Comprehensive Marketing Analysis: McDonald's Principles Report

This report provides a comprehensive analysis of McDonald's marketing principles. It begins with an introduction to marketing and its core elements, followed by an examination of McDonald's marketing processes, including planning, research, strategy, and tactics. The report delves into the benefits and costs of a market orientation for McDonald's, exploring how it gains a competitive advantage and fosters customer satisfaction. It then analyzes the micro and macro environmental factors influencing McDonald's marketing decisions, utilizing SWOT and PESTLE analyses. Furthermore, the report examines McDonald's segmentation criteria, targeting strategies, and the impact of marketing activities in different buying situations. It also covers product development, distribution, pricing, and promotional strategies. The report concludes by comparing marketing mixes for different consumer segments, highlighting the differences between marketing products and services to businesses versus consumers, and differentiating between international and domestic marketing in McDonald's case.

Marketing Principles

TABLE OF CONTENTS
Introduction .....................................................................................................................................4
TASK 1 ...........................................................................................................................................4
1.1: Various elements of the marketing process of McDonald's.................................................4
1.2: Benefits and cost of a marketing orientation for McDonald's.............................................5
TASK 2............................................................................................................................................6
2.1: Macro and micro environmental factors influencing marketing decisions in McDonald's. 6
2.2: Segmentation criteria used for McDonald's products in different markets..........................7
2.3: Targeting strategy for a selected product/service.................................................................8
2.4: Affects of marketing activities in different buying situations..............................................9
2.5: New positioning for selected/service of McDonald's...........................................................9
TASK 3 .........................................................................................................................................10
3.1: Product development to sustain competitive advantage.....................................................10
3.2: Distribution strategies used by McDonald's to provide customer convenience.................10
3.3: Pricing strategies used by McDonald's to reflect objective and market conditions...........12
3.4: Integration of promotional activity to achieve marketing objectives.................................12
3.5: Additional elements of extended marketing mix for McDonald's.....................................13
TASK 4 .........................................................................................................................................14
4.1: Marketing mixes for two different segments in consumer markets with McDonald's
reference.....................................................................................................................................14
4.2: Differences in marketing products and services to business rather than consumers..........15
4.3: Difference between international and domestic marketing in McDonald's case................16
CONCLUSION..............................................................................................................................16
REFERENCE.................................................................................................................................17
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Illustration Index
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INTRODUCTION
Decision making is an important area of the organization which is supported by
arrangement of various tools and techniques of marketing. In the words of American Marketing
Association, the concept of marketing is defined as a procedure which involves planning,
processing and execution of product, its pricing, promotion and distribution. Customers have
been taken as a priority and thereby, core lies in focus to be made on fulfilling their needs and
desire. McDonald's is one of the largest and biggest chains of fast food restaurants in the world.
It has been successfully flourished to serve about 68 million customers at over 119 nations
(Marketing at MacDonald, 2011). With the provided case study, the marketing principles
followed by this fast food chain have been studied. In reference to the provided case study on
McDonald's restaurants, marketing processes, its strategies, new product development have been
covered in the present report.
TASK 1
1.1: Various elements of the marketing process of McDonald's
Marketing is defined as the process of management where goods and services are
produced in favor of customers. The core lies in fulfilling the demand and need of the customers.
This is made by the four aspects which are identification, selection and development of
a product, ascertaining of its price, choosing appropriate distribution channel
to reach the customer's place, and use of a promotional strategy.
Marketing processes plays significant role in determining the brand image of the
organization. As per given case study, McDonald's is well known for its brand. Therefore,
following elements of marketing process of McDonald's have been discussed as follows:
Planning
As per given case study, marketing plan of the McDonald's is created to meet its
objectives. They breakdown their long term objectives into shorter term measurable goals. By
the plan, this fast food chain ensures marketing actions and resources to work simultaneously.
Research
As referred from the case study, market research of the McDonald's takes into account
everything that affect customer's purchasing decision (Retseptor, 2005). With the use of various
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tools and techniques used by this fast food firm, the psychological factors of individual are taken
care to achieve branding.
