Marketing Principles: An Analysis of Unit 4 Concepts and Strategies

This report examines key marketing principles, focusing on segmentation, targeting, and positioning (STP), and the extended marketing mix. The report begins by defining the marketing function and its processes, emphasizing the importance of data collection and strategic planning. It then delves into the STP process, detailing how McDonald's segments its market geographically, demographically, and behaviorally, and how it targets specific customer groups such as kids, families, students, and working adults. Furthermore, the report analyzes the advantages and costs of a market-oriented approach, highlighting how McDonald's uses this approach to meet customer needs and gain a competitive advantage. The report also includes a PESTLE analysis to examine the micro and macro environmental factors affecting McDonald's, including political, economic, social, technological, and environmental influences. The report uses SWOT analysis to assess McDonald's internal strengths and weaknesses, as well as external opportunities and threats. Finally, the report concludes by summarizing the application of marketing principles and strategies in the context of McDonald's.

UNIT 4 MARKETING PRINCIPLES
SUBJECT NAME: MARKETING
PRINCIPLES
ASSIGNMENT NAME: MARKETING
PRINCIPLES
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TABLE OF CONTENT
TASK 1:...........................................................................................................................................3
LO 1: Understanding the notion as well as procedures of Marketing function...........................3
LO 2:............................................................................................................................................7
The notion of STP which stands for segmentation, targeting and positioning............................7
LO 3:..........................................................................................................................................15
Understanding of different element of extended marketing mix...............................................15
TASK 2:.........................................................................................................................................21
LO 4:..........................................................................................................................................21
Using marketing mix in distinct context....................................................................................21
Reference List................................................................................................................................25
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TASK 1:
LO 1: Understanding the notion as well as procedures of Marketing function
AC 1.1 Several components of marketing procedure
Marketing function is basically referred to be an administrative procedure in society that
includes individual and organisation. These two drive their wants and need by creation and
exchanging values with each other. Grönroos (2004, p. 102) stated that the marketing process
comprises of advertising, selling and delivering products and services to the consumers. The
process of a market of a company involves identification of potential opportunities in the
environment, development of strategies for effectively utilising the opportunities, formulating
marketing strategies and implementation of the strategies with marketing efforts.
The marketing products vary from marketing services provided by an organisation. The
staffs are involved in performing the services according to the requirement. According to
Czinkota & Ronkainen (2013, p. 42), there is various process in marketing. The first process
involves collection of quantitative and qualitative data and analysis of those data for
identification of potential market for the company's product. The data can be collected by survey,
questionnaire, audits, observations that were previously done. The next process involves
planning. In this phase, the strengths and weakness of the company, competitors, the culture of
the organisation and technological advancement are analysed to get an overall insight of the
organisation. The final process involves implementation of the plan.
Marketing is considered important for an organisation and for the successful running of the
business that depends on the dynamics of marketing. Viio and Grönroos (2014, p. 1090) opined
that marketing process is one of the tools for growth and development of an organisation. The
planning process includes 4Ps of marketing.
McDonald’s is one of the well-known companies in UK and they are developing their business
by following the proper marketing strategies. In their marketing plan, some important marketing
strategies are there like 7p’s of marketing, marketing mix and so on. By following these
marketing strategies, they can be main competitors of other companies. In addition to that, data
collection process will also be important marketing strategy for them because with help of this
the company can produce the product according to the demand of the consumer.
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Segmentation
This process is about the segmentation of customer’s market into various groups. All
these portions will act in a different way with respect to communication, promotion, pricing and
various other variables. It can be considered as the base for McDonald's to develop marketing
plans which will be more efficient and effective. The customer needs according to their segments
can be fulfilled by this process.
For example:
Type of Segmentation Criteria McDonald's Target Segment
Geographic  Density
 Regional
 Urban/rural
 Intentionally/domestically
Behavioural  Personality
 User status
 loyalty
 Benefits
 Very easy going
 Constant fast food eater
 Addicted loyal
 time efficient, cost benefits
Demographic  Gender
 Age
 Income
 Occupation
 Life cycle
 Male and females
 Between 8-40
 middle and low-income
 Students, employees
 Bachelor's, newly married, young
child
Targeting
Target market is the group of different customer's available in the market on which
McDonald's is aiming at. This can be considered as the first element of marketing. The targeted
group will likely to purchase the products and services of the company. Targeting can be of two
types i.e. primary and secondary. For McDonald's the primary target is kids and adults aged
between 5-30. Their secondary target will be the people ageing 30 and above.
