Macro and Micro Factors Impacting McDonald's Marketing Decisions

This report provides a comprehensive analysis of McDonald's marketing strategies. It begins by explaining the elements of the marketing process, including determining opportunities, choosing markets, and developing strategies, planning, and tactics. The report then evaluates the benefits and costs of a marketing orientation for McDonald's, emphasizing customer-centric approaches and constant improvement. Furthermore, the report identifies and analyzes the micro and macro factors that influence McDonald's marketing decisions, such as customers, competitors, government policies, and economic and technological factors. The report also proposes segmentation criteria for McDonald's in different markets, including demographic and geographic factors, and suggests targeting strategies for its healthy fast food products. Finally, the report demonstrates how buyer behavior affects marketing activities in various buying situations, highlighting the importance of understanding consumer preferences and decision-making processes.

TASK 1
1.1 Explaining the various elements of the marketing process
Marketing process of Mc Donald's aims at building brand image by developing
products as per the needs and preferences of customers (Borges and et. al., 2005). It helps in
identifying the marketing opportunities present in market and thereby, designing marketing
strategy to attain those opportunities. Further, there are different elements of marketing
process which are explained as follows:
 Determining the marketing opportunities: Marketing helps in ascertaining the
marketing opportunities that will help organization in enhancing its brand image in
the hospitality sector (Jagersma, 2006). For instance, with the growing health
consciousness among individuals, Mc Donald's can start offering organic food
products. Thereafter, to determine the market needs and opportunities, company can
use feedback, survey, questionnaire etc.
 Choosing the potential market: After determining the market opportunities,
selection of target market is the next step that is taken by the marketer. With this
aspect, customers to whom business wants to offer its products and services are
selected by the organization (Dennis and et. al)... For instance, company wants to
offer its products to young boys and girls who like to consume fast food products etc.
 Strategy: It is a well-defined plan of action that helps business entity in attaining
overall goals of the organization. Mc Donald's can frame strategy after considering
its strengths and weaknesses that can impact the functioning of company. The
organization can match its marketing strategy with the core competencies, purpose,
vision and mission. This will further provides proper direction to the marketing
efforts.
 Planning: It assists organization in determining sequential process to attain the
framed goals by implementing the framed strategy (Madichie, 2009). Thereafter, it
involves prediction of sales and demand, financial planning, determine the
requirement of resources etc.
 Tactics: Tactics mean short duration plans that will help Mc Donald's in
accomplishing the short duration goals. Main aim of using tactics is to boost the
number of sales by using attractive and impelling offers. For instance: to boost sales
in weekdays during weak business hours, company can offer discounts like 5%
discount on every Wednesday from 12 to 4 pm (Graham, 2008).

1.2 Evaluating the benefits and costs of marketing orientation for Mc Donald's
Marketing orientation is a business tool that concentrates on designing products and
services as per the specifications, needs and requirements of customers. It is customer centric
approach whose main objective is to enhance the satisfaction level of customers and thereby,
boost the sales of company. It further helps company in brand building and retaining brand
loyal consumers (O'Dwyer, Gilmore and Carson, 2009). Marketing orientation also assists
company in getting an edge over its rivals. Therefore, ample amount of expenditure is done
by Mc Donald's to ascertain the needs and requirements of customers. In addition to this, it
focuses on analyzing the strategy of competitors so as to reach the target customers more
effectively than its rivals. Various benefits and costs of marketing orientation are explained as
follows:
Benefits
Customer centric: It pays more consideration on the needs and preferences of
consumers. It can be evaluated that it helps McDonald’s in designing products according to
the specifications that are provided by customers. This enhances the satisfaction level of
customers and ensures brand loyalty among them. It has been evaluated that customer centric
approach help business in increasing sales and revenue (Niininen and et. al., 2012).
Constant improvement: Research done in marketing orientation helps in
determining the changing market trends and needs of customers. Therefore, it has been
evaluated that, constant modification is done by company in its products and services as per
the present and forthcoming needs of customers. It further helps Mc Donald's in staying
competitive and innovative in the market.
Concentrated strategy: Marketing orientation helps in matching functions with the
strategic vision of fulfilling the needs of consumers (Borges and et. al., 2005). Therefore
proper need assessment is done by management and, only those services preferred by
customers are provided which results into focused marketing efforts. Therefore, it has been
evaluated that marketing orientation facilitates concentrated strategy.
Cost
Research cost: Marketing orientation involves intense research to identify the needs
of customers, market trends etc. Therefore it has been evaluated, Mc Donald's invests
significant amount in marketing research activities. In this respect, management appoints
sales personnel who investigate market by using technological instruments that ascertain
customer data. In addition to this, research and development is done to ensure constant
improvements in products which also involve significant cost (Cooke and Dayton, 2015).

