Marketing Principles Assignment: Analyzing McDonald's Marketing

This report provides a comprehensive analysis of marketing principles, using McDonald's as a case study. It begins with an introduction to marketing principles and the marketing process, including situation analysis, marketing strategy, and the marketing mix. The report then delves into the application of these principles to McDonald's, examining its strengths, weaknesses, opportunities, and threats (SWOT analysis), as well as the influence of political, economic, social, technological, legal, and environmental factors (PESTLE analysis). Furthermore, it explores segmentation, targeting, and positioning strategies, along with buyer behavior and the extended marketing mix elements. The report also covers the marketing mix in different contexts, comparing marketing to consumers versus businesses and exploring the differences between domestic and international marketing for McDonald's. It concludes with a summary of the key findings and insights gained from the analysis.

MARKETING PRINCIPLES
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Table of contents
Introduction 3
Task 1 4
LO1 Understanding the concept and process of marketing 4
AC 1.1 Explaining the various elements of the market process 4
AC 1.2 Evaluating the benefits and cost of marketing orientation for a selected organisation 5
LO 2 Be able to use the concept of segmentation, targeting and positioning 5
2.1 Show macro and micro environment factors which influence market decisions with the
help of appropriate tools and techniques of McDonald’s 5
2.2 Propose segmentation criteria of McDonald’s 7
2.3 Choosing a targeted strategy in different markets for selected products 8
2.4 Demonstrating how buyer behaviour affects marketing activities in different buying
situations 8
2.5 Prose the positioning for a selected product or services 9
LO 3 Understanding the individual elements of the extended marketing mix 10
3.1 Analysing how the product or services are developed to sustain competitive advantages 10
3.2 Explaining how distribution is arranged to provide customer convince 10
3.3 Explaining how price are set to reflect the objectives and market conditions of an
organisation 10
3.4 Illustrating how a promotional activity is integrated to achieve marketing objectives 11
3.5 Analysing the additional elements of the extended marketing mix for the chosen company
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Task 2 12
LO 4 Able to use the marketing mix in different contexts 12
4.1 Planning and commending marketing mix for the two different segments in customer
markets 12
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4.2 Illustrating differences in marketing products and services to businesses rather than
consumers 14
4.3 Show how and why international marketing differs from domestic marketing of
McDonald’s 14
Conclusion 16
Reference list 17
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Introduction
Marketing principles are the backbone of the business and the essential element which secure
the possibilities of future growth of the business organisation. In fact, the term marketing
principles denote to the effective process which involves with satisfying the entire needs and
demands of its customer properly. The main aim of the marketing principles is to meet the
entire essentialities of its customer by understanding its actual demands through organising
the effective market research. In this assignment, the learner will explain the term and process
of the marketing mix and how it effects on the business growth to stay ahead in the
competition market.
Figure 1: Logo of McDonald’s
(Source: McDonald's UK, 2017)
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Task 1
LO1 Understanding the concept and process of marketing
AC 1.1 Elements that are part of marketing process
1. Situation analysis: SWOT analysis will tell the organization to analyses present situation
which exists in the market. Furthermore, the customer also can able to understand both of the
strengths and weak points of the organization which motivates them to choose the specific
brand for the purposes of regular use.
SWOT analysis:
Strengths
● Offering unique quality
product
● Excellence delivering services
● Efficient pricing strategy
● Reputed brand value
Weak Points
● Low investments than its competitors
● Stock of the offering products are
limited
● Delivering channel seems weak than
its competitors
Opportunities
● Image and brand loyalty seems very
significance for the growth of the
business
Threats
● Effective competition market consists
of close competitors
● price sensitivity
Table 1: SWOT Analysis
2. Marketing strategy: According to Papadopoulos et al. (2014, p. 55), the main principles
of this situation analyses are to set an effective marketing strategy which provokes to build an
action plan for the organization. On the other hand, the term marketing strategy refers to the
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segmentation process, targeting its viewers and also positioning its offering services or goods
among the society.
3. Marketing mix decisions: In the opinion of Kotler and et al. (2015, p.25), the second
important step is marketing mix decision which encourages for building critical and effective
decision to develop any product of the organisation.
