McDonald's Hospitality Marketing Strategies: A Comprehensive Analysis

Desklib provides solved assignments and past papers to help students succeed.

HOSPITALITY MARKETING
ESSENTIALS
MCDONALD
1

Table of Contents
INTRODUCTION........................................................................................................................3
TASK A...................................................................................................................................... 4
MARKETING PROCESS.......................................................................................................... 4
FUNCTIONS OF MARKETING.................................................................................................5
ROLES AND RESPONSIBILITIES OF MARKETING....................................................................5
IMPORTANCE OF MARKETING ROLE....................................................................................6
INTERRELATIONSHIP IN FUNCTIONAL DEPARTMENTS.........................................................7
MARKETING MIX FOR ACHIEVING BUSINESS OBJECTIVES....................................................8
TACTICS FOR ACHIEVING BUSINESS OBJECTIVES................................................................10
CONCLUSION.......................................................................................................................... 11
REFERENCES........................................................................................................................... 12
2

INTRODUCTION
Being a Marketing Executive at McDonald, this report keeps focusing on marketing its
process, functions and concepts. This report will also focus on the responsibilities and roles
of the marketing manager of McDonald to wider the organization. This will also analyze the
influence of marketing and the relation between functional departments of McDonald. This
report will also compare the 7Ps of the marketing mix for organizations like McDonald and
Costa Coffee and tactics for achieving the objectives of the business.
McDonald is a hospitality public service food industry which was founded on 15th May 1940
by Richard and Maurice McDonald. The company has approx. 210000 employees in
numbers and sells fries, hamburgers, milkshakes, coffee, breakfast etc. and headquartered
in Chicago, US (Bowie et al., 2016).
3

TASK A
Marketing is a process of selling services and products to the business or customers by
sharing relationships with each other. This includes the process of providing satisfaction to
the customers to achieve organizational goals and profit (Kotle et al., 2015).
MARKETING PROCESS
McDonald is one of the known brands in the world where the company wants to build an
image after listing to its consumers (Benedict, 2017). Following are the processes of
marketing which get followed by McDonald are:
 Market research: this process of marketing of McDonald involves identifying the
requirements of the customers and fulfilling their needs better than their
competitors. For creating competitive market McDonald follows 4Ps of marketing
mix which includes product, place, price and promotion (Benedict, 2017).
 Reviewing marketing effectiveness: it means meeting the goals of McDonald by
spending more on market effectiveness for getting positive results in the long and
short term. Reviewing market helps in identifying the present and future trends of
the market also help in reviewing the company's capabilities and resources
(Benedict, 2017).
 Marketing promotion: psychological factors are efficient in customers for buying a
particular product. Marketing research helps McDonald in identifying types of
consumers. The promotion plays an important role in increasing the productivity
and profitability of the company by advertising on TV, Cinema, Radio etc.
 Customer feedback: it is important to manage the feedback from customers as this
is the tool for maintaining the relationships with the customers of McDonald. The
company has settled its position in the minds of the customers so that the teenagers
and children get attracted to their offerings and affordable prices (Benedict, 2017).
 Optimizing sales activities: this process involves conducting market strategies which
are used for the development of business and optimizing sales is a strategy which
fulfils customer's demands and maintains relationships with them. McDonald
4

applies the strategies for expanding the business by adding different things in the
menu card (Benedict, 2017).
FUNCTIONS OF MARKETING
Some of the functions of the market which are taken by McDonald to increase the profit and
customer satisfaction:
 Market identification: this includes researching the market for analyzing the trends
and gathering the market information for modifying the changes in McDonald.
 Financing: the marketing department of McDonald requires funds for researching
market as well as for allocating resources which are provided by the financial
department for production and increasing profit (Baker and Saren, 2016).
 Pricing: this gets set by the marketing department after analyzing the competitors of
the same product and the demands of the affordable price products by the lower
and middle-class people (Aschemann-Witzel et al., 2016).
 Promotion: this is the function of marketing where the company decides to promote
the products as per the demands of the customers for attracting them to increase
the demand and profitability to McDonald (Baker and Saren, 2016).
 Customer support: the company always tries to support its customers by providing
the best and efficient services based on their wants and requirements which is one
of the functions of the marketing department of McDonald (La Rocca et al., 2016).
ROLES AND RESPONSIBILITIES OF MARKETING
The marketing manager of McDonald aims to increase the sales and profit of the company
for its growth and presence in the competitive market. The roles of marketing are:
 It creates a company's brand name and execution via mass communication
 It defines a strategy for the products in support to provide profit to the company
 It creates a baseline for the company and promotes it via communication
 It uses technology for supporting marketing campaigns (Baker and Saren, 2016)
Roles of manager for widening McDonald:
Marketing department manager of McDonald focuses on wider the company by making
effective strategies and plans for the company to provide the best products and services to
5

