Comprehensive Analysis of Marketing Principles: McDonald's Report

This report provides a comprehensive analysis of marketing principles, using McDonald's as a detailed case study. It begins with an introduction to marketing and its significance, then delves into the core elements of the marketing process, including market environment analysis, the marketing mix (product, price, promotion, and place), and objective setting. The report explores McDonald's marketing approach, highlighting its market-oriented strategies and their benefits. It then examines the micro and macro environmental factors influencing the company, such as customers, employees, suppliers, demographic trends, and economic conditions. A significant portion of the report focuses on market segmentation, targeting, and positioning, illustrating how McDonald's tailors its offerings to different customer segments. The report also examines various types of buying behavior and product positioning strategies. Furthermore, it discusses how McDonald's can achieve a competitive edge through research, product development, and effective distribution strategies. The report concludes with a summary of the key findings and their implications for McDonald's marketing success.

MARKETING PRINCIPLES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1................................................................................................................................................1
1.2................................................................................................................................................2
2.1................................................................................................................................................2
2.2................................................................................................................................................3
2.3................................................................................................................................................3
2.4................................................................................................................................................4
2.5................................................................................................................................................5
3.1................................................................................................................................................5
3.2................................................................................................................................................6
3.3................................................................................................................................................6
3.4................................................................................................................................................7
3.5................................................................................................................................................7
TASK 2............................................................................................................................................8
4.1................................................................................................................................................8
4.2................................................................................................................................................8
4.3................................................................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
In an organization there are several departments to manage all the resources in an
efficient manner. It includes marketing, human resource, finance and production departments.
Marketing assist the company to introduce their products and services to the customers. As the
sales and profit of the company highly depend on the purchase of goods, so the marketing
activities plays an important role in it (Jobber and Ellis-Chadwick, 2012). There are different
methods which help the firm to make there products known to the people like through
advertisement given in newspaper, T.V etc. Among the various food companies, McDonald's is a
leading brand which serves with different eat able products. Thus in this report, the concept and
process or marketing is determined. Further, other terms such as segmentation, targeting and
positioning is been stated in detail. In addition to this, marketing mix elements and uses are
determined efficiently.
TASK 1
1.1
Marketing involves several activities such as advertising, selling and delivering the
products to the customers. Thus it becomes important for the company to understand the needs
and demands of the clients and products the goods accordingly (Armstrong and et.al., 2014).
Further, the following are the elements involved in the marketing process:
 Analysis of market environment- The foremost element of marketing process is to
undertake the analysis of internal and external environment. These factors affect
McDonald's in many ways. Thus it is the duty of the manager to collect the data from
both the sources and take the measures for it (Dann, 2010). This can be done by doing
SWOT and PESTLE analysis which will assist the company in collecting the data from
internal as well as external environment.
 Analysis of marketing mix- In this four P's are included which are namely price,
product, promotion and place. These factors help to determine the details of the product
which are to be produced and distributed to the customers (Sferle and et.al., 2012).
 Set objectives- Thus after the survey it is crucial for the company to set the objectives to
produce quality products at adequate price. Further, the customer's choice must be
considered while producing goods (Lee and Kotler, 2011).
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 Decision-making- In McDonald's, the decisions are been made based on getting more
perfection than its competitors. Under this, various tactics are been designed for the
products which will act as a benchmark for a pace of time.
1.2
McDonald's can develop the products based on either product oriented or market oriented
approach. Thus the marketing approach refers to the reaction given by the company on the needs
and demand of the customer (Kotler and et.al., 2015). This approach brings various benefits to
the company. As McDonald's produces goods on the demand of the customers, it attracts high
range of clients to buy the products. Further, it helps in addressing the requirements of the
clients. Moreover, with this, it leads to the creation of buyer value which encourages the
individual's loyalty and frequency of visiting the firm. It also gives a competitive edge to the
competitors in the market.
On the other hand with the number of benefits it has some disadvantages with it as well
(Challagalla, Murtha and Jaworski, 2014). As it includes a high cost for the survey done for
finding the requirements of the customers. It is not a cost effective process and it also requires an
adequate time and people to conduct the survey. It also increases the price of the product as the
cost of arranging survey is also added to the price of the product. Moreover, every customer has
its own perspective and choice, so it becomes complex for McDonald's to produce goods as per
all the clients.
