Marketing Principles Report: McDonald's Marketing Strategy Analysis

This report provides a detailed analysis of McDonald's marketing principles. It begins with an introduction to marketing principles and their application to McDonald's, the world's largest fast-food chain. The report then examines the situational analysis, strategy formulation, marketing tactics, and implementation and control within McDonald's marketing process. It explores micro and macro environmental factors impacting McDonald's, including employees, suppliers, customers, political, economic, social, and technological aspects. The report delves into market segmentation, targeting strategies (differentiated, undifferentiated, and concentrated), and consumer buying behavior, specifically in the context of the new Aussie Brekkie Roll in the UK market. The report concludes with a summary of key findings and recommendations for McDonald's marketing strategies. The report also includes illustrations of the PEST analysis and different targeting strategies.

MARKETING
PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1...........................................................................................................................................1
1.2...........................................................................................................................................2
TASK 2............................................................................................................................................3
2.1...........................................................................................................................................3
2.2...........................................................................................................................................4
2.3...........................................................................................................................................6
2.4...........................................................................................................................................7
2.5...........................................................................................................................................8
TASK 3............................................................................................................................................9
3.1...........................................................................................................................................9
3.2...........................................................................................................................................9
3.3.........................................................................................................................................10
3.4.........................................................................................................................................11
3.5.........................................................................................................................................12
TASK 4..........................................................................................................................................13
4.1.........................................................................................................................................13
4.2.........................................................................................................................................13
4.3.........................................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
ILLUSTRATION INDEX
Illustration 1: PEST analysis...........................................................................................................4
Illustration 2: Different Targeting Strategy.....................................................................................7

INTRODUCTION
Marketing principles can be defined as a process of communicating the value of the
product and service to the customers in order to get the competitive advantage over the
competitors. In the same context, marketing principles is also considered as an idea that helps
organization to make effective decisions on the basis of different products and also with the help
of different promotional strategies (Kotler, 2008). For understanding this concept, e organization
undertaken for the present study is McDonald's which is the largest chain of the hamburgers fast
food restaurant and the cited firm is serving different food products to almost 68 million
customers on the daily basis in more than 36000 outlets which are spread in 119 different
countries of the world.
In accordance to this, the present report is based on evaluating different elements of
marketing process. Further, this report will showcase different macro and micro environmental
factors which will impact marketing decisions of the cited venture. Moreover, this study will
focus on identifying different products which will lead enterprise to get competitive advantage
over the major competitors.
TASK 1
1.1
Marketing is a management process through which goods and services are introduced in
the market through using a proper concept and it generally revolves on four elements i.e.
identification of product, deciding the price, choosing distribution channel and finally
implementing a promotional message for products and services (Parker and et.al., 2011). Further,
there are different elements of the marketing process and some of them have been stated below: Situational analysis: McDonald's has to conduct different situational analysis in order
to identify the market condition and also to increase its market share in coming time
period. Company can focus on SWOT, PESTLE, PORTER'S five forces, Value chain
analysis, etc. Formulating Strategy – After conducting the situation analysis, it is required to develop
strategy so that more of customers can be attracted towards the company. In this regard,
company need to do segmentation, targeting and positioning. For this, market
segmentation for McDonald's is quite large and heterogeneous. Further, it is the most
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important element of marketing process in case of McDonald's as it has to target each
and every individual from the target group. McDonald's is focused on dividing the
targeted market into smaller groups in order attract more number of customers and
centralizing on fulfilling their needs and objectives. Marketing Tactics- Once the strategy is developed, tactics needs to be taken into
account in order to address the needs of target customer. In this regard, marketing mix is
a crucial element as this factor focuses on influencing the demand of customers for cited
firm's product (Ghuman, 2010). In this, decisions are taken with regards to product,
place, price and promotion.
 Implementation and control- McDonald's has to set the marketing objectives so that
they can get maximum profits and revenue as per the stated short term goals and
objectives. Beside this, same need to be implement and control so that better results can
be obtained through it. In this regard, controlling can be done by assessing the response
rate and identify loopholes in the strategy.
