Marketing Principles and McDonald's Case Study Report

This report provides a comprehensive analysis of McDonald's marketing principles, encompassing various elements of the marketing process, environmental factors, and buyer behavior. It begins by outlining the key components of McDonald's marketing process, including research, strategy, planning, and tactics. The report then explores the benefits and costs of market orientation, emphasizing customer value and competitive advantage. Furthermore, it delves into the micro and macro environmental factors influencing McDonald's marketing decisions, such as customer behavior, competition, and social trends. The analysis continues with an examination of market segmentation strategies, including geographic, demographic, and behavioral segmentation, with a focus on how McDonald's targets different customer groups. The report also discusses target strategies like undifferentiated, concentrated, and differentiated marketing. Finally, it explores how buyer behavior, influenced by social, cultural, and personal factors, affects marketing activities in different buying situations, covering aspects like consumer behavior and the impact of social media.

Marketing Principles
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TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1.1.................................................................................................................................................3
1.2.................................................................................................................................................4
Task 2...............................................................................................................................................4
2.1.................................................................................................................................................4
2.2.................................................................................................................................................5
2.3.................................................................................................................................................5
2.4.................................................................................................................................................6
2.5.................................................................................................................................................6
Task 3...............................................................................................................................................7
3.1.................................................................................................................................................7
3.2.................................................................................................................................................7
3.3.................................................................................................................................................8
3.4.................................................................................................................................................8
Task 4.............................................................................................................................................10
4.1...............................................................................................................................................10
4.2...............................................................................................................................................10
4.3...............................................................................................................................................11
Conclusion ....................................................................................................................................12
REFERENCES .............................................................................................................................13
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INTRODUCTION
Marketing principle is used to optimize the market performance of existing product and
for launching new product in new market. The present report is based on the McDonald is largest
chain of hamburger fast food restaurant. In the present report discuss the various elements of
marketing process which is followed by McDonald. Furthermore, determines the environmental
factor influencing the marketing decision. Along with that, demonstrate the way by which buyer
behavior is affects marketing activities in different situation. Apart form that discuss the
elements of marketing mix important for McDonald.
TASK 1
1.1
According to the given scenario, various elements of the marketing process of
McDonald's are as follow
 Research: McDonald required to first research the market and determine the requirement
of market. This research has been done to know the that what strategy to be adopt for
launching the product in market (Bahadir, Bharadwaj and Srivastava, 2015). Through
market research McDonald can collect the data which help in analyzing and action.
 Strategy: After collecting the data McDonald come to know where to launch product.
They also get knowledge position of company in the market in terms of strength and
weakness (Baker and Parkinson, 2016.). Furthermore, also get idea which type of
strategies they need to be implemented and factors need to adopted. So that McDonald
can beat the competitor and and get success in the market. Hence, after research, strategy
decide the mission, vision and goal of the company.
 Planning: In this step, McDonald need to plan how to achieve the goal. In market
planning it include sale forecasting, financial planning and communication strategy for
achieving the strategic goals in future (Chen and et.al., 2015). Work of planning
department in McDonald is keep record to see that they are properly working on strategic
plan or not.
 Tactics: Tactics is short term plan which is implemented to beat the competitor, increase
sales, attract the customer need to achieved by McDonald. Sales tactics is such as offer
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on product “buy one get one free” (French and Russell-Bennett, 2015). Decreasing he
price of product at the time of festival is known as promotional tactics and there are
several such tactics which is implemented by company
1.2
Benefits and cost of Market orientation is a business model that focus on the products to
be made according to customer need and demand. Market orientation has a large development
cost.
 Increasing value increasing cost: when the value of product is increases the cost of
production also increases (Grigolon and Verboven, 2014.). For example providing
services to customer it is necessary for McDonald to increase staff for customer services
hence it increase cost.
 Building customer value: For increasing the loyalty of brand and for maintaining
customer base it can be done through market orientation approach (Huang and Sarigöllü,
2014). Brand loyalty is is the important for the organization.
By building a customer value McDonald can easily increase its profitability. Through
creating and delivering value can develop total customer satisfaction.
