A Report on McDonald's Merchandising: Roles, Functions, and Strategies

This report provides an in-depth analysis of McDonald's merchandising functions, focusing on the roles and responsibilities of its marketing department. It examines how merchandising interrelates with other organizational functions. The report begins with an introduction to the increasing market competition and the importance of marketing strategies for companies like McDonald's. It highlights the marketing mix and its seven elements, focusing on the significance of merchandising in managing buyer-seller relationships. The report then delves into the main roles and responsibilities of the merchandising function, including gathering market information, business planning, customer service, promotion, and communication. It also discusses various marketing concepts, such as production, product, selling, marketing, and societal concepts. Furthermore, the report explores how merchandising interrelates with other organizational functions, such as human resource management, distribution, risk management, and product development, to achieve common goals. The report concludes by emphasizing the importance of these interrelations for McDonald's business success and its ability to compete in the global market.

Marketing Essentials

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main roles and responsibilities of merchandising function..............................................1
P2 Roles and responsibilities of Merchandising interrelates with other organisational
functions.................................................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
In modern world, market competition is increasing every day which has became biggest
threat for all organisations. Now, there are are a huge number of new enterprises which has been
established with new technology and produce such innovative products which can attract many
customers (Dibb and Simkin, 2013). It has become very tough for old companies to survive in
such competitive marketplace. For better growth they should adopt new marketing strategies and
plans because with the help of this they can achieve competitive advantage within market place.
There is most significant concept of merchandising namely marketing mix which includes 7
elements. Those components can help organisation in achieving desired goals and objectives.
This project report is based on McDonald's which is world's largest fast food restaurant chain. It
is an American restaurant which provides various kind of food items. In present time, it is
focusing on its marketing functions so that it can compete with its market competitors. In this
report various roles and responsibilities of its merchandising department has been evaluated and
their interrelations with other functional units has been discussed (Wirtz, 2012).
TASK 1
P1 Main roles and responsibilities of merchandising function
In present time, due to globalisation and use of technology market competition has been
increased. New entities come in market with huge technology and highly innovative products
which easily gets customer attention. This has been put old companies in danger. To compete
with new entities it is highly important for old organisations to make necessary changes in their
existing strategies, plans, functions and policies so that they can lead their business to high level
of success. They can take help of marketing concepts to develop their current market position.
Basically, merchandising is that aspect which helps in managing exchange relationship of buyer
and seller (Brassington and Pettitt, 2011). This concept gives high importance to new market
trends, customer needs and demands so that company can produce its products and services
according to those needs and demands. Without providing satisfaction to clients no enterprise
can generate Hugh level of profit and also can not achieve competitive advantage within market
place. Merchandising department of any company gives high attention to their promotional and
advertisement activities because for business growth firstly it promotion of company is highly
required. People like to be part of that organisation which has high reputation in market place.
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Marketing team of McDonald's always try to identify exact need of customers so that it can
produce products according to them. So, it can be said that main function of merchandising
section is to create, communicate and deliver organisational goods to end users so that they can
create some value for customers. In modern time, needs and demands of clients are continuously
changing which have become tough task for company to identify them. Marketing department
conducts various market research which assist company in determining current trends of market.
Different institutes and expert persons describes merchandising in different way. According to
American Marketing Association, ''Marketing can be defined as the activity, set of institutions,
and processes for creating, communicating, delivering, and exchanging offerings that have value
for customers, clients, partners and society at large''.
Moreover, with the help of merchandising philosophy company can lead to high level of
success and also can make effective decisions which can helps in accomplishing organisational
goals and objectives in most effective manner. There are different concepts of marketing which
can assist enterprise in achieving desired results and these are follows as under:
Illustration 1: Five concepts of marketing
(Source: Bhasin H., 2017)
The production concept: This marketing concept was prevailed in 1920 which was the
revolutionary stage of different industries. This concept states that organization should produce
only those products which have huge demand in market place and which can be produced by
enterprise in most effective manner. Also, organization should be aware about the quality and
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quantity of its each and every products. By determining these things business enterprise can
definitely produce quality products as per the demand of market (Ko, Hwang and Kim,2013).
