McDonald's Marketing Strategy Analysis

This assignment requires a comprehensive analysis of McDonald's marketing strategy. Students must examine the company's approach to the four Ps (product, price, place, promotion) along with aspects like brand valuation and adaptation for global markets. The analysis should delve into McDonald's innovative practices, customer engagement strategies, and their impact on the fast-food industry.

Unit 2. Marketing Essentials
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1........................................................................................................................................3
LO1 Explain the role of marketing and how it interrelates with other functional units of an
organization..................................................................................................................................3
P1 Explain the key roles and responsibilities of marketing function...........................................3
P2 Explain how roles and responsibilities of marketing relate to the other organizational
context of McDonald’s.................................................................................................................6
TASK 2............................................................................................................................................8
LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives..............................................................................................8
P3 Compare the ways in which the chosen organisation applies the marketing mi to the
marketing planning process to achieve business objectives.........................................................8
TASK 3..........................................................................................................................................12
LO3 Develop and Evaluate a basic marketing plan...................................................................12
P4 Produce and evaluate a basic marketing plan for the chosen organisation...........................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
This study mainly focuses on the marketing essentials of McDonald’s. As a newly
appointed marketing manager of McDonald’s, the study will highlight a detailed marketing
analysis of McDonald’s. Primarily it will explain the roles of marketing and way it interrelates
with the other functional units of McDonald’s (McDonald's, 2016). The various roles and the
responsibilities of the marketing functions of McDonald’s will be observed and the relation of
these roles with the wider context of the organization will be analyzed.
Next it proceeds towards comparing the ways in which McDonald’s uses its various
elements of marketing mix to achieve the objectives and the goals of the business. It further
highlights the way McDonald’s makes effective use of the marketing mix to the various process
of marketing plan. Lastly, a detailed marketing plan has been developed for the development and
the evaluation of the entire marketing aspects of McDonald’s. the marketing plan will consist of
the various objectives of the company, the internal and the external factors, the segmentation,
targeting and positioning in order to identify the position of McDonald’s in terms of the products
its offers to its consumers (Luther, 2011).
TASK 1
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 marketing function
Marketing is associated with the exchanging of goods and the services. The goods are
brought at the place of consumption with the help of the marketing medium which helps to
satisfy the needs of the customers. The following are some of the roles and responsibilities of the
marketing functions of McDonald’s: Gathering and analysing the information of the market- the collection of the
information of market is extremely crucial for McDonald’s. It helps it to understand the
consumers thoroughly both internally as well as externally. When it comes to the
external aspect it considers the potential of the market, its does a close research of the
market and the tries to understand its various competitors. The internal aspect considers
the competencies of itself, the culture of the company and the passion or the leadership
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side of it (Theodosios, 2015). It helps to understand the various demands of the
consumers and the quantity which will satisfy them. Marketing planning- the marketer of McDonald’s chalks out a marketing plan to
achieve the objectives of the organization. For example, McDonald’s has 25% of market
share in terms of the Maharaja Chicken Burger. It further wants to raise the share to
40%. To fulfil this objective, the marketer is required to make a plan with respect to the
efforts of the promotion and production. The marketer itself will allocate separate
departments for specific section (Burrow, 2012). With the help of the marketing plan, the
various strengths, weaknesses, opportunities and the threats of McDonald’s will come to
light. Apart from the internal factors, the external factors will also be highlighted which
will make the company aware of the various pitfalls of it. With the help of the
segmentation and targeting, the specific groups and section of people will be targeted
whom the marketer thinks will purchase the product. As McDonald’s offers food so the
targeting of the appropriate people is extreme necessary. Designing and development of product- the designing of the product plays an important
role in the selling of the products. The company which offers better product will attract
more consumers as against the companies whose products are weak and unattractive.
