Marketing Analysis of McDonald's: Strategies and Environment

This report provides a comprehensive analysis of McDonald's marketing strategies, processes, and environmental factors. It begins with an introduction to the importance of marketing in the modern business world and highlights the marketing process adopted by McDonald's, including situation analysis, strategy development, marketing mix decisions, and implementation. The report then evaluates the benefits and costs of a marketing orientation for McDonald's, emphasizing customer value, demand fulfillment, and the company's significant investment in marketing and advertising. It further examines the macro and micro environmental factors influencing McDonald's marketing decisions, such as political, economic, social, technological, and competitive landscapes. The report also proposes market segmentation criteria, discusses targeting strategies, analyzes buyer behavior, and suggests product positioning approaches. Additionally, it explores how McDonald's develops products for competitive advantage, arranges distribution for customer convenience, sets prices, integrates promotional activities, and utilizes the extended marketing mix. Finally, the report outlines marketing mix planning for different segments, differentiates between marketing products and services to businesses and consumers, and discusses international marketing strategies. The report concludes with a summary of the key findings and provides references for further research.

Contents:
Introduction ………….………………………………………………………………………..3
1.1 Explain the various elements of the marketing…………...………………………………4
1.2 Evaluate the benefits and costs of a marketing orientation for a selected
organisation…………………………………………………………………………….....5
2.1 Show macro and micro environmental factors which influence marketing
decisions……...5
2.2 Propose segmentation criteria to be used for products in different
markets………………...7
2.3 Choose a targeting strategy for a selected product/service…………………………………
8
2.4 Demonstrate how buyer behaviour effects marketing activities in different
buying………..9
2.5 Propose new positioning for a selected product/service
………………………………….10
3.1 Explain how products are developed to sustain competitive advantage …………………
11
3.2 Explain how distribution is arranged to provide customer convenience
………………….12
3.3 Explain how prices are set to reflect an organisation’s objectives and market
conditions...12
3.4 Illustrate how promotional activity is integrated to achieve marketing
objectives………..13
3.5 Analyse the additional elements of the extended marketing
mix………………………….14
4.1 Plan marketing mixes for two different segments in customer
markets…………………...15
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4.2 Illustrate differences in marketing products and services to businesses rather than
consumers……………………………………………………………………………………16
4.3 Show how and why international marketing differs from domestic
marketing…………...16
Conclusion……………………………………………………………………………………18
References……………………………………………………………………………………19
Introduction
In the new arena of business world, the succession of business really depends on the proper
marketing strategy. In modern business era marketing activities becomes more complex to
create market share. Organization like McDonalds needs to follow several marketing
strategies while it enters into international market. Here in this assignment it will be
described several marketing process and benefits of marketing orientation of McDonald’s.
Several micro and macro environmental factors will be discussed. Also it will be made a
targeting strategy for a product of McDonald’s. Moreover, it will be discussed the way of
developing products to sustain competitive advantage in market. In addition, a marketing mix
planning will be illustrated here.
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Explain the various elements of the marketing process
In the tasks of marketing the main theme lies in proper delivery of products and services to
the desired customers and to acquire more customers and retain them. Here another main
theme lies on that is, making loyal and satisfied customer. Therefore marketing process will
be smooth the more objective will be gained. In McDonald’s also a general process for
marketing is maintained. That process is mentioned below.
Marketing process in McDonald’s: Situation analysis  Marketing Strategy  Marketing
Mix Decisions  Implementation & Control.
Figure 1.1: Marketing Process of McDonald’s (Self Designed)
In the very first step of situation analysis it is maintained carefully about the execution of
internal resources & external analysis. Such in the case 5C analysis, past analysis & SOWT
analysis is included (Grönroos, 2004). And Then in McDonald’s marketing strategy is
adopted for identifying the customer need and satisfy that. Then marketing mix is concluded
with the combination of product, price, promotion and place. At the last the strategy chosen
from various options is implemented and control actions are taken.
Evaluate the benefits and costs of a marketing orientation for a selected organization
In the new era of information technology expenditure on marketing is huge. It is calculated
that companies expend around 350 billion dollars each year. But the amount is not the same
for every company. Companies advertising expense depends on the size & financial
resources. More over in the new arena of business the concept of occasional advertisement is
arrived (Hennig & Gwinne, 2002.). But before investing on marketing and advertisement the
company thinks about the benefit & return from the cost are occurring.
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McDonald’s invests a lot on marketing and advertising to make it top in the list of world’s
food chain. As a matter of food it is more important for the company to make concern in the
quality of food but as the world’s largest franchise is this, so a huge amount of currency is
invested in the field of advertisement. A dynamic survey says that McDonald’s spend more
than 990 million dollars each year. The advertisement generally goes on the tv channels of
various countries. And all this advertisement made McDonald’s the largest food chain in the
world marked as the major benefit of marketing.
Benefits
There are several benefits of marketing orientation which include, customer value,
responds to demand, fulfilling demand. McDonald's focuses on customer value which
includes needs and wants related to products or services. An organization provides reliable
products at a reasonable price to their buyers. It affects the performance of the organization
because buyers are satisfied with the services which are provided by the employees and
which increases the numbers of consumers. Apart from this, corporation identifies the
demand of the consumer in the market for developing new product. By taking regular
feedback from customer, the employee can make improvements in their products. It helps
organization to maintain relationship with customers as well as goodwill in the market.
