Strategic Marketing Report: McDonald's Expansion in Iceland

This report provides a detailed analysis of McDonald's marketing strategies for expanding its business in Iceland, focusing on the launch of Apple Pie. It examines the adaptation and standardization of the marketing mix (7Ps), including product, price, place, promotion, people, process, and physi...Read More

GROUP MARKETING
MANAGEMENT
EXECUTIVE SUMMARY
This report contains a detail analysis about various marketing mix tools that can used by
McDonald's for developing the strategies that is helpful for expansion of product in Iceland.

The company use CBBE model in developing its brand equity. For expanding the business and
promoting the product, i.e., Apple Pie various promotional tools such as sale promotion,
advertisement and social media are used for developing the brand image. For measuring success
of marketing efforts, company uses various tools like sales target, profitability and return on
investment. It is suggested that McDonald can use Return on investment techniques in order to
maximise profit of the company. Social media platform and advertisement are used to
communicate the message to large number of people so to create high brand image at new
market place.

INTRODUCTION
Strategic marketing can be simply defined as the way in which an organisation
differentiate itself from the other competitors available. The company do so by introducing the
new strategy or product that gain a competitive advantage and is better than the other rivals
available. In this present study McDonald is planning to expand their operations in Iceland by
launching of Apple pie (Baker, 2014) A detail study is done on marketing mix of Iceland.
Further it state the use of CBBE model and IMC that assist McDonald to build a effective brand
image in the market place.
TASK
Adaptation and standardisation of marketing mix
The marketing mix defines as the tactics which is used by the company in promoting the brand
or product in the company. For doing the expansion in the market, it is very necessary for
McDonald to make the involvement of strategic level decision in branding process which are of
following types:
 Standardisation: It refers to the type of strategy where company offers present product
with the similar plan of action of pricing and same promotional efforts because of
similarities of needs and want among the people.
 Adaption: It is the type strategy that involves some of the modification in the existing
product by adding something different that helps in fulfilling the needs of customers.
The 7P's of Marketing are discussed below:

 Product: McDonald's is an US founded organisation dealing in fast foods. Now the
company has plan to expand its operation in Iceland by using adaptation strategy. The
company is offering Apple Pie for the age group of child to infinite age. The reason
behind offering the Apple pie is that it adds to the taste of people in Iceland as it comes
under the category of desert and made up of fresh apples. By the launching of this
product, company is able to encourage healthy lifestyle of the people as it is good for
health and do not have any side effects (Clow and James, 2013)
 Price: In order to capture the market in Iceland company is planning to adopt the new
pricing strategy. McDonald can use penetration pricing strategy in order to achieve the
profitability in the market.
 Place: McDonald headquarter is in California, US and also present in other countries
worldwide. Now the company want to expand its business in Iceland which is a well
developed country. Company offers its product by opening the small outlets and also with
the help of online platform.
 Promotion: McDonald's make use of social media platform like Facebook, twitter etc for
promoting the new product. Moreover it also make use of several advertisement on TV,
newspaper, magazines etc. Its main focus is on targeting children which are targeted cby
giving small toys to children along with the meal (Burns, Bush, and Sinha, 2014) This
technique will be very beneficial as Iceland is one of the well developed country.
 People: As McDonald is expanding its product in Iceland first of all company is required
to known the culture of people over their. Apart from the culture they need to known
about the taste, preference and also the working style of people over their.
 Process: McDonald is offering various fast food in US and now ready for the expansion
in Iceland by offering a new product Apple pie. The manufacturing process used by the
company will be the same which it was using in US. McDonald can update their website
by adding a new category in the desert section with price which will enable the customers
to know about the product.
 Physical evidence: The physical evidence of McDonald is very attractive as the interior
used by the company is same all over the word. The staffs are well trained with a proper
dress code followed. Their restaurant are very hygenic and they maintain the same
cleanliness all over.

CBBE Model:
It is a model that tells us that strong brand equity is very essential for McDonald as it is the way
which customer's thinking can be influenced (Eggleston and Wall, 2013) Its main focus is on
building the strong image so that customers have positive thoughts over the brand.
Brand Salience (Identity) or Who you are
Brand salience refers to the quantifying about the customer awareness about a brand so that the
targets can easily be determined.
In order to apply salience in the context of the company, McDonald's make use of
market segmentation for understanding the segment of targeted customers. The target segment
along with the promotional and communication tool will help in creating a brand identity in the
market place .
Brand Imagery ( Meaning)
The step includes in this are performance and imagery. Performance tell us about how the
product of company are fulfilling the needs of customers. Where as on the other hand, imagery
means fulfilling the needs of customers as per social and psychological level
McDonald is offering a new product that is Apple pie among the people of Iceland that
would add a tempting taste in their life. The people who are fond of a healthy food will
definitely use the product ( Enberg, 2012) It is very important for this business to communicate
about the product of company by using different promotional tool.
Consumer reactions:

