McDonald's Marketing Essentials: Analysis and Strategies Report

This report provides a comprehensive analysis of McDonald's marketing strategies, encompassing various aspects of its operations. It begins with an introduction to the marketing concept, exploring current and future trends. The report then delves into different marketing processes, including the SOSTAC model, and outlines the roles and responsibilities of a marketing manager within the organization. It examines the interrelationship between the marketing function and other departments, highlighting the value and importance of marketing in McDonald's success. The report further analyzes how McDonald's applies the marketing mix (7Ps) in its planning process and compares its strategies with those of Burger King. Finally, the report prepares and evaluates a marketing plan for McDonald's, offering insights into its effective business objectives and interdepartmental functions. The report concludes by emphasizing the significance of effective interrelationships between marketing and other functional departments for McDonald's continued success. The report utilizes various marketing concepts, including the production, product, selling, marketing, and societal marketing concepts. It also analyzes how McDonald's adapts its marketing strategies to meet customer expectations and maintain its market leadership.

MARKETING ESSENTIALS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Introduction of the marketing concept, its current and future trends ................................1
2. Different marketing processes............................................................................................3
3. Roles and responsibilities of marketing manager...............................................................3
4. Interrelationship of marketing function with other organisation's functions.....................4
5. Value and Importance of marketing role in McDonald's...................................................5
6. Conclusion of significance of marketing having effective interrelationships with other
functional departments...........................................................................................................5
7. Comparing ways in which McDonald's apply marketing mix in planning process...........6
8. Preparing and evaluating a marketing plan for McDonald's............................................10
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Marketing can be termed as the efforts made by an organisation for creating awareness
about its products and services available in market with the motive of attracting people and
boosting sales (Baker and Saren, 2016). The present assignment will cover the basic
characteristics of marketing and its responsibilities in the McDonald's, a fast food giant founded
in 1940 headquartered in Chicago, United States. It will show how marketing function is
interrelated with other functions in the company, what importance marketing holds in
organisation, an overview of different marketing processes. Further, the report will highlight
how McDonald's applies its marketing mix for effectively its business objectives.
MAIN BODY
1. Introduction of the marketing concept, its current and future trends
Marketing can be defined as the activities undertaken by an organisation for promoting
and selling its goods and services in the market. The market concept states that McDonald's must
understand the requirements of its target customers and then formulate strategies for meeting
those needs and requirements. This includes comprehensive market research and then detailed
market planning for promoting and selling its food products in the global markets (Baker, 2016).
There are different marketing concepts that are discussed below:
Production concept: This concept believes that customers prefers easily accessible and
lower priced products. Organizations follows this concept by taking production at large scale.
Mcdonald's is employing use of latest technology in its production process for making more
effective and has supported the firm in managing transparent kitchen process.
Product concept: This concept states that people prefers the products that have supreme
quality and distinctive features. Organizations like McDonald's believes in concept and tries to
make its food products highly differentiated from its rivals in terms of taste and quality.
However, the risk involved in this concept is that firms focusing too much on quality of those
products that are not even in customer's preference list. Thus, for managing with product concept
of marketing the firm has incorporated use of current trends that is AI or chat bot for managing
better customer support services and meeting customer expectation.
Selling concept: The selling concept is based on idea that company sells whatever it has
produced without considering customer's demands. A firm under this concept chooses to
increase its sales rather than creating healthy long-term customer relationships.
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McDonald’s needs to focus on market demands and focus on creating long term
customer relationships rather than creating one-time sales. It can replace its 4P's of marketing
mix by 4Es which are emotions, engagement, experience and exclusivity. These are the future
marketing trends which will support robust growth in sales of firm.
Illustration 1: 4Es of marketing
(Source: 9 Thoughts About the Future of Marketing, 2019)
Marketing concept: Under this concept, customer is put at the focal point. The
organization's prime concern is consumer’s needs, desires and how this could be satisfied. The
concept runs on the idea that developing products and services that are able to meets the
requirements and specifications of target audience.
