McDonald's Marketing Strategy Analysis

This assignment delves into the multifaceted marketing strategies employed by McDonald's, focusing on key elements like segmentation, targeting, and positioning. It examines how McDonald's adapts its approach to different markets and analyzes its global expansion strategy. A comprehensive PESTLE analysis is conducted to identify the macro-environmental factors influencing McDonald's operations. Furthermore, a case study provides a detailed examination of specific marketing initiatives undertaken by the company.

MARKETING PRINCIPLES
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TABLE OF CONTENTS
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Various elements of marketing process required...................................................................3
1.2 Evaluating the benefits and costs of marketing orientation...................................................4
2.1 Macro and micro environmental factors influencing marketing decisions............................5
2.2 Propose segmentation criteria................................................................................................8
2.5 Positioning for McDonald's...................................................................................................9
3.1 Development of the products or services to sustain competitive advantage.......................10
3.2 Explain how distribution is arranged to provide customer convenience.............................10
3.3 Explain how prices are set to reflect an organization’s objectives and market conditions. 10
3.4 Illustrate how promotional activity is integrated to achieve marketing objectives.............11
3.5analyse the additional elements of the extended marketing mix for the chosen company...11
4.2 Illustrate differences in marketing products and services to businesses rather than
consumers..................................................................................................................................12
4.3 Show how and why international marketing differs from domestic marketing and show
how you could implement a marketing strategy to market abroad............................................13
Conclusion.....................................................................................................................................13
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INTRODUCTION
Marketing principles are all about using a set of various processes that can be adopted by
firm for meeting up business needs as well as fulfilling consumer’s wants. It entails for
undertaking decisions related to selling its products, promotion strategies and advertising among
others (Cook, 2007). Therefore, the present report has given emphasis on M.C. Donald’s which
is one of the leading fast food chains of the world. The need of report is to have an understanding
about varied marketing concepts that are applied by Mc Donald’s. It will further lay emphasis on
segmentation, targeting and positioning followed by focusing on extended marketing mix and its
elements in the context of Mc Donald’s.
TASK 1
1.1 Various elements of marketing process required
Analysis of market and environment The need on part of Mc Donald’s is carrying out
marketing activities in the best possible manner; the
need is to ensure that there is a proper analysis of
the exiting environment (Deshpande and Rundle-
Thiele, 2011). In this regard, the need on part of
management team is to make use of strategic tools
in form of SWOT etc.
Identification of target market- Marketing activities can be carried out in the best
possible manner only when there is a proper
identification of target market. Hence, management
team at Mc Donald’s is required to analyze the
population as well as group of consumers that will
be targeted by it (Richards, 2015).
Setting marketing objectives Marketing activities can be the best only when
company formulates proper marketing objectives
(7Ps of Marketing, 2015). These can be related to
enhancing the overall product awareness, provision
of information as well as bringing a reduction in
consumer resistance.
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marketing mix This aspect gives emphasis on 7ps of marketing that
are needed to be taken into consideration by Mc
Donald’s while formulating its strategies.
1.2 Evaluating the benefits and costs of marketing orientation
Marketing orientation is that concept which gives emphasis on designing the products
and services as per the client’s needs. This is done by incorporating the element of product
functionality as well as efficiency in the overall business process.
benefits of marketing orientation costs of marketing orientation
Helps Mc Donald’s in providing customer
centric product and service offerings (Richards,
2015).
There will be an increased presence of
Investment in marketing research. This may
add its significant cost factor for Mc Donald’s.
It will provide Mc Donald’s with an increased
edge over competitors.
Technological infrastructure is likely to be
increased in the overall working of Mc
Donald’s
More Focused Production activities will be
undertaken by Mc Donald’s (Deshpande and
Rundle-Thiele, 2011).
Adopting the concept by Mc Donald’s may
require constant modifications in the processes.
This may enhance the overall need for training
(Brentari, Dancelli and Manisera, 2016).
There will be an increased likelihood of repeat
purchases and brand loyalty.
There may be a requirement to undertake
investment in new equipment usage as well as
product iterations.
There will be product improvements and
upgrades by Mc Donald’s as per the
consumer’s needs (Shen and Xiao, 2014).
Mc Donald’s is a segment that is facing high
competition. Hence, issue with respect to
marketing orientation can be in terms of
providing less return on the investments.
