Marketing Principles Report: Mc Donald's Marketing Strategies

This report delves into the core principles of marketing, using Mc Donald's as a real-world example. It begins by outlining the marketing process, including situation analysis and strategy formulation, along with the benefits and costs of market orientation. The report then explores the macro and micro environmental factors impacting marketing decisions, followed by a discussion on market segmentation, targeting strategies, and buyer behavior. Key marketing concepts such as product positioning, the development of competitive advantages, distribution strategies, and pricing methodologies are also examined. Furthermore, the report analyzes Mc Donald's promotional activities and the extended marketing mix. The final sections cover the application of the marketing mix across different customer segments and contrasts marketing strategies for consumer and business firms, as well as domestic and international marketing differences. The report offers a comprehensive overview of marketing principles and their practical application in the context of a global brand.

MARKETING PRICNCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Elements of the marketing process.......................................................................................3
1.2 Benefits and cost of market orientation ...............................................................................4
TASK 2............................................................................................................................................4
2.1 Macro and micro environment factors affecting marketing decisions..................................4
2.2 Market segmentation criteria used for different products in different market .....................6
2.3 Targeting strategies for the firm’s.........................................................................................6
2.4 Way in which buyer behavior affect marketing activities....................................................7
2.5 Positioning of new product ..................................................................................................7
TASK 3............................................................................................................................................8
3.1 Development of product to sustain competitive advantage .................................................8
3.2 Way in which distribution is arranged to provide customer convenience ..........................8
3.3 Ways in which price is determined to reflect an organization objectives.............................9
3.4 Promotion activities of Mc Donald ....................................................................................10
3.5 Additional elements of the extended marketing mix..........................................................10
TASK 4..........................................................................................................................................11
4.1 Marketing mix for different customer segments.................................................................11
4.2 Difference in marketing of product to the consumers and business firms.........................12
4.3 Reason due to which domestic and international marketing are different for Mc Donald. 12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Mc Donald is world leading restaurant chain with presence in several nations across the
globe. This report is prepared on marketing principles under which marketing concepts are
covered and their practical applications are also explained in context of Mc Donald. In starting in
the report marketing process is explained and benefits as well as costs are also explained in
detail. After that environment analysis is done and concepts of market segmentation, targeting
and positioning are also discussed in detail in the report. Marketing mix is widely used in
marketing practice and due to this reason same for different customer's segment is given in the
report. At the end of the report, difference between consumer and business firm marketing is
discussed. Along with this, difference between international and domestic marketing is also
explained in detail.
TASK 1
1.1 Elements of the marketing process
Under marketing process, the strategy is formulated for the firm by doing situation
analysis. Following is the marketing process. Marketing environment- It is the first stage in the marketing process and under this the
business environment is analyzed in context of marketing as a discipline of the
management. On the basis of analysis of business environment managers gets lots of
information about the competitors and other components of the external business
environment that directly or indirectly affects firm’s marketing efforts. Thus, on the basis
of this information McDonald’s Mc Donald formulate a business strategy for its business. Marketing strategy- On the basis of information which is collected from the analysis of
business environment marketing strategy is formulated by the firms. Mc Donald in order
to give stiff competition to its competitors does appropriate market segmentation for its
product (Hollensen, 2015). After doing market segmentation, it selects its target
customers from which it can maximize its sales. In the last stage, Mc Donald positions its
product on the basis of its USP or unique selling proposition. In this way, entire
marketing strategy is prepared by using information that is collected in the first stage of
marketing process.

 Evaluation and control- This is final stage in which Mc DonaldDonald’s top managers
evaluate company’s performance and identify deviation in their performance (Wilson.
and Gilligan, 2012). If they feel that tactics are not implemented properly then they take
necessary actions to make sure that tactics will be implemented properly.
Strength
 Good advertisement of the products.
 Well established brand name.
 Pleasant environment in restaurant. Offer products at affordable price.
Weakness
 Less advertisement of the product.
Opportunity
 Scope for growth of business in
developing nations like India.
Threat
 Influence of Chinese restaurants is
increasing across the globe.
 Threat from local restaurants in
different nations.
1.2 Benefits and cost of market orientation
Marketing orientation is simply a concept under which the company provides quality of
goods and services to its target customer in order to satisfy their needs and to increase their
customer base. Following are the cost and benefits of market orientation. Increase customer's base- Mc Donald is providing quality food with delicious taste to
those who visit its restaurant. By doing this it helps in increasing the customer base.
Since inception the firm is focusing on preparing excellent quality food. Due to this
reason it quickly creates its good image among the people and manages to expand its
restaurant chain globally. Market research benefits- By conducting market research, the company gets lot of
information from the people regarding their purchase pattern and buying behavior
(Moutinho, 2011). With the passage of time trends in these factors also get changed.
Thus, people needs, wants and demands also get changed. Hence, it is necessary to bring
innovative change in the product on time in order to make sure that firm will be able to
retain its customers. The organization time to time conducts such kind of research and

