Marketing Principles Report: McDonald's Marketing Strategies Analysis

This report examines the marketing principles applied by McDonald's in the UK market. It begins with an introduction to marketing principles and their significance, followed by an analysis of McDonald's marketing elements, including market analysis, strategy development, and the marketing mix. The report delves into macro and micro environmental factors, segmentation criteria, targeting strategies, and buyer behavior influencing McDonald's marketing decisions. Furthermore, it explores product positioning, development for competitive advantage, distribution, pricing, and promotional activities. The report also considers the extended marketing mix and differences in marketing approaches for consumer and business markets, as well as international versus domestic marketing. The conclusion summarizes the key findings and insights from the analysis.

MARKETING PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Elements of Marketing Products......................................................................................4
1.2 Benefits and cost of marketing orientation for MC Donald's...........................................5
TASK 2............................................................................................................................................5
2.1 Macro and Micro environmental factors, influencing the marketing decisions...............5
2.2 Segmentation criteria for products in different market....................................................6
2.3 Targeted strategy..............................................................................................................7
2.4 Buyer behavior affecting the marketing activities............................................................7
2.5 New positioning of the product........................................................................................8
TASK 3............................................................................................................................................8
3.1 Development of product to sustain competitive advantage..............................................8
3.2 Distribution of the product...............................................................................................8
3.3 Price setting to meet the objectives and market situation.................................................9
3.4 Promotional activity to integrate marketing objectives....................................................9
3.5 Additional elements of the extended marketing mix......................................................10
TASK 2..........................................................................................................................................12
4.1 Marketing mixes for two different segments in consumer markets...............................12
4.2 Differences in marketing products to businesses rather than consumers.......................12
4.3 Difference between international marketing and domestic marketing...........................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

ILLUSTRATION INDEX
Illustration 1: Marketing p's...........................................................................................................11

INTRODUCTION
Marketing Principles define the process of trading goods and services of a company. It is
a procedure of conducting the sales of a particular product. Most of the organizations utilize
these principles in order to regulate the current market needs and situations in order to launch a
new product into the market. It also helps to control the present performances of their products,
including the recent consumer demands (Linton, 2016). In this report, McDonald's is the chosen
organization of UK to determine the need and importance of their marketing principles. MC
Donald's is one of the largest hamburger food chains in the world, which is currently serving
around 68 million customers on daily basis. It has more than 36,000 outlets, leading successfully
across 119 countries.
TASK 1
1.1 Elements of Marketing Products
In an organization, marketing is basically a process of exchanging goods and services to
conduct an ultimate procedure of sales. In McDonald, this management process is followed to
successfully determine the present market needs and demand of the consumers (Leonidou,
Katsikeas and Morgan, 2013). It further helps in ensuring the current level of customer
satisfaction from their existing product. It also helps the firm to launch a new product into the
market, as per the latest scenario. There exist four main elements to effectively carry out this
process-
1. Analysing the current market situation- It is in regard to determine the present needs and
demand of the consumers. MC Donald's conduct audit programs to analyse the current
consumer preferences and trends by using various strategic tools of PESTLE and SWOT.
It helps in stating the required objectives for the future of the company.
2. Building a market strategy- Once after analysing the present market preferences, MC
Donald's plans to build a strategy in order to successfully meet the above stated
objectives.
3. Deciding market mix- It generally involves the four P's of marketing mix, which
concludes the requirement of introducing a new product in the market or making
necessary changes in the existing one, deciding its place, fixing the price and promoting
that particular product to the consumers by using various means or sources.