Role of employees will be defined more Mc Donald’s is further required to make use of
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clearly. strong technology and data tools. If, this is not
undertaken then this may inhibit the capacity of
manager to undertake business decisions.
Understanding of consumer needs will lead to
long-term profitability for the company (Paul
and Roy, 2014).
Company will further have a chance of less
product differentiation as it will have to spend
more time on interaction and market research
(Cook, 2007). Company will further not be
able to focus on finely tuning the features of
products.
Mc Donald’s will get less susceptible to
competition
Company may further face an issue with
respect to difficulties in carrying out advanced
product development strategies as well as the
related planning.
2.1 Macro and micro environmental factors influencing marketing decisions
Macro environmental factors
Political factors Stability of Government in UK is likely to
positively impact the working of Mc Donald’s.
Trade regulations of UK may impact overseas
operations undertaken by Mc Donald’s
(PESTLE analysis of Mc Donald's, 2016).
Tax rates are likely to impact operations.
Entry mode regulations in other nations may be
favorable or led to a decline in performance.
Economic factors Decline in disposable income and
household income has compelled Mc
Donald’s to bring change in its product
offerings (Jeon and et.al., 2015). With the
increase in product prices, customers tend
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to change their preferences in terms of
products offered by the company.
Social and cultural factors- Consumers of UK in the present times are
more health conscious which in turn resulting
in reaching more for organic food than the
processed one (Gayle and Luo, 2015). Mc
Donald's will have to bring modifications in its
product serving accordingly.
Technological factor Mc Donald has huge opportunity in the field of
research and development, business automation
and mobile devices (Richards, 2015). It can
implement these techniques for increasing its
effectiveness and efficiency.
Environmental factors- Opportunity for Mc Donald’s is rising interest
for the corporate environmental programs and
increasing importance on sustainable strategies
(Deshpande and Rundle-Thiele, 2011). But,
change in the climate is a threat for the
business as it has negative impact on the farms.
Legal factors Change in law works as a threat for the firm.
Business needs to adhere with many laws and
regulations such as labor and employment
laws, corporate law, tax requirements, etc.
Micro environmental factors
Consumers Changing needs and demands of consumers are
likely to put pressure on Mc Donald’s. This is
in terms of providing them products that are as
per their needs (Osman, Johns and Lugosi,
2014). These may include healthy food items
that are also value for money.
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Competitors Mc Donald’s competitor list is major inclusive
of Burger King, Wendy's Taco Bell and KFC.
Hence, company has to take care about the
strategies formulated by them so as to respond
clients in the best possible manner.
Suppliers Mc Donald’s has suppliers which are from
within as well as outside UK. For example,
beef is supplied from Scunthorpe whereas
onions are from America.
We have a number of different suppliers and
manufactures for all of our products. These
suppliers are from within the UK and around
the world (Brentari, Dancelli and Manisera,
2016). For instance, our beef patties are made
from 100% British as well as Irish Beef and are
made by our sole supplier in Scunthorpe
whereas we source our fresh onions from the
America.
SWOT Analysis
Strengths Weaknesses
 It has largest market share in the field
of fast food.
 It is in partnership with the best brands
of the world (Cook, 2007).
 Targets are children.
 Food menus are locally adapted.
 Unhealthy menu.
 Less number of differentiation.
 Negative publicity among the people.
Opportunities Threats
 Healthier food.
 Meal delivery at home (Deshpande and
 Fluctuations in currency.
 Increasing consciousness towards
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Rundle-Thiele, 2011). healthy food.
2.2 Propose segmentation criteria
Dividing a particular single market into the smaller segments is known as market
segmentation. McDonald's has divided the entire market into three segments which are described
below.
Demographic Segmentation: This segmentation includes kids, families and students. As
per it, company offers various ranges of products such as Happy Meal for the kids, different
outlets and meal for the families as well as provides sustainable environment for the students
(Richards, 2015).
Psychographic segmentation: This includes Convenience and lifestyle. As per this,
company offers food as per the culture and life style of nation such as in India, firm offers
vegetarian food due to high demand of it (Gerhardt, Hazen and Lewis, 2014). For there,
McDonald's came with different product line such as Mc Veggie burger and Mc Aloo Tikki
Burger. Similarly, for UK, firm also provides products as per its demand and social life.