4. Implementation and control: In the opinion of Turnbull et al. (2013, p.04), in order to
check the entire process of marketing mix this step becomes very important to implement the
market strategy through monitoring the manufacturing processes.
AC 1.2 Advantages of promotion and value of orientation for enterprise
In recent days, the business philosophy of McDonald’s involves with satisfying the
actual demands of it customer by both of understanding and explaining it. The main aim of
the marketing strategy of the organization was just delivering the dishes to its customers but
now a day the organization tries to modify its dishes to gain lots of service-users.
1. The market oriented approach denotes very effectively the demand which exists in the
market for any specific product of the organization. So, it relates and responds against the
wants of the customers. Thus it is clearly identified that the delivering services of the
organization have been improving constantly. This effective process helps the organization to
build innovation in its offering services by investing low amounts of money which seem very
cost-friendly.
2. Moreover, the market-oriented approach helps the organization to establish efficient brand
loyalty among its customers which encourage the customers to visit the organization
repeatedly.
LO 2 Different concepts of market
2.1 Influence that internal and external factors has on market decisions with the help of
appropriate tools and techniques of McDonald’s
PESTLE Analysis of McDonald’s:
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PESTLE FactorsFindings
Political Factors● Countries that protest against the
consume of fast food can be a threat
to McDonald’s business
● Tax law, trade restrictions, and other
commercial laws are there that can act
as impediments for the business
● Increasing tax rates can affect the
business of the organisation
● Particular political policies which
abandon the entry of capitalist
investments
● Political stability of a country helps a
business to grow
Economical Factors● Changes in inflation rates and the
global market condition has an impact
on McDonald’s worldwide business
● Supply and demand of the raw
materials can possess a threat
● The economical stability of the
country is an issue here
● The buying capacity of the customers
● Per capita income rate of the country
can force a company to mould its
strategies
Social Factors● Food habit of the customers is the
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main issue in McDonald’s business
● The lifestyle of the people in the
country also determines the business
strategy of the organisation
● Religious belief can control the food
habit of the customers
● Age distribution is another factor as
mainly young people are interested in
going to McDonald’s outlets
Technological Factors● The technology is used should be
cutting-edge
● The country should have support for
that kind of technology
● If the competitors in the market use
inferior technology, that is an
advantage for the company
Legal Factors● Employment laws which determine
the terms and conditions of
employment
● Tax laws which determines how
much tax the company needs to pay
● Individual tax laws which determine
whether the customers need to pay
extra tax for eating in restaurants
Environmental Factors● Must comply with the environmental
laws
● Should dispose of the waste in a
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scientific way
● Recycling and reusing prohibitions
set by the government
● Rules to use plastic bags set by the
Government
Table 1: PESTLE Analysis
(Source: Author)
Porter's five forces model is another concept through which the surroundings in which the
referred business is operating can be better understood. A detailed discussion of same is done
below:
Threat of the new entrants – How easily one new company can enter in the market and can be
a danger for business is discussed under this heading (Dobbs, 2014, p. 32). In McDonald the
threat of the new entrants is moderate. The companies are nearly in the saturation point.
Moreover, opening new restaurant does not require huge capital therefore; moderate threat is
there for the new entrants. Moreover, there is no legal barrier therefore; opening new
restaurant in the market is easy in this market.
Suppliers bargaining power – It must be reviewed because strong bargaining power helps
suppliers to supply goods at high price which directly affects the profit level of the buyers.
The bargaining power of suppliers in Mc Donald is low because large number of suppliers is
available in the market. Ample number of suppliers is available in the market therefore; no
uniqueness in the products reduces the bargaining power of the suppliers (Hollensen, 2015,
p.52).
Buyers bargaining power - Buyers are mainly the price setters therefore; decision regarding
the price of the product is decided by the buyers. Bargaining power of the buyers is lao high
in McDonald because intense level of competition is seen in the market. Customers gets
various substitutes therefore; buyers have the power to take decisions.