1.2
Marketing orientation can be referred to a concept in which company develops products
and services as per the needs and wants of the customers. Through this, large set of customers
are influenced towards the company and hence it aids in developing a sound base of customers.
This supports in attaining loyalty by meeting with the needs of customers in effectual manner
(Kotler, 2008).
Cost for McDonald's
For attracting customers towards their existing and new products, cited firm generally
focuses on giving them discount and also attracts them with the help of some seasonal offers.
Moreover, in order to promote the availability of discounts and offers, McDonald's spends a lot
of money on advertisement and other promotional methods. Further, there are other costs as well
which they conduct in order to promote their products ahead of their competitors (Henley, N.,
Raffin and Caemmerer, 2011). McDonald's is having great support of their loyal customer base
as they spend a lot of money on doing a specific market research.
Benefits for McDonald's
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With the increase in cost, organization is also getting lots of benefits from market
orientation. The core one is that they are able to win the hearts of their customers and this is the
only reason of increasing the sale and revenue of cited firm in last half a decade. These
consumers will be loyal towards the organization and McDonald's is having responsibility to
deliver the best quality of products and services to them. Further, by taking efficient feedback
from the clients, company will be able to make sudden changes as per their requirements and it
will be considered as a pure benefit for the cited business venture.
TASK 2
2.1
Micro environmental factors:
These are the factors which generally exist within the organization. Employees and
shareholders may have direct impact on the organization whereas competitors and customers do
not influence directly to organization but they impact to a great extent (Armelini, G. and
Villanueva, 2011). Employees- Employees of McDonald's are multi skilled and talented and they play a
significant role in increasing the brand image as well as revenue and profits of the firm.
Further, organization is having almost 4,20,000 employees who are giving their
productive services throughout the globe. Suppliers- Suppliers are those who supply raw material for the preparation of meals in the
organization. McDonald's has to assure that their suppliers should deliver products on
time basis. Organization also has large suppliers base and it purchases different types of
raw materials as per their requirement and sale.
 Customers- Individual perception towards McDonald's product plays a significant role as
entity cannot force them to use their services. Consumers are only influenced if
mentioned organization is having strong marketing technique to sell their products (The
Impact Of Micro and Macro Environment Factors on Marketing. 2015).
Macro environmental factors Political- Political factor that impacts the turnover of McDonald's is different rules and
regulations which is made by the UK government. Further, performance of firm will be
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affected if government of country increases tax rates and implements sudden trade
restrictions.
Illustration 1: PEST analysis
(Source: PEST Analysis: Definition, Examples & Templates. 2014)
 Economic- Marketing decision of the firm is impacted by various economic factors
including inflation and recession conditions as consumers have nothing to spend which
will decrease sale and productivity of McDonald's (Leonidou, Katsikeas and Morgan,
2013).
 Social- Needs and demands of individuals is changing constantly and organization has to
deliver only those products which satisfy the customers’ needs significantly.
Organization at times get affected just because this market is more sensitive and
substitute products are available in the market at a cheaper rate.
 Technological- Technology is getting innovated continuously and major innovations in
corporate line are bar coding, computer related designs and online shopping (Ferrell
and Hartline, 2012). McDonald's preferring online billing before serving the product and
in coming time they are focusing on self-serving system which will save more time for
consumers.
2.2
For market segmentation of product, McDonald's has to produce different varieties of
products according to the needs and demands of customers. This time mentioned company is
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planning to sell their existing product which they used to serve in Australian market. McDonald's
is launching Aussie Brekkie Roll which is prepared with the help of two sausage patties, bacon,
cheese, mayo and also BBQ sauce. In order to conduct the segmentation, company can divide the
market on the basis of geographic, demographic, psychographic and lifestyle for B2C markets.
Base of Segmentation Example
Geographic Region wise segmentation such as north, west, east, south.
Country, city, region etc.
Demographic Age, gender, income level, occupation, relationship status and other
related
Psychographic Social class, behavioral, occasion, interest, attitude etc.