Customer centric approach is important for the company which offer positive
customer experience which is beneficial for the long term growth. An organization strives for
satisfaction of consumer to sustain in the marketplace. In this way, McDonald's develops
CRM software for understanding the customer and needs which helps to collect the data
related to the customer information and enhance the consumer experience. On the other hand,
McDonald's faces many challenges because various competitors sell the products in Food
industry like Burger king, KFC etc. but organization has uniqueness of the products and serve
low cost to their buyers.
Marketing orientation plays significant role in the organization and it is required by
the businesses to pay extra cost regarding the same. Company research to identify the
consumer needs and wants under which manager takes the feedback and conducts the survey,
all these activities organized by the firm increases the cost of operations. In this way,
McDonald's also needs to pay amount of advertising cost to carry out activities such as print
the brochures, banner advertising, all the expenses incurred by the firm. All these activities
are conducted by the manager which results in increasing the overall cost of operations.
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Apart from this, company is not able to predict the some changes in future and due to this, the
organization suffer some losses.
2.1 Show macro and micro environmental factors which influence marketing decisions
As a food chain, McDonald’s is affected by the various channel of environment from internal
& external pressure. The macro environment refers the combined factors of the economy and
position & the Micro environment refers the combined factors of the specific industry.
Macro environment of the McDonald's
 Political- Government make regulatory frameworks and policies for the
organization’s growth and development. McDonald's has closely considered these
factors to create an effective impact on business day to day operations. Furthermore,
this helps in developing pricing, distribution channels and promotional activities.
 Economical- It includes exchange rate, inflation, bank rate, growth rate, employment,
education rate etc. It directly affects business prospects of the food industry.
McDonald’s undertakes effective market research for enhancing business operations
and productions. This factor helps in evaluating the business cost and growth factor.
Higher growth rate helps the business to increase its sales and profits.
 Social- The market trends and consumer preferences for food and health awareness is
changing in the market. Company focuses on target customer under that it produces
the products and services according to the buyer’s taste and preferences.
 Technological- It plays significant role in the fast food industry. By using advance
technology, organization improves day to day operation and productivity for reducing
waste time, resources. Company provide Wi-Fi facility at the restaurant area which
helps in attracting more and more customers.
 Environment- Environmental changes directly impacts on raw material and available
resource in the organization. McDonald's adopts sustainable practises to operate in the
competitive business environment. For example, it supplies the products in the paper
bag.
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 Legal- An organization can follow the rules and regulatory framework. The business
policy of McDonald's is developed according to the local regulations and government
policies.
Figure 1.2: Macro and Micro environment of McDonald’s (Self designed)
If done a synopsis on the macro environment factors of McDonald’s here will be, agents,
distributors, suppliers and other distributive intermediaries and firms that are competing
(Alserhan, 2011). On another extent the other series of factors include political environment,
social environment, economic environment, geographic environment, legal environment,
cultural environment, technological environment etc. So here the environmental factors
consist of the people, organization and forces outside the firm. Also there is a sub-division of
the macro environment of the company.
If drawn attention on the micro environment of McDonald’s will be found out the factor over
which the firm has control or which can be used in gaining information for marketing
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operation. The factors here are customers, suppliers, employees, distribution channels and
suppliers, competitors, investors and media or general public.
Micro environment of the McDonald's
 Customers- Consumers are crucial part of the organization as they contribute a lot in
overall growth and development. They want the company to deliver best quality of
products at the reasonable price.
 Suppliers- Suppliers are the most vital factor of micro environment which link the
organization and deliver the customer value. In this way, they provide the resources
time to time which are required by the organization to produce its goods and services.
Furthermore, if suppliers not able to render the raw material which affects the
production in the organization then it will impact the performance of the organization
because they not able to produce the goods on time which creates decline in sales of
food industry.
 Employees- An organization provide training to their employees that help the
workers to enhance its performance and knowledge. It assists human resource to
deliver good services by the McDonald's and customers.
 Distribution channels- McDonald's provide goods through the delivery men and its
employees which make sure that the order is received by the buyers. If company is not
able to adopt the distribution channels then it will affect the whole strategy. It impacts
performance of organization and hamper the brand image in the market.
 General public- McDonald's focuses on society welfare under which employees
produces the products and services without harming the general public.
 Competitors- Many competitors sale the products in the food industry like Burger
king.
 Investors- Investors wants to get information related to the internal environment of
the company. McDonald's maintain the relation with the investor and t. It affects the
performance of organization and . It results in increasing the productivity and market
share.
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2.2 Propose segmentation criteria to be used for products in different markets
Market segmenting is a two-steps process: broad market products or services and making
target market based on the selected target criteria. Generally, the term segmenting refers to
division of the products and services based on the different selected criteria it may be such
like age, gender, race, skin colour etc.