4. Regulating plans- It refers to the implementation of the above plans. In which, the stated
firm finally comes to an end of comparing the standard plan with the actual work done.
1.2 Benefits and cost of marketing orientation for MC Donald's
The focus of market orientation is to effectively deliver the goods and services to
consumers by meeting out their present needs and demands. It involves a strategic approach of
product development which is required to meet the stated goals and objectives of MC Donald's.
Thus, it includes numerous benefits in having delighted customers, but together with the incurred
costs of building the preferred products. The following advantages to MC Donald's are-
 Acknowledging demands by valuing customers- The process of market orientation helps
to eliminate various assumptions of forecasting the actual needs and desire of the
consumers. MC Donald's find it helpful in order to create new products as per the current
demand of the customer's. It further proves beneficial for the company to make effective
sales. It also helps in constructing a base of valuable customers along with a loyal brand
name.
However, in order to build effective products, the stated firm has to bear certain
developmental costs, which has been discussed below-
 Ample research- To make an effective report, the stated firm needs to make extensive
research, which automatically increases the production cost of the company (Huang and
Sarigöllü, 2012). As a result, the company needs to fix prices in accordance to meet those
costs, which becomes expensive for the customers.
TASK 2
2.1 Macro and Micro environmental factors, influencing the marketing decisions
To make an effective position in this competitive world, considering these factors plays
an important role in the organization's success.
“Macro environmental factors” affecting the organization can be easily carried out by
making an effective utilization of PESTLE analysis that mainly consists of the following six
factors- Political factors comply of certain governmental rules and regulations according to
which a company has to run its organization. MC Donald's is responsible to maintain the

health and hygiene level of its food products by compiling the health and safety
measures. Economic factors are of utmost importance in building the marketing decisions of a
company. MC Donald's is however maintaining a high level of economic value by
smartly choosing between the import of raw materials or buying them locally. It also
includes deciding the tax rate and employment rate, which helps in minimizing the costs
and increasing company's profit. Social/ Cultural factors mainly affects the sales factor of a particular product by
determining the current trend. The stated firm is highly affected by this factor and thus
build products that matches the present requirement. Technological factors doesn't affect the stated organization, as and if compared to the
other factors (Pathak, Dubey and Pandey, 2015). However, making use of recent and
advance technology can comparatively reduce the operational cost of the company in
terms of building easy methods for paying bills by the customers, scheduling and
ordering the food, etc. It will further help in attaining an increased quality and capacity of
manufacturing products in less time. Legal factors are the biggest concerns of the stated firm, which states various laws,
strictly needed to be adhere by the company. It involves labor laws, corporate laws of
maintaining the health and safety, etc.
 Environmental factors of MC Donald's define protecting the environment. In regard to it,
the stated firm has effectively carried out a friendly environment by using paper based
packaging instead of polystyrene.
“Micro environmental factors” are highly influenced by the “competitors” of the
organization. Subway and Burger king are some major competitors of MC Donald's and
analyzing their competitiveness will effectively help the organization to build an ability of
successfully competing in the market.
2.2 Segmentation criteria for products in different market
Segmentation is done to effectively satisfy the present consumer needs and demand.
Without using this procedure, it would be extremely difficult for the company to control its
major costs. Therefore, the process of segmentation would help MC Donald's to formulate the
market strategy of introducing its new range of product in hamburger (Chikweche and Fletcher,

