Critical Evaluation of Marketing Management Theory and Practice

This report provides a comprehensive evaluation of marketing management theory and its practical application, using McDonald's as a case study. The report begins with an introduction outlining the core objective of demonstrating how an organization creates customer value through marketing concepts. Part 1 critically evaluates McDonald's marketing strengths, focusing on segmentation, strategic marketing concepts, and the marketing mix, providing real-world examples. Part 2 conducts a situational analysis using the PESTLE framework to identify opportunities and challenges faced by McDonald's in the UK market, considering political, environmental, social, technological, legal, and economic factors. The analysis highlights the evolving consumer preferences and competitive landscape. Finally, Part 3 offers recommendations for McDonald's marketing strategy, aiming to maintain a competitive edge and address identified challenges. The report concludes with a summary of findings and recommendations, supported by a comprehensive reference list.

Running head: EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT
THEORY
Critical evaluation of contribution of current marketing management theory
Name of the Student
Name of the University
Author Note

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Part 1:.........................................................................................................................................2
Critical evaluation of the strength of strategy of MacDonald:...................................................2
Marketing segmentation:............................................................................................................3
Strategic marketing concepts:....................................................................................................3
Marketing mix:...........................................................................................................................4
Part 2:.........................................................................................................................................7
Situational analysis for identification of opportunities and challenges faced by MacDonald:..7
Part 3:.......................................................................................................................................10
Recommendation of marketing strategy:.................................................................................10
Conclusion:..............................................................................................................................14
References list:.........................................................................................................................15

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
Introduction:
The report is prepared to demonstrate how the organization is able to create customer
value by the application of marketing concepts and philosophies. In this regard, the marketing
strength of MacDonald has been highlighted and the efforts taken by company to create value
for customers by the application of appropriate marketing concepts. The current marketing
environment faced by MacDonald in United Kingdom is identified by the evaluation of
external forces. The situational analysis has been performed using the framework of
PESTLE. This fast food outlet is well acquainted of the growing threats faced from new
competitors that offer premium quality. The country is struggling to keep up with the taste of
customers and many brands continue to perform well (Adams and White 2015). It is required
by the organization to go for brand as well as product extension for maintaining competitive
position as against its competitor.
Discussion:
Part 1:
Critical evaluation of the strength of strategy of MacDonald:
This particular section illustrates the application of marketing concepts and
philosophies and for development of any business, marketing strategy plays a very crucial
role. The main objective of development of marketing strategy is to ensure that the

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
customer’s demands are fulfilled by the existing or newly launched product. The concepts of
marketing focus on the needs to understand the customers before designing the new product
(Mellentin and Heasman 2014). It is so because it helps in incorporation of needs and wants
of customer in designing the product so that sales and profit target are met. Some theoretical
concepts of marketing that are used by organization involves
Marketing segmentation:
Market segmentation is the process that is used by the organization for dividing a
market into meaningful, identifiable and closely segmented groups of consumers. The
segmentation logic is based on the idea that all consumers would not be satisfied by one
particular product at go. Marketers make use of number of variables for the segmentation
such as demographic, geographic, behavioral and psychological segmentation. Geographical
segmentation is about dealing with the customers that differs across region and countries.
Psychological variables are about segmentation of market based on social class, life style and
individual personality. Segmentation on behavior is based on the level of attitude, knowledge,
response and user of product. Segmentation of market is essential for identification of
potential markets and customers through segmentation of plans and goals (Bublitz and
Peracchio 2015).
Strategic marketing concepts:
In highly competitive markets, it is crucial for organization to keep an eye on
competitors and how a company should position itself in order to gain sustainable
competitive advantage is of utmost importance. An organization can gain competitive
advantage by adopting the service process that is environmentally sensitive (El Ansari et al.
2014).

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
Marketing mix:
Marketing mix is the distribution, production, pricing and promotion strategies to
achieve the target market and producing changes. It is a set of relevant factors and solution
that enables the company to meet the needs of customer and goals of organization as a whole.
The four Ps of marketing are the set of controllable variables that is used by firms to
influence the response of buyer. The four components of marketing include product, price,
promotion and place.
Marketing mix:
(Source: Webster, et al. 2014)
Product- Product is the combination of services and goods offered to the target
market and it is one of the key components of marketing mix. Plans of marketing mix are to
build profitable customer relationship by bringing value to them.
Price- The pricing strategy developed by business should be competitive for
attracting new customers.
Place- Place is about the whole process of organization bringing product and service
to end customer along with distribution channel and physical location. It is essential for

