Marketing Essentials: McDonald's Report on Strategies and Analysis

This report provides a detailed analysis of McDonald's marketing strategies. It begins with an introduction to marketing concepts, including definitions, functions, and current and future trends such as mobile marketing, online performance marketing, and AI marketing. The report outlines the marketing process, emphasizing situation analysis, strategy development, marketing mix decisions, and implementation. It then explores the interrelation of marketing with other departments like finance, HR, and operations, highlighting the importance of marketing roles and responsibilities. A significant portion of the report focuses on a marketing-mix comparison between McDonald's and Starbucks, using the 7Ps framework to evaluate product, place, promotion, price, process, physical evidence, and people. The report also includes a SWOT analysis of McDonald's, and concludes by emphasizing the vital role of marketing in achieving business goals and maintaining competitiveness, particularly in the fast-food industry. The report is a comprehensive overview of McDonald's marketing operations and offers valuable insights into the company's strategies and market position.

Marketing Essentials
Table of Contents

INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
1.1 Definition and functions of marketing.............................................................................1
1.2 Interrelation of marketing with other functional departments of the organisation...........3
LO 2.................................................................................................................................................5
2.1 Marketing-mix comparison between competitors............................................................5
LO 3.................................................................................................................................................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing is the social and management procedure which company uses for creating
values for the consumers and try to build strong relationship with customers. They use it for
achieving the value and goodwill from their customers.
The famous American fast food company which was founded in 1940 by Richard and
Maurice McDonald in San Bernardino, California is known as McDonald's. It is the world
largest restaurant chain. This study shows the marking concept, current and future trends of
marketing (Ang and Rusli, 2018). It shows the marketing process which marketing assistant
manager needs to follow for achievement the team goals.
This report also shows the interrelationship of marketing with other functional
departments and the importance of roles and responsibilities of marketing manager. The SWOT
of McDonald's shows its strength, weakness, threat and opportunities which provides manager
some information regarding customers’ needs and purchasing patterns. The 7Ps of marketing
helps organisation for attracting more customers and make them able to be being in competition.
LO 1
1.1 Definition and functions of marketing
Marketing concept refers the strategy which organisation uses to fulfil customer’s needs,
increase sales and maximize profit and productivity for competition.
There are mainly five main concepts of marketing such are: marketing concept and
societal marketing concept, production and product concept. McDonald's concept of production
is to make the product which is available and highly affordable for the customers (Armstrong
and et.al., 2015). The product concept defines those products which has good in quality and
performance and innovation features. Selling concept defines the selling and promotion efforts
for motivating customers to buy and consume the products of company. The marketing concept
is generally customer centred like requires focussing on customers need and value. The societal
marketing concept is the strategy in which manager of McDonald focus on way in which it
delivers and provide facilities to customers which can help to maintain and improve the
customers and society.
There are some current and future marketing trends: mobile marketing, online performance
marketing, social media marketing, internet video advertisement and text media advertisement.

Mobile marketing- It is a multi-channel digital marketing strategy that is used to reach
targeted audience on their smart phones, and other mobile devices via E-mail and websites. It is a
current trend which McDonald is using for facilitates customers as they spend their most of the
time on mobiles so it becomes helpful to the company.
Online performance marketing- Performance based marketing is a method and online
marketing strategy in which customers pay only for the result oriented by them not for the
strategy itself. It enables the marketer of McDonald to promote a product or service on other
people's websites. It is also present marketing trend which they use.
Artificial intelligence marketing- It is the future trend of marketing. It is the data driven
marketing strategy that enables marketers to create highly personalized consumer experiences.
There are some ways and area which marketer should focus like more intelligent searches, these
searches pattern help marketer to identify the areas that they need to focus their effort.
Marketing processes defines the ways which helps assistant of marketing manager to
create value for the customers to satisfy their requirements. There are some steps which are
included in the marketing process:
Situation analysis- Situation analysis can be done by identify the marketing option, by
understanding the firm's own capabilities and by understanding the environment in which the
company wants to operate.
Marketing strategy- In this step, assistant of marketing manager develops a strategic
plan to pursue the identified option. Manager chooses the best available option and then a
strategy is made for that option (Ang and Rusli, 2018).
Marketing mix decisions- In this step, manager of McDonald's take the decision which
is related to product pricing, development and product promotion for the controllable parameters
of the marketing mix.
Implementation and control- It is the final step of marketing process in which the
marketing plan is executed to see the effectivity and the necessary changes are done in plan or
marketing efforts.
Functions and responsibility of marketing
The responsibility of marketing manager is to develop a personality for McDonald's as a
brand. There are some roles which McDonald's assistant manager follows that are: market