Therefore, it has been determined that there are large number of benefits and costs
associated with marketing orientation program that must be considered by marketing
manager of Mc Donald's.
TASK 2
2.1 Different macro and micro factors that can affect the marketing decisions of McDonald’s
There are various external and internal factors present in business environment that
can impact the performance of Mc Donald's. These are as follows:
Micro factors:
 Customers: They consume products and services offered by company and generate
revenue in turn. Therefore, they must be kept satisfied by the organization. For that,
company can provide innovative services, healthy food, satisfaction for money paid
etc. This will help in ensuring repetitive purchase from customers (Mason and Harris,
2006). Customers can get attracted with the marketing campaigns of rivals and start
purchasing rivals products resulting in lower sales of Mc Donald's. Therefore,
customers have direct impact on the marketing decisions of company.
 Competitors: The strategies adopted by rivals have direct impact on the functioning
of Mc Donald's. Therefore, to gain competitive advantage over its rivals, Mc Donald's
can analyze the strategies of them. For instance, heavy price discount offered by
major rival of Mc Donald's; Burger King can reduce the sales of company. Therefore,
competitors pricing policy, marketing strategies can affect the marketing decisions of
Mc Donald's. Government: Presently, Mc Donald's is working in more than 119 countries.
Therefore its operations can be impacted by the policies and regulations that are
framed by domestic as well international government (Narasimhan, 2005). For
example, restriction on foreign trade can result in heavy loss for Mc Donalds as its
major earnings are from international sources. Therefore, government policies can
affect the marketing and operational decisions of organization.
Macro factors:
 Political and legal factors: To operate without hindrance, it is important for Mc
Donald's to consider various regulatory frameworks laid down by EU and UK
government. Therefore, company is required to follow policies like equality act,
competition, health and safety, environmental etc. For instance, violation of
competition policy can result into legislative actions from government like heavy

penalty, implementation of trade barriers etc. It will further affect the profitability of
company and result into negative brand image.
 Economic factors: Economic variables can impact the performance of Mc Donald's.
Therefore, it should consider various factors like GDP, interest rate, tax rate, disposal
income etc. Presently, GDP of UK is increased by 0.5% which means that economic
condition of domestic country is more favorable for the company (Dennis and et. al).
Further, increase in interest rates can affect the borrowing capacity of company
therefore, it will be forced to borrow at high interest rate. Thereafter, this burden will
be shifted upon customers by increasing the price of products. Therefore, economic
factors can seriously affect various operations of company.
 Technological: To sustain in competitive business environment, it is crucial for brand
to adopt new technical innovations and maintain R&D continuously. The use of
updated technology can increase the sales of company and provide competitive
advantage in market. Therefore, success of company in long run depends upon the
use of updated technology and processes.
2.2 Proposing segmentation criteria for McDonald's in different markets
Market segmentation is significant process that help organization to divide the market
and reach various range of customers (Jagersma, 2006). With this aspect, company can reach
domestic as well as international customers. The segmentation criteria that can be proposed
by Mc Donald's is as follows:
SUITABILITY With this aspect, organization can identify that
potential market that company wants to enter is
suitable or not.
MEASURABILITY It help company in determining the size of
target market. Thereafter, future sales is target
market is predicted (Niininen and et. al., 2012).
ACCESSIBILITY This aspect help Mc Donald's in assuring that
target segment is approachable via using
communication and distribution channels. The
brand can use Ad in cinema, TV, poster, social
media etc (Madichie, 2009).
ACTIONABILITY The marketing executive can design effective

strategy that will assist in reaching the target
customers smoothly (Madichie, 2009).
Table 1: Segmentation criteria
As per the segmentation criteria, Mc Donald's can choose two key segment that have
wide scope and enhanced growth opportunities. For example, brand is planning to offer
healthy eatables to its customers. In this respect, following segmentation criteria can be
adopted by organization.
 Demographic factor: It refers to division of market as per the age, population size,
income, gender, ethnicity etc. The demographic segmentation criteria can be proposed
in terms of income of prospective customer. For instance, company can offer organic
food to middle income customers from different age groups (Terpstra, 2000).
Therefore, more focus will be given on customers of age 18-30 residing in UK who
are more health conscious. Therefore, to influence them, social media marketing can
be used. Thereafter, to influence the elderly customers of Asian and other market,
online service booking, home delivery etc can be used.
 Geographic factor: The organization can divide the market on the basis of
geographical boundaries. This will help company in reaching domestic and
international customers effectively. Considering this aspect, it has been proposed that
company can chose domestic and developing market for offering its products and
bifurcate the market considering the geographical elements. In this respect, MC
Donald’s can provide more products like, beef meat, Cornish pasty, filet-o-fish,
Bacon Buffalo burger etc. in UK where there are more non vegetarian customer. (Mc
Donald's menu. 2015). However, for Asian market like India, beef meat should be
avoided and more vegetarian products like, Aloo tikki burger, garden salad etc. should
be offered. Thereafter, different marketing strategy can be prepared as per the target
market and customers’ needs.
Therefore, it can be proposed that Mc Donald's can divide the market as per
demographic and geographic factors. Further, company can focus on growing market like,
Asia and domestic one to offer its wide range of products and services.
2.3 Choosing a targeting strategy for Mc Donald's for its healthy fast food products
Targeting criteria help business enterprise in locating its customers and deciding
potential consumers to whom entity wants to sell its products. In this respect, consumers can

