Marketing Principles Report: McDonald's Segmentation, Targeting

This report provides a comprehensive analysis of marketing principles, focusing on their application within McDonald's. It begins with an introduction to marketing and its various elements, emphasizing the role of marketing in achieving organizational goals within a competitive environment. The report then delves into the marketing process, detailing situation analysis, strategy development, marketing mix decisions, and implementation and control. It examines the benefits and costs of a marketing orientation, highlighting McDonald's focus on customer needs. The report also analyzes McDonald's micro and macro environments, proposing segmentation criteria based on geographic region, age, and income, and discussing targeting strategies with a demographic focus. Furthermore, it explores positioning options and how buyer behavior influences marketing activities, including cultural, social, personal, and psychological factors. The report concludes by addressing product development for competitive advantage and the integration of promotional activities to achieve marketing objectives.

Marketing Principles
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Various elements of the marketing process...........................................................................3
1.2 The benefits and costs of a marketing orientation.................................................................4
2.1 Analyse micro and macro environment.................................................................................4
2.2 Propose segmentation criteria................................................................................................5
2.3 Choose targeting strategy.......................................................................................................6
2.4 Positioning option..................................................................................................................7
2.5 How the buyer behaviour affects marketing activities in different buying situation.............7
3.1 How the product should developed to sustain competitive advantage..................................8
3.2 How distribution is arranged..................................................................................................9
3.3 Pricing strategy as per marketing conditions.........................................................................9
3.4 Plan and recommended marketing mixes to achieve objectives............................................9
3.5 How promotional activities should be integrated to achieve marketing objectives.............10
TASK 2..........................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Marketing means different activities of a company which are associated with exchanging
of goods and services to different consumers. It plays a significant role in the organisation to
attain goals and objectives of the company, in a competitive environment. marketing activities
also covers different aspects such as reporting, advertising, promotion of goods.
The report will also discuss different elements of marketing mix and their procedure.
While the researcher also focuses on the understanding of the concept of segmentation, targeting
and positioning of products related to the cited organisation namely. McDonald's. The report
would also assists in developing marketing plan of McDonald's will also be discussed in detail.
TASK 1
1.1 Various elements of the marketing process
Marketing is the process and study of exchange relationships. It is also defined as the
study or an activity and set of institutions and also includes a process for creating,
communicating , delivering and exchange of offers that have value for customers, clients,
partners and society at large (Dann, 2010). Mc Donald's is a food restaurants chain founded in
America (Tanner and Raymond, 2010) .The process of marketing followed by Mc Donald's are
as follows:
1. analysis of situation- By analyzing the situation and market opportunities , Mc Donald's
has an opportunity to find about the current and future market trends and also about the
current resources and capabilities and internal and external environment. Mc Donald's
always conducts an analysis to have a knowledge about its strengths and weaknesses
about mc puff amd mc flurry, so that it can implement any kind of changes in it.
2. Marketing strategy- it is the next step which involves to target its customers for its
products and services (Frederiksen and et.al, 2013). It means Mc Donald's will distribute
the market in different parts based on various aspects and then selecting the best one for
its products and services like hamburger, french fries etc. company has selected to
promote its products through advertisements , mails etc.
3. decisions regarding marketing mix decision- the marketing mix decisions are tactical
tools used to attract customers , beat its competition , increase its sales and to provide a
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better value for its customers ). Company has adopted 4 Ps of marketing in order to
achieve goals . The 4Ps are price , product , place and promotion.
4. Implementation and control- it is the fifth and last element in the marketing process
which involves the assessment of what the have planned and performing the work
diligently through out the production process in order to satisfy the needs and wants of
customers. It means that Mc Donald's have implied a strategy to have a control over its
production of Mc puff to make it more tasty and healthy, which can attract customers.