customers for the development of the company. Following are the roles of marketing
manager:
 Research: this is the role of the marketing manager of McDonald to research and
analyze the market with the help of the salesperson by providing them with effective
sales training for gaining the market information. This reach can be done by the
salesperson or the research department for observing the market trends and
customers’ requirements for widening the company (Cao et al., 2015).
 Strategy: this is the next step where the marketing manager of McDonald takes after
collecting the data from research. The manager is responsible for making an effective
strategy for gaining the best outputs for the profit and growth of the company. The
strategies like product pricing, promotional activities, distribution channel etc. need
to get observed and prepared by the manager of McDonald for widening the
company (Kowalczyk, 2017).
 Planning: this is the role of the marketing manager of McDonald to plan the process
for gathering resources, data collection, forecasting sales as well as communicates
the planned strategy to the employees to increase sales directly or indirectly for
generating profit for McDonald. The strategies are for the future and based on past
and present experiences to make changes for widening the company.
 Tactics: these are the actions used by the marketing manager of McDonald for
increasing sales of the company and cut the competition by offering various products
in the market for widening the company. These include promoting products and
services through advertisements, sales promotion and discounted offerings for
attracting the consumers (Kowalczyk, 2017).
IMPORTANCE OF MARKETING ROLE
Marketing is one of the major parts of any company which helps in the growth of the
company. Marketing plays an important role in McDonald in the following ways:
 It helps in meeting with the wants and needs of the customers as well as ensures
McDonald for their growth, survival and reputation in the market
 It helps in widening the company by creating utility, offers the best products at the
right place after facing competition in the market (McDONALD, 2016)
6

 It also focuses on the growth of the economy of the UK by handling the pressure of
the government and demands of the customers and fulfil social responsibilities
INTERRELATIONSHIP IN FUNCTIONAL DEPARTMENTS
The marketing department is a functional department which helps the company in
increasing sales and profit by reaching towards the stated goals of the company. The
marketing department of McDonald tries to find the best opportunity to set up the branch
of their business in many cities and countries including China and India. This is the effective
departmental function which has been played by the manager and salesperson of the
marketing department for increasing business profit (Kerin and Hartley, 2015).
INTERRELATIONSHIP WITH DEPARTMENTS
Finance with marketing department: the finance department keeps the financial records
safe as well as the details of liabilities, loans, assets etc. for McDonald. This department
interrelates with the marketing department in providing safety of the records of sales,
profit, resources and funds. The department also helps in providing a budget for the
estimated sales and profit of the company (Gitman et al., 2015).
R&D with marketing department: R&D department is responsible for market research for
analyzing the market for finding out the opportunities and threats in the market for the
company which are needed for improving the current taste and choice of the customers.
The marketing department gets interrelated with this department as it helps in gathering
the data from the market and the marketing manager implement the strategies for
increasing the sales for the growth of the company (Cao et al., 2015).
Human resource with marketing department: the HR department of McDonald develops
the productivity and accuracy of other departments. This also helps in gathering experience
by hiring effective candidates and provides training sessions to them. The relation between
marketing and human resource department is very strong as the HR departments help in
managing resources for sales and hire the best sales executive for McDonald.
Production with marketing department: the production department makes food for the
customers based on their requirement as they cannot store food products for many days.
The marketing department provides information about the demand for the products of
7

McDonald by the customers so the production department prepares food for them (Kerin
and Hartley, 2015).
MARKETING MIX FOR ACHIEVING BUSINESS OBJECTIVES
This section will compare the marketing mix of 2 companies by showing their similarities
and differences. Costa Coffee is one of the competitors of McDonald, which was founded in
1971 by Bruno Costa and Sergio Costa and headquartered in Dunstable, England, UK. The
company serves tea, coffee, snacks, sandwiches and iced drinks all over the world (Costa
Coffee, 2019).
Marketing mix of McDonald and Costa Coffee:
PRODUCT: McDonald is the world-famous brand and has a big chain of restaurants which
sells burgers, sandwiches, fries, snacks, desserts, shakes etc. and other options like Egg
McMuffin, Hash Browns, Hotcakes, Cheese Quarter Pounder, Hamburger, Double
Cheeseburger, Vanilla Shake, Cheeseburger, Vanilla Cone, Kiddie Cone, Hot Fudge Sundae,
Baked Apple Pie, Strawberry Sundae, McCafé Frappe and McCafé Chocolate Shake (M
Rahman, 2019).
Similarly, Costa Coffee has chains of outlets worldwide and offers many flavours and
variants in coffee. Some of the famous products of the company are Expresso, Cappuccino,
Americano, Flat white, Latte, Mocha etc. and some iced mixed products are Lemonade,
coffee cream, Mocha cream Frostino etc. these are sold in vending machines also which
become easy for the people to consume it (Costa Coffee, 2019).
PRICE: McDonald uses various price techniques for selling their wide range of products.
Some of the techniques which company follows are value pricing, cost-plus pricing, the
going rate, loss leader and price discrimination. Prices of McDonald are comparatively less
than other restaurants and it uses demand-based methodology so that they can fit in the
market and offer the competitive value (M Rahman, 2019).
Whereas, Costa Coffee also has different offerings of the price which influence the market
competition in a premium way as it sells its products on higher cost as the products are of
high quality and have the brand value in the market of the UK. The prices of the products
are directly relative to the ordered quantity where it is small or large. The company sells
8