be classified by marketer so that marketing activities can be easily directed. Therefore,
company can adopt following strategies:
Categories Description
DIFFERENTIATED
Here, Mc Donald's use assorted promotional
means for different market segments
(O'Dwyer, Gilmore and Carson, 2009).
UNDIFFERENTIATED
It is significant process that help Mc Donald's
in targeting the whole market using same
promotional means.
CONCENTRATED
This aspect help brand in focusing on niche
segment having few customers but large
marketing possibilities.
Table 1: Targeting strategies
Considering, the aforementioned strategies, company can target different customers
with varied marketing needs. For instance, for elderly customers of age group 50-65,
company can use ads in newspapers, televisions while for young customers it can use social
media advertisements, mobile application etc. (Cooke and Dayton, 2015). Thereafter, for
reaching the customers of different geographic regions company can use advertisements in
regional newspapers, cinema, billboards etc. Also, Mc Donald's can prepare customized
menu as per the target country and product offered therein.
2.4 Demonstrating how buyer behavior affects the marketing activities in different buying
situations.
The buyer behavior means those constituents that influence target customer to make
purchase and consume the products and services of a particular brand. It have direct impact
on the sales and profitability of organization (Madichie, 2009). Therefore, viable changes can
be made in marketing strategy after considering the buying behavior of target customers. To
understand the concept of buying behavior, marketing personnel can take help of
demographic and geographic segmentation factors. The demographic factors includes
customers of different age group, income level who make buying decision as per the price
charged by company. Therefore, for reaching the high income customers company can offer
slightly high priced products like, Burger king, Mc Chicken burger etc. Therefore, to attract
high end customers, company can associate the brand image with status symbol in its

marketing campaign (Borges and et. al., 2005). However, for middle class customers who
mostly make buying decision if product fall in their buying capacity, company offer value
meals which provides various economic benefits. Therefore, various promotional tools like,
happy meal where products are provided on discount price when combo pack is ordered.
Further, to attract the attention of customers of different age group differentiated targeting
strategy is used. For instance, to stimulate kids of age 5-15 Mc Donald’s provide free gift
toys like Minions etc on ordering happy meal. Thereafter, for inducing customers above age
15 company provides coupons, buy one get one free etc. In addition to this aspect, to target
customers of geographic segment company can make use of local television channels,
regional newspapers, billboards etc (Terpstra, 2000). Further, posters highlighting
customized menu products can be used.
2.5 Proposing new positioning strategy for Mc Donald's healthy fast food products
With the help of positioning strategy, brand can build a distinct image in the global
market as compared to its rivals. This aspect will help in building brand recognition and
boosting the sales of company. Therefore, organization can attract wide range of customers
using following positioning strategy:
 Benefit positioning strategy: It can be said that Mc Donald's can use attributes and
benefit of consuming products of organization to its customers to get distinct position
in market. Therefore, company can highlight the features of its products and services
like economic meal, healthy fast food, fast services, including products made of staple
food for increasing sales etc. Such as, Mc Donald's launched new rice based menu for
countries like, China, India as rice is among the staple food of those countries (Gnizy
and Shoham, 2014).
 Price positioning: Mc Donald's is known for providing good quality food products at
affordable prices. The company use price as effective means to induce different range
of customers. Therefore, organization provide value meal, combo packs at discounted
price. Further, to develop superior perceived worth within brand concerned
consumers, marketing manager can make use of brand image of company (Blankson
and Kalafatis, 2007). In addition to this, it offer high priced hamburgers, deserts,
salads etc. Therefore, it can be proposed that, company can use price positioning
strategy for reaching different income level customers by using its pricing policy as
an effective tool. This will give competitive advantage to Mc Donald's in different
markets and also help in increasing the customer base.