The product concept: This concept states that customer gets attracted towards those products
which are highly innovative and have great features. So, Organisation should produce high
quality and innovative products which can appeal to huge number of clients. By providing such
quality goods, company can make them loyal and also can retain them for long time period.
The selling concept: this marketing concept focus on product's popularity. If goods have good
image in market place then customer will buy them more. So, it is highly important for all
organizations to promote and advertise their products in good manner so that they will attract a
huge number of customers.
The marketing concept: This concept is largely focused on market needs and wants and also
force company to provide quality product as compare to competitors. Further, this concept states
that business enterprise should use pull strategy in which they should make their corporate image
so strong so that customers get force to buy their products and services (Park, Lee, and Morgan,
2011).
The societal concept: It is similar to merchandising concept but it focus on social welfare. As per
this aspect organization should fulfil market needs to consider social welfare.
Moreover, every organization should operate their business activities and practices as per
these concepts. Besides this, there are different roles and responsibilities of merchandising
department which lead it to high level of growth and these are follows as under:
Gather market information: The main responsibility of merchandising department is to conduct
market research so that company can manufacture products and services as per the market trends.
Marketing section of McDonald's helps it in determined current needs and demands of customer
so that it can become most favourable brand of customers. This organisation always make
changes in its current food products to provide new taste to clients.
Business planning: Merchandising department makes various strategies and plans as per the
environmental changes so that organisation will not suffer from any problem in its future. These
plans help McDonald's in surviving in market place for long time period. By following different
plans and procedures this company can operate its business activities and practices in most
effective manner.
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Customer services and satisfaction: The main objective of marketing department is provide high
satisfaction to customers. McDonald's provides such tasty food items to its customers so that
their different needs and demands can be fulfilled in most effective manner. Merchandising
department of this enterprise force production department to produce quality products so that
company can attract a huge number of customers.
Promotion and advertisement: Merchandising section operates various promotional and
advertisement activities so that organization can appeal to many clients. In present time,
McDonald's is spending more and more on its promotional activities so that it can make its
clients aware about its existing products and also it can do publicity of some new products.
Communication: It is main responsibility of merchandising department to maintain good
communication level within and outside the company so that. Company can make connection
with its employees as well as market customers. Marketing team makes connection with
customer via social media, email and text messages (Brettel and et. al., 2011). With the help of
this, McDonald's can make its clients aware about its new food items.
Relationship management: This is the last but most important responsibility of merchandising
department. It makes such strong connection between organization and its customers. By making
good relations with clients company can easily understand their needs and wants. Also can
provide them quality products as per their expectations.
Hence, these are some most significant roles and responsibilities of merchandising
department of McDonald's which helps it in becoming market leader. Also, it helps organization
in accomplishing its desired goals and objectives in most effective and systematic manner.
P2 Roles and responsibilities of Merchandising interrelates with other organisational functions
In business enterprise various functional units cooperates with each other so that they can
accomplish predetermined goals of of company in less time period. In McDonald's there are
different department which operates their different activities to achieve some common goals
which has been set by senior managers or board of directors. Among all organisational functions
merchandising is most important because it plays various roles and responsibilities which are
highly required for organizational growth and development (Mailly and et. al., 2013). The most
important function of marketing department is to conduct various market research so that
company can get aware about new needs and demands of customers. By doing, organization can
manufacture goods and services as per client's expectation. Also, market research helps business
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enterprise in identifying those future opportunities in which it can expand. McDonald's builds
strong relationship with its customer with the help of marketing function. It always make contact
with is clients so that it can inform that about new products, services and offers. Hence,
merchandising department provides various benefits to company, but for better growth
McDonald's can interrelate its marketing function with its other functional units.
Moreover, McDonald's is a large food restaurant chain which is operating its business
activities in all over the world. Also, this enterprise is based on pull strategy in which it provides
such quality products and services which force its customer to buy its product repeatedly. This
strategy helps this enterprise in making its clients more loyal and gratified (Martínez-Blanco and
et. al., 2011). The main feature of marketing is that it make connection with all functional units
so that organization can achieve its target in most effective and systematic manner. The main
functions of merchandising department are discussed below:
Market research: this is the most important function of merchandising department. It conducts
various market research on regular basis so that company can get aware about new customer
trends so that it can produce its products and services according to them. By conducting market
research McDonald's gets idea about future opportunities and thereat which can affect its current
position in marketplace.