For example:
Company's target market includes
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Kids: around 3 to 7 years. For them they are having happy meal offer (healthier choice)
and also giving free toys
Families: For Weekend outings, the company is having driven-thru, Mc delivery,
takeaways, happy meals.
Students: For primary, secondary and college students, they are offering student meals
and making the environment in such a way that it will be a hangout place for them
Working adults: For them they are having grab and go. Like 24-hour service, take away
etc.
AC 1.2 Evaluating the advantages along with the cost of marketing orientation with context
to McDonald's
Marketing orientation is considered a business model that aims to deliver products, which
are designed according to the needs of the customers. McDonald’s undertook the market
orientation approach for developing the products.
The decision is made according to the information obtained from the customers. The
information includes the needs and wants of the customers rather than what the business thinks
that the customer needs. According to Boso et al. (2013, p. 718), the market-oriented approach of
McDonald has needs to focuses on investing in the right direction and invest on the correct
service or products that are in demand. The market-oriented approach of McDonald's is to react
according to customer's needs. It is regarded as the best orientation and can be adopted by
McDonald's. Liozu and Hinterhuber (2013, p. 602) opined that the benefits of the market-
oriented approach are it focuses and meets the needs of customers and it expresses the perception
of marketing where the needs of the customers are the centre of all the activities.
McDonald's marketing orientation will include all the factors like financial, people and
structural cost of the system. This will help in determining the cost of marketing McDonald's
have to pay in order to attract the customer. McDonald’s spent 6% of its total expenditure in
marketing activities and channels against a profit of gradual development in their annual
revenue. The main purpose of marketing orientation is to attract the consumers. McDonald's
increases the market orientation, and their performance also increased in past few years.
By doing this, they gain a competitive advantage over others in the market, because their
products are more attracted and they are fulfilling the needs of the customer's. By doing this
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McDonald's retain its customer's and this helps in establishing their brand name. Due to high
demand, the sales rate increases and the profitability also increased.
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LO 2:
The notion of STP which stands for segmentation, targeting and positioning
AC 2.1 Micro and macro factors of environment using appropriate tools and techniques
The marketing environment is the external factors that affect the development process of
an organisation and in maintaining the relationship with customers. There is two type of
marketing environment, microenvironment and macro environment.
McDonald's is the largest food retailer in the world. There are 31000 restaurant serving people of
more than 118 countries. On conducting PESTLE analysis of McDonald's, it was found that
there are many opportunities and threats that need to be addressed for successfully running their
business in the global economy.
Micro-environmental Factors
The internal factors which can affect the organization is micro-environmental factors and
this can be easily understand by SWOT analysis.
 Strengths- The main strength of McDonald is their brand equality, which is worldwide.
Other important strengths of McDonald's are
I. the consistency of food
II. equality of brand- world wide
III. Fulfilling the needs of customers
IV. Successful items
V. Overseas market
 Weaknesses- some of the weaknesses are as follows
1. Quality and taste of products
2. weak development of market
3. slow in revenue and growth in expenditure
4. reducing the market share
 Opportunities- The opportunities for McDonald's are their expansion, which can be done
internally. Another thing is, if they will start expanding their business, because they are
currently serving only 1% population of the world. They can also open supermarkets in
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the joint ventures with many retailers. Their expansion can be done into the emerging
marketing countries like India and China. Threats- The major threat of McDonald's is the industry they are working in, that is over
stored. The competition is also high. The consumers are now becoming more health
conscious. Another major threat is the fluctuation in the foreign exchange rates, and the
economies of the countries.
Macro-environment Factors
Political Factors
The political factors are influence McDonald’s are the international trade agreements, the
reformation of tax and the emerging health policies. According to Yoo and MacDonald (2014, p.
25), all these are considered to be opportunities for expanding their business all over the world. It
will help to enhance the global supply chain. However, the health policies developed discourages
people to discontinue consume fast food. It can be considered as the threat.
The political condition of UK is affecting the business of the McDonald’s. If there is political
instability, then the market of the McDonald’s will be hampered.
Economic Factors
The economic factors of McDonald's are gradual growth of the economy, stable but the
risky economy and declining Chinese economy. Bynum et al. (2015, p. 255) stated that the
gradual growth of United States economy is considered to be opportunities as the American
market is the largest market all over the world. The current economic condition of United
Kingdom is a threat to the growth of McDonald's. Moreover, the Chinese economy also is a
concern in the growth and development of McDonald's in the Asian market.