Lifestyle Social status, personality, mindset, buying capacity
Considering this, marketing manager of the cited firm will majorly focus on two
segmentation namely demographic and psychographic. Within the context of demographic
segmentation, company can segment on the basis of age as kid, adolescent and adults. This will
help in attracting each set of customers with different marketing strategy. Further, psychographic
segmentation can be done on the basis of interest in which individual that like to have burgers
are been focused majorly. Further, being a reputed fast food venture in UK, many customers will
be attracted towards the organization’s product and for initial time period, cited firm will allow
discount to individuals so that they will start liking the product and in respect of it McDonald's
will be able to achieve the hearts of their loyal customers.
Beside this, McDonald need to segment market for B2B customers as well. Here,
segmentation can be done on the basis of operating variables, purchasing approach, situational
factors and personal characteristics. These have been enumerated below:
 Operating variables: This segmentation deals with customer technologies, nonusers and
users, and other capabilities of customers.
 Purchasing Approach: Company either follows centralized or decentralized purchasing.
Majorly company in B2B market goes for competitive tendering in which goods and
services are procured from suitable suppliers only.
 Situational factors: In this, company buys products due to urgency, fast delivery and
other related.
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 Personal Characteristics: Here, personal selling is practiced in order to generate order
from business buyers.
In this regard, McDonalds need to segment business buyers on the basis of operating variables.
Here, brand name and quality products of McDonalds will aid in attracting more of business
buyers.
2.3
With the completion of the market segmentation, McDonald's will be now focusing on
choosing an appropriate targeting strategy for the new product in the UK market so that they will
be able to give a tough competition to their major competitors. In this context, targeting can be
referred to define the market segment that will be focused majorly for the purpose of boosting
the sales volume. With the determination of target market from segment, company can able to
develop strategies that aids in gaining attention from varied consumers (Ferrell and Hartline,
2012). Further, in context of targeting cited firm will focus on different targeting strategies and
few of them has been discussed below. Differentiated strategy: Under this, business organization focuses on two or more market
segments and prepares an appropriate market mix for different market segmentation
(Dibb and Carrigan, 2013). Undifferentiated strategy: Undifferentiated strategy emphasize on displaying a single
promotional message to all the potential customers.
 Concentrated strategy: Concentrated strategy is a strategy which emphasis shows the
advantage of a product for a particular market segment.
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Illustration 2: Different Targeting Strategy
(Source: MF Strategic Marketing Market segmentation, target market and positioning, 2015)
In order to promote new product Aussie Brekkie Roll, cited firm can implement
undifferentiated strategy as McDonald's will focus on advertising same promotional messages
for both demographic and psychographic segmentation. Organization can promote their new
product to different customers through different advertising sources (Gunsel, 2012). Further, for
targeting effectively mentioned organization will have their core focus on kids, teenagers and
family.
2.4
Consumer buying behavior is considered as a mental and emotional processes and
organization have to effectively consider this in order to increase the brand image and revenue
for the specific product. Further, consumers only choose those products which satisfy their
needs and demands in a significant manner and in the initial time period, McDonald's will face a
buyer behavior towards their newly launched product (Lefebvre, 2011). In this regard, buyer
behavior of individual customers for McDonalds will affects from different factors namely
social, cultural, psychological, economics and personal factors. In this, buyers will influenced
socially from family needs and reference group. Additionally, cultural factors will include sub
culture of customers, social class, beliefs and values etc. Beside this, psychological factor is
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comprises of perception of customers, motivation, learning and attitude. In addition to it,
purchasing power, age and lifestyle also influence the buyer behavior and hence McDonald
needs to consider the same for sustaining in the market for longer. Due to change in factors,
company need to offer Aloo tikki burger in India, pork free burger in Middle East and non-beef
burger in India. Further, cited firm cannot force individuals to choose their products for
satisfying their utility. Moreover, for increase the sale and productivity; cited firm can use
effective advertisement and sale promotion for increasing the customer base in UK. Further,
mentioned company is giving varied options to customers to select best of the meal from the
specific list. Product once liked by the individuals will attract them automatically towards the
retail outlet of the firm.
In addition to it, above factors also influences behavior of business buyers as well. In
addition to it, organization and environmental factors also influences the behavior of business
buyers.