innovate their product portfolio. Hence, in this way marketing orientation concept
benefits the organization. Service and customer care- In today era, merely serving a product is not sufficient it is
necessary to provide excellent service to its customer. Mc Donald is taking care of this
factor and it not only serves good quality food to the people but also provide excellent
service to them in order to satisfy their needs (Beverland and Lindgreen, 2010). This is
the reason due to which Mc Donald is today’s one of the successful business in the world.
Types of market orientation Product orientation- Under this orientation company assumes that product can be sold on
the basis of product strength and its specialty. They think that it is product features that
will motivate customer have to buy a product. Hence, it can be said that this marketing
orientation has a practical applicability. Production orientation – In this orientation firm believe in producing a product in large
quantity. They believe that marketing does not so much influence people purchase
decisions. Hence, it can be said that this orientation does not have any practical
application. Sales orientation- In this orientation companies assume that product must be sold by
hook and crook. Means whole focus is given methods by using which customer can be
persuaded to purchase a product. Due to unique way of selling proposed by this
orientation companies are widely using same. Marketing orientation- Marketing orientation believes that product must be sold by
satisfying needs of the customer's. Means that product must be advertised on the basis of
features that can be used for marketing of a product in proper manner. Due to increased
competition this kind orientation is widely used by the firms.
 Societal orientation- Under this orientation product is prepared in such a way that lead to
welfare of general public. This orientation is directly related to public and due to this
reason it is widely used by the business firms.

TASK 2
2.1 Macro and micro environment factors affecting marketing decisions
Following are the micro and macro environment factors that affect marketing decisions of
the firms.
Micro environment Competitors- These are those entities which are giving competition to the Mc Donald in
marketing practices. Normally, before preparing a market strategy firm analysis their
competitor’s marketing strategy in order to remain one step ahead of them. On the basis
of evaluation of the competitor’s marketing tactics Mc Donald formulate its marketing
strategy in order to give stiff competition to its competitor. Customer's- These are those entities that play a key role in revenue generation for Mc
Donald. Today, customers are not loyal towards any company product and they consume
other company product also. Hence, Mc Donald needs to take some steps in order to
make sure that it will be able to develop loyal customer base. Suppliers- Mc Donald is importing many types of edible items from different nations. It
does this through suppliers. Many times relationships with the suppliers get bitter and this
affects firm’s performance. Hence, Mc Donald needs to increase its suppliers in order to
make sure that its import does not get hamper due to bitterness in relationship with few
suppliers. Employees- These are those who working in the Mc Donald premises. It is their
performance due to which people like to visit Mc Donald restaurant. Hence, mentioned
firm needs to make sure that employees of the firm will further give a better performance.
PESTEL or Environment analysis Economic environment- It refers to the country economic conditions which directly
affect business of the firms. This impact may be positive or negative on the firm in terms
of revenue earning (Sheth and Sisodia, 2015). Mc Donald prepares its advertisement
budget by evaluating current profit and future economic environment. Hence, it can be
said that economic environment indirectly affects firm’s marketing decisions. Social environment- Social environment refers to people culture, belief, customs and
attitude. These factors affects people preference related to the product. Mc Donald
understand this thing and it country wise as per people taste bring changes in its product