The economic condition of UK is also affecting the business of McDonald’s. If the people has
enough money in hand, then McDonald’s can increase their income.
Social Factors
In regards to McDonald's, the social factors are the wide wealth gap, the adoption of the
healthy lifestyle and the cultural diversity. It can be seen that due to the wide gap in wealth,
McDonald's can specifically target its consumers that are the low income and medium income
households. It can improve the product mix to satisfy the needs of the diverse range of
customers. The healthy lifestyle poses a threat as people are opting healthier option rather than
fast foods. Many times the negative effects of the food served by McDonald's are being criticised
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by numerous people. Thus, the company needs to improve the health status of the foods
(Mcdonalds.co.uk, 2015).
The social problem also helps the company to develop the business of the company. The
preference of the consumer in UK is very much helpful to increase the business of the company.
Technological Factors
The success of McDonald's depends on the application of technological advancement. On
analysing the technological aspect by PESTLE analysis, it is found that there are certain issues
that need to be addressed. The issues involve the moderate level of R&D activity, the automation
in use of technology and increase in sales figure due to the widespread use of mobile phones.
Gillespie (2007, p. 124) stated that the three factors can be considered to be opportunities for
McDonald's that will help in enhancing the efficiency of the business. The company can use
automatic machines that will reduce the rate of errors caused due to manual work. McDonald's
can use mobile devices for advertising and can reach a number of people by the use of the
internet.
UK is one of the technology reached country so the company like McDonald’s can adopt
technology oriented production techniques in order to increase the volume of the product. It is
also helpful to increase the business of the company.
Environmental Factors
The environmental factors that affect the external environment of McDonald's are the rise
of interest rate, emphasis on the approach of using supportable business policies and modify the
climate. McDonald's can consider rising their corporate accountability by addressing the
environmental issues. The threats in this case are the change in climatic condition that affects the
working in farms because of which the supply chain gets affected.
In recent situation UK, government is much concerned about environmental problem of the
country. Therefore, the company like McDonald’s should use those technologies that help the
company to avoid hazardous production techniques.
Legal Factors
Every business needs to follow the certain legal framework that is imposed on the macro
environment. The legal factors that need to be addressed by McDonald's are the new wage level
in U.S., the regulatory framework of health policies in workplace and regulation in animal
welfare. McDonald's faces the crisis of minimum wage that increases the cost of products.
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Zalengera et al. (2014, p. 340) commented that the regulation on health policies could a potential
reason for decrease in revenue. McDonald needs to address the issues of animal welfare by
developing new policy.
The legal factors of UK are affecting the business of the company. McDonald’s production
process and the outlet should maintain the rules and regulation of the country otherwise, the
company will be in problem and their business will be hampered.
The analysis of McDonald shows that the company have the potential to grow. It needs to
address technological and legal issues that are potential threats to the company. McDonald needs
to improve the quality of product served by them to address the social issues and reach to a
number of people.
AC 2.2 Proposal of a segmentation criterion
Market Segmentation is the process where a large unit can be divided into various small
industries, which are also having the same characteristics. One market segment is completely
different from the other one. This process includes the individual firm who are having similar
interest and the opinion regarding the industry is also same. The market segmentation is basically
based on age group, gender, income of the individual, their occupation and marital status of the
person.
The segmentation is of 3 types. The first one is psycho graphic segmentation, which is
based on the lifestyle of an individual, their attitude, interest and the market values. The second
one is Behaviouristic segmentation which tells about the loyalty of the consumers towards
McDonald's. The last one is Geographic segmentation, which means the division of market into
different geographic areas.
McDonald has segmented its products all over the world based on three bases,
demographic segmentation, behavioural segmentation and psychographic segmentation. In the
demographic segmentation, McDonald offers product specifically for children, family or college
student. For children they have Happy Meals, for families, there are different outlets and meals
for takeovers. The company offers low price meals for students. According to García (2016, p.
160), in behavioural segmentation the company offers products according to occasions such as
birthday, parties, and Christmas time. In psychological segmentation, the products are designed
according to the lifestyle of the customers of that particular country.