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
restaurant to locate itself in a convenient and good location that will help in making better
sales.
Promotion- Promotion is another important marketing mix component that helps in
boosting sales and recognition of brand.
In the fast food industry, MacDonald became the leader with the strong response to
competition, strong focus on customer service and using marketing service for the
development.
The market segmentation of MacDonald is based on the demographic factors. The
market segment of MacDonald is based on the several population factors such as income,
age, gender, occupation, religious, education, national and other related variables. Children is
regarded as central customers by MacDonald and it took the effort of maintaining loyalty of
customers by the methods such as celebration of birthday parties, offering discounts on some
special events and method of sending gifts. The focus relating to the fast food shop mainly
focuses on the working group people who want good quality food at cheaper price (Frynas
and Mellahi 2015). It is easier for the organization to implement further steps after the
concept of segmentation has been set.
MacDonald sustains their competitive advantage by providing more value to
customers. Company attempts to provide best value to customers of anyone in the market and
when it comes to value, they prevail to be leader with dominance. Innovation is other factor
that is used by organization to sustain their competitive position. The new menu items is
created and innovated by utilizing culinary head chefs so that high quality taste is provided to
customers. Their expansion to dominate the market is done because of sustainable advantage

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
over its competitors in terms of optimal physical locations, purchasing power, brand
recognition and resources available for marketing.
In order to maximize the impact and reach of MacDonald, it utilized branding and co
branding with major companies. For co branding with other companies, company has found
strategic ways and have used the benefits for marketing of the restaurant. MacDonald has co
branded with companies like Coca Cola, Walt Disney, Oil companies, Cadbury and Hot
wheel toys in happy meals.
The marketing mix adopted by McDonald comprised of several approaches that helps
in meeting the concerns in different market around the world. It includes the tactics and
strategies defined by marketing mix to reach the target customers. In order to suit the local
conditions of market, some of the variations of marketing mix are used by company.
Marketing mix adopted by McDonald helps in facilitation of effective reach to the target
market which helps in supporting the leading global industry position of company along with
brand strength. Marketing mix elements of restaurant forms the marketing system of
company and helps in achieving marketing objectives.
All the types of marketing communication are incorporated in the promotion aspect of
marketing mix. Sales promotion, merchandizing, point of sale display, loyalty schemes,
direct mail, door drops and advertising are some of the method. The prime focus of
MacDonald is on targeting children. Children are targeted in happy meals by giving small
toys along with the meal. While placing order on several meal combos, customers are
provided with various schemes for winning prices by way of scratch cards and lucky draws.
Outlets of Macdonald are spread evenly across the cities so that it is easily accessible
to customers. Products of restaurant are available to customers at their further convenience
through drive in and drive through options. Main place used by MacDonald to distribute the

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
products include kiosks, restaurant, mobile application and post mate app and websites.
Restaurant is the place where MacDonald generates most of its revenue from.
One of the important determinants when charging price from customers is the
perception of value of customers. A mental picture is drawn by customers on the worthiness
of product. Products served by organization have psychological connotations for the
customers and it is more than a physical item. Low price strategy comes with the riskiness
of comprising with the product quality. When deciding on the price, organization should be
well aware of the integrity of brand.
Product classification by MacDonald is done into categories of branded core value
products and branded affordability. This strategy has been adopted for the satisfaction of
customers having different price perceptions.
Part 2:
Situational analysis for identification of opportunities and challenges faced by
MacDonald:
Situational analysis of MacDonald is done by the application of PESTLE framework
which is a useful tool that helps in examination of external environment of fast food industry.
Political factors- For the fast food industry, political factors impose threat to the
operations of business due to regulation of government on packaging.
Environmental factors- The revenue growth opportunities and convenience for
customers for fast food chain have been facilitated by the growth of third party delivery
partners. Growth of fast food brands are supported by increasing adaption to their kitchens.
Adaption of kitchen as with all the areas of customer foodservice in year 2018 serves as huge

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
opportunity and disrupting factors for protecting the long term stability of business and
diversification of revenue streams (Jun et al. 2016).
Social factors- The important factors for many UK customers as perceived by
MacDonald are dining experience and quality of food. In order to fight off with the growing
competition, the company is testing more dining options and premium menu. The menus
have been accordingly adapted by different brands as health remains the most significant
topic of discussion among consumers. In area of fall in discretionary income, the trend of
ingredient and short term health of consumer is less evident. In recent years, a large number
of brands such as Itsu and Leon have performed strongly as they have major focus on
customer health. Many other competitors of MacDonald such as Nandos, Greggs and Subway
have positioned themselves for attracting increasingly health consciousness consumers by
developing healthier options.
MacDonald faces challenge in this regard of development of healthier options on their
menu for attracting increasingly health conscious consumers.
In addition to this, MacDonald is in particular focus of attention concerning the long
term sustainability of business models. However, the growth of outlet and strong financial
results has eased the previous concerns surrounding the business model sustainability. The
concern about the business model sustainability has been due to potential fading of health
factors and its relevance. For the wider fast food market, this factor is considered extremely
important.
Technological factors- The increasing staffing cost is the main concern of the
operators of restaurant and there is increased mechanization in many areas have been
facilitated by the technological factors. It is so because the roles of staffs within the outlets of
fast food are less skilled. For mitigating the factor of staffing cost, business model should