Distribution: With the help of appropriate function of merchandising organization can distribute
its different products and services as per market need and demand. In simple words, it gives
detailed information to company that how it should produce how much quantity of products so
that it will generate good profit without any wastage.
Risk management: Marketing department takes helps of different risk analysis tool so that
McDonald's can get aware about future risks which can decrease its financial position within
marketplace. Also, with the help of risk management company can identify future opportunities
and make new strategies to achieve them (Zehe and et. al., 2014).
Forecasting: The main function of marketing manager is to predict future supple and demand of
products within market place. By predicting such things, they can estimate that how much
company should produce products and services. This type of forecasting helps company in
estimating future growth as well.
Product development: Merchandising department of McDonald's gives core importance to their
products because they are the only factor which can increase customer line and also can help
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company in enhancing its organisational growth and development. To survive in competitive
market place it is highly important for McDonald's to develop its food items because by doing
this it can easily compete with its market competitors.
Moreover, these are the major functions of merchandising department which helps
organization in achieving business goals by taking help of effective strategies and plans. All
these functions of merchandising interlinks with other functional units of McDonald's which can
be determined by below mentioned points:
Human resource management: It department is responsible for hiring high skilled employees
which can lead organization to high level of success. Marketing section help this department by
promoting such job vacancies so that company can attract a huge number of candidates for filling
vacant positions. Merchandising helps HR section by providing it big pool of talent so that it can
choose best candidate among them.
Customer service: Every business enterprise gives core importance to their customer and their
demands. Without providing high satisfaction to clients no enterprise can exist in market place
for long time period. In current scenario, all organizations are providing innovative and unique
products so that the can attract a huge number of customers. Marketing department of
McDonald's conducts various market researches so that company can determine exact needs of
customers and then can produce products according to their needs (Ogawa, Saito and Sohmiya,
2014).
Financial section: This department helps company in identifying financial resources so that
organisation can operate its all business activities and practices in most effective manner.
Merchandising section of McDonald's provides required information to finance department about
future need of capital to operate business activities. So, it can be said that there is huge
interrelation between finance and marketing department.
Management section: Merchandising section of organization provides important information to
management team. On the basis of that information, administration department makes various
rules, regulations, policies, strategies and plans. So, management section of McDonald's is
largely depends upon its merchandising section.
Research and development: This is the main function of McDonald's which helps it in
developing its existing products and services. On the other side, merchandising section of this
company helps it by providing market information so that it can develop current products and
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services in most effective and systematic manner. Developed and innovative products can lead
this company to high level of success.
Production section: This department produce products and services to fulfil customer needs and
demands. Merchandising section of McDonald's conducts market research and evaluate that
current demand of products in market place so that production section can produce products in
that quantity.
Hence, these are the some other functional units of McDonald's which are largely
interrelated with its marketing department. It is a successful company because its all sections
work together to achieve its desired goals and objectives.
CONCLUSION
By evaluating this project report, it has been concluded that marketing plays most
significant role in all kind of business enterprise. With the help of this, food industry can easily
promote their food items and also can attract a huge number of customers. It has been mandatory
for all organisation to use merchandising strategies, policies, concepts and plans in their work
place so that they can exist in market place and also can lead to high level of success. Marketing
concept largely depends upon four elements which are product, price, place and promotion. But
later this concept get extended and it included three more P's which are people, process and
physical evidence. This project report is focused on McDonald's which is world's most
successful restaurant chain. Due to increment in market competitors it is giving core importance
to its marketing functions so that it can accomplish its desired results in systematic way. In this
report different roles and responsibilities merchandising department has been evaluated which
largely interrelates with other functional units of this organisation.
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Bhasin H., Concepts Of Marketing 2017. [Online]. Available through:
<https://www.marketing91.com/concepts-of-marketing/>. [Accessed on 27th October
2017].
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