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McDonald’s needs to design a product that is healthy in nature, low in cholesterol and high in
fibre and other nutrients. The company needs to implement price penetration strategy for
introducing the new product in the market. In this way, the company can accomplish the
objectives and increase their profit margin in near future.
AC 2.3 Target strategy in different market for product in McDonald’s
The target strategy by which McDOnald's can target their customers are undifferentiated
strategy, concentrated strategy and differentiated. The main strategy used by McDonald's is
undifferentiated strategy, where McDonald's decides to communicate to their consumers telling
the benefits of the products, by sending them some personal mails or messages to everyone. This
strategy is successful only when the product offered by McDonald's is easily available and at the
same time affordable. The product must give the benefit to all the customers. There are very few
organizations which can offer this and McDonald's is one of them.
Dibb and Simkin (2016, p. 251) stated that the target strategy that McDonald's can adopt
is demographic segmentation strategy with respect to age. The products need to be developed in
such as that they especially target children, youth and older people. McDonald's have a "Happy
meal" for children. However, the company needs to develop something innovate for older
people. The product needs to be easily chewable and digestible in nature. In UK market, the
demand for beef and ham is more thus; the product such as Hamburgers needs to be available all
the time. In India, there are people that prefer vegetarian products. Thus, products such as
McVeggie, McAloo Tikki and French fries need to be available all the time in the outlets. The
use of genetically modified organisms and crops can also be used to increase the nutrition value
of the products served in the restaurants.
AC 2.4 The effect of Behaviour of buyers on marketing activities of different buying
situation
The behaviour of the consumer can be affected by different marketing strategy, which
can affect the buying behaviour of the company. Some of the activities are as follows;
1. Need recognition- This is the activity, by which the customer is selecting or
learning about the product and the items offered by McDonald's. The company
must make sure that the product they are offering should be easily recognizable
by the consumers.
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2. Search of information- After the product is identified, the customer will search for
the product, benefits of the product, harm from the product and many other things.
3. Evaluation of Alternatives- This one is the major activity which can affect the
buying behaviour of the consumer. Because if he will get the same product, of
same price, but of higher quality, then he will purchase that product. McDonald's
have to make sure that the product they are offering is having the best quality and
can be easily affordable to all.
4. Purchase- After identifying all the things, the consumer will purchase the product
which is best suitable and cost effective for him.
5. Post purchase Behaviour- After buying the product, if that product is causing
harm or damage to the consumer, then he will give reviews which might affect the
sales rate of that product. The company have to make sure of that, the product
they are offering should not harm the consumers.
McDonald’s have analysed the behaviour of its customers and realised that the customers
are responsible for segmentation and do not take heed of market segmentation. The customers
are satisfied when the company is catering their needs. Thus, for gaining access to the market
share, the company needs offer products according to the needs of the customer and it is
important to perceive the cost of products that can provide value for money (Pick and Eisend,
2014, p. 190).
AC 2.5 New positioning for product/ service provided by McDonald’s
The positioning of the new product is very important element. This is the method or
technique, by which the company can identify the best way by which they can communicate to
their consumers. They should be able to target their customer's on their basis of needs, the
competitive pressure, most suitable communication available, various channels and carefully
crafted key and important messages.
McDonald's have altered their menu according to the demography. It has kept the depth
of product, width of product within a certain limitation. It has studied various aspects of different
markets and analysed the needs of the customers. In China, the menu is a blend of modified
items. It offered, "Mala grilled Chicken Sandwich" and "Mala Crispy Pork Sandwich. Another
variation is instead of French fries, corn is served. However, in India, many people prefer
vegetarian product rather than not vegetarian. Thus, McVeggie Burger, McAloo Tikki, Veg
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Surprise, Shahi Paneer McCurry and Wrap Panner Salsa are kept in the menu (Mcdonalds.com,
2016).
The 7 P's are;
1. Product: The product comprises of both veg and non veg burgers. In veg burgers
McDonald's are having Mc Aloo tikki, Veg surprise, salad sandwiches Mc Veggie etc. The non
veg burgers include Mc chicken, chicken Mc grill etc. Apart from these they are also providing
combos which have medium fries and soft drinks, econo meals, happy meals and various value
meals with potato wedges.
2. Price: The price is very well maintained by the branding strength and some other
brands like Coca-Cola. These brands also support McDonald's because of their consistency in
quality of products and their prices. The company follow cost leadership business strategy,
where the offered food and drinks are according to the competitive prices in the market.