taste and food preparation process. Firm advertise these things in order to show that its
product is matching with the specific nation culture. Hence, it can be said that social
environment affects firm’s marketing decisions. Political environment- Political environment refers to the political parties and their
ideologies. Sometimes, the company advertises its product in such a way that is against
any nation culture. In such a condition, political parties create an issue on advertisement
in a nation. Hence, it can be said that political environment affects marketing decision of
the firm. Legal environment- It refers to the rules and regulations that govern advertisement given
by the firm (Leonidou and Leonidou, 2011). Mc Donald is operating in several nations of
the world and is following all the rules and regulations in order to make sure that none of
the regulatory authority gets an opportunity to file a case against it. In this way legal
environment affects marketing decisions of the firm.
 Technological environment- In marketing of a product, new technology is used so that
advertisement can be made attractive. Mc Donald understands this thing and makes an
advertisement in such a way that it is eye catching in nature. So, technology environment
also affects firm’s marketing decisions.
2.2 Market segmentation criteria used for different products in different market
Market segmentation refers to the way in which entire market is divided into several parts
on the basis of some specific parameters. These parameters are as follows. Geographic segmentation- It refers to management practice under which entire
geographic area is divided into several parts. From these areas target customers are
selected by the firm and the product is positioned by keeping in mind profile of target
customers (Lusch and Webster, 2011). Due to its wide application, this technique is
widely used by the business firm in their business practice. Demographic segmentation- In this segmentation technique, market is divided on the
basis of demographic factors like income, education and religion etc. Companies
according to their product features and price select best target customers for their
business on the basis of these demographic factors. Physiographic segmentation- In this, market is divided on the basis of traits, beliefs and
people attitude. Mc Donald is following this segmentation technique for sale of its

burgers and other products because culture to culture food preference of people gets
changed (Mudie and Pirrie, 2012). Hence, it is necessary to serve different products from
one country to other country across the globe. Mc Donald understands this thing and it is
the reason due to which its product is gaining high preference among all nations of the
world.
 Behavioral segmentation- It is a segmentation that divide market in to groups on the
basis of people knowledge, attitude and their response towards product. On the basis of
this segmentation technique target customer's can be identified in proper manner. Due to
this reason this segmentation method is widely used by the firms.
2.3 Targeting strategies for the firms
Following are the targeting strategies that normally firms adopt in their business practice. Undifferentiated targeting strategy- Under this targeting strategy, the organization does
not serve its product in single market and to specific customer. By following this tactics
firm tries to reach to large number of customers in the specific geographic area (Cronin
et.al, 2011). Due to its wide applicability, this technique is widely used by the FMCG
companies. Concentrated targeting strategy – This technique is unique in nature and under this
strategy specific kind of customers is targeted by the firm for their products. This strategy
is used by the companies whose products are highly priced or are associated with the
lifestyle.
 Multi segment strategy – In this strategy, firm select multiple types of people as its target
customers and serve products according to their needs and wants. This strategy is used by
Mc Donald because it is selling wide range of products at different price level in order to
serve people with different income levels (Chan, He and Wang, 2012. By following this
tactic firm is serving burgers at different price range to the different people. This is the
tactics due to which Mc Donald gets huge success in the relevant industry.
2.4 Way in which buyer behavior affect marketing activities
Buyer behavior refers to the people purchasing pattern and their factors as well as
influence of others on their purchasing decisions. All these things collectively affect buying
behavior of an individual. In order to advertise product firm needs to prepare its product
marketing appeal statement and role play of different characters in advertisement. Firm prepare

mentioned statement and role play by doping thorough research on the people buyer behavior.
By doing research firm comes to know about the factors that are influencing people buyer
behavior mostly (Foxall, 2014). On the basis of inputs from the buyer behavior and firm product
unique selling proposition marketing manager determine an advertisement appeal statement that
compel target customer to purchase firm product. After that firm identify entities that are playing
active role in person buying decisions. These entities may be opinion leaders and reference group
etc. On the basis of details of the consumer behavior in this regard characters that need to be
included in an advertisement are determined (Desbordes, 2012). Mc Donald managers can
prepare advertisement appeal in relation to burger on the basis of factors that are mostly
stimulating demand for the company mentioned products. In advertisement it will show a group
of friends that are coming in its restaurant for taking eating a burger at its restaurant. In this way
buyer behavior will be linked to the company marketing activities. There are many forces like
opinion leaders and reference group that influence buyer behavior. Opinion leader are those who
are experts in the relevant field and whose statements are listened by the other carefully. If firm
use these opinion leaders in their advertisement then people start believing on the advertisement
and product sale get increased. On other hand, there are reference group which refers to the
friends and relatives etc that influence people buying decisions. For different product different
reference group components influence people buying decisions. Thus, companies by using this
reference group advertise its product and persuade customer's to buy company product. Hence, it
can be said that people buyer behavior affects marketing activities of the company.
2.5 Positioning of new product
Positioning of product means creating an image of the product among the target
customer's. By creating image of the product firm try to differentiate its product from the other
products. Following are the ways that are used for positioning a product. Technology- Technology acts as strength of a product and if firm is using advanced
technology then it is treated as core strength of the product. Companies like Sony are
using this method of positioning for advertising its product (Product positioning. 2015). Quality- This is another factor which is used by the firms in order to differentiate their
product from the competitor product. MC Donald is using this technique and it advertises
its burgers on the basis of quality and taste. This is also major USP of the company
product. Hence, it can be said that firm is successfully using this positioning technique.

