Marketing Principles Analysis: McDonald's Marketing Strategies

This report provides a comprehensive marketing analysis of McDonald's, exploring various elements of the marketing process, including the marketing mix (product, price, place, and promotion), customer satisfaction, and marketing orientations. It examines the benefits and costs of McDonald's marketing orientation, considering factors like customer loyalty and competitive advantages. The report delves into macro and micro-environmental factors influencing marketing decisions, segmentation criteria, and target market strategies. It also analyzes buyer behavior, product development, distribution, pricing, promotional activities, and the extended marketing mix. Furthermore, it explores the marketing mix in different segments, B2B and B2C marketing, and international marketing strategies employed by McDonald's. The report highlights McDonald's adaptation to digital integration, its country-specific menus, and its efforts to enhance customer engagement through innovative marketing campaigns.

UNIT 4
Marketing Principles
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Table of Contents
INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................3
1.1: Various elements of the marketing process................................................................................3
1.2: Benefits and cost of a marketing orientation of McDonald .......................................................5
TASK 2....................................................................................................................................................8
2.1: Macro and Micro-environmental factors influence on marketing decision................................8
2.2: Segmentation criteria for product in different market...............................................................9
2.3: Segmentation Strategy for targeting.........................................................................................10
2.4: Buyer Behaviour and buying situations....................................................................................12
2.5: Positioning for All Day breakfast menu.....................................................................................13
Task 3...............................................................................................................................................14
3.1: Product development for viability............................................................................................14
3.2, 3.3: Distribution and Pricing according to market condition.....................................................15
3.4: Promotional activities...............................................................................................................16
3.5: Extended marketing Mix...........................................................................................................16
Task 4...............................................................................................................................................17
4.1: Marketing Mix in different segments........................................................................................17
4.2: B2B and B2C Marketing............................................................................................................18
4.3: International marketing strategies...........................................................................................18
References...........................................................................................................................................20
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INTRODUCTION
In the present dynamic world, businesses are seeking to gain a competitive position in
the market by attracting as much customers as possible. As such businesses need to
continuously adapt and adjust to the changes in the market and understand what exactly
would work for them. Marketing is generally defined as the process of planning and
distribution that is carried out in order to satisfy individual goals. Alternatively, it has been
defined as a medium of communication to offer products and services of value to the
customers and the community (Kotler & Armstrong, 2012). Considering the various ways in
which exchanges can be made between organizations and their customers, businesses can be
observed to have particular marketing orientations.
Marketing orientations generally depend on the four basic elements that define the
ways in which a company decides to satisfy its consumer needs and hence, position its
brands. Product, place, price and promotion act as the four elements of marketing (Malär, et
al., 2011). These elements are controlled by businesses in order to create value such that the
maximum number of customers could be attracted. It is key for the management to
understand how the elements can be varied in order to maximize profits for the company. The
following study would try to provide a more elaborate understanding of the marketing
principles by developing a marketing analysis of McDonald’s.
TASK 1
1.1: Elements of the marketing process
Elements of Marketing process
According to the American Marketing Association of America, marketing can be
considered as an arrangement of organisations which involves various processes for
developing, interacting and delivering the offerings to satisfy the customers and the partners.
There are two philosophies which are the main reason behind the development of
marketing as a management process:
Sales orientation philosophies- This orientation mainly refers as gimmicks as it will
not develop a long-term demand for the product. The tols which usually use in these
philosophy are buy one get one free promotions, website banners and so on.
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Product orientation philosophies- These philosophy mainly concerned about the
product. If company is offering a superior quality product then customer will surely buy it
without the discount and any other offer.
Marketing segmentation- The group of the customer id very diverse in nature so it
would be very difficult for marketers to target each and every customer from such diverse
group. Segmentation is considered as neither profiterole nor practical attempt for satisfying
the customer, because of the large heterogeneous population the main aim of marketer is
identify those customer who are more profitable for business.
The marketing mix- Marketing mix is also one of the important element of the
marketing process as it focused on the key factors indulge in the marketing area such as
product, price, place and promotion.
There are some key elements in the marketing process. The marketing process of the
organisation is discusses as under :
 First the analysis of the market opportunities is necessary for a better and a clear view
of the condition of the market.
 It can also help in a better evaluation of the time and pricing startegies of the release
of a new arrival.
 Selection of the target market is also an important step.
 Then, the business needs only proper management and control over the cost effective
factors.
