Analysis of McDonald's Marketing Strategy Using Marketing Principles

This report analyzes McDonald's marketing strategies through the lens of established marketing principles. It covers key elements such as the marketing process, costs and benefits of market orientation, and the impact of micro and macro environmental factors on marketing decisions. The report also examines segmentation criteria for different markets, targeting strategies with a focus on the Chicken Maharaja Mac, and the impact of buying behavior on marketing activities. Furthermore, it explores product development, distribution, pricing, and promotional activities, culminating in a discussion of marketing plans for different segments and the differences between service and international marketing. This analysis provides a comprehensive understanding of how McDonald's applies marketing principles to achieve its business objectives.

Marketing Principles

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Various element involved in marketing process...................................................................1
1.2 Costs and benefits of marketing orientation of McDonald's.................................................2
TASK 2............................................................................................................................................2
2.1 Micro and Macro factors which affects marketing decisions...............................................2
2.2 Segmentation criteria for different markets..........................................................................3
2.3 Targeting strategy for Chicken Maharaja Mac.....................................................................4
2.4 Impact of buying behaviour on marketing activities in different buying situations.............4
2.5 New positioning for Chicken Maharaja Mac........................................................................5
TASK 3............................................................................................................................................6
3.1 Ways to develop product to sustain competitive advantage.................................................6
3.2 Distribution to provide customers convenience....................................................................6
3.3 Pricing for reflecting the organizational objectives..............................................................7
3.4 Promotional activity in achieving marketing objectives.......................................................8
3.5 Additional element of marketing mix...................................................................................8
TASK 4............................................................................................................................................9
4.1 Marketing plan for two different segmentation....................................................................9
4.2 Difference between service product and service product......................................................9
4.3 Difference between international marketing and domestic marketing................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Marketing principles can be defined as a range of processes through which firms get to
know the needs and wants of customers. Accordingly, organizations provide services or products
with the help of which they satisfy their customers. Main aim of organization is to gain
maximum profit and for this aspect, marketing principles are very helpful in providing their
customers with the better products or services which attract more and more customers (Yeu. and
et.al., 2012). The present report is about McDonald's which is one of the fastest growing Firms
as it is mostly focused on understanding their customers and accordingly, it provides products
which would satisfy them. It has covered almost all the region in all around the world. In this
context, it has 36000 outlets at the global level.
Main aim of this report is to understand skills which are related with the fundamental principles
and concepts that underpin the marketing process. In this context, different processes and
concepts used in marketing will be covered in this report. Further, it also covers the use of
different marketing mix at different contexts. Lastly, it also includes the concept behind
targeting, positioning and segmentation.
TASK 1
1.1 Various element involved in marketing process
Marketing can be determined as a process through which organizations convey
information to the customers regarding their product and services. It is very helpful for the firm
as it increases the level of sales and revenue (Jeon and et.al., 2015). In this context, there are
mainly four elements involved in it which are product, price, place and promotion. For a firm, it
is very important to know these four elements so that they could deliver their products or
services effectively. Following are the different types of elements which are involved in
marketing processes:
Marketing mix: There are mainly seven elements involved in marketing mix. All the seven
elements are very essential for understanding the demand and accordingly, providing products
and services to the customers which would satisfy them. In this context, McDonald's should be
careful in setting their marketing mix so that they could understand their customers effectively.
Segmentation: It determines target audience to whom firm wants to deliver product or services.
In accordance with the case, it is very important for McDonald's to determine their target
1

audience as it would provide proper direction through which they would be able to attract
targeted audience (Osman,, Johns and Lugosi, 2014).
Analysis of environment: In order to analysis business environment, there are many tools which
are involved and these tools are very helpful for the organization to know drawbacks or areas in
which they lack. McDonald's can use tools like SWOT, PESTLE, Porters five forces, etc.
1.2 Costs and benefits of marketing orientation of McDonald's
Market orientation plays a vital role for the organization. It is a type of model which
helps organization to deliver products or services according to the needs and requirements of
customers. Following are the benefits and costs of market orientation to McDonald's:
Benefit: Marketing orientation has helped McDonald's in many ways like it has helped in
understanding the need and wants of customers (Paul and Roy, 2014). Most importantly, it helps
in making able to satisfy customers and as a result, there are many loyal customers for
McDonald's. Company frequently takes feedbacks so as to understand the requirement of
customers and focus on resolving all the drawbacks. It has helped firm in increasing its sales and
revenues along with developing goodwill.
Cost: In order to attract customers, company has made different target audience through which
they focus on providing different types of offers according to the segmentation. One of the
important strategies which is adapted by McDonald's is that, whenever they come up with new
product or innovation, they provide different discount offers. This is done just to know whether
the product would be accepted by customers or not (Bal and et.al., 2015). When customers get to
know and start accepting the new product, then it raises the price of products and services. In
order to convey their offers or new products effectively, they make use of different promotional
tools like internet, newspapers, television, radio, etc. so as to attract customers.
TASK 2
2.1 Micro and Macro factors which affects marketing decisions
Micro and macro environmental factors highly affect the marketing decisions. Micro
environment includes those factors which have direct impact over the organization. These factors
are necessary to be managed by the organization (Kulkarni, 2012). On the other hand, macro
environment includes factors which also affect organization but company can just take
2