The food products of McDonald’s are extremely appealing to the eyes which makes
customers crave them. In terms of its product line, the competitors are far behind
McDonald’s. It can be stated that the possession of special product provides McDonald’s
with competitive advantage (McDaniel, et al., 2011). It is also important to understand
that only a design or the special ingredients of the products of McDonald’s is enough, it
is required to develop from time to time. Grading and standardization- The term standardization refers to the determining of the
standard size, the quality, design and the ingredients that are used to make a product. By
the virtue of this, the products acquire some peculiarities (Kai, 2015). In terms of the
products of McDonald’s, the customers want the best quality food. Grading is mainly
used in terms of food products to make the sale purchase easy and convenient. The
products which has acquired ‘A’ grade will be more in demand than the ones which has
been graded as ‘B’ or ‘C’.
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 Packaging and labelling- Packaging aims to avoid damage and destruction of the
product during the time when it is stored to delivered (Kirwan and Coles, 2011). The
facilities of packaging involve handling, lifting and the conveying of the goods. In terms
of packaging the food, it requires special attention for McDonald’s. The materials of
packaging for McDonald’s include plastic boxes, bottles and plastic bags. With the help
of the label, McDonald’s provides all the information of the product that has been
packed along with the name of the producer. This information can either be in the form
of a seal or a cover. Branding- it is desired by every producer and seller to give its products a special and a
unique identity in the market (Harfouche, et al., 2016). In order to do this, McDonald’s
gives special names to its different products in order to differentiate it from the other
competitors. For example, the Big Mac. The giving of special and different names to the
product line of McDonald’s is called branding (Alihodzic, 2013). The main objective of
branding showcases that the products of McDonald’s is different from that of KFC or
Burger King. Customer support service- the customers are the asset of McDonald’s. One of the main
functions of marketer is the offering of every possible support to the customers. The
marketer of McDonald’s offers certain services to the customers which includes the
after-sale services, the handling of the complaints of the customers, the technical
services and the maintenance services (Fill, 2011). The help that is meted out to the
customers offers them with satisfaction which is of the topmost priority in today’s
competitive age (VASUDEVAN, 2014). Promotion- By the term promotion, it can be referred to as informing the consumers
about the various products which McDonald’s is encouraging the customers to purchase.
There are several methods of promotion like advertising, sales promotion and publicity.
These days the social media has taken an active part in terms of promoting the products
of McDonald’s (Cox, 2014). All these roles and responsibilities lies with the marketer
where the decisions are taken keeping in mind the budget of the company. Pricing of the products- one of the most important functions of the marketing manager
lies in fixing an appropriate of the products. The price of all the products of McDonald’s
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are affected by the rate of profit associated with it, its cost and the price of the competing
product (Wirtz, 2012). The pricing of the products has been kept by McDonald’s in such
a manner to appear as expensive for the customers to buy them but it should also keep in
mind that enough profit is earned in return.
 Transportation- the production, its sale and the consumption of it should never be done
in the same place. The physical distribution and the transportation of the products will
thereby become irrelevant. All the three aspects should be carried in three different
places. In terms of the home delivery service of McDonald’s, the transportation facility
should be smooth in order to make the products reach the customers within the specified
time. The utility of place is created by the activities of transportation.
P2 Explain how roles and responsibilities of marketing relate to the other organizational context
of McDonald’s
The marketing roles are directly associated with the other organizational context of
McDonald’s. In terms of the gathering and the analysis of the market information, it is extremely
important to understand the needs and the requirements of the consumers to act accordingly and
provide products to them. When the consumers derive product according to their choice they are
more likely to purchase thereby leading to the profit of McDonald’s. a marketing plan is related
to the other aspects of the company as it outlines the various strengths, weaknesses, the
opportunities and the threats which enables McDonald’s to act more towards the strengths and
stress less on its weaknesses.
Marketing plays an very crucial role in success of the organisation, it is interrelated with the
other department of the organisation also. In McDonald's, its marketing activities are connected
with another departments such as finance department, R&D department and operational
department. The role of marketing activities in different departments is as follows: -
 In finance department marketing activities impact on organisational growth and success.
If company is able to achieve its target market so as it can easily attracts investors and
capitalist. and Along with this, the if price of the product are downs in market and it is
not effective so that it raises down the fund of the organisation. Its financial and capital
activities are influence due to the low range range.