Presently, McDonald’s is considered as an essential part of the fast food chains.
Providing quick service to the customers, the main marketing strategy for the company has
generally focused on facilitating better customer relationships Particular strategies have been
implemented by the company in order to establish a better name for itself in the market. The
prime focus of the company has been to integrate the recent marketing strategies and adapt to
the changes in consumer behavior. To that end, the company has enabled particular
marketing strategies that are hugely reliant on the various digital and technical advancements
in the present world. The emphasis on creating more digital content for the company could be
seen as a shift from the traditional marketing techniques that have so far been implemented
by the company. In a recent Conference the company CMO, Deborah Wahl has talked about
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the company’s present digital integration and by forging new partnerships with technology
companies including Google and Facebook. Also, the company is presently aligned towards
developing a more holistic and comprehensive approach towards building effective
communication channels with the customers. According to Wahl, labelling the different
channels as digital, print or mobile could be problematic and confusing in the present world
as one channel of communication is dependent on the other (Johnson, 2016).
1.2: Benefits and cost of a marketing orientation of
McDonald
McDonald's is pursuing various marketing activities in order to increase in there
marketing orientation programme. McDonald's is a fast food chain which has existence
almost all over the world here they operating there marketing activity very effectively to to
expand there business more. McDonald's is having a prudent regulatory framework in which
they are focused upon the making there activities and operations marketing oriented.
The benefits to McDonald's out of marketing orientation:
Customer satisfaction, McDonald's has adopted various marketing orientation
approaches which enable their business to develop products as per the need and demand of
the customer.
Customer loyalty, Through the effective marketing orientation approach McDonald's
is increase the worth of its brand in the eye of the customer.
Competitive benefits, AS the McDonald's marketing orientation approaches is
focused upon the customer so it is providing the competitive benefit to the firm over its
competitor.
More focused production, McDonald is making the customer need a primary focus
so they are producing the product as per the need of the customer. Customer will get more
satisfaction with the product.
Concentrated strategy- Cost of marketing orientation will help McDonald to align
all the functions with the strategic vision of meeting the needs of customers. This will be
useful to define the proper role to the employees of the organization.
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McDonald marketing orientation structure
The marketing operation deals with the two factors which are discussed as under :
Product orientation
McDonald's as famous for meals, so their targets of achieving customer satisfaction
will be obviously through by means of meals. This is termed as the product orientation. If the
organisation starts with some other new business, it is an obvious fact that it may take a much
time to be organised in that specific industry. So, this is called as Orientation of the product.
Market Orientation
It can be referred to any organisation that the business only focuses on satisfying the
needs of the customer. If customers are satisfied with some product of McDonald's, then why
would the organisation exclude the item from the menu list. It is called as orientation of the
market.
The integration of the technological and digital systems can be seen as an effective
way in which the company can improve upon its present marketing strategies. With respect to
the key marketing elements, product, price, place and promotion, changes can be made within
the digital medium to attain a better brand position. The problem however could be in the late
realisation of the benefits of technological integrations, as other companies in the segment
have already taken recourse to excellent marketing strategies. KFC has been brilliant in its
approach; one of the chain’s restaurants in South Africa has developed an interactive digital
table wherein music of local artists could be played by customers while waiting for their
orders. Simultaneously, at other parts of the world, KFC has come up with other innovative
digital integrations like the foldable digital menu, in Germany, which can be accessed by the
in-store customers to order their foodsThe integration of the technological and digital systems
can be seen as an by syncing their smartphones. The focus of KFC, however, could be seen
to be entirely on digital incorporation, which while indicates a target specific approach that
tries to attract the urban youth, also, limits their market.
On the other hand, McDonald marketing is hugely reliant on product adaptations and
localization. McDonald has been effective in coming up with country specific menus and
items that incorporate the local flavors and portray a cultural identity that is specific to that
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region. While some of the local products have been successful for the company, others have
been disastrous; in Thailand, the company had introduced road style chicken products that
failed impress the customers because of the price of the same. The innovation in products in
alignment with country specific customs by the company can also be seen in the introduction
of chicken burgers in India, where the majority of the customers are Hindu for whom
consuming beef is sacrilege (Mourdoukoutas, 2015). As such the company responded by
offering chicken and vegetarian products such that customer satisfaction could be gained.
Furthermore, McDonalds has been an enthusiastic supporter of girl education in the country,
in order to gain a better strategic support.