appropriate steps to reduce its impact but cannot completely overcome it. Following are the
impact of micro environment factors in influencing marketing decisions:
Customers They are the ones who influence marketing
decision highly. Management cannot force
them to use the product delivered by the firm.
Marketing strategy plays an important role in
attracting and influencing customers to
purchase products (Kajanus and et.al., 2012).
Suppliers They make materials that are used in preparing
products of the firm. It is very important that
they make their materials available on time so
that McDonald's can deliver products to their
customers on time according to the demand. If,
suppliers do not make their materials available
to them on time then it would affect the
goodwill of organization.
Employees McDonald's has highly skilled and
knowledgeable employees who focus on
understanding the wants and requirements of
customers and provide them quality services.
Following are the macro environment factors:
Political factors
There are variations in tax rates and whenever,
government makes changes in their tax rates,
then it affects McDonald's.
Economic factors
In this, it influences firm through recession and
inflation rate. It affects the purchasing power
3

of customers (Crawford, 2015).
Social factors Needs and wants of the customers change
frequently and McDonald's should also make
change accordingly.
Technological
McDonald's should be able to make changes
according to the change in technology. They
should be able to adapt new or updated
technology according to the change.
2.2 Segmentation criteria for different markets
McDonald's provides variety of products to its customers and the requirements and needs
of the customers at different places differ from country to country. There are many countries in
which they developed products according to the tastes and eating habits of the customers at
particular market (Ayres and Ayres-Brown, 2014). For example in India when they introduced
McDonald's, it was not able to attract customers effectively as the product provided by
McDonald's was not effective enough. But when they got to know the tastes and preference of
the Indian customers, then developed products accordingly and it helped them to attract
customers. McPaneer Wrap, McAllo Tikki Burger, Chicken Maharaja Mac, etc. are products
delivered by McDonald's and are soled only in India. The cited firm is focusing on introducing
Chicken Maharaja Mac at UK. From its name it is clear that it includes chicken, vegetables and
most importantly it includes India masalas which makes it spicy combination. In order to
introduce it to UK market, managers of McDonald's would focus on psychographic and
demographical segmentation (Quek and Ling, 2013). For attracting customers of UK it would
sell the product at discount rate and when McDonald's would get to know the positive response,
then it would raise its price.
2.3 Targeting strategy for Chicken Maharaja Mac
After segmentation of market, McDonald's would focus on selecting appropriate
strategies through which they would be able to attract customers and in competing effectively to
their competitors. In this context, there are different types of targeting strategies which can be
adopted by McDonald's, few of targeting strategies are as follows:
4

Differentiated strategy: According to this strategy, firm would focus on different market at a
time. In this it has to know all the favourable factors which would help the product to attract
customers effectively (Puzakova, Kwak and Bell, 2015).
Undifferentiated strategy: According to this strategy organization would focus on only one
market. They would be able to focus on one market and it would be easy of the firm to know the
taste and preference easily.
Concentrated strategy: This strategy would be helpful for the organization to know advantages
of adopting the product in the cited market.
According to the above given strategies McDonald's should use undifferentiated strategy as
Chicken Maharaja Mac is totally new for the market and through this strategy they would be able
to know the impact or the likeliness towards the product. If the response of the product would be
positive, then they would be able expand their product to other market as well (Gerhardt, Hazen
and Lewis, 2014). In this context, they would be able to focus on particular target audience of the
market and can also make change in the product according to the preferences of the customers of
UK.
2.4 Impact of buying behaviour on marketing activities in different buying situations
Customers behaviour towards the product would be favourable if the firm uses
promotional tools effectively. Tools like television, internet, newspapers, etc. (Ghobadian and
O’Regan, 2014) should be made used. It should be used in such a way that it creates curiosity
among customers and to try it. It is very essential for the firm to understand customer’s tastes.
Word of mouth and advertisements play an important role in buying behaviour of customers. If
the taste and preference of the customers would be positive, then it would affect the buying
behaviour of customer's. They would tent to buy it and taste it at least once. Further, they should
provide their customers with additional services (Bernhardt and et.al., 2015). As Coco cola has
tie up with McDonald's, Coke should be provided with this product so that customers could be
attracted.
Further, McDonald's can use different pricing strategies through which they would be
able to attract more and more customers. In this context, they should keep the price of the
product low at the starting and when customers get positive response from the customers, then
they should increase the price.
5