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
incorporate the mechanization. Restaurant such as MacDonald is required to increase the
speed of adopting technology as it is not expected that the consumers would have same level
of human interaction (Kraak and Story 2015).
Legal factors- Legal factors would help in promoting health complaints and
campaign regulations among consumers. Some of the significant external legal factors
impacting the operations of business of MacDonald are new health regulation at workplaces
and legal minimum wage levels. Revenue of restaurant can be significantly impacted by local
health regulations and minimum wage levels of United Kingdom.
Economical factors- In light of strong competition prevailing in the fast food
industry of United Kingdom in year 2018, demand for product is likely to remain highly
elastic. For the British consumers, price will be the most important factor influencing product
demand given the current level of inflation. It is so because they would seek to develop more
affordable alternative (Boyland et al. 2015). There would be relatively small impact on fast
food outlets operating in country because of fall in discretionary income.
External environment analysis of fast food industry of United Kingdom is done by the
application of framework of Porter’s five forces.
Bargaining power of buyer- Bargaining power faced by MacDonald is high due to
large number of fast food service providers, high availability of substitutes and low cost of
switching.
Bargaining power of suppliers- The bargaining power of suppliers of MacDonald is
weak. Factors responsible for weak bargaining power include low forward vertical
integration, high supply and large number of suppliers.
Threat of substitutes- MacDonald faces strong threat of substitutes because of high
performance to cost ratio, low cost of switching and higher substitute availability.

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
Threat of new entrants- Threat faced by MacDonald from new entrants is moderate
due to moderate cost of capital and high cost of developing brand.
Rivalry from competitors- MacDonald faces strong competition because of
saturated fast food market. External factors that are responsible for strong forces of
competitive rivalry are high level of aggressiveness of firms, low switching cost and high
number of firms.
Part 3:
Recommendation of marketing strategy:
From the analysis of efforts taken by MacDonald to extend their brand, it can be seen
that revenue growth opportunities have been facilitated with the growth of third party
delivery partners in light of limited delivery options. However, company has been facing
issues surrounding their business model resulting from potential fading and relevance of
health factors. It is required by MacDonald to put a major focus on health for performing
strongly and gain competitive advantage. MacDonald should position themselves to attract
the health conscious consumers in order to gain market share and maintain their competitive
advantage (Kraak and Story 2015).
Strategy for brand extension:
Since consumers are becoming increasingly flavor adventure and crave convenience,
they are looking beyond these departments to prepared food aisles and packaged for organic
offerings. Sourcing ingredients for preparing healthy food is challenging and in order to sport
the official organic seal, organic products should have at least 95% of organic ingredients.
Steps should be taken by MacDonald to develop innovative product. The mainstream organic
ingredient such as chicken soup, wheat for pasta, oil for vinaigrette and chicken for soup are

EVALUATION OF CONTRIBUTION OF MARKETING MANAGEMENT THEORY
limited in supply (Guthrie et al. 2015). Therefore, they should make investment in overseas
and domestic organic farming that will help in increasing the supply of organic food
ingredients. Fast food manufacturer such as MacDonald need to source organic ingredient for
sourcing and for this they should build an organic supply chain.
The main target market of MacDonald includes young children and teenagers along
with business customers. Most obvious market for MacDonald perhaps is the marketing
towards young children and the critical part of the ongoing business is to focus on young
children. MacDonald can leverage their brand name by extending to new categories such as
opening toy shop under the brand name of Mac Toys. Introducing a separate toy shop would
be a child directed marketing strategy that is intended to influence the food choices, food
preparations, health and diet of children. The marketing practice of using toys to market the
meals of children is targeted as potential policy focus (Cooke and Papadaki 2014). This
would help in improving the nutritional quality of meals of children at restaurant.
Furthermore, it would assist parents in their efforts to purchase healthy options when eating.
The choice and preferences of food is affected by the practice of tying premium and
restaurant toys to cartoon, characters and movies.
It is evident from simulation studies that when food is associated with the popular
cartoon characters, branded characters and toys, the perception of children towards
preferences and taste of food would enhanced. There is likelihood that when children are
provided with the option of buying toys, they are likely to choose healthy meals.
Strategy for product extension:
The product extension that is recommended to MacDonald for meeting the needs of
health consciousness consumers is Organic MacD. This particular extension of product line
would sell fast foods with organic ingredients is done due to increasing popularity of fast