1.2 The benefits and costs of a marketing orientation
Product orientation is the process which involves when the business of an organisation
makes its products affordable and available to its end users. The company namely McDonald's is
one of the largest food chain company in world always focuses to offer its products at low prices
so that customers can have access to its food products , for example, Mc puff , French fries and
hamburger are sold at very low prices (Tanner and Raymond, 2010). Market orientation is a
concept where business focusses on to deliver its products according to the needs ,desires and
requirements of customers. McDonald's aims at to render it products according to its end users,
like company sells hamburger according to taste of its customers which includes vegetarian and
non. Veg. The company is of opinion that markets orientation is best because :
1. It has the benefits of focusing and meeting needs and wants of customers.
2. McDonald's desire is to make customers feels that in this organisation , customers are the
first priority.
3. Customers needs are the core of all firms activities.
4. McDonald's is benefited with market orientation because it thinks this is the customer
centric process, which enhances the value and loyalty towards its customers.
5. It gives competitive advantage to McDonald's over its competitors.
2.1 Analyse micro and macro environment
There are two external marketing environments, such micro and macro environment. It
influences the decision making powers of an organisation. McDonald's operates its business in a
environment , which consists of macro and micro environment, which has a effect on the
decisions made by company (Tanner and Raymond, 2010).
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Micro Environment Factors
The company can have control over these factors. it includes factors like suppliers ,
customers , competitors.
 suppliers are the persons who supply the manufactured products to company.
Management of company must watch availability of supply and costs.
 Customers are the most important factor that influences the decision making . The aim of
McDonald's is to serve its customers with best quality products and services . Competitors are the persons who are operating in the same business field. The marketing
states that McDonald's provides greater customer value and satisfaction in-spite of its
competitors. McDonald's have gained more popularity because it sells food products at
low prices and exciting food meal pack .
Macro environmental factors
Macro factors are those factors which are wide in nature and gives opportunities and
threats to company. Theses are as follows: Demographic environment shows study of birth, deaths and disease of population. The
company offers its products according to demographic conditions. Economic environment refers to nature of economic system. It also consists of economic
policies of government and its nature. Technological environment is consists of the innovation and implementation of new
technology in order to produce and develop its food products.
2.2 Propose segmentation criteria
Segmentation means a process which divides a market into smaller sub groups based on
some key defining characteristics of consumers (Kiel, 2014.). There are two types of markets
which are Consumer markets and organisation market. McDonald's decides to opt for
segmentation on the basis of geographical region , age and income. The management of
McDonald's is of opinion that market segmentation is based on the macro and micro
segmentation. McDonald's should go for costumer based market segmentation, which includes
behavioural, geographic, psycho graphic and geo- demographic behaviours. The company
believes that to promote and develop its product namely Mc puff, it should divide the market
area into smaller parts and then identify and analyse the needs and wants of its end users , so as it
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enables McDonald's to know about the taste and choice of consumers which company can
implement in its production (Kotler and Armstrong, 2010). The Mc puff is one of the highest
demanded product among students , so the target customers of the company for this product are
students . The company according to behavioural criteria should know about the responses given
by students for Mc puff. The company also started happy meals hours for kids so as to attract
more people. Psycho graphic behavioural is the criteria which involves judgement of customers
taste and response according on the basis of their lifestyle .
2.3 Choose targeting strategy
Targeting strategy means the way in which business selects potential customers to whom
it wishes to sell its products and service. It requires market segmentation , choosing appropriate
segments and to determine products which will be offered in particular segment. There are many
targeting strategies which organisations opt for success of its company along with delivering
quality goods and services (Kotler and Armstrong, 2010). The company namely McDonald's an
American based company which is one of the largest food chain restaurants across the
world ,aims to opt for a targeting strategy in which customers at the massive quantity are
targeted, which likes to have fast food products. There are 3 types of marketing strategies in the
market that are:1. geographic segmentation2. demographic segmentation3. behavioural segmentation
For developing its product namely Mc puff ,which is highly opted by students , company
has adopted demographic style of segmentation (McDaniel, Lamb and Hair, 2011.). The
company truly wants to satisfy its tag line that is I ' M LOVING IT. It is the strategy which
involves the segmentation on the basis of life style of people. It mainly includes newly married
couples, students , employees etc. Mc puff is demanded by these , the most. It is so because
company offers Mc puff at a very low and middle price, so students and newly married couples
keeps Mc puff at their priority. It targets on to people who does not have enough time to eat and
attempts to appeal the market with a single product line and marketing strategy.