2012). By utilizing the demographic segmentation, the cited firm has divided two sections of its
product. The key indicators of demographic factors include a person's age, gender and income.
Thus, MC Donald's new section of Hamburger also covers two major segmentation of
customer's profile. It includes the teenager customers, consisting of 13 to 18 years of age and a
group of youngsters, ranging from 25 to 30 years of age. The company also selects various
promotional activities to attract the two different segmented areas of consumer.
2.3 Targeted strategy
After the successful implementation of segmentation, Targeting strategy involves
approaching the major number of potential customers. It is an important task to effectively
achieve the desired organizational goal of earning profits. It can be done by arising an increase in
sales of the newly introduced product. In the present scenario of MC Donald's has made an
effective utilization of “Differentiated strategy”, by targeting two different segments of age
group. It is among one of the best strategies, whose main purpose is to determine the major
number of consumers of that particular age group and broadcasting the benefits of that product to
them (Menegaki, 2012). It can be done by conducting various campaigning programs at the
places where the company can easily approach numerous targeted age group, like in offices,
schools and colleges, etc. They can also introduce various promotional offers by allotting
discount coupons to attract numerous customers.
2.4 Buyer behavior affecting the marketing activities
Buyer behavior consists of various internal and external factors that easily influences the
decision of a buyer in terms of choosing and purchasing a product. It is decisive process that
consists of varied dimensions, that include-
1. Internal factors- These are few psychological factors that balances between the
expectations and experience of a person. It states whether the customer's experience
matches the expected level of satisfaction (Rahmani, Emamisaleh and Yadegari, 2015).
On that basis, the customer decides to consume the product for the next time. MC
Donald's can easily meet this mental perception of people by making effective public
interactions.
2. External factors- It includes certain social factors of an individual which tends to affect
their decision by reviewing the remarks of other visitors. MC Donald's can effectively

utilize its website for this purpose, where people can easily go through the review section
to mention their likes and dislikes.
2.5 New positioning of the product
In order to minimize the level of threats and increase the profitability of a firm, Product
positioning is an essential lookout. In involves broadcasting benefits of the newly introduced
product to its consumers into the market. In this particular strategy, the focus of MC Donald's is
to effectively promote the benefits of its new range of hamburger. The major area of concern is
the two segmented sections of teenager's and youngsters. Both the age groups are highly
concentrated towards developing their career and thus focusing more upon their studies,
education and jobs, etc. and generally abort their food (Mintz and Currim, 2015). Therefore, MC
Donald's has specially introduced this healthy product for them. It has been made by using a
wide range of fresh and healthy vegetables with less use of fats like cheese and mayonnaise. It
also includes the use of wheat bun which consists of low calorie. To transmit these health
benefits of the product among the consumers, the stated firm should also make an effective
utilization of various promotional activities. For this particular age groups, social media is an
effectual tool of promoting the product.
TASK 3
3.1 Development of product to sustain competitive advantage
Competitive advantage distinguishes the feature of a firm for handling a strong
positioning in the market. In order to attain such advantage, it is important for a firm to recognize
its competitors at the best and by knowing their applied methodology. To outperform the
competitors of MC Donald's, it should build a positive impact of its product by all possible
means. This includes valuing the effectiveness of the product by comparing it to all similar
products available in the market (Rahmani, Emamisaleh and Yadegari, 2015). In which, they
need to assess each and every quality of its product and broadcasting it to the consumers. The
product should meet the required level to satisfy customers, as compared to the competitor's
product.
3.2 Distribution of the product
To cover the targeted area, an effective distribution of product is a crucial factor. It
involves determining the proper means of promoting and allocating a product to the specific

group of customers (Mintz and Currim, 2013). It demands for a relevant distribution channel for
the consumers. However, the product distribution of MC Donald's is as per the customer's
convenience, by which they can easily purchase and consume their products. The stated firm has
rigorously expanded its outlets all over the world, where the consumers can have the freshly
made food products. It also provides delivery of food products at home and office premises,
especially preferred by the targeted age groups.
3.3 Price setting to meet the objectives and market situation
Product pricing is a crucial step to effectively accomplish the target of meeting out the
organizational cost, along with the present market needs and demand. It needs to attract a broad
range of customers in order to make an effective sales into the organization (Alserhan, 2015).
However, the main motive is to meet the company's expenses, especially covering the cost of
production. Therefore, it requires a smart fixation of price to meet both the objectives and
together considering the present consumer needs and demand. To attract the targeted age group,
MC Donald's introduces various promotional offers and discount coupons. Also, at the time of
recession, the company has decided to make more of the low cost products. It attracted numerous
customers, as and if compared to the normal days.
3.4 Promotional activity to integrate marketing objectives
Promotion is a process of activity that focus on the objective to get market know more
about the company's offering. There are many promotional methods which McDonald could use
to promote its product sales and they are advertising, personal selling, sales promotion, publicity,
sponsorship, etc. McDonald should clearly explain the benefits and positive facts in these
promotional activities (Kleinaltenkamp, Plinke and Geiger, 2014). The company should
advertise the healthy facts of its diet and health conscious range of burgers. The promotional
activities should focus the targeted market of teenagers and youngsters. The main objectives of
promotional activities for McDonald are:
1. To reach the targeted audience in the market.
2. To acknowledge consumers about the healthy facts and presence of its products.
3. To show the wide range of its product are better than that of its competitors.
4. To develop or improve the company's image along with the product's image.