2.5 New positioning for Chicken Maharaja Mac
Positioning is a process through which firm focus in developing a good image of the
product among the mind of customers. It is very essential for the organization to develop good
image among the mind of the customers. Through his they would be able to increases the sales
for Chicken Maharaja Mac. For positioning it is very important for the business to get positioned
then product should be positioned (Teeple, 2016). In the context of McDonald's, this firm has its
positioning done. In relation to this, they should focus to position their product at one direction.
As the product is new to UK market so they should not focus their positioning at different
direction. They should first try to get the response and if they get positive response, then they
should position it to other direction as well. There are many competitors for McDonald's who
also focus on positioning their product. McDonald's should try to develop different type of
positional strategies through which they would be able to compete effectively and could attract
more and more customers.
Advertisement is one of the best source through which they would be able to position their
product effectively (Lesser and et.al. 2013). Firm should thing of innovative through which they
would be able to increase the sales and could position the product effectively. In addition to this,
McDonald's can make use of social media with the help of which they would be able to convey
information effectively and efficiently.
TASK 3
3.1 Ways to develop product to sustain competitive advantage
In the modern world, competition is increasing rapidly. Firms adopt different types of
strategies in order to be better form their competitors. McDonald's can use different types of
strategies so as to sustain competitive advantage. Use of technology plays vital role in sustaining
competitive advantage (Chang, 2015). As use of improved technology helps in providing
customers better services. McDonald's can use following points to sustain competitive
advantage:
Gaining competitive advantage through cost: Providing the product to customers at low price is
the best way to attract customers. If the product is delivered to customers at a price which would
be less than its competitors, then it can sustain competitive advantage. In order to reduce the
price, firm should select suppliers who would provide their material at low cost. They should
6

also make use of new technology so that they would be able to spend less on developing the
product (Gerhardt and et.al., 2015). Through which way firm would be able to reduce the prices
and could sustain competitive advantage.
Gaining competitive advantage through product differentiation: As it was discussed able,
Chicken Maharaja Mac is only provided in India so it is a unique product, thus it would get
product differentiation. As the product is unique there are high chances of product to be accepted
by market of UK. They should closely observe the customer's behavior towards the product and
accordingly they should make changes so that this way they would be able to attract more and
more customers and in sustaining competitive advantage.
3.2 Distribution to provide customers convenience
For providing convenience to the customers it is very important for the firm to distribute
the product in such a way that they could make it available to customers easily. In this context,
they can deliver their product to all the outlet of London. As the product is new for the market
so it is type of risk which McDonald's is going to take (McDonald's, 2015). In respect to this,
organization should make available on in London region so that they get to know the response of
the customer in that particular region. When the response of the customers of London would be
positive, then they would be able to provide their product to other region of UK as well. There
are different types of distribution channel which could be used by McDonald's, which are as
follows:
Intensive distribution: According to this distribution, firm would make at all the outlets of the
country so that customers would get to know about the product and they could experience it
easily (Osman, Johns and Lugosi, 2014). This is type of risk which firm would take, as the
product is new to the market and there are chances of both acceptance and rejection of the
product.
Selective distribution: In this distribution strategy, firm would be selective and provide their
product to few outlets. Through this way they would get to know the response of the customers.
Among the two strategies, McDonald's should use selective distribution as providing the product
all the outlet would be a risk and there are chances that the firm may incur losses ( Paul and Roy,
2014). Thu, it should select selective distribution as through this they would get to know the
response of the customers and accordingly they would be able to provide their services.
7