`The current trend of achieving maximum customer satisfaction could be done by
understanding target audience and producing products what they want. For example,
McDonald's can make its online distribution channel, social media advertising and
communication which helps the business sin managing regular interaction with shoppers (Ashley
and Tuten, 2015).
Societal marketing concept: The societal concept is another concept of marketing
which states that organization needs to provide value to customers. This concept focuses on
society's welfare before anything else. It suggests that organizations through its marketing
practices should consider sustainable development. The societal marketing is becoming more
popular nowadays and firms are delivery value to society in terms of its CSR activities. Further,
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Societal marketing trends are focused on vloggers, bloggers would influence the perceptions of
consumers could be employ by McDonald's for making its brand more popular in the future.
2. Different marketing processes
SOSTAC, a marketing planning model that suggest how to manage the marketing aspect
of an organisation. The model stands for:
Situation: It helps McDonald’s in reviewing its current position in market like where its
stands in terms of public relations, profitability, sales, market share, etc.
Objective: It states that where the company wants to go and what it desires to achieve.
For example, McDonald's focuses on maintaining its market leader position in market and
formulating strategies on how it can achieve this.
Strategies: Mcdonald's then formulates how it can attain its objectives, what would be
the actions plans. For example, it can focus on its pricing strategies, its competitive advantages
or making its products more innovative for its objective of remaining a leader in global market
(Dligach, 2017).
Tactics: This aspect of SOSTAC planning model states that McDonald’s must have
tactics when the plan deviates from its original aim. These tactics also helps in meeting
unexpected demand and requirements of market.
Action: The formulated plan is then implemented by McDonald's for achieving its
desired objectives like market growth, customer expectation, innovation, etc.
Control: The last step in SOSTAC market planning model is monitoring and controlling
the activities of the implemented plan. This is done for keeping the plan on track for achieving
desired results. For example, McDonald’s used performance evaluation methods such as 360-
degree feedback, benchmarking, scorecard for determining where the plan is heading and up to
what level it was successful.
3. Roles and responsibilities of marketing manager
The marketing manager have following roles and responsibilities in McDonald's:
Market research: It is responsible for conducting market researches and keep the company
updated about marketing trends.
Marketing plan: The manager is responsible for preparing marketing plans, promotional
events, campaigns etc.
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Managing customer relationship: The manager focuses on improving customer
relationships and achieving customer satisfaction. The manager uses past data of customers and
analysis it. This helps in providing more enhanced services to customers in the future.
Brand awareness: Building and maintaining brand image and favourable reputation of
McDonald's is the responsibility of marketing manager. It designs effective marketing and
promotional campaigns by which the brand awareness is created.
Identifying new business opportunities: The marketing manager plays crucial role in
identifying new business opportunities such as expanding operations in potential international
markets or shifting from segment to other, etc (Homburg, Jozić and Kuehnl, 2017).
4. Interrelationship of marketing function with other organisation's functions
The marketing function of McDonald's is closely interrelated with every other functional
departments in the following way:
Marketing & Production: Marketing department provides information such as current
and expected demand of food products, customers’ expectations regarding taste, quality and
price etc. This becomes base for production department to conduct its operations.
Human resource & Marketing: The marketing manager gets is supportive and
competent staff which can perform activities such as product development, market research,
other operational activities with the help of HR department of McDonald's.
R&D and Marketing: The R&D department of company tells marketing manager about
the new methods and ways through which it can improve department's operational efficiency.
Marketing & IT: IT department provides technological platforms ready and support the
department for making marketing activities effective. Internal Information system, help in digital
and visual marketing, Search Engine Optimization are some areas where these two departments
work closely.
Finance & Marketing: These departments are interrelated in the sense that marketing
manager requires funds for conduction its marketing activities such as market research,
promotional campaigns, events, advertisements etc., for which finance department arranges
those funds. The finance department makes sure that McDonald does not go beyond its financial
capabilities (Feng, Morgan and Rego, 2015).
