Marketing Essentials: Analysis of McDonald's Marketing Strategies

This report provides a comprehensive analysis of McDonald's marketing strategies. It begins with an introduction to marketing functions, including pricing, promotion, selling, and product management, and their significance within the organization. The report then explores the role of marketing in relation to other departments like production, R&D, finance, HR, ICT, and distribution. A key component involves a comparison of McDonald's with a competitor based on the 7Ps of the marketing mix. Finally, the report culminates in the development of a detailed marketing plan for McDonald's, incorporating SWOT analysis, competitive analysis, and STP (Segmentation, Targeting, and Positioning) strategies to assist the company in achieving its objectives. The assignment showcases the importance of marketing in a global fast-food chain.

MARKETING
ESSENTIALS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Roles and responsibilities of marketing function...................................................................1
P2 Role of marketing in wider context ......................................................................................3
TASK 2............................................................................................................................................5
P3 Comparison between two firms on the basis of marketing mix ............................................5
TASK 3............................................................................................................................................9
P4 Marketing plan of McDonald's..............................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
The function of marketing initial when company start finding the needs of customer and
it ends when they ensure that consumers are satisfied with the goods and services which
company has provided to them. After sale service is now considered as an important part of
marketing (Kanjanatarakul, Sriboonchitta and Denoeux, 2014). This assignment is based on
McDonald's who is known as one of the biggest fast food restaurant player in the whole industry.
This organisation is providing jobs to almost 400000 people and its areas of service is
worldwide. McDonald's is an American company and they are known for their remarkable
marketing strategy. This report will include role of marketing function along with the
interrelation of this department with other wings of the company. Marketing mix will also be
done under this assignment and it will compare 7Ps of two organisation i.e. one is McDonald's
and other is its rival. This project will end after presentation of marketing plan. This plan will
have SWOT analysis, competitive analysis, STP etc. Marketing plan will assist company in
attaining their objectives.
TASK 1
P1 Roles and responsibilities of marketing function
In simple language, marketing the process where goods and services are sold to the
customers. But this is not an easy task as it require convincing buyers to tell their needs so
organisation can develop product according the desire of consumers. Ensuring that customers are
satisfies with the product is equally important because it high customer satisfaction means
repetitive purchase. Although there are many marketing functions but most important of them are
as follows:
Pricing – Price of a commodity is considered as a deciding factor in the success of the
product. Most of the big organisation face the problems of pricing because they do not
understand that what price should they keep of their product (Huang and Sarigöllü, 2014).
Sometime they keep high price which result in failure of product and sometime they keep price
so low that customer give them comments that they would have paid more money for same
product or service. Marketing division of McDonald's is responsible for deciding price tag of all
the offering which this restaurant chain has. They try to evaluate the need of customers and then
determine that what price would be suitable for both sides i.e. company and customers. They are
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also accountable for selecting and making pricing strategy i.e. whether company should adopt
policy like price penetration for an item or they should follow skimming pricing. This crucial
decision is make direct impact on revenue of company.
Promotion – McDonald's is known for their aggressive advertising and this marketing
function played most important role in the position where McDonald's is standing today. This
marketing function is basically responsible for growth of business and motivating customer to
visit and taste food which is offered by this organisation. Marketing team do not only think about
creative advertisement they also evaluate all the platforms where they could show their
advertisements and convince people that McDonald's is best restaurant chain. Beside this work,
they are also responsible managing making discount offers and other promotional events like
arrange birthday parties at the outlets. This type of promotion is key behind making personal
connection with the customers which is another responsibility of marketing function
(Gummesson, 2011).
Selling – Customers seek better service in the restaurant. They does not only want good
food but they also want fast and effective service. Sales team of the McDonald's comes under
the division of marketing and their main role is to convince people to buy more from restaurant
and tell them about various offer so they buy more foods stuff from the outlet and company earn
more amount. This marketing function is responsible for resolving various issues and queries
which customer may have at the time of eating food in the restaurant or at the time of taking food
at home.
Product (Service) management – If a product is presented in the way then it may fail to
get attention of all the potential customers. Marketing function is accountable for position and
targeting of new food items which McDonald's sell in their stores. This department know that
every product have a limited time i.e. its life-cycle and company have to position their product
according to the stage in which that product is present. Marketing team plan complete marketing
process of the eatable sand they also forecast that what can be the demand of particular food
stuff. This marketing function has a unique significance i.e. it provide vital information to the top
level management about what can happen in which time period (Grünig and Morschett, 2012).
Financing – Finance team of McDonald's allotted fund to all the division so they can do
their work without any financial problems. Marketing department is responsible to giving growth
to business with assuring that they use financial resource of the company be best way. Marketing
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team do not limit their work related to finance up-to here, they also manage various deals which
they have suppliers. They try to grab a deal where company get more financial benefits. It is the
duty of marketing wing to ensure that they get deal from suppliers so their overall cost can go
down.
