Marketing Principles Report: McDonald's Strategies and Analysis

This report provides a detailed analysis of McDonald's marketing principles, encompassing various aspects such as the marketing process elements, benefits and costs of market orientation, and the influence of macro and micro environmental factors on marketing decisions. It explores segmentation, targeting, and positioning strategies, along with an examination of buyer behavior and its impact on marketing activities. The report further delves into product development, distribution, pricing, and promotional strategies employed by McDonald's, including an extended marketing mix analysis. Finally, it compares marketing mixes for different consumer segments, contrasts marketing to businesses versus consumers, and differentiates between international and domestic marketing approaches in the context of McDonald's operations.

Marketing Principles

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Various element of marketing process .................................................................................1
1.2: Benefits and cost of a marketing orientation for McDonald..............................................2
TASK 2............................................................................................................................................3
2.1: Show macro and micro environmental factors which influence marketing decisions.........3
2.2 Propose segmentation criteria to be used for products in different markets.........................4
2.3: Choose a targeting strategy for a selected product/service..................................................4
2.4: Demonstrate how buyer behaviour affects marketing activities in different buying
situations.....................................................................................................................................5
2.5: Propose new positioning for as elected product/service......................................................5
TASK 3............................................................................................................................................6
3.1: Product development to sustain competitive advantage......................................................6
3.2: Distribution strategies used by McDonald to provide customer convenience.....................7
3.3: Pricing strategies used by McDonald's to reflect objective and market conditions.............7
3.4: Integration of promotional activity to achieve marketing objectives..................................8
3.5: Additional elements of extended marketing mix for McDonald's......................................9
TASK 4 ........................................................................................................................................10
4.1: Marketing mixes for two different segments in consumer markets with McDonald's
reference....................................................................................................................................10
4.2: Differences in marketing products and services to business rather than consumers.........11
4.3: Difference between international and domestic marketing in McDonald's case...............12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Marketing principles can be defined as a process which is helpful in finding out the needs
and requirements of the customers and accordingly providing them with solution in order to
provide them satisfaction. In this context, there are four elements involved which are product,
price, place and promotion. These elements are helpful in carrying out market research so as to
know the requirements of customer. In addition to this, marketing principles are also helpful for
the organization in making effective decision regarding the changes which they should make on
their product or services, in selecting most appropriate promotional strategy, etc. (Marketing at
MacDonald, 2011). Present report is about McDonald's which has the largest chain of fast food
restaurants and has more than 36000 outlets around the world (Grünig and Morschett, 2012).
They understand their customers’ needs and wants and accordingly provide them services. This
report covers different process and concepts which are involved in marketing. Further, it covers
the use of targeting, positioning and segmenting. Lastly it also includes the use of marketing mix
in different contexts.
TASK 1
1.1 Various element of marketing process
Marketing can be defines as the business or action which is helpful for the organizations
in introducing their products or services to the customers. Marketing is very essential in order to
convey the services and products provided by the organizations. In this context, there are mainly
four elements involved which are: identifying the product, it refers to the item which has to be
sold actually. The product delivered to the customers should have minimum level of performance
otherwise even the best work done on other element would become useless (Ataman, Van
Heerde and Mela, 2010). Next is fixing the price, this is referred to the value which is put for the
product. There are many factors which are involved in determining the price of a product. Next is
place, it is referred to the point of sale. It is the selection of right location because of which
organizations could make their product or services easily available to their customers. Last is
promotion, it involves all the activities in order to make customers know regarding the product
services provided by the firm.
The elements of marketing process which are taken by McDonald is to determine its
brand image. For instance, planning is one main element. Determination of developing
organisational objectives is all in the hands of McDonald. For the same, they are involve in
1

market research as well. Decisions regarding market information are collected and analysed. The
significance of involving employees in the decision making is to make them feel motivated.
Research is another element of marketing. With the help of various tools and techniques, market
trends and information are analysed for meeting various business needs (Shimp and Andrews,
2013). Therefore, this fast food business is also involved in strategy formulation. The strategies
are designed in order to attempt the different functions in the organisation. These are planned in
order to meet the organisational objectives.
SWOT Analysis of McDonald
Figure 1 SWOT analysis of McDonald
(Source: Ericakloera, 2015)
The above illustration depicts the SWOT analysis of McDonald. It shows how the stated
strengths and weaknesses of this fast food Company help in leveraging its future opportunities
and threats. These are assessed for identifying the future growth prospectus of the organization.
PEST analysis of McDonald
2

