Marketing Principles Report: McDonald's Case Study Analysis

This report provides a comprehensive analysis of McDonald's marketing principles and strategies. It begins with an introduction to marketing principles and their application to McDonald's, followed by an examination of the various elements of the marketing process. The report then delves into micro and macro environmental factors influencing McDonald's marketing decisions, including suppliers, competitors, customers, political, economic, social, technological, and legal factors. It proposes segmentation criteria for different markets, explores targeting strategies, and analyzes the impact of buying behavior on marketing activities. The report also covers product development, distribution, pricing, and promotional activities, including the extended marketing mix. Finally, it discusses marketing mixes for different consumer segments and highlights the differences between marketing products and services to businesses versus consumers, as well as international marketing considerations. The report concludes with a summary of the key findings and references.

Marketing Principles
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TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Various elements of marketing process.................................................................................3
1.2 Evaluating benefits and costs of marketing orientation.........................................................4
TASK 2............................................................................................................................................5
2.1 Micro and macro environmental factors influencing marketing decisions in McDonald's...5
2.2 Proposing segmentation criteria to be used for McDonald's products in different markets. .6
2.3 Targeting strategy for McDonald's products.........................................................................7
2.4 Impact of buying behavior on marketing activities in different buying situations................7
2.5 New positioning for selected service or product....................................................................8
TASK 3............................................................................................................................................9
3.1 Ways in which products are developed to sustain competitive advantage............................9
3.2 Ways in which distribution is arranged to provide customer convenience...........................9
3.3 Explanation to how prices are set to reflect an organization's objectives and market
conditions...................................................................................................................................10
3.4 Ways in which promotional activity is integrated to attain marketing objectives...............10
3.5 Additional elements of extended marketing mix.................................................................11
TASK 4..........................................................................................................................................11
4.1 Plan marketing mixes for two different segments in consumer markets.............................11
4.2 Differences in marketing products and services to business rather than consumers...........11
4.3 International marketing differs from domestic marketing...................................................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Marketing principles is referred to as ideas that forms widely agreed upon basis related
with promotional strategies of product. Various businesses makes use of marketing principles
with the aim to optimize market performance of existing products as well as successfully launch
products into new market. Marketing principles involve set of strategies, processes and methods
that facilitates the organization in attaining its marketing objectives such as customer
satisfaction, development of new products as well as increasing customer base (Doyle, 2009).
The role of marketing is effective in increasing awareness among the customers with respect to
products and services. With this, it can attract large customer base in an effective manner. The
role of marketing is majorly towards increasing the image of brand in the market.
In the present report, marketing principle has been discussed with respect to McDonald's.
The company is one of the best known brands across the globe. The present study entails to
understand the concept and process of marketing. Further, it focuses on the concepts of
segmentation, targeting as well as positioning. In addition to this, the study also covers
understanding of both traditional and extended elements of marketing mix which is referred to as
the heart of all marketing strategies.
TASK 1
1.1 Various elements of marketing process
Marketing is considered as orientation of firm that aims at satisfying the requirements of
consumers and achieve satisfaction. Various elements of marketing process of McDonald's have
been enumerated below: Analysis of market and environment: At this stage, management of McDonald's is
required to perform proper analysis through adoption of strategic tools such as Pestle,
Swot, Porter's Five Forces as well as Value chain analysis (Ennew and Waite, 2013). As
such, this assists in carrying out proper evaluation of market. Identification of target market: At this stage, the firm needs to define its target market
segment in UK as well as other countries in order to offer suitable products. For example,
it has been determined that UK's people prefer Chicken burger rather than any other
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variety. Thus, the company has to lay emphasis on production of particular product in
order to increase its sales and satisfaction among customers. Setting marketing objectives: The marketing objectives of McDonald's include
maximization of profit both in long term and short term perspectives. Further, it enhances
the sales so as to increase brand image (Hung and Lin, 2015). Moreover, the company
also pays attention towards corporate social responsibility so as to achieve desired
objectives. Dealing with different marketing mix elements: The importance to deal with several
marketing mix elements presents that needs and wants of the target audiences is required
to be determined and fulfilled by McDonald's.