While McDonalds might have been late in incorporating technical aids in its marketing
strategy, being culturally sensitive has proved to be beneficial for it. Now with digital
incorporations, the company would be able to better understand its customer needs and
accordingly adjust its marketing elements in developing a better marketing mix.
The digital integration can be beneficial for the company in observing the various ways in
which customers can be communicated. The company has involved itself in creating almost
5000 content pieces to interact with its customers. Noting the frequency at which the
company’s name is mentioned in the social media sites, the company has decided to enhance
the ways in which it seeks to interact. The company notes the significance of maintaining
brand authenticity while interacting with the customers; regular interaction can improve the
credibility of the brand. Certainly, as noted by Wahl, it would be important to reduce the
costs on other traditional forms of marketing in order to facilitate better digital integration
procedures. Another excellent marketing campaign in relation to the promotion of a new
product, the Zesty BLT Wrap. McDonalds had created a four hour long video loop that shows
the entire process of the wrap being prepared, which also comprises of fun facts about the
company in humorous way. According to the company advertising chief, Melanie Courtois,
the loop video has been intended to be played on social media sites; followers of the company
group on such sites can involve themselves by participating in trivia quizzes based on the fun
facts. One can note the constant strive to involve the customers through the innovative
marketing activities.
The benefits of being digitally oriented in marketing at present could be seen in the excellent
ways of communication that can improve the image of the brand. It is difficult to keep the
customers interested for a longer period as customers at present have access to multiple news
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and information. Such innovative strategies can be seen as excellent tools to grab the
attention of the customers and engage them through ingenious methods. The present
marketing strategies have been dubbed as being gimmicky, but as long as they are able to
engage the customers, companies are being benefited.
If the organisation continuously focuses on satisfying the customers, then the customers will
also love to visit and have their meal there. Like, said above if any product of the
organisation is liked by the customers, it is an obvious fact that the organisation will not
exclude that product from their list till the time the people will get bored of it. These factors,
for sure are bringing benefits to the organisation as whether on some selected products only,
they are earning the higher amount.
TASK 2
2.1: Influence of micro and macro environmental factors
Marketing strategies can be affected by various environmental factors including demographic
changes, buyer behaviour changes or economic changes. Essentially for marketers, it
becomes important to assess the various ways in which such changes could be addressed and
accomplished. As such, there are two types of environments within which companies
generally adopt their marketing strategies, viz., the macro environment and the
microenvironment (Gourville, 2006). The macro-environment is the comprehensive
environment that notes the implications of the economic, technological, political, social and
natural aspects with regards to company activities. The microenvironment factors are those
that impact the internal environment of the company like the organizational structure, the
marketing channel, the competitors of the company, and the various stakeholders of the
company. By studying the micro and macro environmental factors, businesses can
effectively adapt to the needs of the market and at the same time grab the attention of the
consumers.
As the changes within both the micro and macro environments are constantly in a state of
flux, there are certain tools and techniques that can be employed by companies to better
understand the market situation. Data analysis, customer relation management and data
mining are some of the most important tools that re regularly implemented by the companies
in order to achieve better business results (Kapeller & Puhringer, 2010). Since customer
behavior provides the basis of marketing, most of the changes in the market are analysed in
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relation to the customer behaviour. Customer value analysis is one such tool that defines the
level of customer loyalty and measures the degree to which they would be remain loyal to the
brand in the future.
SWOT analysis of McDonald's:
STRENGTH
 Advanced advertisement and brand
name
 Collaboration with coke
 Environmental friendly
 Trained employees
WEAKNESS
 Product development process is slow
 High advertising cost
OPPORTUNITY
 High growth rate
 Increase in people’s standard of living
THREATS
 Customer are health conscious
 Threat from local and small businesses
Environmental audit of McDonald's:
Political factors : The business of McDonald's is under the control of the government
regulatory framework. The main political issues are health, license, tax issue etc.
Economical factors : The catering of services of McDonalds's is being done on an
international level. So, the business may get affected by different taxation rules of different
states.
Social factors : The standard of living is getting advanced of the people on the international
level which is influencing the demand for the brand such as McDonald's.
Technological factors : technology bring advancement in the the process and also provides
competitor advantages. McDonald's is also hving a speedy and modern distribution channel
and payment facility provided by them is also quick.
