Marketing Strategies for McDonald's: A Detailed Analysis

This report provides a comprehensive analysis of McDonald's marketing principles and strategies. It begins with an introduction to the marketing process, exploring various elements and the benefits and costs of a marketing orientation. The report then delves into the macro and micro environmental factors affecting McDonald's marketing decisions, including PESTLE and SWOT analyses. It examines market segmentation criteria, targeting strategies (differentiated, undifferentiated, and concentrated), and buyer behavior. The report further explores product development, distribution, pricing, and promotional activities, analyzing how McDonald's sustains competitive advantages. Finally, the report includes planning marketing mix for consumer markets and discusses the differences between marketing products and services to business rather than consumers and international and domestic marketing.

MARKETING
PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Various elements of marketing process with reference to McDonald's...........................1
1.2 Benefits and costs of marketing orientation.....................................................................2
TASK 2............................................................................................................................................2
2.1 Marco and micro environmental factors affecting the marketing decision of McDonald's
................................................................................................................................................2
2.2 Segmentation criteria that can be used by McDonald's....................................................3
2.3 Targeting strategies that can be used by the McDonald's.................................................4
2.4 Examining how buyers behaviour affects the marketing activities..................................4
2.5 proposing a new positioning.............................................................................................5
TASK 3............................................................................................................................................5
3.1 Ways of developing a McDonald's products in order to confirm that competitive
advantages is sustained...........................................................................................................5
3.2 Distribution strategies used by McDonald's.....................................................................6
3.3 Pricing strategies used by McDonald's.............................................................................6
3.4 promotional activities of McDonald's and they have used it to achieve the marketing
objectives................................................................................................................................7
3.5 Analysis of additional elements of marketing mix...........................................................7
TASK 4............................................................................................................................................8
4.1 Planning marketing mix for two segments in the consumer markets with reference to
McDonald's.............................................................................................................................8
4.2 difference in marketing products and services to business rather than consumers..........9
4.3 Difference between international marketing and domestic marketing in respect to
McDonald's.............................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

TABLE OF ILLUSTRATIONS
Figure 1: PESTLE Model................................................................................................................3
Figure 2: SWOT Model...................................................................................................................4
Figure 3: Marketing Mix.................................................................................................................9

INDEX OF TABLE
Table 1: Differences between international and domestic marketing...........................................11

INTRODUCTION
Marketing involves the formation of all the strategies and tactics to identify, maintain and
create healthy relationship with the customers which in turn develops value for both customer
and the company in an organizations (Brooks and Simkin, 2012). In this report, marketing
process that is used by the McDonald's has been depicted. McDonald's is one of the largest
chains of fast food restaurant of the UK which is operating its business all over the world and
serving around 68 million customers (McDonald, 2016). Main aim of this restaurant is to
increase its brand image by listing the wants and desires of the customers.
In this project report, benefits and cost of marketing orientation has been described. In
addition to this, environmental factors that are affecting the decision making capabilities of the
company are also mentioned. Along with this, pricing and distribution strategies that are used by
McDonald's are also interpreted. Finally, a plan has been prepared with reference to McDonald's
in two different segments.
TASK 1
1.1 Various elements of marketing process with reference to McDonald's
Marketing comprises of large number activities like designing the product, pricing and so
on. These elements place a very important role in the success of the company. In short, these
elements can be said as the backbone of marketing for the success of the marketing a product.
Thus, four basic elements of marketing process are as follows:-
Investigation: - Before launching any new product in the market, McDonald's should first
investigate the whole market situation (Buckley, 2002). They should analyse the type of market
condition, needs and wants of the customers. Investigating the market in advance will help the
company to analyse the best medium, segment to target and their positioning needs.
Plan of action: - Once the research has been conducted and company is able to know the
level where they are standing and what are their strength & weakness, they should start
formulating the strategies. They should prepare strategies keeping in mind the factors that can be
used by them to beat its competitors. Strategies helped the McDonald's to set its vision, mission,
objectives and goals and the level where the company want to be.
Designing: - After formulating the strategies, plan should be prepared in order to
implement them (Chimhanzi, 2004). It is the role of the marketing planning department to
develop the plan which pertains financial planning, sales forecasts, communication strategies and
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many more things which determine how the McDonald's is going to achieve its desires
objectives.
Tactics: - At last, different types of tactics need to be offered to the customers in order to
finally implement the plan.
1.2 Benefits and costs of marketing orientation
Marketing orientation is the procedure which concentrates on identifying the requirement
of the customers. This method also helps the McDonald’s to increase its gross income by
generating more sales but at the same time cost of the organisation will also increase. Complete
knowledge about the needs and wants of the customers assist the company to produce the goods
and services as per there requirement (Dibb and et.al., 2012). This in turn; satisfies the
customers, and if customers are satisfied then brand image of the McDonald's will also build up.
Along with this, marketing orientation will aid the company to examine the number of
competitors present in the market and what types of strategies are used by them. In lieu of which,
McDonald’s will be able to produce the things accordingly. Analysing the need and wants of the
customers will definitely increase the sales of the goods and services but will also increase the
expenses of the company (Doole and Lowe, 2008). This in turn may reduce the profitability level
of the customers. Therefore, in order to overcome this problem, McDonald’s should make an
attempt to minimize the cost of its production.
TASK 2
2.1 Marco and micro environmental factors affecting the marketing decision of McDonald's
Some of the micro environment factors that affect the marketing decisions of McDonald's
are as follows:
PESTLE
2