 Service- Service is another factor that is used for positioning a product. It is company
service quality that creates its good image among the customer's (Grönroos, 2011).
Therefore, today most of the firms are giving due importance to their service quality and
using this as USP for positioning of the product.
As per this model product must be positioned on the basis of product attributes, price specialty,
unique advertising and good distribution model. Apart from this, this model state that after
segmentation and targeting of customer's product positioning must be done on the proper
manner. Thus, it can be said that this model helps business firms in taking their position related
marketing decisions.
Illustration 1: Product positioning model

TASK 3
3.1 Development of product to sustain competitive advantage
In order to sustain competitive advantage it is necessary to bring changes in the product.
Fir this long process is followed by the firm. In order to sustain competitive advantage
companies cannot stand at single point. They need to focus product development so that they
always remain ahead of competitors. In this regard MC Donald first conduct a market research
and under this it collect lots of information about the people needs, wants and changes that they
want to see in the product. On that basis firm carry out research and development activity. After
thorough research new product is developed by the firm (Michaelidou, Siamagka and
Christodoulides, 2011). In final stage company makes an attempt to identify whether its product
will be successful in the market. In this regard, firm conduct a pilot testing and on the basis of
results of same it takes decision about the launch of the new product. By following this entire
process firm sustains competitive advantage over competitors. Idea generation- This is the first stage in product development under which business idea
is generated. Business ideas can be taken from friends, relatives and employees. After
selection of idea same is screened in proper manner. Idea screening- In the second stage all generated ideas are discussed among specific
group of people. In this stage business ideas are developed from various sides and best
idea is selected for starting a business. Concept development and testing- In this stage idea is tested by the managers in order to
identify viability of the business idea on which they wants to start a business. Business analysis- If business idea seems viable then analysis of business is done and
requirements for starting a business are determined. Hence, it can be said that this step
play a decisive role in commencement of new business. Product development- After business analysis relevant product is developed by the
business managers in specific quantity. But before launching a product its success is
tested by the managers. Test marketing- In this stage test marketing of product is done and sample of product is
given to some of the people in order to make find out the probability of success and
failure of the product in the market.

 Commercialization- After product successful test marketing commercialization is done
and under this stage way in which marketing will be done is decided. In other words,
promotion method that will be used for the product marketing is determined in this stage.
 Launch- This is the final stage in which product is launched in the market by organizing
a program. Through such kind of program people will come to know about the product.
Hence, this is final stage of the product development.
3.2 Way in which distribution is arranged to provide customer convenience
There are many ways in which product is distributed among the customers by the
business firms. These distribution models are as follows. Direct distribution channel- Under this distribution channel firm directly sale its product
to the customers through its own shops. Means that in this model there are no
intermediaries like wholesalers and retailers in this kind of distribution channel. The main
benefit that firms get from this kind of channel is that it easily conducts its market
research program at ground level. In case of wholesalers and retailers it has been seen
that they failed to get filled questionnaire results in proper manner (Shaw and et.al,
2012). Due to lots of errors research produces false results and entire efforts become
waste. Due to this reason direct channel of distribution is preferred by most of the firms.
 Indirect channel of distribution- In this kind of channel of distribution there are
intermediaries like wholesalers and retailers. Firm sale its product through these
intermediaries. Most of the firms follow this channel of distribution in order to sale their
product.