research, develop pricing and marketing strategies, customer relationship and employee
management and identify new business opportunities.
Marketing research- Marketing research makes enables manager to identify new market
chance. It shows manager about organisation competitors to develop superior products.
Marketing research can be done by using questionnaires, oral interview and by analysing the
feedback.
Developing the marketing strategy- The main responsibility of marketing manager is to
develop marketing strategies for their organisation. It shows the ways to manger to promote
their products and services to its target markets. The aim of making this strategy is to increase
the sales volume (Simkin, 2016).
Customer relationship and employee management- It is also the function and
responsibility of marketing manager is to perform periodic performance evaluation of the staff
that are working for them. For management the customer relationship, manager of McDonald
collects the information related to customers’ needs through face to face interview and then try to
fulfil their all the needs.
New business opportunities- For identifying new business opportunities for its products
and services, manager analyse the current market trends that helps them in kn owing the needs
and requirements and purchasing pattern of the customers.
1.2 Interrelation of marketing with other functional departments of the organisation
The various departments in McDonald's are finance, marketing, human resources and operations.
Marketing and production department- The main function of production department is
to create new products, manage the quality of products. The function of marketing is to
concentrate on customers’ needs and satisfying customers. So marketing function is interrelated
to production function because without knowing the customer’s needs, production department
wont be able to make the products. It impacts in positive way as it helps them to increase profits
and fulfil customer’s needs (Tuten and Solomon, 2017).
Marketing and HR department- The marketing department of McDonald's require to
work with the HRM to achieve the production target by analysing the proper information related
to products and for research and development new product ideas.
Marketing and finance department- Finance department is responsible for revenues,
profit and expenses, on the other hand marketing is responsible for helping the organisation in

acquiring and keep profitable customers and therefore its fictions directly relates to cash flow.
For doing the marketing activities it requires the cash and money which interrelated to finance
department.
Marketing with sales- Sales department maintains healthy relations with customers and
marketing helps organisation in order to enhance sales of the company.
value and importance of marketing role
Marketing plays a vital role for a successful business and marketing department of
McDonald's do all the activities for developing business. By establishing the relationship
between customers and the organisation it offers the market (Baker, 2016). There are some
benefits of marketing to the organisation:
Increase awareness- Marketing manager try to increase the awareness amongst the
customers about products and services of organisation. By doing this it builds an audience of
potential customers which helps organisation in making profits.
Increase sales of the company- For increasing the sales of the McDonald's, the tool of
marketing plays very important role. By improving interest of the consumer's through providing
the better information like benefits related to the goods and services and by providing it at the
reasonable price.
Conclusion of effective interrelationship between functional departments
The marketing department is responsible and important for the success of McDonald's. It
includes various functions like research and development, improving the ways to present
products to customers and fulfil the needs of customers.
The main objective of marketing department is to influence and attract the customers
towards the business. For achieving this goal, company supports this other functional
departments of organisation that are inter-relates with the marketing. Achieving the team goals
they require working together. The interrelationship of marketing with other functional
departments helps McDonald's in achieving the goals, maximize the sales and keep company
competitive in the market (Steenkamp, 2017).
Marketing department and the functions of marketing is responsible for every functions
within the firm. Functional co-ordination is particularly important because in focuses on the
involvement of all levels in the firm's organisation. Marketing supports the sales function by

providing the data and information of target market. By providing the materials that sales
department needs to increases their sales.
Marketing department works also with the legal department to ensure that all the sales
and marketing is done by keeping the all factors and law in mind. It collaborates with the
distribution department also to make and avail the products to the point of purchase which can
help customers to buy them.
LO 2
2.1 Marketing-mix comparison between competitors
Marketing mix of McDonald's corporation relate different approaching that help them to
meet business concerns and objectives in different fast food restaurant markets around the world.
It defines all the strategies which company uses to meet its existing as well as new customers. It
includes products, price, promotion, people etc. (Bahadir, Bharadwaj and Srivastava, 2015).