 Respond to demand: McDonald get benefits if it fulfill the demand of the customers.
Customers taste and preferences changes after a particular period of time. Products made
by a customers should be according to their taste and needs.
 Customer centric: Through customer centric approach add value to a company by
making a products different from its competitor. It increases the customer base and
benefits to the McDonald.
 Fulfilling demand: By fulfilling the demand of customer MacDonald can easily
increases the profitability. Sometimes customer wants products and services according to
their needs. So it is necessary for company to fulfill their needs and demand.
 Making valued customers: it is important to understand what drives a value for
customers. Through survey McDonald get information which type of products they want
and what changes company required in their products. It valued the customers and also
increases the benefits of the company.
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 Competitive advantage: McDonald is selling a products which are different from other
other brand and at reasonable price. It helps company in gaining competitive advantage.
Cost
 Research can be expensive and involve high cost in research: McDonald can make
market research of their products to know how much their products are liked by
customers. It can be expensive to conduct a research, it also consume time. Through
research McDonald can easily know which types of products more demanding in the
market.
 Advertisement cost: McDonald advertise its products in market which cost high. It can
advertise through newspaper, social media etc.
 Higher prices: If the price of the products then McDonald customer will switch to other
brand products it effects the sales of product and also company face loss
 lack of predictability: Company charge high cost on their products without making sure
that it is liked by customer or not. Company makes strategy without thinking it is cost
germinating in future or not.
TASK 2
2.1
Macro and micro environment factor influences marketing decision of McDonald are as
follow
Micro environment factor
 Customer: McDonald not provide product according to the customer demand then it
affects customer they cannot earn profit (Huang and Sarigöllü, 2014.). Company should
know the customer type and developed effective marketing campaign to build a customer
base.
 Competitor: The competitive environment consist many basic things which firm has to
keep in record. McDonald has to face various form of competition (Jaramillo and
Spector, 2015). If competitor of McDonald provide different types of product and
services then its affect the sales of their company.
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 Suppliers: Suppliers also influence the decision of McDonald in many ways. If there is
one supplier then bargaining power is in supplier hand. suppliers provide resources to the
company when they needed.
 Employees: Employees are the part of the organization and it influences the marketing
decision. Employee exert an influences the the product quality, profitability and
operations through their activities
 shareholders: McDonald used new strategy which are mostly beneficial for the
organization. By applying new technology company can increase it sales which beifits
the shareholder.
 Media: Media also affect the ongoing business image. They support the McDonald
because it provide a jobs.
 Company: McDonald is proving a high quality of services to their customers. It is using
new technology which are useful in increasing the sales of business.
Macro environmental factor
 Social and cultural factor: Changes in social trend has a great impact on demand.
Consumer purchase is affected by the changes in core cultural belief of people (Johanson,
and Mattsson, 2015). McDonald need to sale a product which not hurt the belief of
customer.
 Technological factor: Advance technology has been developed in UK, so McDonald
need to adopt those technology (Kumar, 2015). Through internet McDonald can easily
advertise their product and sale it online. It provide advance service to customer such as
online order and payment option.
 Political factor: There are many political factor which influences the marketing decision
of McDonald. These factors are Increasing international trade agreements, evolving
public health policies etc. hence, public health policy increasingly tends to discourages
people from consulting fast foods from McDonald.
 Economic factor: Economic factors influences the marketing decision of McDonald.
External factors are stable but European economies and stable growth of US economy
etc.
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 Social factor: McDonald required to respond the socio culture changes. At the time of
making products they need to keep in mind that culture and value of consumer not be
affected. Healthy lifestyle trend affecting the business of McDonald because it products
are often criticized for negative health effects.
 Technological factor: MacDonald success is depend on the advance technologies. By
using advance technology firm can easily sell its product any where. Online website of
McDonald helps costumer to buy product by sitting at home.
 Environmental factor: environmental factors that affects the McDonald consumer and
also a performances of company. The social responsibility of company influences to the
operations of the organization.
 Legal factor: There are many legal factors that affecting the marketing decision of th
McDonald. Company is facing loss due to higher minimum wage rate, it leads to higher
cost and prices of products.