5. To remind the consumers that a reliable, health conscious and a well thought of product is
now available in the market.
3.5 Additional elements of the extended marketing mix
The extended marketing mix is a set of elements that build up a campaign to increase the
sales of a product. It is an expansion of traditional marketing mix, that consist of price,
promotion, place and product, adding additional factors that influences the success of marketing
campaign. McDonald should focus on the task of organizing and promoting the product and its
reputation in the market, before preparing to launch a new marketing campaigns for new
products. The company has to implement the changes and direction routed by the additional 3P's
of extended marketing mix in its selling strategy (Armstrong, Denize and Kotler, 2014). The
additional 3P's of marketing mix are as follows: Physical Evidence: this P extended the traditional 4Ps marketing mix with the modern
approach of marketing. If the company could effectively turn as many as satisfactions in
all the potential customers and clients in the market, it generates more long-term sales
revenue for itself in the same market. People: For McDonald, the Power of people is very almighty in all markets, hence it
should not overlook it. People can affect and influence the company's products in any
situations and channels. If it applies all other P's without considering about people, then
its sales could not be really maximized.
 Process: When both the above P's and the other 4Ps are applied to the product but if the
process of product is weak, the company would suffer failures/losses. For McDonald,
process is a key to fully succeed in promoting its products in all markets. The company
should have a good or at least suitable process that is to carefully planned along together
without P's.

Illustration 1: Marketing p's
(Source:Sarker, Aimin and Begum, 2012)

TASK 2
4.1 Marketing mixes for two different segments in consumer markets
Combination of all the elements of marketing mix for McDonald's two different markets
segments are as follows:
 Teenage Section (age group 13-18) and Youngsters Section (age group 25-30)
◦ Product – These targeted segments are based on the teenage students and youngsters
who are engaged in studies, sports and cultural activities. Due to heavy practices,
studies and part-time jobs, they abort time for taking lunch or dinner and thus;
McDonald is trying to provide them range of burgers which are healthy, fat free,
made of wheat and with no mayonnaise.
◦ Price – McDonald should set the new range of diet burgers according to the spending
capabilities of teenage members. Teenagers have limited budget and hence; they
should not afford high pricing food products (Hastings and Domegan, 2013).
However, youngsters also have average capacity to spend on the food products; they
like to consume those products that give high satisfaction to them.
◦ Place – McDonald should provide low range of burgers at their every restaurant.
They can also start their services in schools and colleges that are near to them.
◦ Promotion – The promotion techniques which McDonald can use are advertisements
of its products in the leading newspapers, internet, hoardings, TV channels, shopping
application on mobile, etc to attract the party of both the segments.
4.2 Differences in marketing products to businesses rather than consumers
The research over the marketing theories has stated the difference between the consumer
and business to business markets. This has illustrated that marketing mix for operating business
in these two areas may vary a great deal. Marketing mix for many business market consumer
goods places its role by emphasising upon the advertising campaigns in the media, however; the
business to business marketing relies more on private contacts and method of personal selling.
But in business to business marketing, the situation is different (Smith, 2014). The business
buyer wants to buy, so, all business enterprises must routinely buy products and services that
help them to stay, profitable, competitive and successful. However, McDonald's marketing
strategies of B2B and B2C, clearly defines the difference between both the sources, where
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