Marketing Report: Analysis of McDonald's Marketing Principles

This report analyzes McDonald's marketing strategies, covering various elements of the marketing process. It includes a SWOT analysis, market opportunities, and integrated marketing approaches. The report explores the benefits and costs of a marketing orientation for McDonald's and examines macro and micro environmental factors influencing marketing decisions. It proposes segmentation criteria, target strategies, and discusses how buyer behavior affects marketing activities. Furthermore, the report suggests new positioning for a product/service, details product development for competitive advantage, distribution strategies, pricing, and promotional activities. The report also explores the extended marketing mix, marketing mixes for different consumer segments, differences in marketing products and services to businesses, and international marketing considerations, concluding with a comprehensive overview of McDonald's marketing practices and strategies.

Marketing Principles

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Various elements of the marketing process...........................................................................1
1.2 Benefits and costs of a marketing orientation for McDonald’s.............................................2
TASK 2............................................................................................................................................3
2.1 Macro and micro environmental factors which influence marketing decisions....................3
2.2 Propose segmentation criteria................................................................................................4
2.3 Target strategy.......................................................................................................................4
2.4 How buyer behavior affects marketing activities in different buying situations...................5
2.5 Propose new positioning for a selected product/service........................................................5
TASK 3............................................................................................................................................6
3.1 How the products/services are developed to sustain competitive advantage........................6
3.2 How distribution is arranged to provide customer convenience...........................................7
3.3 How prices are set to reflect an organization’s objectives and market conditions................7
3.4 How promotional activity is integrated to achieve marketing objectives..............................7
3.5 Additional elements of the extended marketing mix for the McDonald’s............................7
TASK 4............................................................................................................................................8
4.1 Plan and recommend marketing mixes for the two different segments in consumer markets
.....................................................................................................................................................8
4.2 differences in marketing products and services to businesses rather than consumers...........8
4.3 How and why international marketing differs from domestic...............................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals....................................................................................................................10

INTRODUCTION
One of the most crucial tasks for organization nowadays is to enhance their customer
base by the way of doing appropriate marketing for their products and services. Marketing is
becoming key concepts these days and it is all about making appropriate communication with
customers (Mesdag, 2000). With the help of this, company can easily achieve their target market
as well as enhance their consumer base. According to the American Marketing association
(AMA), Marketing is having its direct relation with the performance of company. It is highly
essential for every organization these days to fill their customers’ needs and demands. In order to
fulfill these demands, companies are required to take effective consideration at the time of
planning strategies.
For this particular study, McDonalds is taken into consideration which is one of the
largest chains of hamburger fast food restaurants worldwide. They are having millions of loyal
customers due to their quality services as well as taste. Within this respect, appropriate marketing
report is being prepared which is presented to marketing manager of McDonalds (Avlonitis,
2011). It involves different concepts regarding marketing as well as its segmentation, targeting
and positioning strategies. In addition to this, the main purpose is just to formulate a suitable
marketing campaign relating to the fundamental concepts and principles that reinforce the
marketing process.
TASK 1
1.1 Various elements of the marketing process
One of the most common goals of McDonalds is to go through the changing needs and
demands of customers in order to provide them high quality services. For the same, company
needs to imply with various elements of marketing process so that effective changes can be
made. In this concern, situational analysis is best tool through which company can make
complete investigation of their entire internal and external marketing situation. Market element
can be defined as a combination of both external as well as internal conditions of company. It
also refers to the four p’s of marketing such as: product, price, place, promotion. Marketing mix
of any organization is the element of marketing which helps the company in finding out its
position in the market.
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By setting best marketing plan company can easily go through the appropriate marketing.
In order to develop this plan, McDonald’s needs to focus on the appropriate segmentation as well
as targeting and positioning strategies (Martin, 2009). In order to adhere with the same and fill
the customer’s needs there are some of the most common marketing process elements which
needs to be used by them. These elements are as follows:
SWOT Analysis: It can also be define as internal analyses of company through which
McDonald’s can easily use identify its strengths, weaknesses, opportunities and threats for the
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Capture value from customers
to created profits and
customers equity
Build profitable relationship
and created customers delight
Construct and integrated
marketing program that
deliver superiors valour’s
Design customers driven
market strategy
Understand the market place
and customers’ needs and
wants