2.2
There are various type of market segmentation used for which McDonald can easily use
to construct market segmentation. Such as geographic, demographic, behavioral etc.
 Geographical segmentation: This type of market segmentation divides people on the
basis of geography. McDonald can expand its business in new geographical area where
population is high it helps in increasing the profitability of business.
 Demographic segmentation: it is one of the widest type of market segmentation used by
the McDonald. This company use it for to get the right population in using their product.
Hence this segmentation has own variables such as Age gender, income religion etc.
 Behavioral segmentation: In this segmentation population is divided on the basis of
decision making pattern usage and behavior of consumer. For example young people
mostly like a spicy burger whereas old age people want burger which is hygiene for them
 Phychographic segmentation: It is a type of segmentation in which use lifestyle of
people, their interest and activities. It is same as behavioral segmentation and it also take
a physiological aspects of consumer behaviors.
Demographic segmentation is very appropriate for the McDonald because
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McDonald utilize demographic market segmentation to sale their product in market.
McDonald target their customer on the basis of their age because it sale fast food which is mostly
avoided by old age people (Kumar, Bhaskaran, Mirchandani and Shah, 2013). For example
burger is liked by all age people so McDonald need to make it in different types by keeping in
mind health of customer. It classify in three group
 Young age group (3 to 25 years): Young age people like more fast food the other age
group people. They want burger more spicy and with different flavor.
 Middle age group (26 to 50 years): At this age of people they prefer less fast food. They
like fast food with low cholesterol which not affect their health.
 Elder age group (above 50 years): At this age of people many customer avoid fast food
because they suffer from many disease (Lages, Mata and Griffith, 2013). McDonald
require to provide the low cholesterol and hygienic fast food according to their taste.
2.3
Target strategy in different markets for products and service of McDonald are as follow
 Undifferentiated marketing: In this marketing strategy business send same promotional
message to everyone in all market (McDONALD, M.A.L.C.O.L.M., 2016.). Under this
McDonald will decide to develop a single strategy for targeting whole market.
 Concentrated marketing: In this marketing company target only one segment with one
marketing mix (McDonald and Eisenhardt, 2014.). They understand the need and motive
of the of segments customer and design marketing mix according to it for targeting
customer.
 Differentiated marketing: In differentiated marketing company follow multi
segmenting targeting strategy and develop a marketing mix for each of them (Nell and
Cant, 201). They design a specific marketing mix for each segment.
McDonald used differentiate marketing mix strategy for targeting the customer. They
can serve more products by targeting the different age people. They will give more then one
promotional message with each communication different benefits of products and service.
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2.4
Buyer behavior affects marketing activities in different buying situation by the following
components:
 Social factor: Social factor include family, role and status it influences buying decision
regarding the product and services of company (Pels, 2015). Customer are influenced by
social media and online marketing.
 Cultural factor: In cultural factor it included social class, consumer cultures etc. therfore
marketers need to analyze the culture of different group.
 personal factor: In personal factor it included age, occupation, interest etc. in this age of
consumer influence buying behavior because people buy different product at different
age (Rowley and McMurtrey, 2016).
consumer buying behavior is perception and intention and attitudes regarding the product and
services. Consumer behavior also change
2.5
McDonald adopt product positioning strategy by looking both internally and externally.
Products positioning is also result in increased sales. McDonald is increasing continuously they
need to target according to the age and sex. For fulfilling the purpose company sells company is
selling product at reasonable price (Huang and Sarigöllü, 2014.). They also focus on the health of
age people while preparing their product. Such as for low cholesterol product for old age people
and strategy that health of people is not affected by their product.
 Positioning by attributes or benefits: McDonald products and services are very unique.
Burger of McDonald is of variety of taste and hygienic for the old age people
 Positioning by quality and price: quality of McDonald product is appreciable is and it
can be afford by the all class people either they belong to middle or lower class people.
 Positioning by user: Burger is fast food which mainly not like by old age people
because of high cholesterol. McDonald burger is liked by all age people because it
makes by keeping in mind the healthy of old and young age people.
 Positioning by use: elder age people mostly like to eat burger because it is of different
taste spicy, non veg etc.