Strategy
The marketing strategy is another element used by McDonald's. As analyzed from case
study that strategy implies use of resources and marketing actions. Identifying the need of key
audience is the main strategy which is applied in their work to meet its various business
functions such as customer satisfaction, sales revenue, market share etc.
Tactics
According to tactics, short term plan or idea that can be implemented in operations for
meeting sales is called tactics. At McDonald's, these are applied with respect to product's taste,
new line, discounts, offers etc.
Customer wants and needs
As per this concept, the core of marketing activities lies in producing goods and services
as per the demand and wants of the customers.
SWOT Analysis
This is the effective technique which is also known as internal analysis of company.
With the help of this firm can easily identify all the points regarding their internal situation. It
helps them in evaluating strengths, weaknesses, opportunities and threats of the company. With
the help of SWOT, McDonalds is able to identify their favourable and unfavourable conditions
for their firm.
Market Opportunities
Another most important element of marketing process is opportunities. With this,
McDonalds can forecast for its specific product or a service with respect to its present as well as
future condition. They are able to attain all the market opportunities as per their customer’s
needs.
1.2: Benefits and cost of a marketing orientation for McDonald's
The term market orientation refers to the implementation of market intelligence in order
to meet the need of customers with the help of customers development and modification.
Business models are applied in order to design as per the customers demand (Hargrave, 2012).
As mentioned in case study that McDonald's establishes very significant position in the mind of
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its customers through branding. This type of market orientation is adopted for gaining the
various benefits and cost of a market orientation stated as follows:
Benefits of marketing orientation
Market orientation is useful for the McDonald's as it helps in assisting different needs of
the customers. Application of this aspect yield following benefits to this fast food chain:
Gain competitive advantage
McDonald's is identified as an organization who predict the need of its customers and
produced food accordingly. This is the reason why organization is ahead and gained competitive
advantage (Porter, 2011).
Customer satisfaction/loyalty
As per case study, McDonald's use customer-oriented approach. Customer research of
this firm identifies different need and profile of customers to satisfy them.
Increase sales revenue/profitability
Selection of suitable orientation is made to gain the effective outcome. Regular analysis
of results helps the firm to give flexibility to its working thereby helps in increasing sales.
Increase market share and growth
The success of McDonald's is evidenced from its number of chains all across the world
(Fitter, 2001). It is because of appropriate use of market orientation used by this fast food firm.
Cost of marketing orientation
Details of the areas which show the cost of marketing orientation at McDonald's are:
Intensive investment in research and development
According to case study, McDonald's establishes high spending on its products as per
customers need. It leads to increase in the price of its products (Graham, 2008).
Investment in technology infrastructure
Activities in which McDonald's is involved are vivid. Technology infrastructure infuses
huge spending to them.
Staff training
Employees at McDonald's are trained as per their marked standards. This is to get the
advantage of efficiency. Staff training cost the firm as a huge spending.
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TASK 2
2.1: Macro and micro environmental factors influencing marketing decisions in McDonald’s
Decision making at the McDonald's are influences by some internal as well as external
factors which have been analyzed on following basis:
Micro Environment
SWOT is an abbreviation for strengths, weaknesses, opportunities and threats. This is a
significant as SWOT analysis is used for auditing the overall strategic position of a business and
its environment. The rationale behind using the SWOT analysis is to provide a framework to
measure firm’s ability to overcome barriers and avail the opportunities.
Strengths
Collaboration with Coke
Successful brand name and advertisement and
promotion.
Training provided to employees in professional
ways.
Competitive prices of the products.
Clean and playful environment.
Weaknesses
Management of Joint ventures and Franchisee
Weak development of the products
Opportunities
The internationalization concept which
accounts for only one percent of the world’s
population
Growing interest of people for out dinning
Threats
Threat of competitors such as Burger King,
KFC etc.
Change in mind of people with respect to junk
or unhealthy food.
Existence of global recession in the world
In order to know the internal position of the organization, there is need to assess the
internal factors. For that, SWOT model has been used for knowing about the present and future
business of the McDonald's (Jain and Jain, 2014). According to case study, this analysis will help
to determine the operations they can do to increase its chances of marketing successfully.