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2.4 Positioning option
The purpose of positioning strategies is to establish the brand image of a product within
the market place., so that the can easily look for the product which satisfies their requirements.
Here, the management of McDonald's are planning to produce a new product namely Mc puff.
So to increase its value and sales , the company 's marketing manager should need to position its
new product (Sheth and Sisodia, 2015).
There are different marketing strategies that McDonald's can opt for. It adopts low
pricing strategy so as to attract large customers. People always wants to go for a product which
has been offered to them at low price and of high quality.
2.5 How the buyer behaviour affects marketing activities in different buying situation
The activities of organisational activities hugely depends upon the behaviour of buyers
and customers. its up to customers, they can be extremely involved or may be lowly involved
with the organisational products and services (Deshpande and Rundle-Thiele, 2011). It basically
depends upon the tangible and intangible value of products. There are 4 types of behaviour:
1. complex buying behaviour
2. variety seeking behaviour
3. habitat buying behaviour
4. dissonance buying behaviour.
McDonald's have its customers at large (Deshpande and Rundle-Thiele, 2011). It also deals
Buyer can effect the marketing activities through ways like cultural, social, personal and
psychological. Cultural influences- it is the most basic cause of one's wants and behaviour. The
consumers of McDonald's influences its marketing by going for low calorie foods ,
healthy and hygienic food products. Cultural influences includes in which buyer on the
basis of cultural aspects affects marketing strategy of an organisation. Social influences- it means consumers are communicating online and taking the
opinions of their friends, family and others about a particular product. It means the
consumers of McDonald's are making their decision about having Mc puff on the basis
of the views shared by their well knowns (Jobber and Ellis-Chadwick, 2012.).
Consumers are effected by opinions on social media.
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 Personal influences- it means buyers are influenced by their own lifestyle , personality,
esteem and status and also, beliefs and attitudes. The consumers of McD are becoming
more choosy about the products as their life style changes. People are becoming mpre
health conscious.
 Psychological influences- it is difficult to plan any marketing strategy without having
the clear understanding of what the customers want in market place. it means to have a
understanding of the psychological needs of consumers.
3.1 How the product should developed to sustain competitive advantage
Companies in present era, are opting for the different strategies to achieve competitive
advantage .for example Mc D are competing with burger king and so on. One of the important
factor to get sustainable competitive advantage. The 3 different strategies are cost leadership.
Differentiation and focus (Coduto, 2015). Organisation can develop new products and can update
its existing products for achieving sustain competitive advantage. the development of products
have physical and insubstantial benefits. Companies should develop its products so that it can
achieve success and profits along with competitive advantage(Nowak and et. al., 2015). Mc puff
is very highly demanded by the costumers , especially young generation. Here, Mc DONALD'S
have a very few set of competition advantage. The management of Mc Donald 's have framed a
detailed policies to gain advantage for their product namely, Mc puff are :
 they offers their food products at a low prices and want to become cost leaders.
 They believes that the store must be efficient and packing of mc puff should be well done
so that it would be easy for them to eat.
 Company should speedily deliver mc puff to the consumers.
 The process of making of mc puff should be made easy and healthy raw materials
should be used.
 They aims to provide its goods and services with outstanding quality , cleanliness and
values so that they can make every consumer smile.
3.2 How distribution is arranged
A firms distribution objectives are highly rated. Speed of delivery and and intensity
should be ensured along with cost efficiency(Wang,. and Pizam, 2011.).