Behavioral Segmentation: This segmentation is related to the occasions such as casual
parties, birthday parties, festivals, etc. It provides an environment for the parties along with the
products which are affordable for the customers to celebrate the parties of their children.
2.3 Target strategy in different markets for McDonald's
Targeting refers to the selection of targets and matching them with the suitable responses
regarding the operational requirements and many more. An appropriate target strategy for the
above stated three different segment market for McDonald's is multisegment marketing targeting
strategy. By this approach, company tries to meet the needs and expectations of each and every
market segment. The firm provides different products as per the different segments of market
(Deshpande and Rundle-Thiele, 2011). For example, for the market of India, firm prepares
burger from the lamb instead of beef due to the issues regarding religions. Happy Meal is
prepared by targeting children segment of the market. On the other hand, McDonald's offers
family value dinner box for targeting families (Cook, 2007). While, in case of young adults, firm
offered products named Arch Deluxe as hamburger but it failed to attract them. On the other
hand, breakfast and different categories of the food products such as burgers, French fries,
deserts are liked by the adults, school and college students etc.
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2.4 Buyer behavior affects marketing activities in different buying situations
There are four factors which affect the buying behavior of customers in different
situations which are as follows. Cultural Factors: This includes culture (festivals, values, etc), sub culture (nationality,
religion, etc) and social class (lower, middle and higher) of the customer. McDonald's
manages this factor properly by offering products as per the culture of specific country.
For example: McBaguette of France (having French baguette and Dijon mustard) and
Gurakoro of Japan (having macaroni grain and croquettes). Social Factor: In this, families, friends, neighbors and groups of individuals influence
their behavior while purchasing the products. With respect to the McDonald's, parents
does not like to eat fast food and due to this, they also prevent their children for not to eat
unhealthy food. Personal Factors: It involves age, lifestyle, personality, self-concept, etc. of the
customers which affect their buying behavior. People having high income as well as a
good and comfort living standard like to visit McDonald's for maintaining their status
(Richards, 2015).
 Psychological Factors: This factor includes motivation, perception, learning, etc. People
who are health conscious do not prefer fast foods and due to this, they do not like to visit
McDonald's.
2.5 Positioning for McDonald's
Positioning refers to the identification of suitable market niche for a product or service
and establishing it in that particular decided area. With the help of positioning, organizations are
able to express the benefits of products to their customers. McDonald's also uses positioning for
informing people about its products and for making a good brand image among them (Brentari,
Dancelli and Manisera, 2016).
For better positioning, firm can use price-quality approach for attracting people towards
its food items. As per this method, company needs to give quality and healthy food products to
the customers at affordable and reasonable price so that children, students and adults of each
class can buy it and enjoy its taste. With the help of this, McDonald's will able to create a
position among the people of all class (middle, lower and higher).
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3.1 Development of the products or services to sustain competitive advantage.
There is a huge and cut throat competition in each and every segment of the market. To
lead the market and to take competitive advantage, it is important for McDonald’s to use some
innovation, creativeness and fresh ideas while producing food items. The strong competitor of
McDonald's is Burger King and to take advantage of this competition, McDonald's uses various
strategies in the field of price, product, channel and image. With respect to the product
differentiation, McDonald's has more and large variety of products as compare to Burger King.
These products are fresh and innovative prepared for fulfilling the expectations of children and
young adults.
On the other hand, McDonald's has huge and wide coverage as well as easy convenience
(Deshpande and Rundle-Thiele, 2011). For Example: there are 218 branches in Hong Kong with
24 hour Delivery service. To maintain the leading position, it is essential to watch the strategies
and growth of competitors. McDonald's does the same and uses slogan “I'm loving it” for
influencing the independent, affordable and seeking trendy adults as well as teenagers. This helps
company in making a good and different image among the customers and in the market as
compare to Burger King.
3.2 Explain how distribution is arranged to provide customer convenience
Mc Donald’s has ensured towards overall customer convenience by making use of a good
distribution strategy. In this regard, it has opened outlets in those locations that are within the city
and can be easily approached by people (Brentari, Dancelli and Manisera, 2016). Various shops
are available in the malls etc. Mc Donald’s has also opened its outlets in more than one location
within the city premises. This will make sure that outlets are within easy reach of consumers
(Cook, 2007).