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 Positioning by product category: McDonald's product is different from the other
company product . It serves a product which is delicious and healthy for the customers.
For example it serves aloo tikki burger, chicken burger etc
TASK 3
3.1
Products an service are developed to sustain a competitive advantage include:
 Cost leadership : In this McDonald produce and sells its product to customer at lower
price then its competitor (Salam, Inam and Awan, 2015). It is done to earn high
investment to achieve economies of scale.
 Differentiation: It is strategy products and service of McDonald are different from its
competitors (Swani, Milne and Brown, B., 2013). Hence company can charge premium
price and earn profits because it has different and unique product.
 Focus: Focus is a strategy through which company can target a limited part of market.
McDonald can sustain competitive advantage if understand the customer needs of their
market (Turnbull and Valla, 2013.). By focusing on customer taste and preferences they
can earn average profit and reduce threat entering the market place.
 Branding: Effects of brand building advertising over a time helps in contributing the
sustainable advantage. McDonald has attracted by families and kids because of its happy
meal, play land areas and fast services.
Their is another competitive advantage is fast delivery of their product so that customer attract
toward their product. Through online marketing customer comes to know about he full
information of their product and quality of product. Customer can easily find their product
online and order it.
3.2
Distribution channel is platforms through which product and service are delivered to
customers. McDonald deliver their service to their customer at right time and at right place.
Through direct channel they sell product direct to customer without intermediary (Usman and et
al., 2012). McDonald also provide online services for selling of their product to customer. Their
main motive is to give easy and fast service to their customer online service customer also get
any offers and discount. Customer can easily pay through debit and credit card. Further there are
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many stores are available in the market. It can be directly bought form the manufacturer over
telephone or direct mail. Through email they can get information of product and accurate detail
of company. By seeming review of other customer on their websites they come to know about
which product is good in taste and preference.
3.3
Prices of McDonald are set to reflect an organization objective and market condition.
This company use different pricing strategy for selling their produce in market. Moreover,
products of McDonald are famous in market with cheap price (Viswanathan, and et al., 2014).
They build penetration pricing strategy to capture market share with low prices. This pricing
strategy reflects the objective of organization. They are attracting more customer and want
customer switch from other brand existing in the market. They also provide offer and discount on
products for attracting customer and for capturing market share. McDonald also consider several
factor before setting a price such as premium pricing, skimming pricing optional product pricing
etc (Wright, 2016). premium pricing strategy is useful for McDonald when they produce unique
product and services which is different from the other competitor. In this price of particular
product is higher from the other product. They also launch a new concept offering more then one
product and reduce a price on any festival. So that customer attract toward their product.
3.4
Promotional activity is integrated to achieve marketing objective. There are many
promotional activity followed by McDonald to increase their sales are as discussed below:
 Advertising: McDonald can advertise their product with different manner to achieve
objective. Through social media websites such as Facebook and google+ they can
advertise their product and service (Bahadir, Bharadwaj and Srivastava, 2015). Social
networking is used by all over the world so many customer come to know about their
activity.
 Personal selling: In personal selling it involve sales people for selling their product.
Sales person use their skill to convey the consumer for buying their product or services
(Turnbull and Valla, 2013). They mostly use pricing strategy for attracting customer to
buy their product. Through this they highlight the benefits of product and sometime offer
free delivery to their customer.
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 Sales promotion; This is a temporary incentive that convey the buyer to buy the product.
Forms of sale promotion are coupons, discounts, sales etc (Lages, Mata and Griffith,
2013). company offer discount on their product to attract more customer. For increasing
sale company also provide free home diversify for their customer within a given period of
time.
 Public relation: promoting a product in informal sense is the element of public relation.
McDonald develops relation with its customer, so that people recommended it product to
their customer.
 Company also used different marketing strategy such as online and offline for easy for
their customer. Customer can easily choose a product for buying throughout their
website. Their are varieties of menu can be seemed online. They can choose online
payment option also it is safe. secured for them.
3.5
There are additional elements of marketing mix which are mainly used by McDonald are as
follow
 place: it is important element for McDonald to determine where the service product will
be located (Rowley and McMurtrey, 2016). They need to find a place where chances of
sales is increases. They need to locate it on place where customer can easily come and
face any problem in searching their company.
