firm provides a clear information about its
product to its target customers. In order to maintain relationship with public con continue
basis firm time to time launch new products and communicate about same through social
media. People comment on the company products image and through this MC Donald
comes to know about the features that people wants to see in the mentioned firm products
(Morgan, Katsikeas and Vorhies, 2012). Hence, it can be said that use of social media
promote conversation of MC Donald with the general public. Hence, it can be said that
such kind of promotional activities positively affects MC Donald sales. .
 Sales promotion- MC Donald time to time conduct sales promotion activities on its
restaurants. Under this conduct various kinds of programs in its restaurants. Sometimes it
offers toys to the small children who visit its restaurant for dinner. By doing this it creates
its distinct image in the heart of small children. By doing this it promote its product and
also increase footfalls from its target customer's on its restaurants. Hence, it can be said
that sales promotion is increasing sale of the MC Donald product.
3.5 Elements of the extended marketing mix
The Elements of the extended marketing mix are:
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 People – MC Donald understand importance of each and very custoemr and due to this
reason since its inception it is focusing on satisfying their needs (Yu and Cai, 2007). Due
to this reason it successfully create huge customer base across the globe. Thus, it can be
said that satisfaction of people needs on time is the basic reason behind company success.
 Processes –It refers to the way and time with in which product is served to the people,
visiting MC Donald restaurant. Company time to time innovate its service delivery
process in order to serve customers in short duration. This is the cornerstone of the firm
success in the competitive market.
 Physical Evidence – It refers to the physical things that are around customers when
they visit company restaurant. MC Donald is making available attractive tables, furniture,
utensils and decoration in its restaurant. This makes entire restaurant very attractive and
eye catching for the people. This play a great role in attracting footfall to its restaurant.
Thus, physical things are playing great role in attracting people on its restaurant,
TASK 4
4.1 Marketing mixes for two different segments in the consumer markets
Marketing mix of two different segments is as follows:
 Product - The hamburgers should be for both the type of consumer. They are different
income group and taste of the consumer. It should work and it should be what the
consumers are expecting to get.
 Place –MC Donald is using a franchisee model in order to sale its product. In future also
firm must open its new restaurants so that people by covering short distance easily get
MC Donald products.
 Price – The Product should always be seen as representing good value for money.MC
Donald understand this thing and it is made available quality products at reasonable price
(Wright, 2006). Due to this reason its products is consumed by the customer across the
world.
 Promotion – Advertising, PR, Sales Promotion, Personal Selling and, in more recent
times, Social Media are all key communication tools for an organization. Hence, firm
must use all these techniques for promoting its product in order to advertise its brand
name in efficient and effective manner.
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4.2 Differences in marketing products and services to business and consumers.
Differences in marketing products and services to business and consumers Business- These are those customer that are institutions and doing business. Normally,
business firms before purchasing any product do a thorough analysis of same, after
collecting detial information about the products they form a parameters. On the basis of
these parameters they make purchase decisions. It is a very difficult to persuade business
firms because they strongly stuck to their parameters for purchasing a product (Mason
and Harris, 2006). If product does not beat parameters then business firms does not make
purchase of such kind of products. Due to this buying behavior of the business firms it is
very difficult to persuade them.
 Consumers- These are those who make purchase products form the shops. Like business
consumers they also collects lots of information about the company product. But they
does not strictly stick to the determined parameters (Lin and Zhou, 2012). Due to this
reason it is very easy to persuade consumers in relation to sale of product.
 Hence, it can be said that marketing efforts made for business firms and
consumers are totally different from each other.
4.3 Difference between International marketing and domestic marketing Domestic marketing is
totally different from international marketing. This is because cultural and social factor very
from country to country. Due to difference in social and cultural factors people preference and
taste are also different from each other. Whatever, product is preferred in one country does not
necessarily be preferred in other nations. Marketing and product are closely related to each other
in case of MC Donald. This is because in marketing of product information about price an
quality is communicated to the people through specific channel of communication. With change
in product marketing of the product also get changed. Hence, MC Donald do marketing of its
products in different manner across the globe.
CONCLUSION
It can be concluded that the marketing principle help the company in evaluating
marketing process and it different elements. McDonald uses Intensive distribution strategy.
When McDonald is having a mass marketing product like hamburger that is loved by both adult
and kids, then it uses intensive distribution. It uses penetrating price strategy, the idea is that the
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business will be able to raise awareness and get people to try the new products. Even though
penetration pricing may initially create a loss for the McDonald, the hope is that it will help to
create awareness. Promotional activities like PR activities McDonald also can integrate other
marketing strategies. Moreover, marketing principles help McDonald in maintaining its brand
name.
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REFERENCES
Journals and Books
Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.
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Implementation. Cengage Learning EMEA.
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strategies. Marketing Intelligence and Planning. 29(5). pp.344 – 356.
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advantages. Industrial Management and Data Systems.112 (5).pp.729 – 747.
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and directions. Routledge.
Marshall, R., 2013. Guest Editorial: Cognitive mapping of strategy in marketing. Journal of
Business Research, 66(9), pp.1541-1543.
Mason,J.K. and Harris, C.L.,2006. Market orientation emphases: an exploration of macro, meso
and micro drivers. Marketing Intelligence and Planning. 24(6)pp.552 – 571.
Morgan, N.A., Katsikeas, C.S. and Vorhies, D.W., 2012. Export marketing strategy
implementation, export marketing capabilities, and export venture performance. Journal of
the Academy of Marketing Science, 40(2), pp.271-289.
Wright, R.,2006. Consumer Behaviour. Cengage Learning EMEA.
Yu, Y. and Cai, S., 2007.A new approach to customer targeting under conditions of information
shortage. Marketing Intelligence and Planning. 25(4). pp.343 – 359.
Online
Kokemuller, N., 2004. Advantages & Disadvantages of Having a Marketing Orientation in an
Organization. [Online]. Available through :<
http://yourbusiness.azcentral.com/advantages-disadvantages-having-marketing-
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