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 In research and development department, marketing activities forces managers for more
research about customers needs and wants. If company is capable to produces product
according to the market needs so as it is capable to achieve its goals and aims. On the
other hand, if the products is not research based so that it is not able to attract the
customers. Marketing managers have to communicate with research department in order
to know the customers needs and demands and produces product accordingly. It will give
more customers satisfaction and grow up the brand image of McDonald's.
 Marketing activities also plays an essential role in operational department. So as with the
help of marketing research, managers are enable to understands the customer's needs and
wants. Then it forces operational department to produce accordingly. This will also helps
in to providing quality products to the customers.
The designing of the products helps to attract the customers towards the product. The
branding helps the company to different itself from the other competitors. It enables the
customers to distinguish McDonald’s from the other companies in terms of its product line which
leads to greater success of the company. The branding of McDonald’s makes itself stands out
from the other brands that serves similar products. With the help of suitable customer service, it
tries to build a good reputation in front of the customers which further builds a good reputation.
M1
Marketing plays an essential role in for every business organisation. It helps to set
strategics and polices that are helpful to develop the productivity and efficiency of employees. It
is also helpful in order to the promotion, advertisement and substance of the products and
services of the organisation. Marketing is helpful to know the customer needs and to make
product reachable in every sector of the society so that everyone can use at. Its aim is to produce
good quality products at minimum range so that the lower section of the society is also able to
live standard lifestyle.
M2
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There is a very flexible relationship of marketing with other departments of the
organisation, such as finance department, research & development department, HR department
and operational de[department. The success of all those sections is based uopn the success of
marketing department. In finance department, marketing supports investments decisions and also
helpful in the forecasting of sales. Along with this, managers can evaluate their capital growth. In
production/operational department marketing assist the overall production in order to produce
good quality products that can meet customers desires. It also analyse the number and the kinds
of product to be produce. In R&D department marketing is helpful to know the most lekily
products and that can be more marketable. It is also helpful in understands the what types of
features consumers would like to have.
D1
In McDonald, there are so many key elements that affects its interrelationship from other
departments. Such as product, place, promotion, prices, physical evidence, process and people.
Place and prices effect on financial department, if the product cannot get a right place so that it
cannot be succeed in market and sales revenue of MC'Donalds wil goes very low so as company
cannot accomplishes it financial targets. Promotion and physical evidence impact on R&D in
order to get more knowldege about customer's choices and their demands. Due to this, if
company is not capaable to produce according to customer's wants so that they are not prefer to
purchase anything form that company, this will impact on organisational image in overall
external market.
TASK 2
LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives
P3 Compare the ways in which the chosen organisation applies the marketing mix to the
marketing planning process to achieve business objectives
One of the main features of the Marketing Mix that has been developed by McDonalds is
hugely crucial with respect to the globalization strategies that are being implemented by the
company. It needs to be observed that the techniques employed at one place would not be
sufficient for the company to follow at other places. However, the aspects of globalization need
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to be considered with respect to the various standardized procedures that are required to be
followed with respect to developing an effective brand image.
There is no doubt that McDonalds is a hugely successful name in the global market with
presence all over the world. Considering these aspects, what needs to be considered is the fact
that the large companies should not view their international operations as being separate from
their national or local operations. Subsequently it has been noted that various multinational
companies find it crucial to adjust their marketing strategies to develop local policies in order to
sell or distribute their products. Certainly, the marketing mix also needs to be adjusted in order to
fit the needs and demands of the local market. As such the idea of marketing mix is generally
seen to be attributed to McCarthy who in 1975 came up with the view that the role of the
marketers is analogous to that of mixers who need to adjust the right ingredients to achieve
success in the marketplace as also attain a differential position in the same. He developed the 4Ps
as the basic ingredients like product, price, promotion and place to be the basic ingredients that
should be mixed to gain the perfect strategy in the market.