2.1
The activities of organization are highly dependent on the micro and macro
environmental factors. They have a great influence on the decision making process of
McDonald's. Thus the factors are been explained in detail below:
Micro environmental factors Customers- These are very crucial for the success of business. As these are the ultimate
purchaser of the goods. So the company must make sure that client's needs and
requirements are fulfilled (Tanner and Raymond, 2011). Employees- It is important for the company to take care of its staff members as they are
responsible for performing the activities of the firm. The success and growth of the
organization is highly dependent on the performance of the employees. Thus, the
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company must take measures to motivate and satisfy the members to increase their
productivity.
 Suppliers- McDonald's needs to organize an efficient supple chain management system as
the final products can only be produced if there is sufficient amount of raw material in the
company. So the firm must maintain healthy relations with all the suppliers (Lefebvre,
2011).
Macro-environment factors Demographic factor- This includes the study of occupation, age, density, location etc. of
all the people in the area. This will help in getting the idea for making the decisions of the
company (Wymer, 2011).
 Economic environment- It involves the study based on the buying behaviour and
purchasing power of the customers.
2.2
The growth of the company is highly dependent on the demand and need of the
customers. Thus the company must segment the market to which they will be serving its products
or services. It may include niche, differentiated and undifferentiated marketing (Lovelock, 2011).
So by analysing the needs, buying behaviour and purchasing power of the customers McDonald's
segment there market. For example: as in foreign countries people prefer non-veg over the veg
items, so the company has widened the range of non-veg products to serve them. On the other
hand in India most of the people are vegetarian so there the company provides with veg products.
Further, they have also targeted kid zone by providing with happy meal (Ghauri and Cateora,
2010). This attract the small children as they have given a toy with every pack of happy meal.
The company also comes up with new products so as to attract wide range of customers. Thus by
providing the food to every age the company becomes a family corner. Thus this makes
McDonald's one of the most popular brand. It also helps to attain the competitive edge in the
market over its competitors.
2.3
After the segmentation process is done, the next step is to target the market in which the
company has to serve the products (Varey, 2010). Thus, McDonald's must make the decision on
how many customer groups they have to target and provide them with products. It always
formulates different strategies to attract the maximum number of customers. Target marketing
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refers to the evaluating the market segment attractiveness and from it selecting one or more
segments to enter. Further, the profit and sales of the company is dependent on the customers so
it should make right decision to target the company (Serrat, 2010). So analysing the market,
McDonald's targeted the kids, teenage and families. Thus it make all the provisions to satisfy all
the people. For the kids the company has provided with happy meal and for the teenagers there is
a wide range of products like burger, French fries, wraps etc. Moreover, to satisfy the families as
a whole they started with giving meals which provided with number of items to have a one time
lunch or dinner. They also introduce with new products with the changing taste and trend of the
people. Undifferentiated marketing is also adopted by the company. Under this, there are some
common foods which are always consumed by a number of people and everyone is fond of
consuming them (Kelleher, 2011).
2.4
Buying behaviour refers to the perception and process of the clients which demonstrate
their attitude towards the products. Further, every person make decision before buying a certain
product by choosing the best from the number of options available to them. Further, there are
mainly four types of buying behaviour:
 Complex buying behaviour- Under this category, it involves the purchase of high cost
products. This includes car, gold, diamond etc. Thus for purchasing these items the
individual has to think twice to make the decision for buying as it involves huge amount
of investment (Hawkes and Harris, 2011).
 Dissonance buying behaviour- This category includes the products which are very
limited. Thus under this, the customers have a high involvement while buying the
products.
 Variety seeking behaviour- Under this, the food with normal price are included (Saren
and et.al., 2012). Like the food purchased by the by McDonald's, the customer will have
low involvement.
 Habitual buying behaviour- In this the degree of involvement is very low as these are
the products which are being consumed on a daily basis so the person do not think much
before buying them. Mainly products are consumed as the daily habit of the customer
(Sherlekar, Prasad and Victor, 2010).