Distribution – Their are many sources which argue that McDonald's is among the very
few company who is present in almost every country. Running a business which is present across
the globe is not possible if distribution network is weak. This marketing function is solely
accountable for delivering required quantity and quality of raw material at all the stores in agreed
time. McDonald's do not share their business secrets with anyone which means that distribution
unit has to operate at very large level but without leaking a single key information.
Marketing information system (MIS) – Marketing team get special attention in the
organisation because they have that information which is not present to any other division. This
division has responsibility of keep all the information in a manage way and deliver it to the
department who has asked for the information. They are not only accountable for saving it, they
are also responsible for processing it can be used in correct manner. If this marketing function is
performed in best manner then company definitely get competitive advantage on the other player
of market, specially in present time (Grönroos, 2011).
P2 Role of marketing in wider context
Most of the division of McDonald's is only responsible for doing their work in
appropriate way and they are not connected to other departments, expect in special condition.
But marketing is a wing which has the responsibility of support all other department of the
company so proper synchronisation in the company can be generated and organisation reach
their goal is set period of time or may be earlier. Below is the role which is played by marketing
unit at the time of helping other divisions:
Marketing and production – Manufacturing unit of McDonald's do not know the exact
number of product which have to sell on in particular period of time. This department is
responsible for making the goods on time so customer do not have to wait but they cannot do
their job in effective manner if they do not get significant information from the marketing unit
who know that what demand of which product will consist in what time period. Marketing team
have all the information about present trends and they can use it to anticipate that which type of
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burger will be sold in upcoming time. When they share this detail with manufacturing unit then
their work become very easily and manageable.
Research & development and marketing – McDonald's understand that taste of people is
changing in no time so they try to provide more strength to the R&D wing. They want them to
make new eatables with fresh taste but the problem is that research team do not know that what
taste will people like. Marketing team take the responsibility of delivering vital information to
the research wing so they can develop those product which is loved by customers and gain
instant success (Gordon, 2012). Marketing wing is also accountable for transferring the detail of
rival company's to the research unit so they can make similar kind of product and grab more
market share.
Finance and marketing – McDonald's has strong financial record but it is not only
because of their financial department. It is the responsibility of marketing division to assist
finance unit when they try to make a call between which location will be best for future
investment McDonald's is continuously opening more and more store in developing markets and
this marketing division is assisting them in tell the right place where they should open the store.
Beside this, marketing unit collect details about which source of financing should be used by
company at the time of improving their balance sheet. Marketing team have data of all the rivals
so they understand that which source will be most appropriate for the company. They cannot
process financial information but they are responsible for giving vital information so finance
team can use it (Friesen and Lowe, 2012).
Human resource and marketing – The biggest reason behind hue success of McDonald's
is their HR division. They department is managing 400000 approx. Which is very difficult or one
can say next to impossible task. Marketing team understand that job of HR division is not easy so
it is their duty to provide the fixed set of skill which they seek in their unit. One may think that it
is not a huge help but in reality, HR team do not know technicality of job so they want assistance
from all those departments who are doing their job on the basis of a set skills. HR team sometime
ask for the details of other companies i.e. rivals which they most of the time get from marketing
team because they store all the important data and content related to their rivals. This data is
basically used by HR team at the time of understanding culture of other company which
basically tell that what strategies company can use in forthcoming time (Mittal, Babin and
Zikmund, 2014).
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ICT and marketing – Information technology is now used in every organisation and
McDonald's also understand its importance. It department of this company is doing remarkable
job because they are managing lot of work which is basically done by a hardcore of It company.
It is the accountability of marketing unit to support IT team when they store key information and
process it. They are also responsible for giving suggestions to this department so they can
improve their internal working system and make it more effective. Marketing team know the
exactly content which should be promoted on internet and they provide this content to the IT cell
so they can present it in proper manner and company get benefit from it.
Distribution and marketing – The prime reason behind such a strong distribution
network on this company is that it getting proper support from key department i.e. marketing.
Marketing team of McDonald's know that what should be the path of sending raw material from
one place to another or where warehouse should be constructed so company can earn more
revenue by decreasing cost of business (Mihart, 2012). They do not only provide important
details about different routes but they also provide them the blueprint and other significant detail
of the rivals so company can take positive from it and improve own system. Distribution system
of McDonald's is highly dependent on the support which this division get from marketing.
TASK 2
P3 Comparison between two firms on the basis of marketing mix
Marketing mix is used by companies for ascertaining the performance by focusing on few
key factors which are very important for success of the organisation. Below is difference
between McDonald's and Burger King, one of the rival of McDonald's.
Basis McDonald's Burger King
Product Everyone know that
McDonald's is known for their
burgers which is their most
sold product. This company
has managed to make a
product which is liked in
almost every part of this
world. They sell quality
Burger King is also known for
selling Burgers but it is not
still considered as their USP.
They are selling few non
vegetarian items which have
gained more popularity
compared to the non-veg of
McDonald's but their veg
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products which has unique
taste (Maghaireh, 2016).