 Implementation and control: It is the last element that assists in making assessment of
effectiveness of marketing tactics. Further, it determines the improvements needed in
relation with marketing strategy that needs alteration in internal and external business
environment.
1.2 Evaluating benefits and costs of marketing orientation
It has been determined that firm is required to produce its product and services on either
product oriented approach or on marketing oriented approach. With later one, the aim of the
business relates with responding towards the needs of customers. Therefore, management of
McDonald's need to develop suitable decisions based upon the needs and wants of customers in
order to achieve satisfaction. The major benefit relating with other one is associated with focus
of firm on customer centric approach (Julian, 2003). This implies that firm aims at determining
needs of customers and then offer products that are desirable by them in order to gain expected
set of outcomes. Moreover, the aim of the business is to increase brand value that assists in
enhancing the loyalty of the customers. This would assist in achieving sound reputation in fast
food market. The focus of McDonald's is on development of products and services in accordance
with the needs and requirement of customers as such this assist in giving tough competition to
the rivalries.
On the other hand, marketing orientation involves certain disadvantages. This is in
relation with the enhancement in the cost of organization. This is because; it involves greater
investigation of the market. McDonald can make use of marketing approach in case where it
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possesses sound experience regarding understanding of customer needs. Moreover, with the aim
to attain success through this approach, latest technology along with unique strategy needs to be
available.
TASK 2
2.1 Micro and macro environmental factors influencing marketing decisions in McDonald's
Micro and macro environmental factors that affect marketing decisions of McDonald are
enumerated in the manner below:
Micro environmental factors
It includes internal factors that affect McDonald's function. These are as follows: Suppliers: It is comprised of suppliers who act as important part of internal business. The
firm has their own suppliers and is closely associated with them (Poolton and et.al, 2006).
There is greater need for the company to make payment to suppliers on time so that
demand of business can be fulfilled within specified time. Competitors: It is another factor that affects the business. Strong competitors of
McDonald’s include KFC, Pizza Hut and Burger King etc. All the competitors possess
sound image and market share that provides strong competition to McDonald. Therefore,
there is need for the organization to make determination of competitor’s power and their
marketing strategy in order to gain an edge over them. Customers: McDonald is engaged in serving large customer base on regular basis. Thus,
it offers greater value to its customers in order to enhance their satisfaction level as they
are its first priority (Nguyen and Bosco, 2015).
Macro environmental factors Political factors: It has been determined that McDonald's works in more than 100
countries and thus it affected by the political factors across the globe. There is greater
requirement for the business to follow the regulations of government authorities in
relation with health and hygiene factors (Penn, 2014). Further, the ruling authorities are
taking strict actions against such fast food industry as it has been noticed that intake of
such results in causing heart and cholesterol related problems. Economic factors: It includes elements such as tax rate. In addition to this, it is important
for McDonald to decide on whether it needs to import raw material from outside or
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purchase product loyalty which is one of the most crucial factors. It is significant for
management of organization to make analysis of tariffs engaged in raw material being
imported. Further, the rate of unemployment influences the business. Moreover, this has
resulted in decreasing spending by the people. Social factors: It is another factor that presents the change in the lifestyle of people which
greatly affects performance of McDonald's. In the present times, people are becoming
more health conscious (Ruckman, Saraf and Sambamurthy, 2015). Thus, they avoid
intake of junk food which results in affecting the sales performance of organization. Technological factors: There is limited role of such factors in fast food industry. It can be
determined that if firm makes use of technology within its operations then it would assists
in improving its performance. For example, through installation of computing devices
need of customers can be accomplished. Moreover, it is necessary for business to pay due
attention towards environmental factors like water and air pollution. In case, it is
determined that polystyrene packaging of McDonald's is affecting environment adversely
then such issue needs to be resolved by the organization (Zhuang and et. al., 2006). Such
criticism can affects the sales of the firm to a greater extent.
