Marketing Principles Report

This report delves into the marketing principles employed by McDonald's, covering various aspects such as market segmentation, targeting strategies, and the marketing mix. It discusses the importance of understanding consumer behavior and the impact of micro and macro environmental factors on marketing decisions. The report also highlights the significance of marketing orientation and the development of competitive advantages through innovative product strategies. Additionally, it examines the differences between domestic and international marketing, providing insights into how McDonald's tailors its approach to different markets.

MARKETING PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Explanation on elements of marketing process.....................................................................1
1.2 Benefits and cost of marketing orientation...........................................................................2
TASK 2............................................................................................................................................2
2.1 Micro and macro environment factors affecting marketing decisions of MC Donald..........2
2.2 Segmentation criteria for MC Donald ..................................................................................4
2.3 Targeting strategy for MC Donald........................................................................................4
2.4 Impact of buyer behavior on marketing activities of the firm ............................................5
2.5 New positioning for the product .........................................................................................5
TASK 3............................................................................................................................................6
3.1 Ways in which products are developed to sustain competitive advantage...........................6
3.2 Arrangement of distribution of the product..........................................................................6
3.3 Way in price are set to reflect objectives and market conditions..........................................6
3.4 Promotional activity of MC Donald and way in which they are integrated in order to
achieve marketing objectives......................................................................................................7
3.5 Extended elements of the marketing mix..............................................................................8
TASK 4............................................................................................................................................8
4.1 Marketing mix for two different segments in consumer market with reference to MC
Donald ........................................................................................................................................8
4.2 Difference in marketing a product to business rather than consumers.................................9
4.3 Way in which international marketing is different from domestic marketing ...................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
MC Donald is a company that is operating a restaurant chain across the globe. In this
report an attempt is made to understand the marketing efforts of the company. In respect to this
marketing concepts like market segmentation and targeting etc are discussed in detail. In today
era it becomes very difficult to perform market segmentation. This is because with passage of
time all variables of market segmentation are changing. Hence, on the basis of current market
segmentation strategy firm during its entire life span cannot do proper targeting of the target
customers. Firms need to evaluate their market segmentation in proper manner time to time. In
this report market segmentation techniques are described in detail and along with this appropriate
way for market segmentation is also proposed for MC Donald. After targeting of target
customers’ product is positioned by the firms. In respect to this positioning strategies are also
discussed in detail and its model is also explained in the report. On analysis of positioning
strategies it has been find out that there are many unique ways that can be adopted in order to
position a product. Companies can position product on the basis of quality, technology and price
etc. Firms by selecting optimum position strategy can increase sale of their product. After
discussing positioning strategy distribution channels are described in detail. In the report new
product development process is explained in detail. Under this entire phase of product
development is described in detail in the report. Competitive advantage of new product
development is context of this model is also explained in the report. Apart from these porter five
forces analysis is also explained in the report. Under this, environment forces like economic,
social, political, and legal and technology factors are described in detail. Apart from this
marketing environment is also discussed in detail in order to understand way in which they affect
marketing decisions of the firm. After this marketing mix is described in detail and for different
segments different marketing mix are proposed. At the end of the report, difference between
consumer and business marketing is described in detail. This is done in order to help reader in
understanding that there is a huge difference in the consumer and business marketing and
whatever strategy applied in case of consumer marketing does not applied for business marketing
Along with this domestic marketing is also differentiated from international marketing. This is
done in order to make clear understanding that consumer behavior of the people vary from nation
to nation. Due to this reason similar tactics cannot be applied on all nations.
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TASK 1
1.1 Explanation on elements of marketing process
Marketing refers to any efforts that a firm made in order to sell its product. Without
proper marketing a product cannot be sold in the market even it has good features. Some of the
elements of marketing principles are as follows. Integrated marketing- It is a marketing in which several channels of communications are
used by the firm. This concept states that message delivered through several channels of
communication must go in same direction. If all messages will communicate message in
different direction then it will not put positive impact on people. MC Donald is following
this concept and under different channels of communication it convey same message. In
such messages it makes an attempt to make people aware about its product and feel
positive in regard to same (Cravens and Piercy, 2008). If from one channel of
communication MC Donald communicate that it is innovating its food making process.