3.3 Explain how prices are set to reflect an organization’s objectives and market conditions
Prices set by Mc Donald’s are there to reflect the organization’s objectives. Hence, company has
priced itself in such a manner so that it can provide value for money to their consumers. This has
not only led to maximum sales but also generated to increase profit margins. Here, company can
further change its policies as per the market conditions. For example, if there is an increase in
competition, then there may be a need to focus on Competition pricing. Here, prices will be set in
tune with the competitors (Cook, 2007). In the same way, it can make use of Price penetration
strategy when it is making an entry into underdeveloped market. This can help in increasing the
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overall consumer base followed by enhancing market share in the nation. Once, it has achieved a
firm grip over the market then it can increase the prices.
3.4 Illustrate how promotional activity is integrated to achieve marketing objectives
Mc Donald’s still considers promotion to be a central part of marketing. In this regard, it
has made use of many promotional strategies so as to capture an increased consumer base and
garner their loyalty. It has thus made use of advertising technique where company ads are
presented regularly on television and newspapers. Flyers are also distributed to the public,
whenever there is a presence of special offer (Promotion, 2016). In the same way, Mc Donald's
has further got an increased presence on social networking sites such as Facebook where it
regularly shows its presence. Company has undertaken many endorsement activities so as to
communicate with the potential consumers in an effective manner. Other than that, Mc Donald’s
has also shown its presence on billboard and posters (Deshpande and Rundle-Thiele, 2011).
3.5analyse the additional elements of the extended marketing mix for the chosen company
People Company ensures to recruit the right kind of
people and also trains them regularity so that
they can handle consumers in the best possible
manner.
Process These are inclusive of handling consumer
complaints, providing them the best possible
services as well as ensuring quality in food and
beverage production (Cook, 2007).
Physical evidence Mc Donald’s has made its outlets user friendly
ones. IT makes use of vibrant colors so as to
attract more consumers. Employees are present
in the outlets so as to rake care of consumer’s
needs (Richards, 2015).
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TASK 2
4.1 Plan and recommend marketing mixes for the two different segments in consumer markets
Table 1: Marketing mix for two different segments in consumer market
/Marketing Mix Demographic segmentation Geographic segmentation
Product Mc Donald’s veggie wraps Mc Donald’s veggie wraps
Place Own outlets Own outlets
Price Low price Competitive pricing
Promotion Traditional methods Social Media and Internet
Marketing so as to enhance
consumer reach
4.2 Illustrate differences in marketing products and services to businesses rather than consumers
marketing products and services to businesses marketing products and services to consumers
Marketing practices are relationship driven. Marketing practices are product driven.
Brand identity is created on account of
building personal relationship with business
clients.
Brand identity is created with the help of
repetition and imagery (Brentari, Dancelli and
Manisera, 2016).
Buying decision of consumers is rationale that
is based on business value.
Buying decision of consumers is emotional and
happens on the basis of status, pricing and
desire to purchase a commodity.
4.3 Show how and why international marketing differs from domestic marketing and show how
you could implement a marketing strategy to market abroad.
international marketing domestic marketing
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There is lack of information about cultural
ethos which makes it difficult to carry out
marketing activities (Deshpande and Rundle-
Thiele, 2011).
There is availability of proper information
about cultures, norms and traditions that are
followed in country. Hence, it makes easy to
carry out marketing and promotional activities
by MC Donald’s.
High level of competition is faced while
carrying out marketing strategies (Difference
Between Domestic and International
Marketing, 2016)
Competition likely to be faced by Mc Donald’s
in domestic market is very low. This favors
marketing efforts carried out by company.
Marketing managers have to deal with
consumers that are diverse in beliefs, opinions,
traditions and practices.
Marketing managers have to usually deal with
only one set of consumers (Cook, 2007).
CONCLUSION
The area of marketing is crucial for Mc Donald’s for a long term sustainability of
business. This is with respect to immense competition in the area of fast food segment that is
faced by it. Hence, Mc Donald’s has ensured to adhere with all the marketing concepts as well as
practices. This has not only aided in attaining the stipulated business objectives but also assisted
in meeting up the consumer demand, thereby leading to their overall satisfaction.
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