3. Place: In 119 countries, there are a total of 36,285 restaurants. The aim of the company
is to establish mainly in urban and rural areas. McDonald's is providing the location of their
restaurants according to the convenience of the consumer's. At airports, malls, colleges they are
having quality restaurant to give easy access to the consumers.
4. Process: The food manufacturing processes is entirely different from their competitors.
The whole process is visible to their consumers. The standard maintained is very hygienic. The
customers can check the ingredients used in their food.
5. Physical evidence: The prime focus of the company is to maintain clean and hygienic
environment. At the same time the interior should look attractive to the consumers. The
furnishings, self-services napkins should be neat and clean.
6. People: The employee of the company is having their standard uniform. The behaviour
of the workers is very friendly and the services are very fast, so the consumers don't have to wait
for their food.
7. Promotion: The focus is on the children and adults. For them they are providing happy
meals, and for children small toys are also given along with the meal. Various schemes are
running like lucky draws, scratch cards on the order placed on combo.
Positioning
It is the market concept which tells about the implementation of business strategy
according to the 7 marketing P's, so that the product and services should reach to the consumers.
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For McDonald's, the first thing is to identify their place where the product can increase their
sales rates. In pricing positioning, the company have to make sure that the price of product is
affordable to the consumers. After identifying this, the company can use all the 7 P's to position
their product in the market which can increase the profitability of the organization.
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LO 3:
Understanding of different element of extended marketing mix
AC 3.1 The way in which the products/ services are being developed to withstand
contending benefits
To sustain competitive advantage, McDonald's must follow the process of new product
development, which is having different techniques by which the company can gain the
advantages over other. Some of the approaches are as follows
Idea Generation- To gain the advantage in the market, the company must generate new
and innovative idea of their new product. This idea should be different to all other ideas present
in the market and should attract the customer.
Idea screening- All the new ideas which are generated for the product, will have to get
through screening. This is done to select the best idea possible
Concept testing- The selected idea will be implemented on a smaller scale just like a
concept. This will be done through the concept testing techniques.
Business Analysis- McDonald's have to make sure that their idea is much attractive and
economical than the other companies which are offering food. They must analyse the market
condition and in which part of the country they will implement the idea first, so that they will get
huge success.
Product will be developed after testing and screening all the ideas. The product will be of the
highest quality and very affordable to all the consumers. The product will be then tested in the
market in some part of the country, just to make sure that how the customers are responsive and
their views on that product. After that the product is commercialized. The product will be
available to all the consumers.
The most revenue-generating outlet of Asia is in Pakistan. The competitors of
McDonald's have raised their standards and are taking up the market share by a large proportion.
The competitors include KFC, Pizza Hut; Dominos have developed over the years and are
gaining popularity. Another competitor, jumbo King is using a simple and basic approach of
serving burgers in quick time. KFC is considered one of the biggest competitors of McDonald's
taking half of the market share in the fast food chain. According to Grant (2016, p. 122), in this
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competitive environment, it is not sufficient to deliver products at the right time. Other factors
are also responsible for gaining competitive advantage. The service provided by the company
and the environment of each restaurant are key factors that McDonald's can utilise to gain the
advantage. It is important to consider the demographic area of the company. By using Wi-Fi in
the outlets, help in attracting college students. The strategy developed by McDonald's is "Food,
Fun and Folks" for the customers in providing an enhanced experience (Mcdonalds.com, 2016).
AC 3.2 The arrangement of distribution for providing customer convenience
Distribution channel is a long chain of intermediates through which the product will
passes by, until it reaches the end consumer's. Different companies like B2B and B2C can use
the common distribution channel which may have
 wholesaler or distributor
 Direst/ internet
 through sales team
 value added reseller
 consultant
 dealer
 retailer
 sales agent
These are the strategy by which the consumer gets the products. The main approach for
distributing the product is through the stores of the company. McDonald's must open more
number of food outlet, so that it will be easy for consumer to get their product.