While from another channel of communication it state that its product is good in quality.
Then people will not be able to focus on single factor. Some people will pay attention on
the innovative factor and some on quality. Hence, big change will not be observed in
sales. But if MC Donald communicates its product quality through all channels of
communication then people attention will go on single point and demand for product will
increase. Marketing audit- Marketing audit is a technique by using which managers identify the
success of their marketing efforts. Today, consumer behavior is changing very quickly
and it become very difficult to prepare effective marketing strategy. Tactics that were
successful in one period of time become failed in other time period. Hence, this technique
is used by MC Donald to measure effectiveness of its marketing efforts. MC Donald in
this regard collects data from its all restaurants and identity restaurants where more
people are comes. Moreover, by doing data analysis it also identify that in which area
which products of MC Donald are mostly consumed. By doing this company gets
information which can be used for advertising a product. SWOT analysis- SWOT is done in order to identify company strength and weakness.
Further, these are tally with available opportunities and threats that are prevalent in the
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market. By matching with each other MC Donald identify areas where it needs to make
improvements.
Strength
 Presence in the wide geographic
network.
 Unique product portfolio.
 Innovative product manufacturing
process create different image of the
company. Product is acceptable in all nations by
all religions.
Weakness
 Less promotion on traditional media.
Opportunities
 Increase in employment rate will
increase demand for fast foods.
 Reduced inflation rate will boost
demand for MC Donald products. Middle class people income level is
increasing in countries like India and
China and there is a lot of scope of
growth for MC Donald in these nations.
Threat
 Receiving stiff competition from small
retailers and Chinese restaurants.
 Marketing objectives- MC Donald prepare objectives in order to measure effectiveness
of strategy (Hollensen, 2015). These objectives are divided into small objectives in order
to ensure that major objective will be achieved on time.
1.2 Benefits and cost of marketing orientation
Marketing orientation is a concept which states that products must be customized as per
target customer requirements. Firm must not stick to its existing product line in such a highly
competitive market. If same will be done then organization will be finished. Service and customer base- It state that quality service must be provided to the people
and it must be sure that they do not face any difficulty while taking a service of the
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company (Jüttner, Christopher and Baker, 2007). MC Donald understands this thing and
it is putting heavy stress on its service quality. It is continuously innovating its service
delivery mechanism in order to make sure that service will be delivered on time and in
systematic manner. Due to this reason its product gets wide acceptability across the
globe.
 Marketing research- MC Donald is conducting marketing research time to time in order
to track changes in consumer behavior of the people. It adopt this practice earlier and by
doing this research it also identify possible changes that can occur and impact that these
changes will put on the people willingness to buy (Wilson and Gilligan, 2012). After
predicting future situation company formulates a strategy in order to maintain people
willingness to buy its product.
There are following types of market orientation and their merits and demerits are as follows. Production orientation- Under this orientation firm believes in generating economies of
scale at the production place in order to keep its product price low. The main merit of this
technique is that firm create loyal customer base of those people who prefer low price
products and does not give importance to quality. But main demerit of this orientation is
that in this firm compromise with product quality. Hence, such kind of firm cannot attract
that customer’s that give a due importance to the quality of the product. Product orientation- In this sort of orientation firm believes that by producing and
selling superior quality of product it can develop loyal customer base. The main merit of
this orientation is that firm is giving importance to the quality which every buyer wants in
a product while purchasing a product. But main limitation is that quality alone not sell a
product cost is also a factor which is given due importance by the buyer while making a
purchasing decision. Sales orientation- In this firm focusing on selling a product by estimating their needs and
wants without conducting a research. The main disadvantage of this orientation is that
without conducting a research a product is prepared while may lead to failure of the
product in the market. The main advantage is that in this orientation firm makes an
attempt to make product as per people need. Hence, if need is estimated in accurate
manner then firm product can gain a wide acceptability in the market.
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 Market orientation- Companies following this technique assume customer as a market
king and they develop product and market strategy after doing a thorough research on the
people buying behavior. The main advantage of this technique is that chances of product
failure are very low in the market. The main disadvantage is that people buying behavior
keeps on changing continuously and a lot of amount needs to be spending on research.
