Marketing Essentials: Role of Marketing and McDonald's Analysis Report

This report provides a comprehensive analysis of McDonald's marketing strategies, examining its role in the fast-food industry. It begins with an introduction to marketing essentials, then delves into the history and organizational structure of McDonald's, including its hierarchical structure and functional areas such as HR, R&D, administration, IT support, and finance. The report focuses on the seven key marketing functions, including distribution, financing, pricing, promotion, product/service management, selling, and marketing information management, and their application within McDonald's. It then explores the elements of the marketing mix (product, price, place, and promotion) and their implementation. Finally, the report details the development of a marketing plan, providing a complete overview of McDonald's marketing efforts. The report also includes illustrations of key marketing concepts.

UNIT 2 MARKETING ESSENTIALS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
LO 1: ROLE OF MARKETING......................................................................................................2
P1. Marketing Functions and its relation with McDonald's........................................................2
P2. Organisational functional areas and relation with marketing functions...............................5
LO 2: ELEMENTS OF MARKETING MIX..................................................................................8
P3. Marketing Mix and pricing strategies...................................................................................8
LO 3: DEVELOPMENT OF MARKETING PLAN.....................................................................12
P4. Marketing plan....................................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

ILLUSTRATION INDEX
Illustration 1: 7 Functions of Marketing..........................................................................................3
Illustration 2: Functional Areas of Business....................................................................................6
Illustration 3: Marketing Mix...........................................................................................................9

INTRODUCTION
Marketing essentials are the elements which are used by the companies to track the
progress of their business. These are very important in marketing i.e. sales and promotion of
services and products (Purvis, 2016). Necessary also includes advertising and market research.
The selected organisation McDonald's, which is a hamburger and fast food chain. The role of
marketing and its relationships with other units of the company have been discussed in this
report. This report is containing the origin of McDonald's and its expansion. Further this
assignment explains the functions of the company like finance, IT and HR. The uses of
marketing mix i.e. place, price, promotion and product is also explained in this study (Puddle,
2015). This document includes the marketing plan and its elements used in this administration.
The functions of marketing and the management of information is also obstinate in this report.
MAIN BODY
Marketing:
The study related to selling and buying of products or services of company is
known as marketing. In this various advertising and promotional activities are considered.
Organisations use slogans, designs and services packages in order to attract customers.
Establishment:
McDonald's was established at United states in 1917 by Ray Kroc, who was an
ambulance driver. It wants to become famous for providing good and uniform quality of food. In
the beginning, he had purchased multi mixers, but after sometime he established a restaurant
with his brother which was successful (Dey, 2016.). The first franchisee was established in 1954.
They had started with limited menu such as burger, fries and beverages, so that they can focus on
quality of product. But later it becomes motto of company. After 5 years of first franchisee, they
opened their 100th franchises in Chicago.
Employees:
They are having 375,000 employees working at different franchises of
McDonald's. They all are working at different level of firm at various franchises of firm.
Employees of McDonald are having minimum wages of $15 (Ghobadian and O’Regan, 2014).
On the basis of their skills increment is provided. They provide various benefits to their staff
such as insurance, health, retirement benefits and vacations policies.
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Branches and stores:
McDonald is a famous fast food restaurant chain. They are having restaurants in
120 countries and region. About 36,899 are serving customers across world. According to the
report of 2016 they are having total 5666 companies at different locations. Also having 31230
franchises at 21559 different locations (Crawford, 2015.).
Organisational culture:
Hierarchy type of organisational structure was implemented in McDonald's. For
this they work in different levels by using top- down control in order to maintain production.
They give importance to quality for success of company. Along with this it is one of the rigid
culture.
Charles handy:
By using the specialised organisational approach, companies mainly focus on four
factors that are:
1. Power culture: On the basis of McDonald, it is considered as a centralised culture. As the
organisation follow hierarchy structure, due to which all the power and rights are reserve
by higher authorities. In order to maintain management firm (Scherer, Palazzo and Seidl,
2013).
2. Task culture: McDonald's use this approach in order to distribute task into the small
groups. Through this way problem is divided into small modules so that issues can be
resolved faster. Along with this skill and performance of employees also get improved.
3. Person culture: This approach is considered by McDonald's in order to make employees
involved, so that working environment of company does not get affected.
4. Role culture: Companies mainly use this culture in order to distribute roles and
responsibilities to their employees. McDonald use this culture in order to improve chain
of command.
LO 1: ROLE OF MARKETING
P1. Marketing Functions and its relation with McDonald's
7 main functions used in marketing, which are discussed below;
Distribution: It is basically known as the deciding factor which company will use and provide
the services and products they want to sell to their customers.
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The idea for any kind of product is outstanding, but the firm cannot make money. If that product
not reached to its consumers.
The company is having over 30,000 restaurants, and they are located in 121 various
countries (Sachdeva, 2015). Their aim is to become the first food service chain in the market
with the help of marketing and advertising, they are establishing their brand's name in entire
world. This function helped them in developing very strong share of market in the global food
industry.
Financing:
It is all about to take loan and used that to earn revenue. The critical function of
marketing is financing which can be done by loans, investments or by using of personal capital.
McDonald's money comes from their individual owners (Gibbs, 2017). There are several
investors which invest the money in the company to control the production. The business of this
organisation is like a real estate, in which the consumers pay rent.
The major revenue is generated from the money paid by the customer's. Along with this firm can
use this fees which is paid by the franchisees.
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Illustration 1: 7 Functions of Marketing