 Legal factors: This includes labor law, employment, corporate law and tax requirement
which need to be complied with by the organization such as McDonald's in an effective
manner.
2.2 Proposing segmentation criteria to be used for McDonald's products in different markets
Market segmentation is referred to as the manner in which entire market is categorized
into several parts. This includes segmentation on the basis of geographic, psychographic as well
as demographic. Under geographic segmentation it is determined that entire market is
categorized into several parts. For example, whole geographic market include wide range of
customers and therefore from such target market needs to selected by McDonald's by keeping in
mind their preferences and requirements. Due to presence of greater applicability this technique
is effectively used by the organization. In addition to this another criteria of segmentation
includes demographic wherein market is divided into factors like income, education and age. For
example, McDonald's needs to take into account income and religion factors when offering
products to target customers.
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Along with this psychographic segmentation presents division of market on the basis of
factors such as attitudes, personality and beliefs etc. The firm makes use of such technique in
order to make analysis of taste and preferences of people belonging to different cultural
background (Brooksbank, 2001). Therefore there is greater need for the firm to offer suitable
products as per customers’ needs. For example, McDonald's is not engaged in offering beef
related products in India. This is because such is not preferred as per culture of India. This results
in attracting larger customer base to consume the product of firm. Thus this leads to increase in
market share and profitability of McDonald's to a greater extent.
2.3 Targeting strategy for McDonald's products
There is existence of several products and services existing in the menu of McDonald's.
This includes Burgers, Fries, muffins and drinks etc. Further there are several strategies relating
to targeting which are implemented by organization with the aim to conduct business practice.
Undifferentiated targeting strategy states that under this organization does not fulfill the needs of
a particular market or specific set of customers. But with the use of such strategy business can
gain large customer base in specified geographic area in an effective manner (Hung and Lin,
2015). For example, FMCG firms make use of such strategy to a greater extent. Another strategy
is concentrated marketing tactic that is specific in terms that it target unique set of customers for
its products. For example, BMW takes into account such targeting strategy as it products are
luxurious, high priced and associated with the lifestyle of people.
In addition to this the strategy of multi-segment is used by the organization in order to
attract large number of buyers in accordance with their taste and preferences. Such strategy has
been adopted by McDonald's as company is engaged in offering wide range of products such as
burgers, fries, desserts etc. which is greater attraction for people with varied needs (Kenning,
2008). For example, company offers burgers to large customer base in accordance with their
income level. This assists in increasing sales and profits of business. Further with adoption of
this strategy company can increase its sales and profitability to a greater extent.
2.4 Impact of buying behavior on marketing activities in different buying situations
The buyer's behavior is determined as pattern of people that are buying goods and
services. Further it includes the factors that affect the purchase decision of other people. These
later results in influencing buying behavior of the consumers. Thus it is important for marketing
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manager to make determination of several buying situations with the aim to maximize
profitability. Thus for the sake of attracting customers business needs to design attractive
advertisement and include suitable logo and characters in order to enhance buyer's behavior. For
example, marketing manager of McDonald's need to conduct market research so as to determine
the buying habits of the people so that they prefer company's product for the sake of satisfying
their needs (Scholes, Whittington and Johnson, 2008). With the unique taste of McDonald's
product the affects the buying pattern of the people and increases the reputation of the company
within the market place. In addition to this several feedback gained from buyer behavior and
unique selling point of business assist the marketing manager of firm in designing the
advertisement approach that attract target market towards the firm (Suki, 2013). Moreover there
is presence of several other factors like influence groups, opinion leaders etc that affects the
buying decision of the customers. Thus marketing team of the business laid emphasis on the
factors that contributes in offering quality products to customers in comparison with competitors.
As such this builds image of brand in the market for long run and ensures it survival as well.