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2.5
Product positioning is a tool used in marketing to attain the maximum number of
customers to the company. It is a marketing approach which presents its product in the best
possible manner to different target audiences (Toften and Hammervoll, 2010). The segmentation
and positioning is correlated and company have to perform positioning activity as per the product
segmentation. It becomes very crucial for McDonald's as there are large number of competitors
like KFC, Subway etc. which are serving with the similar products in the market. Thus, the
product positioning of the company must be done in such a way that it helps to increase the
customer's loyalty and responsiveness. Thus McDonald's is having an outstanding strategy from
a long time. They are successful in creating a brand image in the minds of people and retain them
by giving quality products. To increase the market, the company must use extensive advertising
campaign (Strydom, 2015). Under this, it should make advertisement through newspapers,
television and radio. This will help the firm to attract wide range of people which will directly
increase the profit and sale of the organization. Further, the company must also provide with
different discount coupons and gift vouchers which will help to get new customers. Further, it
should make the pricing policy considering the price of the products served by the competitors.
3.1
Each company wants to attain the competitive edge in the market as it helps to maintain
and improve the position in the market. Thus to getting better competitive advantage, the
organization must focus on the research methodology as it helps to gain better knowledge about
the customers as well as about the competitors (De Mooij, 2013). The firm can achieve the
strategic benefits by coming up with new innovative products and developing their services
towards the customers. Further, it should also consider the needs of customers, adopt latest
technology and follow the government regulations to sustain the competitive edge in the market.
Product development is the key strategy for gaining sustainable competitive advantage.
McDonald's to attain the position in the market must put the prices which are below the price
served by the customers. Further, they must also serve them high quality products and satisfy
their needs and requirements. For this, the company must understand the needs and demands of
the clients and make the products accordingly. This will help them to cover a wide range of
products in the market (Saylor., 2012).
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3.2
The factor of distribution plays an imperative role in the success of the any brand and
increasing the awareness among the potential customers. It is important to understand that
distribution is the means through which an organization is able to make its product or services
available to the market and hence, is one of the major link between the two. The distribution
strategy developed by Mc Donald's can be characterized as extremely effective as immense
importance is attributed by the management on this segment of the business. It is a known fact
that the brand makes itself available through various physical outlets, which have been placed in
every corner of the road. The food service chain is operating at the global level and is serving
around 46 million customers through 30, 000 outlets across 121 nations (Jobber and Ellis-
Chadwick, 2012). A wide range of products are offered at every such store, and this has become
one of the most important source of attraction for its customers. In addition, every store or outlet
covers a locality or area to provide the service of home delivery, which in turn has enhanced the
distribution channel of the entity addition to this, every outlet provides the service of takeaways
which capture the market which are going to office or college and are in a hurry or are facing
parking issues. Hence, with the assistance of such an effective distribution strategy, Mc Donald's
has been enabled to develop a highly strong market share for itself.
3.3
Pricing is one of the most vital element of the marketing mix and requires great amount
of consideration from the management of every organization involved in any kind of business.
The development of a pricing strategy has twofold consideration, one from the perspective of the
profitability of the organization and other from the perspective of attracting maximum
consumers. In essence this is one of the main source through which the aims and objectives of a
business unit can be achieved in an effective manner (Armstrong and et.al., 2014). Mc Donald
strives to enhance the level pf market share in addition the extent of profitability which can be
realized on an annual basis. It is important to note that the brand has successfully accomplished
this objective through an effective pricing strategy which it has developed and deployed in the
market. In addition, the entity has also earned a great level of brand loyalty. Various
determinants which can be identified for development of an effective pricing strategy are the
market conditions, competition and so on. With the assistance of its pricing strategy Mc Donald's
has attained a competitive advantage in the market as well as accomplished its targets.
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3.4
A very important position is occupied by the marketing mix of Promotion in determining
the sales volume of a business organization. In essence this is the medium through which the
product or service is introduced to the potential customers and an image in developed in the
minds of individuals (Dann, 2010). The promotional strategies of Mc Donald's has proved to be
very effective and can be established from the fact that each and every person in the nation is
known to the brand. In addition, the effectiveness can be judged from the fact that each and
every person in the market is acquainted with the product range offered by the brand. It is
interesting to note that the management of the company laid strong emphasis on the promotion of
the name in the initial stage, which has now been replaced with promotion through various offers
and innovative products. Various innovative and creative techniques have been deployed by the
entity for promoting its name in the market, which in turn has popularized the brand all over the
world.