 Social orientation- Under this orientation firm by keeping in mind society develops its
product. The main advantage of this orientation is that product easily prefer by the people
because it is prepared as per their preference. The main disadvantage of this orientation is
that defect in product in terms of quality may tarnish company image overnight.
TASK 2
2.1 Micro and macro environment factors affecting marketing decisions of MC Donald
MC Donald is operating in a competitive environment and it needs to look after so many
factors in order to formulate an effective business strategy. Following are the factors that MC
Donald can follow for preparing a sound business strategy.
PESTEL analysis (Macro environment)
Political environment- Political environment also affects MC Donald because sometimes
message is communicated in such a way that hit sentiments of specific community. Due to these
reason political parties comes against firm. Thus political environment affects marketing
decisions of the firm.
Economic environment- Such environment refers to the condition of economy. Indirectly it
also refers to the people economic conditions. If unemployment rate increases and same trend is
observed in case of inflation then MC Donald faces a lot of problem in its business. In such a
situation firm by conducting a marketing research identify future scenario and prepare a plan
tom maintain firm sale up to a certain level when environment unfavorable (Moutinho, 2011).
However, it is not necessary that marketing research will help company in achieving desired
results. Further, negative change in the environment may lead to fall in demand from people
side. Ultimately, profit of firm may decline heavily. In such a situation firm will need to take
strategic move in its marketing efforts. Hence, marketing environment affects marketing
decision of MC Donald.
Social environment- It refers to people belief, attitude, value system and customs. If product
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that is served is against these above mentioned components then it is not possible to sale a
product. Because it will not get acceptability from people side. MC Donald understands this
thing and it customized its product according to people taste and culture (Lambert, García‐
Dastugue and Croxton, 2005). Due to this reason, firm product is accepted in all nations without
any issue. In order to gain acceptability of people many times firm need to advertise its product
in new way. Hence, social environment affects marketing decisions of the firm.
Technological environment- Lots of ways of advertising are already availability and it is
difficult to choose from options. Competitors also use different sort of technologies for
advertising their products. Hence, these factors affect marketing decisions of the firm.
Environment- MC Donald must dispose of all its waste materials in the proper manner in order
to make sure that environment will not be harm by their business. It is also ethical responsibility
of the firm to make sure that its product waste is placed at a proper place. However, firm is
already making good efforts in this regard but it needs to bring some more changes in its
relevant practices.
Legal environment – In UK there are some rules and regulations that firm needs to follow
regarding preparation of advertisement. Violation of these rules may lead to invitation of
penalty from regulatory authorities (Reid and Bojanic, 2009). In this way, legal environment
affects marketing decisions of the firm
Micro factors Customers- With change in consumer behavior of the people marketing efforts needs to
be made in different direction (Sheth and Sisodia, 2015.). Hence, consumer behavior
affects marketing decisions of the firm. Competitors- In order to give stiff competition to the competitors MC Donald needs to
make good marketing efforts. Hence, change in the competitor marketing strategy affects
marketing decisions of the firm. Suppliers- These are those people that supply raw material to the MC Donald. If firm
relation becomes bitter with suppliers then its sales may decline. Hence, company must
try to enhance its supplier base as much as possible. So that even problems created with
one supplier firm have second alternative to get supply of raw material on time.
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 Employees- These are those who provide service to the people on behalf of the company.
It is their service quality and courtesy due to which people likes to visit MC Donald
restaurant. Hence, this factor is playing a crucial role in the company success.
2.2 Segmentation criteria for MC Donald
Market segmentation refers to the way in which entire market is divided in to several
parts. The entire market can be divided on the basis of different parameter. Some of these are
explained below. Geographic segmentation- In this entire geographic area is divided in to several parts.