The principal plans have been as such developed based on these 4Ps which have later
been expanded to include another 3Ps to get a comprehensive view of the overall market. These
later additions are generally considered to the service aspects of the marketing department which
are as much important for the company to be considered as other core marketing elements. For
McDonalds, therefore, the 7Ps would be considered and compared with Burger King to gain an
analytical idea of how the two companies have been employing the marketing mix strategy in
order to gain benefits in the market (Yeu, et al., 2012).
Product
The basic product for McDonalds has been the same, no matter where the company has
tried to expand its base. The standardization process has been effective for the company in
creating a global brand name that can be easily recognized by millions across the world.
However, in keeping with the adaptation and globalization strategies, the company has also been
successful in responding to the local needs of the specific countries. Like in countries which
favour kosher products, the cheese and meat burgers are served separately. Also, in countries like
India where vegetarian dishes are hugely popular, the company has introduced the veggie
McNuggets, simultaneously with the Mutton burger because there are not enough beef
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consumers in the country. Similarly, in countries with most Muslim population, the pork meat
products have been called off the menu (Haynes, 2016).
McDonald's have to increases it product qualities and services so as it can attracts
customer's clients. For that it should have to supplying more quality products than Burger King,
so as they can chive their target markets and goals as well.
Not only the additions and subtractions in the menu, but the company has also tried to
incorporate local flavours and tastes within its traditional menu products like experimenting with
sauces and beverages. Japan and Italy are respectively the countries where Teriyaki sauce based
products have been introduced and espresso beverages have been added. A similar strategy is
followed by Burger King as well. In entering countries like India, it has paid special attention to
its menus and tried to adapt the same accordingly as per the local tastes and religious sentiments
of the population. Another important aspect of the company is probably its increased concern
about the health aspects of the consumers that can be seen in the Healthier Kids Club.
Price
McDonalds follows an effective localised pricing strategy to understand the buying
capacity of the market consumers and also with regards to the buying capacity of the target
market. Also, the standardised products like the Big Mac are marketed at such adjusted price
points that reflect the market conditions of the company at regions. McDonald's has to manages
its pricing strategics therefore it can more customers prefer to choose its products. It always
have to providing attractive offers so as customers can easily attracts. The prices should be
always based upon the numbers of customers so as there is balanced between demand and
product.
Burger King has been noted to follow a competitive pricing strategy to respond to the
competition in the market as also evaluate the various pricing policies in the particular countries.
In this regard the company has been noted to employ a strategic marketing analytic whose job is
to review the various price points and determine the best price in comparison to the global
customers.
Place
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McDonalds presently operates at more than 119 countries with over 35000 restaurants
worldwide. The company has been successful based on its aggressive marketing expansion
strategy that has helped it to set up its operations in the most successful locations and
neighbourhoods like the airports or the colleges. Generally, it has been seen that the fast food
restaurants tend to cluster together in the same neighbourhood (Rad, et al., 2014). Company has
to choose that place there has more rush so as it is easier to extends McDonald's products and
services. It also have to developing its strategics and policies in order to enchanting of product,
so a sit can easily compete with Burger King's product in capital market.
Burger King has been operational in nearly a hundred countries with around 13000
restaurants. Around 66% of the restaurants are based in the US with international operations
based in all over the world. The company has segmented its operations into three main segments
including subsidiaries, alliances and expansion stores. The franchising option has been hugely
successful for the company as well. The company generally selects its franchisees on several
criteria including their compatibility to the local set-up and the environmental needs. Also, the
distribution and the franchising work together in the development of the outlets.
Promotion
McDonalds employs a differential promotional strategy to understand the sensitivity
issues as also to identify the communication strategies that would be able to affect the motivation
among the consumers. The company has also been successful in associating its name with major
events including the NFL and Olympics to gather mass attention (Coursaris, et al., 2014).