The distributional arrangement of McDonald's is based on two main aspects, behavioural,
and demographic. Williams and Dargel (2004, p. 315) opined that the distribution channel is
important for any organisation. This is because the product is available to all the customers when
required at the appropriate quantity, time and place. McDonald's have developed certain value
proposition to cater the needs of the customers. The company offers good ambience, proper
hygienic conditions and satisfying services to the customers. The company have started to offer
internet connection in each outlet in some countries. They play music on their own radio station
rather than playing normal music and an area is dedicated for children where they can play and
spend quality time with their family members. According to Osman et al. (2014, p. 240), about
80% of the restaurants of McDonald's are franchised and only 20% is owned by the company
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and operated by their own. The franchise model of McDonald's will help in increasing the
growth and profitability along with mitigating the risks. The company offers a variety of option
in the seating arrangement that accommodates single person to a large family. The staffs
maintain the hygiene of the restaurant by sanitised the tables and chair after the customers left
the area.
AC 3.3 Setting of price that reflects the objectives and marketing condition of the
organisation
The pricing objective is to make sure that the product of the company is having the best
quality and on the lowest price. Quality and price should be directly proportional, this means the
higher the quantity, the more will be the cost. But now the consumer wants more quality on a
lower cost, which will make very difficult for the organization to develop such kind of product.
There are various methods of cost orientation of setting a price, they are as follows
1. Cost plus pricing- this technique include the addition of some of the percentage of the
cost to fix the main price of the product. This method is very easy. McDonald's can easily
use this technique in determining the costs and their percentage to achieve the selling
amount.
2. Mark-up pricing- this fluctuates or bring deviation in the cost pricing. Different mark-ups
are calculated on the percentage of different selling prices. McDonald's uses cost oriented
process, so they can use mark-up pricing.
3. Break-even pricing- this will have used by the company to determine the level of sales
which will need to cover all type of relevant costs which are either fixed or variable. This
price will be equal to the price where the sales revenue will be equal to the cost of goods
sold.
4. Target return price- this price will be set by McDonald's in order to get a specific return
on company’s investments.
Pricing strategy is an important aspect of an organisation for setting the price of the
product or service that can cause high demand in the market. Pricing is a part of a marketing mix.
According to Weisstein et al. (2016, p. 422), there is two type of pricing strategies, premium
pricing strategy and psychological pricing strategy. In premium pricing, the price is set so that it
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is distinguishable from similar products thus it is set higher. Another pricing strategy is a
psychological strategy where the price is set according to consumer's psychology.
Pricing, discount and financing are important aspects in case of all the fast food retailers. The
pricing strategy of the competitors needs to be analysed before developing the strategy. It is
considered an important part of marketing mix because it is the only source of revenue generated
by the company. MaGrath (2013, p. 132) opined that the price of the products is determined
according to the supply chain management. McDonald's used a strategy that offers a low-cost
product that is accessible to everyone. This was developed to attract low-income families and
middle-class people. It is a strategy used to penetrate in the developing countries such as India
and Pakistan. The company offers certain value for money product, family meals and combo
meals for students and family to increase their sales in such countries.
AC 3.4 Integrating the promotional activities to achieve set goals of marketing
Promotional activity which is frequently used by the companies for marketing. It is used
for generating the awareness in the customers about the new product the company will be
launching. It will be used in generating sales and will help in creating brand loyalty.
The promotion mix is the mix of 4 marketing P's which consist of advertising, public
relation, sales promotion and personal selling. This can be used by the organization in
establishing the meaning and can influence the buying behaviour of the consumer. McDonald’s
is using this promotional mix in the promotion of their new product which is McCrispyVeggie.
This will be done on many cities in UK, so that all the veg lover will get attracted towards their
new product.
It can be said that promotion is the main voice of the organization, which send the
message very loud and clear to the consumers about the new product of the organization.
Promotion can be done on TV, radio, outlets, social networking sites etc.
To achieve the marketing objectives, a number of strategies need to be formulated. Thus, the
promotional mix is an important part of the marketing mix. Heerde et al. (2013, p. 185) stated
that the market mix is mainly composed of 4Ps, price, product, promotion and place. It focuses
on developing strategies that help in informing the customers about the products. Promotion
involves advertising, sales promotion, direct selling and maintaining public relation.
McDonald's have various promotional channels across the world for promoting their products.
For understanding the effectiveness of the promotional strategies, it is necessary to have
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knowledge of the value of customers to decide the cost need to be incurred for promotion. The
most important reasons that McDonald conducts promotional activities are to inform the
customers about the customers. Thus, developing a message that strikes the customers and can
remember for long is the objective of McDonald's. Rodrigues et al. (2016, p.53) commented that
the purpose of communication is to send the right message through the right media and to focus
on the target customers. The company uses television, the internet, hoarding in the roads and
print media as a mean for promotion. The tagline use by McDonald's is "I'm lovin it". The
company use “above the line" activity for promoting the brand and its product.