Pricing:
To set the price for different products can be very difficult. If the set price is too
high, the company will lose the customers. If the price is too low, then profit generated would be
very less (Gayle and Luo, 2015). The accurate price only comes from market research or from
trial and error. McDonald's have set their prices for different products after doing deep market
research in different countries.
Promotion:
Many firms are well aware about the promotion activity. To attract new customers
and to retain the old ones, advertisement and promotion is very necessary. By the use of various
advertisements, the company can communicate with their consumers. This will be used in
informing them about the new product and services (Hannah and et.al., 2014). McDonald's uses
various coupons and online offers to attract more consumers. This helps in creating more interest
in food and this will improve the revenue. There are other competitors also, so by keeping prices
low and portion large, the organisation can promote the services.
Product service management:
After targeting the market and setting of the prices, the aim of any company is to
manage the services and products with more effectiveness. This activity will include taking
feedback form the consumers, and responding according to their needs and wants. The
management should be such that the product and services should remain fresh and up to date.
The food provided by McDonald's is majorly to the wide market (Grybs, 2014). They are the
world's leading food industry. Majority of the owners of the restaurants are individual owners.
Their slogan remains open 24*7. Their branch McCafe allows heavy cash flows in the market.
On highways, they are having pick up facilities.
Selling:
It is the last function of marketing. Because it can occur only when the company
knows the wants and needs of the consumers, so that they can respond them with the accurate
products in the given time and affordable price. McDonald's 80% share sells in China
(Hofstetter, Aryobsei and Herrmann, 2017.). But this can generate some major problem, because
the food they are offering is not attracting the customers in the market of China. The growth of
the company has slowed down a little since 2014, because of the increased competition.
Marketing Information Management:
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This system used in managing, obtaining and using the information from market
to improve the decision making (Angrave and et.al., 2016). This will also help in improving the
performance of the organisation. To manage the information gathered from the market two basic
management system used in McDonald's are:
1. Transaction Processing system: This is used in answering the routine questions,
payment of employee, keeping the record of the employees and payroll.
Transaction process includes collecting, storing, modifying and retrieving all the
transactions made by the company. In McDonald's, this system will keep the
record of the supplier name which is supplying them raw materials, the quality of
purchased item and at last the total amount of purchased material.
2. Management Information system: This is used in providing the information
essential in effective managing of an organisation (Slack, Corlett, and Morris,
2015.). This will include technology, information and people. In McDonald's,
MIS system is used in generating the report of daily list of employees, their total
working hours. MIS is used to give profitable information to the managers. So
that business performance can be evaluated.
P2. Organisational functional areas and relation with marketing functions
Several companies have their organisational structure in different ways. This is done by
creating different departments and giving them their roles and responsibilities. The structure of
the company will have several groups of employees having different skills and expertise (Rayner
and et.al., 2016). This will improve the efficiency and effectiveness. McDonald's functional areas
can be described as:
Human Resource:
This is the most important asset in organisation. Any company's heart lies on its
employees. Human resource department is responsible for recruiting new employees with the
required skills and experience. They are also accountable for determining the salaries of each
employee according to their performance (Darcy and et.al., 2014.). McDonald's HR department
selects such employee which are having good communication skills. So that they can easily
communicate with customers and provides them good environment for eating. This division will
keep on organizing various activities and training programs, so that the skills of the workers can
be improved.
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Research and development:
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Illustration 2: Functional Areas of Business