Burger King hugely relies of celebrity brand endorsements for its products. Also, what
has worked for the company is the revealing the humane side of the company through the
development of such charitable organisations like “Have it your way” and “McLamore
Foundation” (Mifsud, et al., 2014). McDonald's has to develops it promotional activities by
organising events, seminars, workshops and sales advertisements so that customers can aware
about product and services. It also have to create att5ractive posters and paqmplates that are able
to compete with burger king,
Process
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The process of McDonalds is similar across the globe with standardised techniques being
used for all the outlets. Generally, it can be noted that the specifications are like the core business
and company strategies. Also, the layout of the outlets and the kitchen are like one another. To
cater and address the differences in the language across the globe, differences can be noted in the
menus as well. Service delivery times are also maintained across the outlets. McDonald's also
has to developing its proces sof prodcutions and manufacturing so as customers can gain fastly
services. It also have to focus on onl;ine bsuienss and home delivery option.
Burger King also has a similar strategy with standardised operating procedures. Market
research is conducted in order to understand the packaging and food safety regulations in
particular countries as well. Emphasis is being laid on the effective manufacturing process as
also on the developments in terms of the licenses that are required to be adhered to (Kirby,
2012).
Physical Evidence
The standardisation process is also evident in the physical aspect of the McDonalds
stores. All the stores are family themed restaurants with some of the larger outlets having play
areas for children. The structure and design of the menus are also same with children meals
being served with company toys. Burger King Outlets are generally maintained at the optimum
hygiene level with all the staff members portraying the common company standards. The stores
are generally maintained by the staffs that have been trained on the company policies.
People
McDonalds generally hire local people for the separate restaurants to understand the local
cultures and streamline the corporate philosophy of the company. The standardised procedures
are implemented in order to streamline the operations of the outlets as also the service delivery of
the products. The Burger King Outlets are run by the Restaurant Managers who head the
interaction and the communication process of the outlets. The delivery staffs are also involved in
maintaining the service policies and standards of the restaurants.
M3
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If company, MC'Donalds really wants to achieve its goals and objects so that it have to
develop its strategics and polices towards development of the business organisation. These
strategics and policies decides a criteria in order to accomplishment of missions and visions.
Marketing plan is a written statement that have all the details about marketing objectives and
goals. It involves a brand and a product line by which organisations set their forthcoming
outcomes. Business strategics also assistive in finding out the optimum solutions of issues and
problems because they have already idea about forthcoming problems and challenges. A solid
marketing strategy is helpful in evaluate the internal and external factors of the business, they
impact on individual's performance so as it also provides many attractive offers to the employees
towards improves their efficiency and productivity.
TASK 3
LO3 Develop and Evaluate a basic marketing plan
P4 Produce and evaluate a basic marketing plan for the chosen organisation Executive Summary :- The following marketing plan has been prepared in order with a
view to provide a brief analysis of the marketing situation and the market scenario now.
McDonalds is a hugely reputable company and has appropriate marketing plans that
follow globalisation policies. In this regard, it is important to consider the various aspects
of present day marketing and understand how the external and internal environmental
factors can impact the changes for the company. Market Scenario Presently the fast food sector is one of the most profitable around the
globe and one of the rapidly growing in the market. Some of the most served items
include fast food items including burgers, sandwiches and snacks including the Mexican
food. The industry has been noted to generate around 199 billion dollars in the US in
2014, which has been estimated to grow to 223 billion by the end of 2020. McDonalds
has been noted to be the most well-known among the quick service restaurants in the
sector with the company being recognised as the most valuable brand in the world in the
fast food category in 2015. However, there have been customer satisfaction issues that
need to be addressed by the company in order to gain more market share in the coming
years (statista, 2014).