3.3 Pricing for reflecting the organizational objectives
Pricing plays vital role in attracting customers. As customers prefer to get high quality
product or services at low prices. In accordance with the new product that is Chicken Maharaja
Mac should be sold at an affordable price as firm should get to know the impact over the product
(Bal and et.al., 2015). There are different types of pricing strategies which can be adopted by
McDonald's. Following are the few strategies for pricing which could be adopted by
McDonald's:
Skimming method: According to this strategy, firm would keep the price of the product high at
the initial stage.
Penetration pricing: In this pricing method, price of the new product is kept low at the initial
stage. This is the best strategy which could be adopted as the product is new and the demand for
the product is unknown and through this strategy at the initial stage they would be able to know
the demand of the product (Kulkarni, 2012). If the response of the customers would be positive
towards the product, then organization could increase the price.
Competitive pricing: According to this pricing strategy, the price of the product would be
determined according to the prices kept by competitors. It is very essential for the organization to
conduct market survey to know the pricing adopted by competitors and accordingly firm would
determine its price (Kajanus and et.al., 2012).
Among these pricing strategies McDonald's should select penetration pricing in which they
would keep the price of the product low at the initial stage and slowly it would increase the price.
This would be the best strategy for McDonald's which should be adopted.
3.4 Promotional activity in achieving marketing objectives
Promotional activities plays important role in attracting customers and convey
information regarding the product. There are many promotional tools which can be adopted by
McDonald's so as to attract customers (Quek and Ling, 2013). Following are the ways which can
be adopted by McDonald's:
Through television and newspapers: Both television and newspapers are the best source through
which McDonald's could promote Chicken Maharaja Mac in UK. As these are the most
commonly use tools and this is one of the easiest way through which promotion could be done.
Firm has to develop attractive tag line and attractive advertisement so that they would be able to
8

develop curiosity among customers and they could increase the sales (Puzakova, Kwak and Bell,
2015).
Through online promotion: In today's world, use if internet is growing rapidly. This is the
cheapest source through which firm can promote their product. In this context, there are many
social media in which they can provide their advertisement and attract customers. Social media
like Facebook, LinkedIn, Twitter, etc. are very effective social sites through which information
could be provided.
3.5 Additional element of marketing mix
Additional element of marketing mix is physical evidence, people and process. All three
are very important for the organization and they should take special focus on their areas as well.
Process: It is the process through which the product is delivered to the customers. The firm
should be very careful in selecting the suppliers and selecting the various sources through which
they would be able to deliver their product to their customers easily (Gerhardt, Hazen and Lewis,
2014).
People: This is related to the employees who provide product to their customers. In this context,
it is very essentials for McDonald have to understand their employees and accordingly they
should be provided with things which would satisfy them (Marketing Mix, 2013). In addition to
this, it is also important for the organization to provide them with training after monitoring each
employee and understanding the areas and accordingly they should be trained.
Physical evidence: According this, healthy and clean environment should be provided to the
customers so that they could attract customers effectively.
TASK 4
4.1 Marketing plan for two different segmentation
As it was discussed above, there would be two segments on the basis of which marketing
planning would be developed which are as follows:
Demographic segmentation: In this context, all the four element of marketing mix would be
taken into consideration which is as follows:
Product: In order to provide Chicken Maharaja Mac in UK, it is done only after conducting
research on the market and by understanding the needs and requirement of the customers.
9

Price: For pricing, penetration pricing strategy would be kept, that means the price at the initial
stage would be low (Bernhardt and et.al., 2015).
Place: The product would be distributed at outlets at London only, that is selective distribution
would be followed. This would help in knowing the demand of the product.
Promotion: for promoting the product, newspapers, television and internet would be used.
Psychographic Segmentation: Similarly marketing mix would be used, which are as follows:
Product: As the product is new to the market, the customers would prefer it.
Price: In this, the price would be kept same. It would not be changes.
Place: It would be distributed only at the outlets of London.
Promotion: Similarly like demographic segmentation advertisement would be done through
newspapers, television and internet.
4.2 Difference between product and service
Following are the difference between product and services:
Both are totally different form each other. When a product is sold to customer, then they could
actually see it, taste it and could know the presence. On the other hand, service can only be felt it
cannot be touched or cannot be seen.
McDonald's focus on providing developing relationship with the customers and for this they
focus on providing understanding their customers’ needs and wants and also provide them
services which would satisfy them (Lesser and et.al., 2013). Understanding customers’ needs
would be helpful in attracting customers and it would be helpful for the firm to grow.
4.3 Difference between international marketing and domestic marketing
Following are the difference between international and domestic marketing:
 Domestic marketing can be determined as the transfer of products and services to same
country. On the other hand, international marketing is transfer of products and services to
different countries.
 In order to transfer products and services to same country not documents are required in
domestic marketing but in international marketing documents are very essential for the
transfer of products and services to other countries (Chang, 2015).
 For paying the expense incurred in transfer of products and services are played through
direct cash, through cheques and through developing direct deposits. On the other hand in
10