AC 3.5 Analyse of additional element of extended marketing mix for McDonald’s
Marketing mix of McDonald's is very easy. It is all about putting the right product at the
right place, including all the right combination. This is somewhat difficult part of the
organization, as the company have to include each and every aspect of the business plan. The
marketing mix included 4 P's of marketing and 7 P's of service marketing. Service marketing P's
are place, price, promotion, people, physical environment, process and product. But the
company's main focus is on the 4 P's of marketing, which are
1. Product marketing mix- the company have to make sure that they have the right type of
product, which is in demand in the market. All the marketers have to do an extensive
research report before developing the product.
2. Price marketing mix- The price is generally the amount paid by the consumer for that
product. This is very important component. It will determine the profit of the
organization on that product. The price adjustment has a larger impact on the market
sales and the demand of the product.
3. Place marketing mix- McDonald's must make sure that they are distributing the right
product at the right place. The product should be deployed on such a place where number
of buyers are more. This will increase the revenue and the sales rate of the product. The
place should be accessible to all the consumers.
4. Promotion marketing mix- Promotion can increase or boost the brand sales or
recognition. Further, it will have
▪ Sales organisation
▪ Public relationship
▪ advertising
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▪ Sales promotion
5. People: In service marketing, this is very vital element. The person who is
delivering the service is also included in this. McDonald's staff is very friendly.
They treat the consumer's in very friendly way and very eager to solve their
problems regarding anything. They are having good communication skills in all
the local languages so that the customer will feel more convenient while talking to
them.
6. Process: The manufacturing process of McDonald's is easily visible to all of their
consumers. The provision of services required special kind of attention to
maintain the balance between standardization and customization. The products are
prepared with same process for all the consumers at any time of the day. If the
consumer wants they can even see the process and ingredients used in the
manufacturing of food, they have ordered.
7. Physical Evidence: The location of McDonald's also plays very significant role in
marketing mix. The restaurant should be located to such a place which is easily
accessible to all the consumers. It should look attractive and gives the premium
comfort level to the consumers.
Huang and Sarigöllü (2014, p. 120) opined that the elements of the marketing mix are the
place, price, promotion and product. In the above section, the promotion and pricing strategies
have been discussed. A marketing strategy for McDonald's can be developed to achieve a set of
objective that has been formulated by the management of McDonald's. The company have
broken the long-term objectives into shorter one so that the objectives can be achieved at a
regular interval.
McDonald's have emphasised on developing a menu that contains numerous option for
the customers. The menu is designed keeping mind the needs and preference of customers.
However, the preference of customers keeps on changing with time. Thus, to keep pace with the
change, the company develop new products and remove the older ones. It is noted that the sales
of the company do not get affected due to this. The sales of a product vary in the different stage
of the product lifecycle. The place is another element of the marketing mix that encompassed the
location, distribution channels and numerous processes that enable proper delivery of the product
to the customer (Mcdonalds.co.uk, 2008).
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These seven mixes are the essential part of marketing and are used for developing an
effective marketing strategy. However, McDonald needs to look that the process is conducted in
an integrated manner and within the target budget.
TASK 2:
LO 4:
Using marketing mix in distinct context
AC 4.1 Planning and recommending marketing mixes for 2 distinct sections in customer
markets
As discussed earlier, segmentation is a process where large organization can be divided
into small segments. This segmentation of McDonald's will be based on following aspects;
1. Gender: the organization has divided the market on the basis of gender. Both male as well
as females has dissimilar interest and choices, so it will require segmentation.
2. Age group- To divide the organization according to the age group will also have some
impact on the segmentation. In McDonald's, older age people will not like spicy food, so
they have to prepare the food which is suitable to them. Adults like spicy food and kids
have their different choice, so like this they divide the segments.
3. Economic- McDonald's have divided segments according to the economical' condition of
the consumers. This is divided into 3 sections namely high, mid and low income groups.
Apart from these, geographic segmentation can also be done, which will divide the
business according to the geographical areas. McDonald's have the promotion of beef and they
sell beef in UK, but they are not selling in India. Because it is against their religion. By these
types, the segmentation can be done.