Seven P's of marketing McDonald's Starbucks
Product McDonald's product mix has
the various products like
Hamburgers and sandwiches,
There are some categories of
Starbucks products like:
Coffee, tea, pastries,
Illustration 1: Marketing Essential
Sources: (Marketing mix, 2015)

salads, Beverages, chicken and
fish, dessert and shakes.
smoothies and Merchandise.
Place There are some places through
which it distributes its
products such as: Restaurants,
kiosks, McDonald's mobile
app, post mates websites and
apps.
There are various places
which Starbucks uses for the
distribution of products:
Cafes, online stores,
Starbucks App and retailers.
Promotion McDonald's uses some ways
and tactics in its promotional
mix that are: Advertising, sales
promotion, public relation and
direct marketing (Karjaluoto,
Mustonen and Ulkuniemi,
2015).
Starbucks promotional mix
are as follows: Advertising,
public relation and sales
promotion.
Price It uses some pricing strategies
like bundle pricing strategy
and psychological pricing
strategy.
It uses premium pricing
strategy.
Process The food manufacturing
process at McDonald's is
completely transparent, the
whole process is visible to the
customers.
It does it best to improve the
process of giving services to
its customers. Quality of
service and quality of coffee
are the key aspect of
Starbucks.

Physical Evidence It focuses on clean and
hygiene interiors and at the
same time the interiors are
attractive. It maintains a proper
decorum.
It is not limited to its store
designs, logo, coffee cups
and napkins but also it
offers customers an inviting
atmosphere.
People McDonald's specially focuses
on friendly and prompt
services to its customers from
their employees.
It is a customer centric
company as it focus on the
customers. It treats their
customers with respect and
dignity.
This 7Ps help McDonald's in achieving their goals as their good satisfy the customers by
fulfilling the all demands and needs. For instance, McDonald's corporation promotion strategies
lain emphasises on media in those countries where such media are most important and uses. It
uses the best strategies that help in achieving the target customers and team goals to grow the
multinational chain business.
The product strategy of company accent on the quality of the product. The company
satisfies market demand and improves its revenues by improving its various products line. These
elements of marketing mix shows company's innovation of new products to attract
In the marketing mix, place strategy of McDonald's focus on the location. Most of the
McDonald's restaurants are where, the company generates most of its sales revenues. It locates
restaurants in those areas, where customers can access information about the company's products
and buy these products.
In order to publicity, strategy focusing on marketing communicating with new and
existing customers. For instance, McDonald's provides information and attract to target
consumers to purchase new products. It uses sales promotions also for attracting the more
customers to the company's restaurants. For instance, company provides discount coupons for
products and product bundles for attracting more customers (Oelze and et.al., 2016). Public
relation activities or relationship with customers of company also help in promoting the business
to the target market through goodwill.

In the pricing strategy, it specifies the pricing points and the amount of the company's
food products. The main aim of company to use this strategy is to maximize net profit and sales.
In this strategy it offers those products bundles to customers which are discounted, compared to
purchasing each food product separately. It helps in encouraging customers to purchase the
company's products based on affordability.
LO 3
Marketing plan
It is a part of business plan. McDonald's uses effective management strategies to enter
into new markets (Fine, 2017). It wants to promote its new products as it makes biscuits. It uses
the best strategy for promoting its new product.
Vision of marketing plan
 To provide outstanding quality, service and value to customers about new product.
 To enhance consumer experience.
1 Objectives of company
 To achieve sales target as most as possible by selling their new product.
 To provide the best quality which helps to gain trust among consumers.
 To become the favourite of target customers.
Business Model- The three types of business models are:
Franchise Model- Only 15% of the total number of restaurants are owned by the
company. The remaining 85% is operated by franchises. It follows a comprehensive training and
monitoring of its franchises to ensure them that it focuses on and believe to the quality, service
and value propositions offered by the company to its customers (Hijazi and et.al., 2016).
Product consistency- The company has been able to achieve consistent product taste and
quality across the geographies by developing a supplier network operation and distribution
system. Now it also wants to develop its new product.
Act like a retailer and think like a brand- It not only focuses on delivering products
and the sales but also focus on protecting its long term brand reputation in market.
2 SWOT of McDonald's
Strength Weakness