The management of Mc Donald's considers promotion as an integral part of its operations
and communicates introduction of all the new products and services through the means of
advertisements. In addition, the enterprise has successfully gained an advantage over the
competitors by reaching in every corner of the market and marking its presence in an effective
manner.
3.5
Some of the additional elements of marketing mix are considered by Mc Donald's in the
following manner: People: Mc Donald's consider the human resource working with them as one of the most
important assets, and have developed strategies to maintain a standard level of employees
within the organization. The recruitment process of the entity is highly strict and sought
to hire only qualified and suitable individuals who have the potential to enhance the value
of the brand. In addition, to this effective training and development of every employee is
undertaken to provide excellent services to the customers and maintain the quality level. Process: Every service provider is required to strike a balance between customization and
standardization, and in pursuance to the same Mc Donald's has ensured provision of
equal level of service quality to each and every consumer through its product as well as
services in each and every store.
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 Physical Evidence: The internal environment of the service location plays a vital a
significant role in determining the level of success in the business (Sferle and et.al.,
2012). Mc. Donald's in its initiative to focus on this element of marketing mix has
developed highly convenient stores in accordance to the needs and preferences of the
target market. Since, the major target of the brand are children, a specific focus is laid on
the making it children friendly.
TASK 2
4.1
Mcdonalds is offering several kind of products to its target market in accordance with the
need as well as requirements of its customers. Along with this the marketing mix for the two
varied segment based upon the age is enumerated in the manner stated as under:
The marketing mix for the age group below 35 is as under: Product: In this the product of Mcdonalds will be burger. Price: Here, for the normal burger the prices would be low. This is due to the reason that
there is existence of several competitors in the market who are providing the products. Place: In order to offer burger there is need of physical outlet that is effective in serving
the requirements of the customers in an effective manner.
 Promotion: Advertisement is considered as one of the most appropriate source with
which promotion of burger can be done before the target market.
The marketing mix for the age group above 35 is as under: Product: The product for the particular age group is nutritional burger. Price: The nutritional burger is comprised of some additional attributes. This is the
reason due to which the prices would be kept higher. This kind of the product does not
possess greater popularity in the market. Place: The nutritional burger would be provided by the means of physical store.
 Promotion: The means through which promotion would be done is advertisement as well
as social media that assist in making promotion of the product within the market.
4.2
Business marketing refers to the sale of product as well as services by a organization to
the another while the consumer marketing is done between the company and the clients. Further
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the main focus of company in business marketing is on the continuity, recognisability and
accessibility while the consumer marketing mainly focus on the geographic, demographic and
psycho graphic factors. The major difference between the marketing of products and services to
organization rather than consumer are:
 The business buyer wants to buy- In this the customer purchase the goods which he do
not want to buy as the promotion done is so appealing that the people change their
decision (Toften and Hammervoll, 2010).
 Business buyer will read a lot of copy- The person change their mind by seeing the
specification of the products. This help to attract wide range of customers.
4.3
International marketing differs from domestic one in every possible manner as it is well
known fact that at international level market size is quite wide due to which Mc Donald’s is
required to develop more effective marketing strategies for attracting large number of customers
(Varey, 2010). Further, in comparison with this domestic level requires less influencing
marketing activities as market size is small and due to this reason business is not required to
invest lesser in marketing activities. Apart from this, difference is being present in form of taste
and requirement of target market where its influence is high at international level and Mc Donald
is required to develop products on the basis of same. Moreover, competition level at international
level is quite high due to which business is required to highlight unique features in the product
range at the time of marketing products. At domestic level of competition is low and this acts as
main advantage for the business.
CONCLUSION
From the above report it can be concluded that the success of McDonald's is highly
dependent on the marketing activities performed by the company. Thus, it is recommended for
the firm to provide quality products at adequate price to the customers so as to attract maximum
range of customers. Further, there must be an efficient research team which will assist the
company to get data about the preferences and demands of the clients so as to produce the goods
according to them. Moreover, the company must segment, target and position their products so
as to grow their firm in the market. In addition to this, the marketing mix elements must be
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