4P’s Product 1 Product 2
Product Diet coke: which is very healthy
and recently launched in the
restaurants
Chicken Mc Grill: This is old
product and liked by all the
consumers
Price Premium Penetration
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Promotion Advertisements on websites,
social media
Advertisements publicly on
new papers, TV.
Place Restaurants only Restaurants, drive-thru, take
away
On analysing the segmentation strategies, target segment and positioning strategies of
McDonald’s, it can be noted that there is a need to focus on the marketing strategy of the
company. As opined by Wasan and Tripathi (2014, p. 127), there are 4Ps that are being analysed
in case of McDonald's. The 4Ps are price, promotion, product and place. However, in this case,
another P can be incorporated that is people. In the context of McDonald's, people and place are
the most important aspect of the company that need to be analysed.
For understanding, the true value of McDonald's it is necessary to understand the
customer that the company is serving and the employees working in the company. The
management of the company needs to look into the fact that the employees are satisfied. As
suggested by Shah (2013, p. 54), this is because satisfied employees will serve better which in
turn will satisfy the customers. In turn, the strategy needs to be introduced in the external
marketing that involves recruitment, training of the employees along with providing motivation
to them. The level of importance given by McDonald's follows customer, employees directly
serving the customers, managers. The tagline of McDonald's is not only made for customers. It
also indicates that the employees love the job they are doing and in serving the customers.
Place indicate the distributional channels of McDonald's. The channel is important as it
help in delivering the product to the customer at the right time. McDonald and Wilson (2016, p.
52) stated that. In U.S.A. 50% of the population resides in an area from which the outlet of
McDonald's is around 3 minutes. McDonald's provides the value proposition to the customers. In
many countries, online ordering option has not been started. The company need to address the
issue for further growth.
AC 4.2 Dissimilarity among customers and marketing products and services
Product Marketing Service Marketing
1. The process which includes the sell or
promotion of a specific product is called as
1. The marketing activities which includes
economies, offered to clients for their
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product marketing.
2. 4 P's of marketing are applicable, which are
product, place, promotion and price.
3. The company offer product according to the
customer's requirements.
4. Product can be transported from one place to
another.
5. Product cannot be customized.
6. Quality of product is measurable
consideration is service marketing.
2. 7 P's of marketing which includes further
process, people, and physical existence.
3. service is like a relationship to the clients.
4. service cannot be transported, so either the
service provider reaches to the consumer or the
consumer visit the service provider.
5. Service may vary according to the
requirements of consumers.
6. service quality is not measurable.
The concept of marketing products and services in an organisation are different because
that are within the organisation are employees in their departments. As stated by Kotler et al.
(2015, p. 42), different organisation develops different products or services that cater the need of
the customers. However, marketing activities are not similar in nature. They perform different
activities for the promotion of products; however, the target customers will be same. The target
customers for McDonald's and KFC will be same however; the cost of the product in both fast
food retailers will be different. Thus, it indicates the difference between marketing service and
products to business rather than customers. KFC, Dominos, McDonald focus on the products
rather than customers because of these companies caters to same customers. It is noted that
customer of these companies will buy products that are loyal and concentrates on their marketing
activities.
AC 4.3 Dissimilarity among international as well as domestic marketing. Implementing a
marketing policy to market aboard
Marketing at national level Marketing at global level
1. production, promotion, distribution,
advertising, selling in their own country is
known as domestic marketing.
1. the marketing is on the international level; it
is international marketing.
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2. it have small area.
3. Less government is influenced
4. The organization have to face less problem
while dealing with local clients
2. covers a large area
3. company have to deal with all sorts of
formalities like rules and regulations of other
countries.
4. the company have to face a lot of barrier,
like language, religion, place etc.
International trade- it can be defined as the exchange of capital, goods and different other
services which can be transported across international borders. It represents some significant
share of gross domestic product.
The difference between international marketing and domestic marketing are in terms of
scope, obstruction, profit and political relation. International marketing has a much wider scope
than domestic marketing. International marketing faces much more obstruction than domestic
marketing. Czinkota and Ronkainen (2013, p. 125) stated that the profit margin of international
marketing is more than that of domestic marketing. International marketing uses modern
technologies as compared to domestic marketing. The political relation does not affect the
domestic marketing issue however; it influences the international marketing activities.
For developing a marketing strategy to market their product aboard, the need of the customers
residing abroad, need to be understood. The organisation needs to make trade visits to understand
the target market. The next step involves research, logistics and infrastructural analysis for
managing the supplies of overseas chains.
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