For any business to become successful and remain there, Innovation is the major
factor. New innovation will give the organisation a competitive advantage over other companies.
McDonald's R&D department is responsible for checking the quality of food and finds out new
innovative ways to improve that quality (Moreno-Luzon, Gil and Arteaga, 2014). This team is
responsible for finding out new ways by which the food can be prepared in a better way, which
attracts more number of consumers. With the help of this department organisation is able to
introduce new product into the market. It helps in attracting customer and play significant role in
promotional activity.
Administration:
This can be considered as the back bone of any business. The function of this
department is to handle the planning of business, their process of decision making and financial
revaluation. This section gets easily linked with other sections, so that there will be a smooth
flow of information. The role of administration department is also significant in promotional
activities. They are maintaining communication between different departments of the company.
It helps in increasing promotional approaches of the firm.
IT support:
Information technology is very important in any business. McDonald's IT
department is having the job to develop the software for another department. All the
management of data and other functional areas are managed by IT section. McDonald's are
implementing IT services at great extend, it helps in maintaining large amount of customer
related data. It helps in further promotional activities. Along with this they are able to connect
with various branch and able to manage their services effectively. Therefore, IT is playing
significant role into the organisation.
Finance and Accounting:
The financial statement of the company is prepared by them. They are answerable
for the auditing, accounting and finances of the company (Bobe and Kober, 2015). The flow of
cash is very important for McDonald's, this department manages the inflows and outflows of the
cash. They are considering budget for promotional activities along with this implementing offers
and discounts. It helps in attracting customers.
Customer Service:
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The representatives answer the queries of the customers. Some customers who
required additional information of the food quality and its price, so they can contact to this
department. In McDonald's it may happen that the food purchased by the customer's is not of that
quality, so this department is answerable to the consumers. The food industry is having different
level of customer service support like; one is separate for online problems, other is for the
problems occurred in the restaurant and last one is the 24*7 call services. Through the help this
department company is able to directly connect with costumers. It helps in understanding their
needs and making necessary changes into the services.
Marketing:
The promotional activities are one of the best technique by which the company
can communicate to their customers. If the marketing is effective, then it will give the success to
the company, which will be long lasting. This department is liable for generating sales and
increasing the revenues of the company (Yang, Yeo and Vinh, 2015). McDonald's marketing
team will help them in deciding the price strategy for each product, which will attract more
consumers and accordingly increase the sales.
Sales:
The biggest role for the success of the organisation is played by the sales
department. They are responsible for increasing the profitability of the company by generating
more revenues. The task of McDonald's sales team is to ensure that whatever product they are
selling is generating profit to the company. They are attracting customers by implementing
offers and discounts. It helps in influencing customer's towards their products. Therefore, sales
department plays significant role in promotion services.
Business Development:
The function of this section is to develop the business in other countries. Though
the company is already having its restaurant chain in more than 120 countries, but the business is
developing and it’s their duty to develop the business in other parts of the world. So that profit
can be increased.
If Research and development department is doing any kind of research on the food
products, then it will require funds which is related to the financing functions. Because they have
to take care of all the finances of the company. Same way, if the price team is setting out the
prices then it must be discussed with administration team. Because they are the one who are
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involved in decision making process of McDonald's (Mintz and Currim, 2013). The structure of
the organisation reflects the way they are managing the job and people. This is done to meet the
goals and objectives set by the company.
The functional organisation is having very static role but if the area is other than this,
then it may be having very dynamic roles. In this firm people are being coupled with each other
and forming a group according to their skills so that it will have very positive effect. The
information and data gathered by marketing management department can also be used by
business development. Because the information is very relevant which can be used by this
section to develop the business which will be more effective and profitable. Through considering
various research organisation is able to implement approaches and develop new products. It
helps in influencing customer. Through this way they are able to plays significant role in
promotional activity.
LO 2: ELEMENTS OF MARKETING MIX
P3. Marketing Mix and pricing strategies
The marketing mix is all about putting the right product at the right place, at the accurate
time and in affordable price (Meyer, 2015). This characteristic is very difficult, because you have
to know all the aspects of the business and its plans.
Product:
The emphasis of McDonald's is on developing such kind of menu and the
products which are wanted by the consumers. But the requirements of the consumer may vary
from time to time. In order to meet these requirements, the company has launched various new
products and removed all the old ones. They will keep on doing this.
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