Threat of the substitutes- same companies are selling same products in the market therefore,
the threat of substitutes are the most important driving factors in the organization. There are
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many competitors in the market therefore; more number of substitutes is available in the
market.
Rivalry among the competitors- Market share of the companies helps the rival companies in
deciding the areas where improvement must be done for maintaining the better position in the
market (Dobbs, 2014, p.32). Fierce competition is there in the market because quick services
eatables, cafes are available in large numbers in the market. Among the competitors
McDonald holds top position in the market.
Figure 2: Porters Five Forces Model
(Source: Hollensen, 2015, p.52)
Apart from the above discussed models 5 M” s analysis also plays an important role in
understanding the influence of distinct factors on business. How they affect an enterprise is
discussed below:
Men- Large number of employees is available in the McDonald Company. Nearly 375000
employees are there in the company. Therefore, strong workforce is seen in the company.
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Money - Large turnover in the form of sales is seen in the company. Total assets are seen to
be about $31.024 Billion. Therefore, huge funds are available for further investment in the
company.
Machinery- modern technology is used in the company therefore, revenue and turnover rates
are high in the company. Efficiency rate is usually high in the market
(corporate.mcdonalds.com, 2016).
Materials- good quality materials are used in the market therefore, profit and the demand are
usually high in the market for the company. More customers can be attracted by the
company.
Minutes- Decisions in the company are taken by the company by organizing meetings.
Agenda of the meetings are also decided by the company beforehand so that planning can be
done before the meeting.
2.2 Propose segmentation criteria of McDonald’s
There is no meaning in launching a product universally because different markets have their
own needs. Therefore, it is better to launch products targeting a specific market. However, in
today’s competitive business world, market segmentation has become something obsolete.
The companies are now trying to segment the buyers based on their needs. Therefore, it can
be said that segmentation and targeting are interconnected with each other and tailored
products should be brought out for targeting various customer groups. The customers will
select the product based on its features which will satisfy his needs. This will act as a two-
way purpose. The company can sell its products to the targeted customers as well as the
customer will think that the company really thinks about the group. Hence, the goodwill of
the company will increase.
In the opinion of Hollensen (2015, p.52), the segmentation process of marketing principle and
business strategy seems very significant to position produced goods or services in the existing
market. The marketing manager of McDonald’s must design such effective business strategy
by understanding the present market and analyzing the nature of the upcoming foods, which
seems very profitable for the growth of the organization. The marketing manager of
McDonald’s must follow the demographic segmentation approach, which denotes to the
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division of the market in various parts in the context of demands, capacities, and choices of
its customers.
2.3 Choosing a targeted strategy in different markets for selected products
McDonald’s is a fast-food chain operating throughout the world with reputation for many
years. Therefore, it is to be noted that they have well accepted the idea of market
segmentation and targeting to enjoy sustainable success as opined by Brassington and Pettitt
(2003, p.56). However, for launching a new product, they always choose the target market
and the target customers first and then they launch the products. For example, if they want to
launch a new product, which contains spicy objects, they will surely target the young
generation as they mostly like spicy food. Therefore, they will introduce the item in such a
place where young people go most, like in a shopping mall or somewhere near a college. In
addition, combo meals for large families, or cholesterol free food for older people, these all
are the examples of choosing target strategy by McDonald’s. Therefore, it can be said that
McDonald’s does maintain a very good record of choosing a target market and market
segmentation.
Targeting strategy is the strategy that is done for segmenting the market and also used
for choosing the appropriate market. Proper selection of the customers is done to set the
target market. Proper Segmentation helps the organization to decide the appropriate segments
to enter the market. There are different types of marketing strategies which, can be divided in
three parts:
Undifferentiated marketing
Strong differences are seen in the market therefore; under this situation the companies
decide to adopt undifferentiated strategy. Single marketing strategy is developed in the
market so that segmentation in the market can be reduced. Marketing orientation is reduced
here therefore; mass market philosophy is seen in the market (Solomon, 2014, p. 49)
Differentiated marketing
When there are several target markets then the strategy of differentiation is taken. in
this strategy specific marketing strategy is taken therefore, specific results are done in this
project.
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