company. All the favorable and unfavorable conditions for McDonald’s can be identified
through its range of opportunities and threats.
Figure 1SWOT analysis
Market Opportunities: At the time of developing any marketing plan it is highly essential
for McDonald’s to go through its specific product or a service for identifying its present as future
condition (Kotler, 2010). It is regarded as another most important element of marketing process
by which company can easily identify its consumer
Integrated Marketing: It is another most important marketing element which helps the
company in enhancing its brand image. By using this concept within their business strategy
company can easily provide the consistent brand experience to all their customers.
1.2 Benefits and costs of a marketing orientation for McDonald’s
Marketing orientation is becoming one of the most crucial tasks for organization these
days. With the help of this orientation company can easily meet out the consumer needs. This
technique is used by McDonald’s in order to become more customers centric and gain customer
loyalty as well.
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There are various benefits associated with the same as McDonald’s easily able to identify
the changing needs of customers. It helps them in providing quality customer service. Moreover,
they are able to attract and retain more number of consumers towards their any newly launched
food product or Hamburger as well. In addition to this, it is highly essential to go through the
appropriate development of marketing orientation. It helps them in making their strong presence
in the market through high consumer profitability (Brassington and Pettitt, 2006). However, it
requires huge costing for better marketing orientation techniques but through this company is
able to make great revenues in food zones.
MARKETING CONCEPT
The selling concept
Starting point Focus Means Ends
The marketing concept
McDonald’s is facing huge competition with all the existing food brands such as KFC,
Pizza Hut etc. and for the same it is quite crucial for them to deliver quality service. Further, it
can be stated that with appropriate marketing orientation McDonald’s can easily retain their
4
Factory
Existing
product
Selling and
Promoting
Profits and sales
volume
Market Customers’
needs
Integrated
marketing
Profits and
customers
satisfaction
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
marketing
concept