Figure 1.3: Segmenting strategies of McDonald’s (Bearden and Ingram, 2002)
For segmenting market McDonald’s generally at first goes for geographic segmentation
where the segmentation is done based on country, nation, states, region, and cities. For
example, in Muslim countries McDonald does not allow selling hamburgers as they do not
consume the meat of pig. In demographic segment the main focus laid on age, gender, sex,
family, education etc. The psychological segment works on the point of life style, social
class, personality etc. Then the behavioural segment work on usage rate, loyalty, occasions,
attitude, benefits, status etc. Where the sales rate is high and the people are most willing to
spend on food specially those areas are chosen by McDonalds to set up their franchise. The
food menu is also prepared based on the likings of the people of that locality and region.
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2.3 Choose a targeting strategy for a selected product/service
To gain higher sale of product and service every company mostly target a specific market
segment. And from the targeted market the companies carry up with their lion’s share of
profit. So for targeting market the company should need to invest a lot because if the target is
made wrong the whole investment on specific arena will be wasted.
Figure 1.4: Targeting strategy of McDonald’s (Crossland,2015)
So as to target the market McDonald’s sometimes go for mass marketing or undifferentiated
marketing. In the case of the markets of same nature it is taken as a strategy. For example, the
beverage of lemonade is universal for every food stores of McDonald’s. Then another
strategy is taken by McDonald’s is differentiated marketing. Differentiated marketing means
market segmentation. So here in this case different types of food items are produced and
served to different types of market based on some selected criteria discussed before
(Brassington & Pettitt, 2003). Then the strategy comes here customized marketing adopted by
McDonald’s. Here in the strategy of this content the product or the service is customized to
the customers according to their desire. And at the last focused marketing means the target of
acquiring market that is highly potential but didn’t identified still by anyone.
There are different types of distribution channels one is direct and indirect which deliver
products and services to their customers. Under direct distribution, McDonald's provide
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products through employees at the restaurant premises. In Indirect distribution, organization
appoints the delivery men who deliver product at the buyer’s house. Apart from this,
McDonald's has opened various outlets in the city which helps customers to easily approach
the stores.
2.4 Demonstrate how buyer behavior affects marketing activities in different buying
situations
Time to time, place to place, nation to nation buyers or customers behave different to the
product or service of company. The customers want a high quality, legal price proper delivery
and after buy support from the company. In the case of food business or chain food shop the
main attention of the customers is good quality, good environment, mass consent and proper
placement. So McDonald’s pay attention to the behaviour of the customers as they know
customers are the key source of revenue and their attention is to acquire customers and retain
customers (Khan, 2011).
Figure 1.5: Buyers behaviour factors affect McDonald’s (Flat World Knowledge, 2013)
In this case of buyer behaviour, at first come the cultural factors. In the culture the buyers
behave according to their social class and sub-culture of the society. And then it come the
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social factor. Here the learning from family, social role and status and reference group play
vital role. Then in the case of personal factor the age, occupation, economic status, lifestyle,
economic satiation affects food consumption behaviour. Then the psychological factors such
like as motivation, perception, learning and attitudes play role in the case of food habit.
2.5 Propose new positioning for a selected product/service
Market positioning means to placing value of product and service over the mind of the
customers (Sheehan, 2011). McDonald’s has become more popular in the food chain market
by strong positioning strategy by the various aspects. Whenever a new product is launched in
market, marketers try to satisfy the customers by various efforts and then if the customers are
satisfied they become loyal customers.
Figure 1.6: Positioning strategy of McDonald’s. (Sheehan, 2011).
In the positioning strategy at first the marketers try to target the customers of different
localities with the best fits (Grönroos, 2004). Then all the targeted customers are influenced
through different promotional activities to purchase from McDonald’s. Then another most
significant focus is drawn on the competitive analysis. McDonald’s shows in comparison to
the customers how the food is more batter than the food of other food chain shop. At this the
customers get addicted to the brand. Then by the various economics and functional skills
McDonald’s create brand position in customer’s mind.
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McDonald's launched the new product like Salad in UK market which are included the
products benefits, quality etc. These are described as below:
 Positioning by attributes and benefits- Company launch the new product in the
market so that select the saled .
 Positioning by quality and price- An organization adopts the competitive price
under which the products are served at the reasonable price. By giving best quality of
products in low price it will help the customers to be attracted towards the product
 Positioning by use- Company focuses on target customer who buy the products as
per this provide the products with proper packaging.
 Positioning by users- Company focuses on the target customer accordingly produces
the products. An organization target 35 to 50 ages of people who are conscious for the
health.
 Positioning by product category- McDonald's provide various products like beef
burger, salad, soft drink, ice cream which helps the consumer to be attracted towards
the products and buy it.
3.1 Explain how products are developed to sustain competitive advantage.
As the quality is the measure to acquire the customers and to retain customers, there are also
some factors that are very powerful weapon to gain competitive advantage. All the time the
customers count the price of the product or service and compare the quality of competitor’s
product with the existing one (Sherlekar & Prasad, 2010). So hence here price is a
competitive factor. In the case of Competitive advantage Michel Porter has told about the
three major concern and all these concerns are adopted by McDonald’s to gain competitive
advantage.
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