Costa Express in a vending machine which has competitive cost compared with CCD and
Starbucks (Costa Coffee, 2019).
PLACE: it refers to the distribution and the strategies followed by McDonald for providing
the products to customers affordably. The company has 37,855 outlets over 100 countries
and various channels of distribution which also includes online delivering of products in
many countries. The restaurants of McDonald work for 24 hours for providing food services
to the customers to satisfy them (M Rahman, 2019).
Whereas, Costa Coffee operates in 3300 outlets over 31 countries and targets the middle
and rich class people as their products are of high cost and mainly found in malls, airports
etc. The company transforms its menu card according to the country where it is operating
for gaining the base of the customers (Costa Coffee, 2019).
PROMOTION: the advertisements of McDonald are notable among its tactics of promotion.
The company uses television, magazines, newspapers, internet and other media channels
for communicating with people as well as also uses sales techniques for promotion. For
example, collect stickers by purchasing 6 coffees and get another cup of coffee free as well
as offers discount coupons (M Rahman, 2019).
Whereas, Costa Coffee does not rely on advertisements on print media, TV etc. the company
follows the strategy of mouth publicity by the customers after getting the experience of
consuming the products of Costa Coffee. The company also provides a free sample to the
customers of their new product for getting the review and increasing the intention of
purchasing the product. The company uses digital media as a source of promotion for its
existing and new products (Costa Coffee, 2019).
PEOPLE: McDonald approximately has 97000 people working in the UK and Northern
Ireland. The dealerships of McDonald in some countries are in the hand of the women and
local businessmen. About £40million has been invested by the company in providing
training to the employees in which the managers focus on addressing the aspect of the
marketing mix and concerning both employees and customers (M Rahman, 2019).
Similarly, Costa Coffee focuses on its customers and employees globally. The company has
more than 20 thousand employees who are trained by the managers for developing
9

communication skills to solve the problems of the customers or fulfil their requirements
which provide satisfaction to the customers (Costa Coffee, 2019). `
PROCESS: the process is a set of activities which are performed by the McDonald for
achieving the satisfaction of the customers. The Company takes several activities for
delivering their products to the customers like it provides transparent services for preparing
food in front of the customers (M Rahman, 2019).
Whereas, Costa Coffee has nice sitting arrangements for its customers for making them
comfortable and the employees treat them particularly politely with a smile to catch their
attention. The company also uses a varied range of the device for process fee from the
customers like online payment, cash payment, debit/credit card payment etc. (Costa Coffee,
2019)
PHYSICAL EVIDENCE: the interior of McDonald attract the customers and visitors as the
restaurants maintain hygiene and clean interiors of their outlets (M Rahman, 2019).
Whereas, Costa Coffee operates in 31 countries all over the world and more than 3300
outlets and over 2100 outlets in the UK (Costa Coffee, 2019).
TACTICS FOR ACHIEVING BUSINESS OBJECTIVES
Tactics are called the strategic actions used by McDonald and Costa Coffee for achieving
their business objectives.
 Product strategy is used by the companies for improving the existing products and
introduce the new products for the satisfaction of their customers
 Price strategy is get maintained for attracting the customers at the negotiable pricing
range and affordable range of products so that it can enhance the buying decision of
the customers (La Rocca et al., 2016)
 Marketing strategy includes promotion, place, price and products of the companies
which satisfies the demands of the customers and results in achieving the business
goals (Cao et al., 2015)
 Communication is a very important aspect for the companies to maintaining
coordination between the employees and the customers for benefiting the company
to achieve the target and objective (Adler et al., 2015)
10

 The activities of the companies aim to match with the market conditions to maintain
the operating cost and improving the level of satisfaction of the customers
11

CONCLUSION
Thus, this report has mentioned that marketing plays an important role for the companies
by performing its functions and by focusing on responsibilities and roles. The marketing
manager of McDonald played a vital role in wider the organization. This has also analyzed
the influence of marketing and the relation between functional departments of McDonald.
This report has also compared the 7Ps of the marketing mix for organizations like McDonald
and Costa Coffee and tactics for achieving the objectives of the business.
12