2.5 New positioning for selected service or product
It can be determined that positioning of the product assist in developing unique image of
brand in the customer's mind. This assists the firm in differentiating its products and services
from others. For example, taste as well as price range of Burger is suitable positioning strategy
that affects the target market towards consumption of product (Van Doren and Johns, 2010). In
addition to this technology is another important factor that assists in positioning the product in
the customer's mind. For example, McDonald's undergoes innovative technology like use of
computing devices for billing in order to reduce the customer waiting time. This in turn results in
increasing the satisfaction level of customers.
Along with this quality is considered another important factor that can be used with the
aim to differentiate products from that of competitors. For instance McDonald's design
advertisement of its product through adoption of features such as quality and taste so as to grab
the attention of customers. Therefore quality is regarded as suitable positioning strategy that
affects the target market towards making purchase of product. Further quality of services affects
the positioning of product. It is effective for the organization to offer quality service delivery to
customers in order to develop sound image in customer's mind.
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TASK 3
3.1 Ways in which products are developed to sustain competitive advantage
It can be determined that firm is required to bring continuous changes within the product
and services in order to gain competitive advantage. For the purpose of surviving in the market
McDonald's needs to expand its product line rather than pay attention on single product. BY
taking into account product development organization is able to beat with its rivalries and gain
unique position in the market (Liu and et. al., 2013). Moreover they need to carry out market
research for the purpose so as to gain information with respect to market trends and needs of the
customers. At last stage, McDonald's is engaged in determining the ability of its product so as to
determine the loopholes that exists within the product and services. Because of such pilot testing
is conducted by the firm which would assist in launching new product in the market. By taking
into account all such aspects firm would be able to sustain competitive advantage.
3.2 Ways in which distribution is arranged to provide customer convenience
There is presence of various techniques that assist in making distribution of products and
services to customers in order to attain objective of customer convenience as well as satisfaction.
McDonald's needs to carry out such method of distribution as it assist in providing satisfaction to
the target customers. The firm makes use of franchisee distribution channel that is commonly
used in the chain stores so as to distribute products (Maenpaa, 2012). As such it avoids
investment as well as liability of operating a chain. Under this ownership is not sold to the person
who is engaged in operating chain. Thus the major advantage of carrying out this type of
technique is it assists in reaching target market and offers product in convenient manner.
Further it also satisfies the main aim of the organization that is to reach large customer
base in fastest manner which results in enhancing business sales. There organization is making
use of this model in distributing product and assist it in attaining success (Salkin, 2009).
However there is another major strategy that is indirect channel of distribution that includes
intermediaries such as wholesalers and retailers. There are several FMCG businesses who sales
their product by this distribution channel so as to reach target market.
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3.3 Explanation to how prices are set to reflect an organization's objectives and market
conditions
It is important for the organization to set suitable pricing strategy with the aim to
influence customers as such they would visit store on regular basis. Therefore the team of
marketing needs to set such prices of the products that assist in attracting customers to make
purchase of products. This acts as an aid in improving the profitability of the organization.
Further McDonald's needs to make analysis of its objectives as well as market condition as there
is existence of recession in the country. This compels the business to adopt penetration strategy
so that large mass of customers can be attracted towards offering made by organization at
reasonable prices (Baisya, Sharma and Priya, 2010). The organization adopts penetration pricing
strategy in order sell its product at cheap rates as this would result in increasing market share of
organization. This is feasible strategy in situation when business enter new market with fresh
product. The organization undergoes this strategy as offers products such as burger and fries at
reasonable price in order to enhance satisfaction among customers. Moreover setting prices in
accordance with market condition and analysis of purchasing power leads to success of business
in long run course of time.