Like UK can be divided in to several states. MC Donald is following this segmentation
because it’s producing edible items and people preference and taste as well as culture
change from one area to other (Liu, Kasturiratne and Moizer, 2012). Thus, different
products need to be produced to serve needs of different kinds of people. Hence, by
following this segmentation method MC Donald is serve appropriate product to the
customers. Demographic segmentation- In this entire population is divided on the basis of income,
age, occupation, religion etc. In order to fulfill requirements of different kinds of people
firm is making available its same product at different price ranges. So that every kind of
people can afford its product. Hence, this segmentation method is suitable for firm. Physiographic segmentation- In this segmentation is done on the basis of people
lifestyle, attitude and their value system. With change in lifestyle people eating habits
also get changed (Cronin and et.al, 2011). Moreover, change in value system also affects
demand for product. MC Donald takes care of this factor and it is innovating its product
so that same does not contradict with the people value system and get wide acceptability
from them. Hence, along with geographic segmentation firm can also follow
psychographic segmentation technique.
 Behavioral segmentation- Under this kind of segmentation market is divided in to
various parts on the basis of knowledge, attitude and response of the product. Hence, by
following this method firm tries to serve product as per people thinking and knowledge.
Here product is served by keeping people in mind and due to this reason firm following
this method of segmentation gets huge success in their business.
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2.3 Targeting strategy for MC Donald
After doing segmentation, target groups of the people are selected from the appropriate
segment which can be done on the basis of geographic areas or people attributes. Some of the
targeting strategies are given below.
 Undifferentiated target strategy- Under this strategy firm view entire market as single
segment an it does not produce product for specific customer. But this strategy is not
suitable for MC Donald because its customers are different from each other in terms of
taste and preferences (Foxall, 2014). However, country wise MC Donald is following this
strategy because normally in a single nation a big change in the people tastes regarding
food in not observed.
 Concentrated targeting strategy- In these strategy managers focuses on specific group
and makes an attempt to develop products as per their requirements. This strategy is also
not suitable for the firm because it is operating globally and people taste varies from
country to country. Hence, by focusing on single group firm cannot enhance its
profitability.
 Multisegment strategy – In this focus is given on the people that belong to more than one
segment (Vargo and Lusch, 2008). In this way firm cover all people that can play an
important role in the growth of the business. Hence, this targeting strategy is most
suitable for the MC Donald. Firm is serving Berger in each and every nation in which it is
present. But from nation its way of preparing same and its taste changed. Hence, firm is
using multi-segment strategy in effective manner.
2.4 Impact of buyer behavior on marketing activities of the firm
Buyer behavior refers to the purchase pattern of the people. It also refers to the factors
which plays a decisive role in the people purchase decisions. Hence, collection of information
regarding people consumer behavior is necessary. It has been said that by analyzing consumer
behavior of the people advertising message must be drafted by the advertiser. If same thing will
be done then people will highly pay attention to the advertising message (Cova and Salle, 2008).
Advertising appeal also play a vital role in making firm marketing efforts successful. By
analyzing consumer behavior of the people motivating factor can be identified which will be
used to draft an advertising appeal. By making relevant advertising appeal effective advertising
message can be prepared. Hence, this will lead to formulation of good advertising message.
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Thus, it can be said that consumer behavior affects marketing activities of the firm (Desbordes,
2012). If consumer behavior will not be analyzed in proper manner then advertisement will not
be draft in proper manner. Hence, marketing efforts will go waste. Hence, buyer behavior affects
marketing activities of the firm.
B to B- It refers to the products that are produced by the firm and sold to another firm. This
means that producer and buyer both are companies.
B to C – It indicates that firm is producing a product which is consumed by the individual
consumers. So, it can be said that both are different from each other.
Buying behavior of both kinds of people is different from each other. In case of B to C
consumers preference changed very quickly and affected by the numerous factors. On other
hand, in case of B to B preference does not change overnight. Resistance and knowledge level is
also different for both kinds of consumers. Due to this reason marketing efforts are also made in
different manner for these kinds of customers.
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Illustration 1: Factors influencing consumer behavior
(Source: Cova and Salle, 2008 )

As per this diagram people buying behavior is affected by the factors like psychological,
personal, social, cultural and marketing programs. All these things collectively form a consumer
buying behavior. Hence, MC Donald must try to understand these things and must formulate its
marketing strategy in proper manner.
Consumer buying process is given below. Need recognition- In this stage a consumer determines his needs regarding consumption
of specific product. These needs can be created by the friends’ relatives. Same can comes
in existence due to internal stimulating factors.
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Illustration 2: Product development process
(Source: Manikas and Terry, 2010 )