customers and make their strong brand identity in the market (Converse, 2008). Through this,
they are able to enhance their market share and easily increase their profit margin as well.
TASK 2
2.1 Macro and micro environmental factors which influence marketing decisions
Macro environmental factors can be identified through PESTLE analysis while Micro can
be presented through internal analysis of company.
PESTLE Analysis:
Political: Political stability of McDonald’s is very broad as they are having their stores
worldwide. For the same, they need to comply with the entire political conditional and follow all
government rules related to the health and hygiene (Kotler, Bowen and Makens, 2010). Due to the
change rules and regulations of different countries McDonald’s might leads to face several
problems and it also leads to hamper their performance.
Environmental: McDonalds is highly in favor with paper packaging in order to protect
environment. They are highly environment friendly and use to protect this by complying with all
the essential policies.
Economical: Due to the changing economic condition and heavy duty and tax rates on
food products the pricing of company might affects. It is the only factor which affects the buyer
behavior as they need to pay heavy taxes on their bills.
Social: It is becoming more difficult for McDonald’s to fill the changing needs of
customers according to their different culture as per their country (Shoemaker and Shaw, 2007).
The language as well as their taste also differs according to their religion. For the same, meeting
these needs and providing quality services is becoming highly difficult.
Technological: By using various technologies McDonalds can easily go through the
quick delivery of their services. It makes their processing faster by using various technological
equipment and satisfying the needs of customers.
Legal: There are many legal requirements which McDonalds must adhere, such as the
labor and employment law, corporate law and tax requirements etc. (Till and Nowak, 2000). It
hampers their business operations.
Micro environmental analysis can also be identified as internal analysis which is as
follows:
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Strength
 Globally recognized brand
 Customization of products
 Largest food chain
Weaknesses
 Negative reviews regarding unhygienic
food products
 High tax and VAT
 Conflict situation by PETA for killing
Chicken in plentiful
Opportunities
 Huge opportunity for launching health
hygienic food products worldwide
Threats
 Huge number of competitors
 Changing demands and needs of
customers
 Banned in few countries
Porter’s five force model of McDonald’s
Threat of competition (High): This is quite high as this industry is very competitive fast
food industry. There are various existing competitors such as Yum brand INC, Burger king etc.
Threat of substitute: (Moderate) it defines that company is having its irreplaceable
image due to which its substitute products are moderate.
Threat of new entrance (High): It requires low startup cost and easy market access due
to which threat of new entrant is high.
Bargaining power of supplier (Low): McDonald’s is world’s largest chain of restaurants
most of them are having their own stores. They consist of low power of suppliers as lower the
cost of raw material, higher the competitive prices.
Bargaining power of customers (Low): Customers are not able to make any type of
bargaining regarding price of products. However, they can ask for the quality measurements and
company should improve this quality as well.
Stakeholder analysis:
McDonald’s including several stakeholders such as customers, suppliers, government,
employees etc. These are the key part of company and help in enhancing the sales margin.
Employees are responsible providing quality services to all their customers and make them
satisfied.
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2.2 Propose segmentation criteria
At the time of planning for launching any new product or a service McDonald’s needs to
select the best STP strategies. Segmentation is the most effective one through which company
can easily achieve their objectives. McDonald’s is planning to launch its new desert dish in their
menu as they are having less sweet dishes in their menu. For this, they have selected to launch
Crunchy Chocolate pie with added sugar free for all their customers (Bowie and Buttle, 2013). In
order to make effective launching of this product, company has segmented their market on the
basis of demographic and psychographic segmentation. For the same, firstly McDonald’s have
identified all its factors associated with their consumer choice and preference. They have find out
the consumer preferences and needs and try to provide them appropriate products according to
same. McDonald’s have segmented its market for high income group people as company keeps
their prices high usually. They regularly prefer to have chocolate dessert dishes and for the same
major focus are on the taste and preferences of customers.
2.3 Target strategy
Targeting is next and most crucial strategy which company need to consider at the time of
launching its product. The targeting strategy adopted by McDonalds for their new dessert i.e.
Crunchy Chocolate pie with added sugar free is highly focused on kids, young adults as well as
families (Cass and Julian, 2003). Dessert is one of the most likely categories as people usually
have some desserts after taking any food or beverage category.
With the help of targeting these people McDonald’s can easily enhance their customer base
and sales margin. There various stores can also be opened in different areas as well as crowded
places such as shopping malls, near universities etc. It is the most effective way through which
huge base of customers can be attracted towards the company (Geyer, Van and Atasu, 2007). By
delivering quality services to their target customers company can easily make better relationship
with their customers and enhance the level of customer loyalty as well.
2.4 How buyer behavior affects marketing activities in different buying situations
There are various situations which make consumers happy and satisfied towards the
shopping while some of them negatively hamper their buying attitude. In order to make them
happy it is highly essential for company to identify the changing needs of customers so that
appropriate market plan can be prepared (Cass and Julian, 2003).
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Market and other stimuli
Market and
marketing;
product, place,
price and
Buyer behaviour process
The whole marketing activity of company might get hampered due to the changing
perception of customers. It is highly possible that the attractive feature for today itself may be
discarded tomorrow. McDonald’s always try to meet out the changing needs of consumers as
they are changing day by day. For the same, it is highly essential to introduce their new product
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Other economic stimuli;
technological, political
and cultural
Buyer black box;
buyer characteristic,
buyer decision
process
Buyer responses;
product choices, dealer
choices, purchase
timing, purchase amount
Information
search
Need recognition
The buyer
procession
Evaluation of
alteration
Purchase
decision
Post purchase
behavior