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5. Value and Importance of marketing role in McDonald's
The marketing plays a crucial role and is of significant value to company. McDonald is
market leader because of innovative marketing strategies such as changing as per the market
trend has boosted its sales and maintained stability and consistency in its profitability. It creates
a brand value of company and advertisement element of marketing helps in spreading awareness
amongst potential consumers and keeps McDonald's name buzzing in minds of existing
customers (Erevelles, Fukawa and Swayne, 2016).
It is valuable because helps in building and enhancing the customer experience by
serving food products and services as per consumer expectations. The marketing helps in
building loyal customer base and increases the probability of customer retention for McDonald's
by meeting their expectation and by providing excellent customer support services. Customer
relationship management is one area of marketing which focuses on maintaining healthy
relationships with company's existing customers.
6. Conclusion of significance of marketing having effective interrelationships with other
functional departments
The fact that say proper coordination and effective interrelatedness of each functions in
an organisation is the reason of its success. Marketing cannot be effective if it works in isolation
or other functions such as production, sales etc., cannot operate without having sufficient
knowledge about customers’ expectations and demand.
So, by observing interrelationships of marketing functions it can be concluded that
McDonald's stability, profitably and consistency in providing food products and services is the
result of such effective interdependence of organisational functions. Production department
produces exactly what the marketing department guides it about market trends and customers’
demands. For instance, when company moved to South eastern countries such as Sri Lanka,
Nepal, India, Pakistan, marketing department conducted researches about consumers preferences
that turned out people like spicy food. Accordingly, production department altered their dishes
and offered products as per customers’ demands. This became the reason why McDonald
successfully entered new market (Katsikea and et.al., 2016). Thus, it can be concluded that
interrelationship between department of firm play vital role in meeting customer expectation and
business goals.
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7. Comparing ways in which McDonald's apply marketing mix in planning process
Marketing mix is a set of activities and tactics for promoting the brand or products and
services in the market. Every company develops this strategy for marketing its products. It has
7Ps in its that are product, place, price, people, promotion, physical evidence and process
(Kumar, 2015).
Illustration 2: 7 Ps of Marketing Mix
(Source: Marketing theories – the marketing mix – from 4 ps to 7 ps, 2019)
Below is the table showing organisations have applied marketing mix strategies in their
marketing planning process.
Marketing Mix
Seven Ps McDonald Burger King
Product Have wide range of fast food
product line such as
hamburgers, sandwiches,
salads, shakes, Mc Cafe,
chicken and fish products etc.
Popular for burgers.
It also has variety of food
products potato fires, burgers,
milkshakes. It recently has
added kid meals in its product
line for being more
competitive.
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Price McDonald's applies
psychological and bundle
pricing strategies for setting
the prices of its food products.
The bundle strategy or combo
packs have generated large
sales for company. This
strategy involves setting lower
prices when goods are brought
in combo and high when
purchased individually.
It applies market oriented and
competitive pricing strategies
for facing competition. It sets
its prices as per the market
demands. It specifically
considers its operational cost
in price sensitive markets
globally.
Promotion The company uses various
tools for effectively
communicating with
customers. It applies direct
marketing strategies, public
relations, advertising food
products through digital
media, print media.
Burger King promotes its
brand and products through
paid advertisement on heavy
traffic websites, television,
food magazines, radio,
newspaper. It has recently
applied added content blogging
in its marketing strategies of
promoting its brand. It also
hosts various events for
reaching customers.
Place This component of marketing
mix represents the locations
where its products are being
offered. The company
distributes its products through
McDonald’s mobile
application, restaurants,
franchise.
It expands globally by the way
of franchises being given local
business man in the target
market across the globe.
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People Human capital is integral part
of organisation which helps in
achieving the business
objective of customer
satisfaction. It provides
training for making its
employees highly competent
and fulfils their needs for
achieving business goal. It has
employee strength of 440000
globally in 2017.
Happy and satisfied employees
are able to make customers
happy is the baseline of Burger
King. It makes proper and
regular appraisal of its
employees, helping them to
increase their living standards,
also proper recognition is
given to employees who
outperforms their duties. It has
about 35000 employees.