Figure 2PEST analysis of Mcdonald
(Source: PEST analysis, 2015)
From the above illustration, PEST analysis of McDonald has been analysed. This has been
made in context to UK. It has helped in evaluating the external forces that affect the organization
and its working.
1.2: Benefits and cost of a marketing orientation for McDonald
Market orientation is considered as another tool which covers the major part of the
marketing dimension. The term 'market orientation' is defined as the exercising of various tools
and techniques in the affairs of business. The motive behind the same is to meet the demand and
desire of the customers.
Types of market orientation
1. The Production Concept
According to this concept, McDonald’s goods are produced in large quantities. Mass
distribution strategy is made where products are not distributed to a particular target market.
Price is the main focus where they set efforts into production of quality product.
2. The Product Concept
3

According to this concept, McDonald’s put efforts into creation of quality product as the
quality will help increase customers.
3. The Selling Concept
According to this concept, McDonald’s sells with an idea that customers will only buy
product as per company’s persuasion. They put into consideration but the only thing that is
considered is selling to their customers.
4. The Marketing Concept
According to this concept, McDonald’s marketing concept considers different approach
at marketing which starts from identifying a target market. This is made by choosing the target
market and identifies the customers’ needs.
5. The Societal Marketing Concept
According to this concept, McDonald’s societal marketing follows in line with the
marketing concept. However, accomplishing needs of consumers is considered with respect to
promotion which is required to be effectively made by the customers.
According to the given case study, the major element which is considered by McDonald's
is the customers. Every plan made by this organization is related with the production and
delivery of food product which is admire and demanded by the customers. Therefore, branding is
the most dominant factor which is valued by the McDonald. The rationale behind choosing the
market orientation is to render various benefits to its customers. However, there are various
advantageous and limitations which are related with the use and implementation of market
orientation. These are stated individually.
The benefits of market orientation for McDonald are determined on the basis of
customers. Actions taken by this fast food company has to achieve the target in meeting the
customers need. By utilizing the concept orientation, McDonald gain competitive advantage. The
effective planning of market research helps the firm to know their customers properly thereby
they stay ahead of their competitors always (Huang and Sarigöllü, 2012). According to the given
case study, the company always uses customer orientated approach. They achieve this target by
analyzing deep customer survey. This is a step taken by them to attain maximum sales and profit
earning. By indulging in the same process, they gain the larger market segment. This is the
reason why company is so successful in expanding its chains all over the world.
4

In contrary to same, there are some cost factors as well that are associated with the
market orientation. Implementation of action plans for market research is made through the
heavy spending into the research and development. Along with the same, the company makes
use of high technology and infrastructure. It helps them to stay advance and effective outcome.
Similarly, another cost plus factor is the training of staff. Processes which are used by the
Company to train and develop its staff members are standardize. The core the behind the same is
to achieve the factor of efficiency.
TASK 2
2.1: Show macro and micro environmental factors which influence marketing decisions
There is a presence of varied macro and micro environmental factors that puts an
influence on the marketing decisions undertaken by Mc Donald’s. The macro environmental
factors are inclusive of political areas. Mc Donald’s while carrying out its operations in UK will
have to adhere with the health and hygiene regulations as specified by the government. UK
government has further been pressurizing fast food industry to stop adding ingredients that
causes obesity, heart diseases as well as high cholesterol (Luca and Suggs, 2010). Hence the
company will have to abide by the same while carrying out its marketing activities.
MAIN
FACTORS
FORCES DISCUSSION
Macro factors Economic
factors
Economic factors are a crucial factor for Mc Donald’s as the
company has operations of company are affected by inflation
rate of UK. In the same manner, tariffs on imported raw
materials may put at impact on production of the products.
This may make Mc Donald’s to reduce its marketing budget
so as to manage the cost factor. Social factors also play a key
role for Mc Donald’s while undertaking marketing decisions.
This is as the restaurant will have to take car about he needs
and preferences of consumers while delivering the products.
In the same manner, during the process of marketing, Mc
Donald’s will have to make the ads so as not to affect the
overall consumer sentiments. It should not make
advertisements that are derogatory to a particular class or
5