Figure 1: PESTLE Model
Political factors: - Political factors affect the business in some or the other way. Some of
the factors that can affect the McDonald's in the country like India are Legislation and
Enforcement (El-Ansary, 2006). Large number of rules and regulations has been imposed by the
government on fast food companies. These companies are required to maintain a minimum level
of hygiene, storage of unused items, number of employees, their salary and many more.
Economic factors: - Purchasing power is one of the major causes for increasing the sales
of the company. If purchasing power of the customers is more than they will prefer to invest
more. Thus, it can be said that it is one of the major factors that is responsible for shaping the
business.
Social/culture factors: - Values, belief, perception, preference, attitude and behaviour of
the society play an important role in the success or failure of the company (Environmental
responsibility, 2014).
Technological factors: - Technology change and innovation in products and services can
increase the sales of the McDonald's.
Micro environmental factors (SWOT)
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PESTLEAnalysis

Figure 2: SWOT Model
Strength: Strength of McDonald's is its brand image and market research which help
them to create an effective marketing mix.
Weakness: - McDonald's should constantly make efforts to bring innovation in its
products to attract more and more customers.
Opportunities: - Increasing number of customers who prefer to eat the food that is served
in a speedy and a friendly way (Fassin, Van Rossem and Buelens, 2011).
Threat: - Change in lifestyle of the customers due to increase in number of competitors of
McDonald's.
2.2 Segmentation criteria that can be used by McDonald's
Market segmentation is dividing the market into different small segments. The main
cause for doing this is to easily address the desire of the customers and then try to produce the
things accordingly. McDonald's has segmented the market into three different ways:-
Demographic Segmentation: - McDonald's has divided this segment into three sub parts
(i.e. kids, students and family). They have started offering Happy Meal which includes the toy
for the kids, for students they have created such an environment where they can come for hang
out with their dear ones and can also have the lunch (Ferrell and Hartline, 2012). And for family,
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they have offer variety of outlets and meals that can be consumed by them as per there
requirement.
Psycho graphic segmentation: - This segmentation is divided into two sections (i.e.
Convenience and lifestyle). McDonald's has started introducing different product like Mc veggie
and Mc Aloo tiki in order to catch the attention of vegetarian people along with non-vegetarians.
In addition to this, company has made the McDonald's place for relaxation and entertainment.
2.3 Targeting strategies that can be used by the McDonald's
There are mainly three types of targeting strategies that are used by McDonald's in order
to attract sizeable mass people and generate more revenue and income. The three targeting
strategies that are reasoned by McDonald's are Differentiated, undifferentiated and Concentrated
targeting strategies:
Differentiated: - This strategy is used by McDonald to differentiate its products from that
of others competitor’s products (Gary, 2006). By using this strategy, McDonald's try to deliver
same encouragement message for everyone.
Undifferentiated: - This strategy is used by the company when McDonald's want to
communicate the significance of the products to the end users. For the success of this strategy,
availability of the product that particular time is very essential whose advertisement has been
done. In addition to this, the products should contain all the features that are communicated to
the customers.
Concentrated: - By using this strategy, McDonald's makes efforts to communicate the
promotional message formed in a peculiar market section.
2.4 Examining how buyers behaviour affects the marketing activities
Buyer behaviour is made up of different environmental factors that may affects the
working of the organisation. Customer’s perception about the company and its products, there
need and wants; their likes and dislikes are one of the reasons that can affect the functioning of
the McDonald's. Demand of the customers about the particular products and services are
provided by McDonald's to increase the sales of that particular product (Golding and Pattie,
2005). A positive perception of the customers about the products and services provided by the
company proves to be beneficial for the company in increasing its brand value and image.
Behaviour of the buyer is one of the causes for increasing the level of competition. Now-a-days
customers want healthy and good quality food product at reasonable rate and which is having
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less fat and cholesterol. Thus, in order to increase the sales and its brand image, McDonald's
should start providing health products to its customers as per there requirement. Besides this,
various internal and external factors also affect the buying behaviour of the customers.
2.5 Proposing a new positioning
Positioning a product is somewhat about developing the product and brand image in the
eye of the customers. The process of positioning includes improvement of perception for the
customers about the company's products. McDonald's should start collecting the feedback from
the customers in order to find out their view point about the products and services provided by
them. This in turn will help the company to produce the things accordingly (Henley, Raffin and
Caemmerer, 2011). McDonald's should make efforts to attract more and more customers by
providing them what they want. Company should start positioning its products and the basis of
different segment with an aim to catch the attention of large number of peoples. In regard to this,
McDonald's has started offering various types of offers to the customers like Happy Meal in