Process This element means
undertaking of different
activities for providing food
and other services to
customers (Akbar and et.al.,
2017). Preparation of dishes is
a process in which it uses the
latest kitchen equipment’s and
also the kitchen is made visible
to customers. This has resulted
in gaining trust of consumers
by making things transparent
in organisation. The other
process is taking orders, que
lines, customer care services
etc.
The company has a smooth
flow of process of seamlessly
delivering food products and
services to customers. Orders
are taken through electronic
devices and then these orders
are processed to kitchen where
the food products get ready
and finally the product is made
available to consumers.
Physical Evidence All services and products have
some physical existence.
McDonald's have its physical
The organisation has a global
presence about in 91 countries
and 13000 outlets in the year
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evidence in the form of its
location, outlets. McDonald's
have hygienic and attractive
interiors in its outlets which
grabs customer's attention,
providing them a nice
experience of visiting the
place.
It has around 34000
restaurants in 119 countries.
2018. The company always
focus on reinventing its decor
and stores attractiveness for
giving customers a soothing
ambience and feel of the place.
For maintaining its position of one of the markets leaders in fast food industry, McDonald needs
to continuously evolve in terms of its marketing strategies, products, process etc. for building a
competitive edge over its rival firms.
The company can introduce more healthy and high protein food offering for attracting
diet conscious people. It will add numbers to their customer base and sales. Also, providing food
products that are healthy and nutritious helps in gaining confidence of people that organisation is
socially responsible. It would help it in enhancing its brand image and reputation. Organisation
has to be more updated regarding the taste and preferences of the target customers as new firms
providing quick food is opening their ventures very fast (Kumar, 2015). This area of providing
healthy and high protein food is still not exploited by Burger King, therefore, McDonald's enter
into segment and can become of its kind.
The company alter its pricing strategies in the countries where customers are high price
sensitive. For examples, consumers in south eastern countries are highly sensitive to changes in
prices of products. They easily switch if McDonald's increases their prices or if its competitor is
providing the products at low cost.
For building a competitive edge, it has to make its operations more technology driven.
Taking order through devices, an integrated information system, a highly personalised billing
system, highly furnished kitchen equipment’s would result in increase in productivity of
company as the operational cost gets reduced. Using more digital media, Facebook, Instagram
etc. for promoting its products, making its website more user friendly for providing more
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satisfactory services to customers. For instance, Burger king has not optimally explored the
strength of AI which is advantageous for McDonald's. By exploiting this source of providing
excellent customer support services, it would help it in developing a competitive edge in terms
of marketing strategies.
8. Preparing and evaluating a marketing plan for McDonald's
The marketing plan for the McDonald's is prepared below:
Executive Summary
The marketing plan is prepared for the business objective of increasing 10% sales
globally of McDonald's, a fast food chain. The plan will include a marketing plan of increasing
sales by introducing high nutritious hamburgers and protein shakes. It will highlight the situation
analysis that is its market scanning would be done, its internal strengths and weaknesses will be
assessed. Lastly, the strategies will be developed for achieving the above mentioned aims and
objectives along with methods of monitoring and measuring the performance of the plan.
Mission: “To be customer's favourite place and way to eat and drink”.
Vision: “ To become even better McDonald's by serving more customer, delicious food
each day around the world.
Aim
Aim: “To increase the sales by 10% globally with the introduction of nutritious
hamburgers and protein shakes. A study on McDonald's”
Marketing objectives
Marketing Objectives:
 To increase the market share by 5 % in six months.
 Increasing customer base by 2 % in six months. To venture into different segment of market.
Analysis of External and Internal factors
An assessment of market condition is to be conducted analysing factors that could affect
the business of McDonald's.
PESTLE analysis is the scanning of macro environmental factors that have the potential
of affecting the operations of organisation. It has following components:
Political: Being global fast food chain, McDonald's business gets affected by political
conditions of different countries. Stability of political conditions, corruption level at bureaucratic
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