Macro Environment
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PESTLE analysis has been conducted in order to study the macro environment of
the McDonald's
Political Increasing international trade agreements
Pending tax reform
Evolving public health policies
Economic Slow but stable growth of the U.S. economy
Stable but risky European economies
Slowdown of the Chinese economy
Social Widening wealth gap
Increasing cultural diversity
Healthy lifestyle trend
Technology Moderate R&D activity in the industry
Increasing business automation
Increasing sales through mobile devices
Legal New legal minimum wage levels in the U.S (Patterson and et.al., 2010).
Local health regulations in workplaces and schools
Animal welfare regulation
Environment Rising interest for corporate environmental programs
Increasing emphasis on sustainable business strategies
Climate change
2.2: Segmentation criteria used for McDonald's products in different markets
The term segmentation is defined as a marketing strategy where market is divided into
categories for meeting the different needs of the customers. As per case study, McDonald's is
always ahead in producing goods and services as per the needs of the customer. Basically, there
are four main types of segmentation criteria detailed as follows:
Geographic Segmentation
In this segmentation type, the mass has been targeted on the basis of locations. It is
generally suitable for the company who are dealing in small market areas (Thrassou and et.al.,
2011). For example, clothing stores.
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Demographic Segmentation
A type of market segmentation where customer are identified by the bifurcation of the
customer’s needs and demand has been made on the basis of family size, age, religion, ethnicity
etc. It is generally seen in the market such as an automobile company who can target markets for
their cars based on age, genders and income levels of customers.
Psychographic Segmentation
It is another type of market segmentation where division of market has been made on the
basis of various segments on the basis of different categories (Wright, 2005). These are inclusive
of factors such as personality, attitude, lifestyle and interest. The central idea behind choosing
this type of segmentation is to support the marketers to design products to match with customers
need and aspiration. For example, companies of organic food who target their products to select
only those consumers who are conscious to their health.
Behavioral Pattern
A segmentation type where division has been made on the basis of various factors such as
knowledge, use, response, attitude of customers is behavioral pattern. Buying behavior of the
customers are generally taken care and has been classified on the basis of dimensions such as
occasional buying, purchasing products to seek benefits, etc (Layton, 2011).
Examples
Products Type of Segmentation
Happy meal product
of Mcdonald's
Demographic Segmentation has been done where the division has been
made on attracting the young adults and students between the age group
of 15 to 29 years of age.
McVeggie Burger and
Mc Aloo tikki burger
Psycho-graphic Segmentation has been adopted which has been made
by segmenting on the basis of customers convenience and lifestyle.
These products focus on providing relax environment (Finch, 2008).
2.3: Targeting strategy for a selected product/service
Targeting strategy
It is defined as the selection of potential consumers to whom a business is desirable to
market products or services. As per this strategy, there are inclusive of segmentation of the
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market, choosing suitable market arena, determination of market etc. Firms offer various
products and services which are achieved mainly through the use of targeting strategy by the
organization. The targeting strategy is adopted in order to give the significance of giving an
advantage of placing a new product in the market. According to the case study, McDonald's
paves very much attention to the taste, preference of its customers. Therefore, the products are
produced in mass quantity and high sales volume. It is to earned good and effective return from
the targeting approach. McDonald's is a fast food firm who uses various approaches of the
marketing. In the market, the factors of measurable products with their size, accessibility, growth
and profit are taken while doing selecting type of targeting strategy.
Differentiated Marketing Strategy
According to differentiated marketing strategy, company develops marketing campaigns that
influences at least two market segments or target groups. For example, a firm can encourage a
sale that make people impel at particular locations. With the help of differentiated marketing
strategies, McDonalds can target many more than two segments to create campaigns that appeal
to both men and women in a variety of age groups. Differentiated marketing strategies encourage
the use of different communication in the same campaign for different segments. For example, a
retailer might market low cost to a budget-conscious segment and product quality to a prosperous
market segment. It chooses differentiation targeting strategy as a new market targeting to
develop interest in a specific brand to study the effectiveness of its products.