race.
Technological
factors
Mc Donald’s will have to make use of latest as well as
sophisticated technology in it marketing activities so as to
garner more sales figures. This can include making use of
social media for its campaigns, advertising on the Internet
among others. While taking the marketing decisions, Mc
Donald’s is required to conduct the activities in an
environmental friendly manner. It should focus on making
use of recyclable material in its pamphlets etc (Carter and et.
al., 2013). This will not only make the company adhere with
the concert of green marketing but also help in creation of a
green image. McDonald while carrying out its activities in
UK is required to adhere with the laws and regulations. These
are related to labor and employment law, corporate law and
tax requirements etc. In this respect, Mc Donald’s is required
to adhere with labor policies and ensure that is does not make
use of children in the advertisements which is beyond the
legal standards.
MICRO
FACTORS
Consumers The marketing plan of Mc Donald’s should aim at attracting
as well as retaining the consumers through products that meet
the wants and needs. In the same manner, the company
should also be in a position to provide for excellent customer
service to its clients (Tapp and Spotswood, 2013).
Employees The employees must be skilled enough and should have
relevant experience in Service Sector Marketing. This will
help to garner more consumer sales due to provision of
excellent customer service.
Suppliers The behavior of suppliers puts a direct impact on the
business. It happens as provision of poor service may enhance
the time scale of product quality.
Competitors Competitors are one of the most crucial micro environmental
6

factors that put an impact on overall working of organization.
Being a part of business it is important to examine the
responses of competitors so as to maximize the impact.
2.2 Propose segmentation criteria to be used for products in different markets
Market segmentation is all about grouping the various consumers into segment in terms
of common needs so that there can be a similar response towards a marketing action. Each of the
segments is likely to pose a different response to a marketing mix strategy. This is as each of the
proposed segment offers growth and profit opportunities
B2B and B2C
Figure 3Segmentation criteria’s
(Source: Fitter, 2001))
From the above illustration, it can be depicted that these two segmentation criterias
specified above tends to be undertaken by the business organizations. Hence, it is the case with
the McDonald as well who have used it with respect to its new product named, Brekkie Roll.
The proposed segmentation criteria for selected product being Brekkie roll is as follows.
The segmentation to be used in this respect can be demographic. The set criteria can be in the
area of family size as well as income. In this regard, the Brekki roll can be segmented on basis of
small size, medium size and family size (Metcalf and et. al., 2012). The small size can be for
kids. Medium size can be for an average adult person. While the family size can be eaten by
7

entire family of four. In the same way, the price range for Brekkie roll can be set as per the
decided size.
2.3: Choose a targeting strategy for a selected product/service
After the segmentation has been carried out the need is to make a child of proposed
targets. This is as a single strategy may not suit to all the client groups. Hence he is to develop
specific strategies for target markets
The targeting strategy in the present scenario can be Multi-Segment Targeting for Brekki roll.
The approach can be best utilized in the present context as the technique will help to focus on
well-defined markets so as to develop strategies as per them (Rosenbloom and Dimitrova, 2011).
His strategy can be beneficial for the selected product being Brekkie roll as the market has been
segmented on the basis of family size as well as income. However, making use of this strategy
can be costly as there is a need to generate greater input from management. There may further be
a need to focus on increased market research followed by using too much of promotional
strategies.
2.4: Demonstrate how buyer behaviour affects marketing activities in different buying situations
The behavior exhibited by the buyers has a significant impact on the marketing activities.
This also applies to the different buying situation that is exhibited by the buyer. The below
analysis has been made with respect to the buyer behaviour model which has been illustrated as
follow:
8

Figure 4Buying process model
(Source: Jobber and Ellis-Chadwick, 2012)
New buy
This buying situation occurs when the consumers purchase Aussie Brekkie roll for the
first time. In this scenario the marketers are required to provide a competitive argument about
Aussie Brekkie roll so as to make the consumers consume the product for at least once. The
information generated may help the consumers to make the decision regarding purchase option.
Straight Rebuy
This is the easiest kind of buying situation where buyer makes a routine purchase. Here,
the behavior of buyer is with respect to buying (Stone and McCall, 2004). Hence, the markets in
this scenario do not have to take in many efforts to confirm the sales once the order has been
satisfied. For example, if the person buys Aussie Brekkie roll on an ordinary basis then he can be
easily satisfied by the ongoing marketing strategies.
Modified Rebuy
9

In this situation, the buyer makes an option to buy a same product but there is a
significant difference from the previous purchase. The difference may occur of there is slight
change in ingredients of Aussie Brekkie roll. This noising situation requires a substantial amount
of marketing activities in order to make the consumers purchase the product. They are required
to be convinced with respect to new ingredients that are added in Aussie Brekkie roll.
2.5: Propose new positioning for as elected product/service
Positioning strategy is all about developing a brand image in the minds of consumers. It
entails for improving the perception of consumer while they make a choice for a product or
service.
Positioning model
This has been made with respect to the illustration depicted as follows:
(Source : Retseptor, 2005)
In this regard, Aussie Brekkie roll can be positioned in the minds of consumers through
many ways. One can be with the help of its taste factor (Glynn, 2011). The products of Mc
Donald’s have always been known for taste and quality. Same aspect can be applied in case of
Aussie Brekkie roll as well.
10