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 Competitive environment: - The main competitors of McDonalds are other multinational
chains that have been contending in the fast food sector as well. Burger King, Wendy’s
and Starbucks are some of the most significant competitors in the US with KFC being the
largest competitor if considered on a global scale. As such the fast food market, can also
be seen to be hugely fragmented considering various local shops that can prove to be
detrimental to the success of the company soon. The range of products offered by these
multinational fast food chains is similar and hence, it is important to gain market
differentiation to retain the market share in the rapidly evolving scenario (Samson &
Sheela, 2016). The promotional offers that are being launched by the competitors are also
quite similar because of the integration of technological advancements which have been
noted to be successful in reaching a wider customer base. In this regard, it would be
necessary to develop such strategies that consider the aspects of franchisees and how the
success can be retained. Consumer trends: -Consumer trends can be noted to be favourable for the fast food
industry even though because of the health consciousness issues, a large chunk of
population is more likely to choose food options that are healthy and light (Kanagal,
2015). Chicken has been noted to be one of the trendiest as well as the most favoured
ingredient in snacking because of both its universal taste and the lean protein that it
provides as against other either costlier or fatty varieties. Since, the main ingredient in
McDonalds is chicken, there is advantage in retaining the customers; however, it would
be important to consider adding variations in the menu to attract more customers. Segmentation, positioning and targeting: -In terms of segmentation, positioning and
targeting McDonalds follow an effective marketing and communication strategy. The
segmentation aspect of the marketing plan can be noted in the division of the single
market into several smaller components or segments. The major segment of McDonalds
is the family wherein children and adults can share their happy meal at the same time
(Schlegelmilch, 2016). The positioning is largely based on creating the image that can
help in developing a broader market for the products. The image that has been created by
McDonalds is hugely reliant on the family theme (Gerhardt, et al., 2014). Also, the
company has been effective in creating a trendy image to cater to the youths and the
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young adults. Considering the positioning aspect of the marketing strategy the company
has also developed an effective targeting policy that hugely deals with developing
interactive and engaging promotions to target the intended customers. The toys help
attracts the children in the families and the recent promotions with sustainability
messages have been effective in attracting the younger generation.
SWOT Analysis
The strengths of the company lie in the brand name and equity. It is a global company
with operations all over the world. Also, the fast food industry is growing at a rapid pace with
more and more consumers looking for convenient snacking options. The balance sheet of the
company is also a huge plus for the company
The main weakness of McDonalds lies in the fragmentation of the industry and the
development of franchises. It has been noted that because of the standardised global operations,
some of the promotions like the all-day breakfast have failed to gain much market interest. The
revenue and income growth has also been slack for the company as well.
In terms of opportunities, integration of technology can be profitable for the company in
the long run. Also, it would be important to respond to the changing consumer needs in terms of
the healthy eating options as also develop customer relationship management systems to retain
the customers.
The major threat for McDonalds is probably the huge brand names in the competition.
The maturity of the industry is also a threat for the company. Furthermore, considering the global
reach of the company the changes in the exchange rates and the different price points at different
locations can prove to be harmful.
Conclusion
The above marketing plan provides a brief understanding of the present marketing
scenario for McDonalds considering its various marketing strategies and understanding the
strengths, weaknesses, opportunities and threats for the company in the present situation.
Activities/ weeks 1 2 3 4 5 6 7 8 9 10
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Executive summary
Target customer
Unique selling Propositions
Priding and positioning strategics
Distribution plan
M4
An effective marketing plan is the key factors of success for every business organisation.
It provides strength and power to the organisation in order to determining company's goals and
objective. The plan should be able to identifies the customers needs and it also involves optimum
utilization of available resources. The marketing plan is as follows:- set objectives, identifies the
factors & resources, evaluate risk, develop marketing startegy and implement the plan among
marketing department. Following plan should be able to clearly find out internal and external
factors, gives relevant solutions in order to reduces the impact of them. Marketing plan makes
product more marketable, effectively and flexible among all over customers.
D2
An impressive strategic marketing plan impact on the 7P's of marketing mix. It is helpful
in defining the overall directions an objectives of marketing by satisfying the customers through
products and services. Marketing mix tactics helps to turn the marketing plan in reality. It
provides the full details about product typology and the ingredients that are involve in
manufacturing process, it also gives value or price to the products. These 7P's helps to gives
promotion and develop the shape or image of the MC'Donalds in terms of sales revenue as well
as increasing the turnover of the company also.
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CONCLUSION
The above report has been prepared with a view to understand the essentials of
marketing. In this regard the various issues and elements of the marketing function have been
noted and related to the larger organisational scope. Lastly, the marketing environment and
marketing analysis have been understood in relation to the marketing mix and marketing plan of
McDonalds.
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