3.4 Ways in which promotional activity is integrated to attain marketing objectives
Promotional activity is regarded as suitable technique that assists in conducting suitable
marketing strategies by the means of advertising, sales promotion as well as publicity. With all
such techniques firm can effectively promote organization's product in the target market so as to
attain objective of marketing. McDonald carries out promotion of product by developing
advertisement so that wide range of products can be promoted in order to increase sales (Fearne
and Cacciolatti, 2013). Through advertisement on television wide range of customers can be
attracted towards the product. Further this assist in creating unique image of the brand in an
effective manner.
Business also carried promotion by the means of social media so as to popularize the
brand in the people. The firm uploads it menu items on Facebook page and update its offers and
discounts on regular basis. This facilitates in attracting customer to visit the outlet. Along with
this organization also adopts sponsorship program wherein company organizes particular events.
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Here the company place hoarding or visual advertisement on t-shirt and trophies so as to offer
information to the customer in relation to the range of product it offers.
3.5 Additional elements of extended marketing mix
There is presence of several elements of extended marketing mix such as people, process
and physical evidence. These are as such: People: It includes human resources and management of organization that assist in
exposing culture of organization before customers so as to attain marketing objective.
There is greater responsibility of HRM to make selection of dynamic employees to work
within various departments. This assist in offering suitable services to customers. Process: It is the manner in which the product is delivered to the customers. For example,
the company needs to undergo system like uniformity of offering products, service
delivery and service consumption (Michman, 2006). Further McDonald need to develop
process that can assist in simplifying waiting time of customers and attain satisfaction.
 Physical evidence: It is comprised of infrastructure and ambiance of the outlet that is
required to be neat, tidy and safe. Further friendly services needs to be delivered in order
to persuade customers towards organization.
TASK 4
4.1 Plan marketing mixes for two different segments in consumer markets
The two marketing segments of customers for McDonald's involve both high and low
income group people. For people belonging to high class products will be offered in accordance
with their lifestyle. For them prices will be kept high. For the purpose of distributing the product
the firm owns franchisee model so that it can reach target market (McDonald, 2012). Further the
promotion can be done through social media and visual advertisements in magazines.
In contrast this marketing mix for low income people includes products that are provided
at lower prices. Further the price would be kept reasonable. Moreover distribution in such case
would be through franchisee method. Lastly promotion will be done by newspapers, leaflets and
television in order to achieve satisfaction among customers.
4.2 Differences in marketing products and services to business rather than consumers
Marketing of products and services for business and customers varies to a greater extent.
The major differences among both marketing types is that firm needs to make more investments
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in order to attract customers by developing promotional plan. However in case of business
customers firm has to make investment of fewer amounts so as to attract customers (Graa and
Dani-elKebir, 2010). For business clients products are sold in bulk whereas customer purchases
less quantity. While marketing to customer’s emotional factors needs to be taken into account.
However for business clients the role of emotional factor is not significant as decision is made
among both parties.
4.3 International marketing differs from domestic marketing
It can be determined that there is existence of various differences among international
and domestic marketing. The scope of international marketing is high in comparison with
domestic marketing. Under international market the firm has opportunity to offer wide range of
products so as to satisfy client needs (Marketing strategy, 2009). While in case of domestic
marketing the product availability is less. In case of international market the firm has to comply
with all the legislation of the government where it operates. However political factor in domestic
market is less forceful. While carrying put business in international market languages and
different cultures needs to be taken into account. As such it affects the success of the business in
long run. However in case of domestic market such does not apply.
CONCLUSION
It can be concluded from the study that the role of marketing is effective in attaining
organizational objectives to a greater extent. With the assistance of this the organization is able
to determine the needs and wants if the customers in an effective manner. This assist in attaining
satisfaction by the customers. Further it is important of marketing team of McDonald's to
conduct suitable market research. This is in order to gain deeper insight regarding the taste and
preferences of the customers in appropriate way. Thus with this sales and profitability of firm
can be enhanced significantly. Once the marketing strategy is implemented the major task is to
assign responsibility so that actual plan can be executed in an effective manner. McDonald
obtain feedback from the customers in order to measure the success of the business against short
term targets.
REFERENCES
Journals and Books
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