 It is a well-known brand in fast food
industry.
 It has strong position domestically
and globally.
 McDonald's is financially very
strong.
 It focuses on marketing and
customer engagement so it has
strong relationship with customers.
 It has the weakness of lack of
innovation.
 It has the menu in which products are in
heavy calorie.
 It has limited process flexibility.
Opportunity Threat
 It is the opportunity for McDonald's
is that it wants to expand its
business in Asian markets.
 It has opportunity to have
partnership with other brands.
 It provides classes that promote
healthy eating.
 It is the threat for McDonald's that it
has poor economic situation globally.
 The other threat is it has pressure for
health consciousness.
 Intense competition.
3 Segmentation, targetting and positioning
Segmentation- The strategy which is uses by McDonald's is demographic segmentation
strategy according to age. The main target of firm are youth and children. The main aim of

developing and producing new product is to increase their value and provide all type of food at
one place. (Schlegelmilch, 2016). Demographic segmentation for new product of cookies of
McDonald's is important because the company can easily estimate the size of target market.
Targeting- After segmentation, company needs to require targeting strategy. The process
of selecting the target market from the different segments are called market tar getting. It needs
to select the market segment that it wants to focus on like demographic segment according to age
and then put in their future business strategy. The main target of the company is children as they
prefer and more likely to choose and like cookies. It uses concentrated marketing approach of
targeting because it wants to focus on a specific consumer segment on the basis of age like
children. It helps company in identify customers needs and wants because it focuses on
demographic segment and can better satisfy their needs (Simkin, 2016). It also helps the
company to target the right audience and save budget.
Positioning- Positioning defines as a process of creating an image or make customers
believe of a product. In order to position its nee product cookies correctly in the target markets,
McDonald's uses segment information about the consumer behaviour specially of children that
can be developed through market research. By doing this it creates a positioning profile for every
product.
4 Marketing-mix:
Product: The company wants to promote and sell its new product cookies especially for
children.
Place: It chooses the place for distributing and providing its new product to its customers. It
provides its new products to customers through its mobile apps.
Price: It has adopted new pricing strategies for promoting its new product such as bundle pricing
strategy.
Promotion: For promoting its new product cookies it uses some strategies and modes that
are:Advertising, sales promotion, public relation and direct marketing
People: McDonald's specially focuses on children and the 3-10 age years of group for its new
product cookies.
Process: The whole process is visible to the customers which it uses.
Physical evidence: It focuses on clean and hygiene and attractive interiors.
5 Budget

Marketing expenses
Newspaper advertisement £100
Sales and promotion £100
Online Advertisement £100
Direct marketing £50
Other £150
Total expenses
Monthly Spending money £500
Monitoring and controlling
Controlling system is a key factor of its sustainable business success. Control
involves measurement, evaluation and monitoring. It has a huge chain company so a different
control method are necessary for an effective and efficient management. There are many
approaches to control like market share analysis, budgets, quality control, cash flow statement
etc. It uses the bureaucratic control as a major method. It is known as top[ to bottom method of
control, where managers attempt to affect worker's behaviour through punishment for ineffective
work and bonus for their working performance.
Firm uses' customer feedback for controlling and monitoring through survey and online
polls. This control takes place after an action. It provides meaningful information to managers on
the effectiveness of their planning efforts. It indicates the variance between standard and actual
performance through customers.
CONCLUSION
From the above study it has been concluded that marketing played an important role in
any organisation for developing business and in making a goodwill in market. The proper
management of 4 PS of marketing plan helped organisation to achieve their goals. Demographic
Segmentation according to age group, targetting special group of segment and price positioning
also help firm to maximize profits, fulfil the customers needs and attract the more customers. It
showed that marketing manager follow some rules and responsibilities which are not only
responsible for organisation's growth but also responsible for the effectiveness of other

functional departments like production department, finance department, sales department, HR
department etc.