after going through the proper market research. All their items of menu vary in popularity and on
the basis of this, buyer behavior affects. In the way, it can be determine in order to meet out the
different buying situation company needs to take regular updates and feedbacks from their
customers (Kotler, 2010). Their whole marketing activities get affected due to the increasing
competition within food industry. Nowadays, most of the people prefer hygienic food items with
high quality service. For the same, McDonald’s need to provide appropriate services to all their
customers on the basis of their buying behavior.
2.5 Propose new positioning for a selected product/service
McDonald’s is launching its new food product i.e. Crunchy Chocolate pie with added
sugar free after identifying the need of dessert in their menu. As per their variety of food
products, they have targeted families usually. In the concern of this new product, targeting takes
place for families, kids as well as youngsters. After going through the appropriate segmentation
as well as targeting strategy, positioning need to be done. McDonald’s can select the competitive
positioning strategy in order to attract more number of customers. For the same, they can call for
celebrity endorsement (Mourdoukoutas and Siomkos, 2009). Further, posters and banners can be
made and put at the crowded places so that customer’s awareness can be increased. With the help
of selecting competitive positioning strategy company can differentiate its product and create
value in the market. Further, target base can be easily attracted and appropriate sales margin can
be enhanced as well.
TASK 3
3.1 How the products/services are developed to sustain competitive advantage
It is highly essential for McDonald’s to develop its products according to the consumer
choice, taste and preferences so that competitive advantage can be sustain. They require
differentiating their products according to consumers and building a positive brand identity in
their mindset (Donovan and Henley, 2010). In order to sustain higher competitive advantage
some of the most common factors are as follows:
Price: Due to their high pricing strategy McDonald’s have become one of the top most
food brands. It is the most effective strategy which helps them in sustaining higher competitive
advantage. Company mainly target high as well as middle income class people and provide them
quality services.
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Place: At the time of launching any new store McDonald’s always select its store or outlet
at basic crowded places so that more number of customers get attracted (Leadley and Forsyth,
2004). These places are near to the college, schools as well as in shopping malls etc.
Promotion: The product should be promoted through effective media sources so that
company can reach out to the large target and intended audience. McDonalds usually males
perfect advertisements through televisions as well as banners in different areas of city.
Product: McDonalds is trying to make its brand presence more strong by introducing its
new product i.e. Crunchy Chocolate pie with added sugar free. It helps them in attracting huge
base of customers and makes their products more beneficial with added sugar free to all the
health conscious people (Melewar and Saunders, 2000).
The above given factors are considered to be the most effective one which helps the
organizations in attaining higher competitive advantage.
3.2 How distribution is arranged to provide customer convenience
Providing convenience to customers it is highly important to understand them and their
desires. McDonald’s need to adopt appropriate distribution channels such as licensed stores,
consumer packed goods, online services etc. With the help of this it is becoming easier to reach
out to the target customers. Crunchy Chocolate pie with added sugar free is a newly launched
product and it needed to be distributed on different outlets and franchise of McDonald’s. It is
ready to eat product which can only be available at stores (Rinas, 2007). Most of the time
consumer can demand for hot chocolate so it is easier to provide it to customers. This is the most
effective channel by which customer’s demands can be easily meet out. Due to this, consumers
can select any of their nearest stores and purchase this newly launched product.
3.3 How prices are set to reflect an organization’s objectives and market conditions
McDonald’s is highly focused about the high income class people as they are able to pay for
their hamburger food products. Company need to set their pricing strategy on the basis of
different market conditions. Prices are the only parts which are set to reflect on the organizations
objective. One of the main objectives of McDonald’s is to keep their consumer base high by
providing them quality services (Esopo and Almquist, 2007). In this context, at the initial stage
they require to keep their product pricing low. Here, they also need to comply and cope up with
different economic situations of the country. Keeping low pricing at initial stage is one of the
best strategies which help McDonald’s in enhancing their sales margin.
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