Besides burgers, now thing
company is selling many other
eatables and they are providing
a wide range of variety which
many other firms are failing to
product.
burgers gained limited success
i.e. liked in few countries and
regions.
Price McDonald's has image that
they always keep price of their
goods affordable and
competitive. They are still
following same strategy and
price of their eatables are
affordable or one can say
below of what their rivals are
offering.
Burger king, in comparison to
McDonald's, keep their prices
high. Their veg product are
available at economic price but
other items i.e. non-veg is
expensive. They use skimming
price strategy for their non-veg
eatables.
Promotion Their is no company in fast
food restaurant industry who
can claim that McDonald's do
not have aggressive
promotional strategy. This
company has a clear motto i.e.
buy a place in the mind of
customers. They do not only
promote their products on their
outlets, they also promote
them on TV, internet and all
the other platforms because
company want people to
Burger King also promote
their brand but they do not
have aggressive strategy like
of McDonald's. This is not
their fault because what they
do is done by most of the
companies but McDonald's has
extra ordinary marketing
strategy (Lipsman and et .al.,
2012). But there are few
popular promotional tricks
which help Burger King in
making their unique image i.e.
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always talk about them. They
firmly believe that mouth
publicity is the best promotion
but company has to remind
people about the great
experience which they get at
the time of eating food in the
McDonald's. They will start
talking about McDonald's
when they will see its
advertisement.
they put a crown on one of
their customer who is sitting
their outlet and eating product
of Burger King. They want
people to feel special and this
promotional trick helped them
in constructing their different
image.
Place McDonald's open their stores
in every part of a region i.e.
whether it is a prime location
or a two tier city. They believe
that their products are so good
that if people will try it once
then they will want to eat it
more times. If they will get a
outlet near by then they will go
and eat at McDonald's and this
will increase sale of company.
McDonald's was among the
first companies who have store
in almost every nation and
they have around 40000
outlets. One can only have this
number if they have above
much strategy.
Burger king has different
strategy of opening their
restaurants. They prefer to
open them at the prime
location because they feel that
low demand at remote areas
will make company financially
weak. They do not support the
thinking of McDonald's i.e.
open store and then customer
will come. They feel that there
are many restaurant of
McDonald's which are not
earning profit but company is
running them because they
what to show that they are
present everywhere.
People McDonald's prefer to recruit Burger King like to hire those
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those people who understand
the rules made by company
and follow them without
making any mistake
(LEHTINEN and MÄKINEN,
2012). They want their
employees to focus on fast
service and follow
organisation culture so if they
feel that a particular candidate
will not suit for a position then
they do not hire him/her.
people who enjoy their work
and use mind mind for
assuring that customer get
desired value for the money.
Most of the companies feel
that it is only related to
product but Burger King also
concentrate on their service
because their main aim is to
ensure that company provide
overall great experience to the
customers.
Process McDonald's know that they
cannot run such a big business
if they will do not have an
effective process. This
organisation make their
product by working on a
successful process i.e. every
person in the outlet is
responsible for some job, like
one person put sauce in the
burger while other is
responsible for some different
work.
Burger king also have different
process but they do not believe
in rigidity like of McDonald's.
They feel that if a process is
not working then they should
immediately make necessary
amendments. They do not
prefer the policy of wait and
watch because it is time
consuming.
Physical evidence Millions of customers, high
brand value, thousands f stores
are physical evidence that
McDonald's is not only present
but they are number one in the
Burger King has many stores
and thousands of people are
working in this organisation.
This is physical evidence
along with all the eatables
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industry. which they are selling in their
restaurant.
TASK 3
P4 Marketing plan of McDonald's
Executive summary – McDonald's may hold number one spot in the fast food retail sector but
they are cannot survive on this position if they will not improve their service and provide more
variety of eatables to the customers (Kennedy and Parsons, 2014). This organisation want to
increase their global market share and for this they have launch new variety of burgers.
Marketing objectives
 Increase sales of company by 5% in 2 years
 Increase footfall in the restaurant by 15% in 3 years
STP
Segmentation – New burgers will be launch vegan segment i.e. for those people who do
not eat food which is given or made by animals. Number of vegan people has gone in last 5 years
and the most important thing is that it is continuously increasing with an impressive rate. If
company will start selling vegan burgers now then they will get competitive advantage on all the
players who are not thinking about this strategy.
Targetting – Main target of these types of burgers will be those people who are vegan or
going to become. These people seek something new at the restaurants where they visit but they
do not get much options. If they will get taste burgers which do not have any connection with the
animal then they will get ready to pay more amount for it. By targetting these customers at early
stage company can earn more revenue in upcoming time and attain both of their objectives. This
will increase footfall and at the same time it will also increase revenue of company in short
period of time.
Positioning – McDonald's will present their burger which will grab attention of all theoe
people who are either vegetarian or vegan. This will not ask people to become vegan, they will
just position their product in way where vegan people will feel that they get real choice in terms
of eatables after so long time. They will ask customer to taste it once so gradually people start
eating it in lunch, breakfast and in their other meals (Hsu, 2011).
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