 People: People is important elements it defines service (Bahadir, Bharadwaj and
Srivastava, 2015). Chef ad staff members defines customer. They need to treat a customer
in well mannered at the time of providing a a services. If a rude employee is hired by
company their it affect the customer.
 Process: Process is a way through which services is delivers to the customer. McDonald
deliver quick services without loss of quality (Jaramillo and Spector, 2015). Hence the
process of delivering is important for company. They define the process through which
product reach toe their costumer
 Physical evidence: It is a last element of marketing mix. Service are intangible however
to provide better service to customer they need to deliver tangible elements (Lages, Mata,
and Griffith, 2013). McDonald require to provide good seating arrangement, chairs and
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table and good food to their customer. It is also used for differentiating a service in
marketing.
TASK 4
4.1
Recommendation marketing mixes for different segments in consumer markets.
Basis kids Old age people
Price Price for kids to be keep less
so that they can afford easily
Price for old age people should
people should be reasonable
not so high or less.
product Product made for them should
be less spicy (Salam, Inam and
Awan, 2015). Kids prefer
different varieties product and
also sweets.
Product should be of low
cholesterol for old age people.
They are health conscious so
McDonald need to make
product which are hygienic
Place Online delivering is best for
kids.
Online and offline delivery
both are good for the old age
customer.
Promotion McDonald can promote by
making package attractive by
designing cartoon picture on it.
They can also advertise in
attractive manner for kids.
Promotion can be done by
providing additional
information in advertisement
how much is health conscious
is product for old age people.
4.2
Difference in marketing product and services to business and consumer
Business marketing Consumer marketing
Business marketing means sales of products
and services by one organization to other
organization.
In consumer marketing product and service are
exchange between organization to consumer.
Business required to buy in business market to
stay profitable in market.
In this products are buy by consumer even not
required in day to day activities
The business buyer is well-informed at the
time of involving buying process and decision
making
Customer is not sophisticated in consumer
market.
The business buyer is information searcher and
look out for knowledge and advise(Bahadir,
At the time of making decision customer only
search information for buying product.
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Bharadwaj and Srivastava, 2015).
Packaging of product is not important for
business buyer.
In consumer market packaging of product is
important.
Business products are complex for business
buyer
Simple product are their in consumer market.
4.3
International marketing is different from domestic marketing
basis Domestic marketing International marketing
meaning Domestic marketing is a
marketing done within the
geographical boundaries of
country.
International marketing is
marketing done outside the
country. Activities are
production promotion,
distribution selling etc
Area covered It covered small area It cover large area because
activities are performed
international level.
Business operation It operates business within the
country
All the operation of business
perform in more then one
country.
Risk factor In domestic business there is
low risk(McDonald and
Eisenhardt, 2014.)
Business operates outside the
country so risk level increase
Uses of technology Technology are used limited
because business function are
small
Latest technology are used by
company because they operate
at high level
Research Information is required to be
collect by research but not at
high level
There is required to deep
research because they have
less knowledge of international
market
Nature of customer Nature of customer is same There is variation in customer
taste and preferences.
Marketing strategy is required for international market is necessary for company. They need to
analysis the environment by using advanced tool and techniques. The effective pestle analysis is
used to remain n competitive market. They also need to analysis the strength and weakness of
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company in market (Swani, Milne, and Brown, 2013.). Through opportunity they can increase
their market share and survive. for longer time in market. Using of advanced technology they can
easily cover the market for long time and can take over to other company. Product an d selling
method is different in international market. They can target customer bu identifying the group
that are purchase specific goods and services.
CONCLUSION
From the above report it can be concluded that McDonald;d is using best marketing
strategy for targeting the customer. Various elements of marketing process are useful for their
business. Their are many micro and macro environmental factor influences the buying behavior
McDonald. Such as customer, competitor social factor etc. through demographic segmentation
company can easily target people of different age for increasing sales. Further it can be
concluded that company need to develop strategy to sustain in the competitive market. Along
with that there are additional elements of marketing mix which are important for expansion of
company.
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