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Distribution strategy plays an important role in enhancing the convenience of customers.
It is a system which channelise selling of company's products. There are several ways in which
company can arrange distribution to provide convenience. It depends upon the nature and
environment of the business in which it is operating. Place is the term used for distribution of
products (Bühler and Nufer 2015). The aim of management is to keep prices as low as possible.
As, distribution system of company is the major competency for company. The distribution of
product is associated with place, which is included in 4 ps of marketing. For example
McDonald's have its outlet in all over the world .the aim to make available its products speedily,
so as to avoid any inconvenience to its customers. Production of Mc puff is done in the outlet
only, not in a factory(Henley, Raffin and Caemmerer, 2011). Customers also want that products
should be packed in a way to avoid any issue while eating it.
3.3 Pricing strategy as per marketing conditions
As, price is just not a number on a tag hanging on a product, but also its an important
market strategy. Company should appropriately price its products. If Customers find their
products at a reasonable price , they definitely purchase it. Although, the price of the product
should be worth of it. prices are always decided and implied according to firm's objectives and
goals as well as market conditions in their mind. Company namely McDonald's decides price of
its food products according to the market conditions (Bühler and Nufer, 2015.). McDonald's
always evaluate price of its products based on income distribution , local inflation, change in
policies of government and currency exchange rate. If there are recession period the company
sells its products at comparatively low prices. McDonald's always have a overview of it,
products namely mc flurry, Mc puff. Hamburger etc. so to have eye check whether the are
performing well in market
3.4 Plan and recommended marketing mixes to achieve objectives
Promotional activities are those which includes the activities which are integrated to have
an impact that leads into increased sales and growth. so. Promotion of the products are
important. Promotion is any thing which involves letting people know about the offerins of
company (Armstrong, Denize and Kotler, 2014). It fills the gap between willing buyers and
sellers. Strategy of promotions depends upon the budget of the company(French, 2010.).
Management of Mc Donald's is of opinion that Marketing objectives can be achieved only by
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having a proper planned and detailed strategy. Strategy of mc Donald's involves the following
points :
 The company should have proper place of distribution. It means Mc d has its proper place
in which customers come , sit and enjoy the meal.
 Mc D has implied a proper price of its products so that it can attract its customers.
 The basic objective of promotion is to promote its products well enough so as customers
come to know about the presence and innovation of new products. Mc Donald's promote
its ' happy hour meals ' through the way of advertisements and online ways.
3.5 How promotional activities should be integrated to achieve marketing objectives
Marketing objectives can be only achieved by reaching out its target consumers and
rendering them the best quality products and services so as to convey its brand image to the end
users(Abdullah and Ismail Ahmad, 2010). The extended marketing mix is a combination of those
elements which are combined to render a product sold in the market. its an expansion of the
original marketing mix. The following are the key elements in strategy of McDonald's marketing
mix plan:
 Power of people is very dominant in the market. They can be convinced by the views of
any other people about any particular product (Weinstein,2013.). Success of happy hours
meal is a result of the views and opinions of the people shared to others. The physical evidence is one of the extended ps of marketing which involves render
satisfaction to consumers with delivery of products. Always, Mcd , since long time ,
through delivery of its products satisfies it customers.
 Process is a concept which involves a cycle of production of goods (Abdullah and Ismail
Ahmad, 2010). In McDonald's ensures that the production process should be according
to norms.
TASK 2
In ppt.
CONCLUSION
The report discussed herewith about marketing principles of a leading fast food
restaurant chain across the world namely “McDonald's” , in which marketing process of the said
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company is being discussed. The report shows that the process starts with identifying needs and
then satisfying consumers, so as to offer products according their needs. The cited company
adopts low price strategy as to increase number of costumers. It can be said that Mc Donald's
product prices varies country to country depending upon the conditions. It promotes its company
by mouth publicity and in store promotions.
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REFERENCES
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