Customer responses are categorised in to judgement and feeling. Consumers evaluate the brand
on the basis of product's quality, superiority etc.
McDonald's can communicate the customers about the healthy benefits of the Apple Pie.
With the help of social media, company can reach large customer base.
Consumer brand Resonance: ( relationship)
It is most difficult level to reach, this can only be achieved when customer feel a psychological
bond with brand.
McDonald's must do a detail research over Iceland to know the demand of customers
and then place the product (Halinen, 2012)Company must ask potential customers to give proper
feedback about the product and also must tell where the improvement is required. This will help
Mcdonald's to build a strong customer relation with brand.
Integrated communication mix and methods
It defines as integrating the methods of promotion of brand to promote particular product
among the targeted customers. McDonald can use IMC in order to create the awareness of brand
which will help the company in achieving the maximum profit. It is very useful for the company
as it ensure that the right product is reached to right market at right time. Below are the tools
used by McDonald's in promoting the product to the targeted customers:
 Advertisement: It is considered as one of the most effective method for promoting brand
as through it information is delivered about product and services to large gathering within
the shortest time. It can be placed in newspaper, magazines, television etc. which help
McDonald's to influence their customers to buy their new food product , i.e., Apple Pie.
Moreover advertisements helps in increasing the sales which in other words will increase
the profitability of the concern. It also help in developing the awareness among the
targeted customers of Iceland through the use of appropriate channels.
 Social media: It defines as the way of promoting the products of company by making the
help of social media apps like Instagram, Facebook, Twitter etc. With the help of this
tool product can be promoted and awareness can be created among the people on large
scale. McDonald has develop its website on which it has tell about the product
specifications.

Measurement of Success:
Measurement is very essential for a company as through it company is able to measure
the performance and clearly knows where it is standing in the market (Omoigui, 2012). It helps
the McDonald to know about the area where there is requirement of extra efforts. This would
enable the company to attain the marketing success. Below are the performance indicator which
is used by McDonald's for measuring the marketing success.
 Profitability: It is one of the most common tool used for measuring the success. It gives
an overview of the profit attained by the company in the financial year. McDonald can
compare the estimated profit with the actual profit in order to measure its success. After
the comparison, McDonald is able to know about where it is lacking. Different
techniques and methods to be developed with time so to maximize the profitability.
 Return on Investment: It is a tool which assist in evaluating the efficiency of investment
and the profit that is generated over the investment. Through ROI, McDonald can
measure its success which is earned over the investment done by the company. In order to
improve the ROI, McDonald can offer the food products according to the taste and
preference of customers to provide better satisfaction so that the high return can be
achieved (Shiau and Luo,2012). Budget can also be prepared by the company in order to
minimise cost which is related to the promotion process. This in turn will help in
effectively increasing the ROI for the business.
 Sales Target: It refers to setting of the sales target which company has to achieve within
the specific time period. This is a quantitative method which is used in evaluating the
marketing success. In this McDonald's can set target over the product sale for a specific
time. As soon as this period is compete, McDonald's make comparison of actual sale with
the targeted sale for determining the progress. If any gap is arise in between the two
performances, then the reason must be identified in order to improve the performance.
CONCLUSION
As per the above discussion it can be concluded for developing the strategy, marketing mix is
very important tool as it helps in increasing the sales of the company and also helpful for the
brand awareness. Moreover, CBBE model will assist McDonald's in building a strong brand
equity. The Integrated marketing communication will make use of promotional activities in order

to promote the brand to the targeted customers. The use of various tools like ROI, profitability
and sales target helps McDonald's in measurement of its success.
REFERENCES
Books and Journals
Baker, M. J., 2014. Marketing strategy and management. Macmillan International Higher
Education.
Burns, A. C., Bush, R. F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.
Clow, K. E. and James, K. E., 2013. Essentials of marketing research: Putting research into
practice. Sage.
Eggleston, Y. and Wall, L. G., 2013. Method and system for monitoring internet information for
group notification, marketing, purchasing and/or sales. U.S. Patent 8,595,049.
Enberg, C., 2012. Enabling knowledge integration in cooperative R&D projects—The
management of conflicting logics. International Journal of Project Management. 30(7).
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Halinen, A., 2012. Relationship marketing in professional services: a study of agency-client
dynamics in the advertising sector. Routledge.
Järvinen, J. and Taiminen, H., 2016. Harnessing marketing automation for B2B content
marketing. Industrial Marketing Management. 54. pp.164-175.
Libby, R. and Emett, S. A., 2014. Earnings presentation effects on manager reporting choices
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Omoigui, N., 2012. System and method for knowledge retrieval, management, delivery and
presentation. U.S. Patent Application 13/168,785.
Shiau, W. L. and Luo, M. M., 2012. Factors affecting online group buying intention and
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