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2.2: Segmentation criteria for product in different market
One of the crucial topics in marketing is segmenting the market according to the customer
buying behavior and tastes. Segmentation of marketing can be achieved through customer
behavior identification and creation of accurate customer profiles. The assumption of
consumer behavior, therefore, provides the organizations with a base upon which marketing
strategies could be developed. The understanding of buyer patterns and consumer behaviors
is important in developing a marketing strategy that can satisfy the consumer needs and also
align the same with the overall business strategy. As such, consumer behavior can be shaped
and affected by a number of factors, the prime ones being cultural, social, individual and
psychological aspects. Segmentation involves three key steps including identification of
market segments, selection of the market segments and the positioning of the products on the
basis of the target market.
The identification of the target market is based upon various social and demographic
trends that differentiate one segment from the other. In order for the segmentation to be
effective, organizations need to analyse the trends and market ideas that can facilitate the
development of key products and such that the brand could be developed in keeping with its
image. In the following sections, the report would provide a brief analysis of the various
trends that define segmentation procedures.
Demographically, segmentation of a market can be done based on the age, gender,
income, ethnicity and social status. There are also other factors that can determine the
demographic orientation of the market. McDonald is offering different product such as happy
meal for the kids, for family they made different outlets and meals for takeaway and drive
through.
Psycho graphic, Segmentation can also be psycho-graphically by noting the
particular attitudes of the people with respect to the interests, opinions, values and lifestyles.
Psycho-graphical analysis provides insight about the intention of the buyers in making a
particular purchase decision. McDonald generally targets the urban youth who maintains
probably a fast lifestyle. Also, the company mascot, Ronald can be seen as an effective
promotional idea to attract the toddlers and the children who would perhaps follow their
newly wed parents to the store. McDonald segmentation policy also differentiates between
the regular and potential fast food eaters. According to Carol Sagers, however, the company
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customizes its products according to the specifications and needs of the target population
after analyzing the key segment trends (McDonalds, 2013).
2.3: Segmentation Strategy for targeting
One of the key marketing strategies employed by McDonald recently can be related to its
new all day breakfast menu that has been recently introduced in global markets. Market
experts have seen this strategy as being effective for the company to regain its customers who
have lost to strong competitors. In keeping with the whole breakfast idea, the company has
also come up with fashion wear in collaboration with designer Emma Mulholland to better
position its breakfast menu service (AdNews, 2016). The product as such, has been
positioned with respect to its competing brands Dunkin Donuts and BoJangles. The move to
introduce the new menu has been a huge factor in the company’s success. Some of the
business experts in the market note the continuous innovation in product development being a
great marketing strategy in itself.
The idea has so far been effective for the company as far as the sales of the company is
concerned.
McDonald's segmentation involves segregation of the population into the groups as per
according to certain characteristics such as:
GEOGRAPHIC
Region: Local, domestic and international
Density: Rural and Urban
Age: 8-55
Gender: Males & Females
Demographic
Life cycle: Young, single, married, chidren
Income group: Low, Middle and High
Occupation: Students, Professionals,
employees
BEHAVIOURAL
Loyalty : Whether the customers are loyal
enough to pay the appropriate amount
without bargaining.
Status of the user : regular or not
PSYCHOGRAPHIC
McDonald's targets resigned, struggle and
mainstreamer, Culture and brehaviour of the
customer.
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Occassions : every day
Attitude of the customers : positive or
negative
Usage rate of per service and item : along
with the proper amount of tax
Differentiation strategy of McDonald's:
McDonald's is using a wide differentiation strategy as per the supporting and second
generic strategy which focuses upon making the business and its products in a way that it will
be distinct from the competitors.
Advantage of differentiation strategy-
 McDonald's may charge more for the product and services they providing
 Strong brand identity
 Competitive advantage because of the lack of substitute product and service
Disadvantage of differentiation strategy-
 Copy by the competitors
 Costly and time taking
 Required wide knowledge and understanding about the market
2.4: Buyer Behaviour and buying situations
The buyer behaviour forms one of the crucial factors in market segmentation strategies and
hence, is important to note with regards to the McDonalds marketing analysis. As has already
been noted, McDonalds as a company has always tried to develop products in accordance to
the cultural and ethnic alignment of a market (Kelly, 2012). Be it ‘halal’ meats in the Gulf
countries or extra spicy burgers in Philippines, McDonalds’ product development strategies
have in itself been effective in marketing. Emphasizing on effective products have provided
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