2.4: Affects of marketing activities in different buying situations
McDonald's has been using marketing strategies where they are successful in identifying
the customers and their buying behavior. However, they are vital to be considered as these
marketing activities affect the buying behavior of the consumer sin different situations. Firstly,
there is complex buying behavior where customers living in urban areas are generally targeted by
the McDonald's. Therefore, understanding the complex purchasing attitude of people is essential
in producing various products and services. Secondly, there are varieties seeking buying
behavior where customers who demands variety are included. This is same in context to the
customers of McDonald's as well (Cadogan, 2012). They expect eatables available in different
variety. Therefore, this fast food chain focuses on making them available with different food
varieties.
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Thirdly, there is habitual buying behavior where purchaser has been detected by
marketers by selecting goods on the basis of their nature. Generally, low price and high quantity
are their preference. Therefore, McDonald’s also tried to make available the products in
minimum quantity as well for its customer. Lastly, there is dissonance buying behavior which is
a category where there are infrequent buyers are available. It is generally not seen in case of
McDonald's.
2.5: New positioning for selected/service of McDonald's
Positioning is another component of the STP strategy of marketing which is used by the
McDonald's. New positioning is essential for this fast food chain in order to launch its nmew
product in the market place. As analyzed from the given case study that McDonald get more
number of customers but still they made more emphasis on their targeting technique. This is
required in order to get the sustainable advantage over their competitors in the long run.
There is general the aspect of producing goods which contains low cholesterol (Jarvis,
MacKenzie and Podsakoff, 2003). This can be applied to attract more consumers who are diet
conscious as well. Therefore, positioning can be made by adopting the differentiation strategy
where penetration pricing technique can be used. For example, by introducing burgers which are
of low fat can attract number of health conscious people. Similarly, the food items such as ring
roles, potato chips or colorful items can be introduced to attract children at minimum price value.
They should apply new positioning technique to create a new image in the minds of consumer
about healthy variants available at the McDonald's. Another positioning strategy which can be
used by the McDonald's is the undifferentiated marketing. In this, this fast food chain can offer
same marketing mix to mass audiences.
TASK 3
3.1: Product development to sustain competitive advantage
The product development is considered as the significant aspect which is made to achieve
the competitive advantage. In context to given case study where McDonald's develop its products
by considering the Michael Porter's product development strategy. The significance of using this
model is to provide differentiation to producers to segment markets. This is to target goods and
services at various segments. The discussion of each and every strategy as used by McDonald's
has been used as follows:
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Cost leadership
Mcdonald's working and operations always stay ahead in incorporating leadership in
terms of cost. By providing food and drinks which are different in process as well as quality, it
has been successful in occupying a larger market segment in the industry (Dann, 2008).
Differentiation
This is the strategy suggested by Porter. According to this, differentiation is an aspect
where the core lies in developing a factor. As analyzed from the case study, McDonald's has
establishes a strong command over the taste factor. It has helped it to emerge in the whole
industry as the first choice of every customer.
Cost focus
This is another strategy where functions and business of the organization tries to create a
competitive advantage over the niche market.
Differentiation focus
By differentiation focus, we mean the aspect of using practice where efforts are made to
produce the goods and fast food which is different from the competitors. The reason McDonald's
always stay ahead is its differentiation focus which is highly taken into consideration. All the
points stated above helped the organization such as McDonald to ascertain the competitive
comparison of points to other competitors such as Burger King, KFC etc.
3.2: Distribution strategies used by McDonald's to provide customer convenience
The term distribution strategy is defined as sources or channels which are used to make
goods available to the final customers. Generally, there are two methods which are used for
selling new products and services. By using effective and suitable distribution strategy, the
selling of goods can become more appropriate. After, producing and pricing of product, the
distribution strategy is considered to be vitally crucial activity. The reason is to focus the
customers. It has been made by adopting the three main ways detailed and discussed in regards
to McDonald's.
Firstly, there is direct channel which is a distribution strategy where the customers can
take the respective information about the products and services directly from the marketers or
retailer. By engaging into the practise of direct purchasing and selling of goods, direct
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