2.5
Positioning is considered as developing the product along with the goodwill of cited firm
in the eyes of their potentially loyal customers. Positioning process also includes changing the
perception of customers regarding the experience they had after having McDonald's new product
(Bruno and et.al., 2013). Further, the positioning strategy of McDonald's is prominent since the
initial stage of the incorporation. Further, McDonald's develop alternative positioning strategies
for the different market when it is compared with their major competitors.
Furthermore, cited organization has to make the positioning of existing as well as new
product in the minds of all classes of people. Whether it would be on basis of their occupation
and earning or as according to the interest and attitude of the individuals, a reputation in terms of
brand image regarding to that service should be enhanced. Further, McDonald's can do effective
positioning of their product with the help of advertisement technique and cited firm can also take
the help of social media and other sources to increase the sale and productivity of the newly
launched product.
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TASK 3
3.1
Recently, competition has been increased in each and every field and in order to meet this
cited firm is applying different techniques in order to have a competitive advantage over their
major competitors (Jackson and Sparks, 2005). Further, competitive advantage is basically a
unique feature about the product which is analyzed by the consumers and they choose the most
as compared with other products of the organization. Some competitive advantages which
McDonald's can use are: Product differentiation: If the newly launched products of cited firm are unique as
compared with competitors then guarantee product differentiation will come into
consideration. Further, price of McDonald's products differ on the raw material which
organization is using in order to produce that product. However, aforesaid organization
cares for the customers' demand and McDonald's focuses on producing the best quality of
products at an affordable price.
 Cost competitive advantage: This is the advantage in which company uses skilled
employees, inexpensive raw materials and superior operations for generating maximum
value to consumers (Ruckman, Saraf and Sambamurthy, 2015). However, some of the
companies use offshore methods for keeping their cost of production as low as possible.
 Focus: In addition to it, McDonald can adopt strategy of focus as well in which main
emphasize will be on specific segment of customers only. It can either be cost focus or
differentiation focus.
3.2
Distribution has a significant effect in raising the convenience of individuals. In this
context, the distribution system of cited firm can appear as major competency for organization.
Within the context of distribution, there are different levels that can be incorporated for
delivering the products to actual customers. These levels have been discussed below:
 Level Zero: When goods are delivered directly to the customs by producers then it is
termed as level zero distribution. In this context, there is no middleman between
producers and customer due to which company is able to deliver goods very quickly with
low cost of distribution.
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 Level One: In this, retailer is present in between the producers and customers which aids
in delivering products within the convenient reach of customers. Through this, company
is able to expand its reach further. McDonald offers products from the retail outlets in
different country that aids in meeting with the needs of varied customers.
 Level Two: This is a level in which retailer and wholesaler coexist in between the actual
producers and customers. With the help of it, company is able to enhance its operational
base and can enter into different region.
Further, for increasing more of the sale for the new product, McDonald's will sale it in their retail
outlet so that more of the customers will come to have it and this will simultaneously lead to
increase the sale of a specific product. Further, mentioned company is going with the aim of
keeping the distribution cost to low as possible. Moreover, in order to increase the sale for the
same product, cited company can choose: Selective distribution: Selective distribution is a distribution channel which emphasize on
creating high market sales by developing effective income by selling the newly launched
product in the company’s outlet itself (Olimpia, 2011).
 Intensive distribution: This strategy focuses on making maximum availability of
products within market so that customers get best of the experience from the product at a
reasonable price.
Apart from it, McDonald's can focus on online product delivery where the product will be
directly send to the customers without including any type of whole seller or retailer. Dominos
and Pizza Hut have started this service which supporting them effectively to increase their sale
for the products.
3.3
Pricing strategies will help McDonald's to increase the sales and brand value for both
their newly launched as well as existing products. However, there are certain factors that affect
the pricing decision of cited company. In this, price of competitors need to be considered by the
company while setting prices. Company need to set price as per the competitor’s price so that
more of customers can be attracted towards it. Additionally, rise in cost of operation also makes
an impact over the price. Economic conduction and change in regulatory mechanism are also
need to be considered by the company at the time of charging prices as it aids in boosting the
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