which toy are provided, combo pack etc. Furthermore, main aim of McDonald's is to attract
people of all age group. In lieu of which McDonald's has started offering better quality products
at reasonable rate.
TASK 3
3.1 Ways of developing a McDonald's products in order to confirm that competitive advantages
is sustained
In order to develop a product a product and confirm the competitive advantages,
McDonald's should try to take into consideration the following factors:
Creates brand loyalty: - In order to develop product and increase the sales, McDonald's
should make efforts to increase its brand loyalty (Huang and Sarigöllü, 2012). This can be done
by providing valuable products and services to the customers as per there requirement.
Research: - To catch the attention of large number people, manager of McDonald's
should conduct a research to analyse the need and wants of the customers. A thorough
understanding about the demand of the customers will assist the company to its products and
services as per the desire of the customers.
Unique merchandise: - By providing different types of unique products and services to
the customers, McDonald's can increase its level of level of probability.
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Positioning and differentiating: - McDonald's should make an attempt to position and
different its products and services from that of its competitors (Jobber and Ellis-Chadwick,
2012). Differentiating the products from others will help the company to increase its revenue by
reducing its expenses.
3.2 Distribution strategies used by McDonald's
Level of customer satisfaction does not only depend on the various offers provided by the
company. It largely depends on the services and products by the organisation. And, in order to
offer different services to the customers, selection of the best distribution channel is very
important for the success of the product (Rimal and Creel, 2008). If an effective distribution
channel is not selected then customers may not be able to know about the various products and
services provided by the company. Thus, in order to catch the attention of the people,
McDonald's should select the advertisement and promotion method in order to retain the
attention of large group of people within a short period of period. Therefore, McDonald's has
been using different types of distribution strategies like advertisement, by distributing pamphlets
and so on.
3.3 Pricing strategies used by McDonald's
Pricing strategies are used by the organisation when they are selling their products and
services. By using these strategies, price of the product can be set by increasing the level of
profitability for each and every product sold and manufacture by the company. Thus, some of the
pricing strategies that are used by companies are as follow:-
 Economy pricing strategies
 Premium pricing strategies
 price pricing strategies
 Psychological pricing strategies
 Penetration pricing strategies
Out of all these, McDonald's takes into consideration psychological pricing strategies in
order to increase its level of profitability. Psychological pricing strategies are the strategies in
which McDonald's tries to serve various products according the wants of the customers (Tapp,
2008). They set the price of its product by comparing it with that of its competitor’s products. By
using these strategies, company set the prices of the products in such a way that they are able to
maximize its level of probability.
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3.4 Promotional activities of McDonald's and they have used it to achieve the marketing
objectives
With an aim to achieve the marketing objective of the organisation, McDonald's should
take into consideration various activities into existence. Out of the various activities, promotional
activities play a very important role. These activities help the company to create awareness in the
mind of the customers about the various schemes, services and products offered by the company.
Thus, in lieu of this, some of the promotional activities that are used by McDonald’s are
advertisement and public relation (Waeraas and Solbakk, 2009). Advertisement is the technique
that is used by the company to attract large number of customers sitting at a distance within a
short period of time. By using this method, McDonald's will be able to create much awareness
about the goods supplied by them in the mind of the young age people and children. Similarly,
on the other hand, a healthy public relation between customers and company will increase the
sales of the goods and services provided. This in turn will assist the McDonald’s to increase its
level of probability.
3.5 Analysis of additional elements of marketing mix
Marketing mix is the marketing tool that is used by every business organisation in order
to market its product properly. Marketing mix is done by the McDonald's after identifying the
marketing strategy. Apart from the 4Ps of marketing mix, different authors have prolonged 3
more Ps. (i.e. people, process and physical evidence). These three Ps are described below in
detail:-
People: - Employees are the one who are responsible for increasing the sales and
productivity of the company. These employees are only responsible for producing good quality
of products and to attract large number of customers by providing them good services. Thus, in
order to increase the productivity, McDonald's should recruit the right person who has enough
knowledge about the food and its various related products and is able to maintain the good
relationship with the customers (Yannopoulos, 2011). This in turn will improve the efficiency
level of the employees and on the other hand will increase the productivity of the company.
Physical evidence: - Physical evidence shows a way in which the company perceived its
services and products. In addition to this, presentation of the food served to the customers
should be attracted and timely innovation should be introduced in the products.
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