Strategic Marketing Analysis: McDonald's - Coursework Report

This report provides a comprehensive analysis of McDonald's strategic marketing efforts. It begins with an introduction to strategic marketing and the chosen organization, McDonald's, followed by an examination of its internal and external environments, including market size, competitor analysis, and PESTLE factors. The report then delves into strategic marketing decision-making, exploring strategic goals, market opportunities through Ansoff's growth model, target audience analysis using the STP model, and campaign messaging. A strategic marketing plan is developed using the RACE model, and budget considerations are discussed. Finally, the report addresses key performance indicators (KPIs) and control mechanisms to measure the effectiveness of the marketing strategy, concluding with an assessment of McDonald's overall marketing approach.

Strategic Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Task 1.....................................................................................................................................1
Internal and external......................................................................................................1
environments of an organization..................................................................................1
Task 2.....................................................................................................................................3
Analysing strategic marketing......................................................................................3
decision making...........................................................................................................3
Task 3.....................................................................................................................................5
Developing a strategic marketing plan..........................................................................5
Task 4.....................................................................................................................................6
Control mechanisms to measure marketing strategy....................................................6
CONCLUSION................................................................................................................................7
References:.......................................................................................................................................9

INTRODUCTION
Strategic marketing is defined as the developing of marketing strategy in an organization
in terms of promotional activities, target marketing, analysis of external and internal business
environment and many more. This is done for the better operations in the company so that firm
could achieve the desired objectives of the company (Brooksbank, Subhan and Miller, 2018).
Organization chosen here is McDonald's, it is one of the leading international fast food company
founded in 1955 in US. It mainly offers the food items like burger, pizza, beverages, French fries
and many more. It has a concept of self service for the customers. The following discussions are
made on the analysing of internal and external environment of the company,interpreting the
decision making through strategic marketing, building up the marketing plan for the company,
measures to control the marketing strategy and finally the conclusion in context of McDonald's.
MAIN BODY
Task 1
Internal and external
environments of an organization
Market Size
All over the world, there is $245 billion market size of the fast food companies and the
market size of McDonald's is $8.253 billion of the total market size in the world of fast food
restaurants. It is situated in approximately 100 counties all over the world with more than 38,600
locations having 1.9 million workforce internationally. This shows that it has a wider market size
and share of the company established in many places leading the market with the loyal
customers. Moreover, reason behind such a great market size is that they are offering the vast
variety of products in standard prices which can be affordable by middle class and rich society as
well with a good physical infrastructure (Brown, Abduljabbar, Englund and Treen, 2018).
Competitors analysis
Competitor analysis of McDonald's is very tough because there is a strong competition in
a fast food industry among so many brands like Yum brand, Darden restaurants, Starbucks
restaurants. Fast food industry is considered as the most fast growing and competitive industry.
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There are many small and big outlets of restaurants all the world which provide similar food
items at similar prices. McDonald's has comparatively less earnings then Yum brand but more
than Darden restaurants and Starbucks. It is having tough competitors with good marketing and
promotional strategies but they are in advantage because it has brand image, reputation and
loyalty in the market. They have managed this analysis to grow their company in increasing their
sales and revenues.
External and internal factors affecting the organisation
External factors includes the PESTLE model analysis which contains six factors which
can impact the company's environment internally and externally. These factors includes political
factors which are unfavourable for McDonald's because there are strict regulations from the
government in terms of health and hygiene. Economic factors are favourable to the company
because it contributes to the country in increasing the gross domestic product and employment
rate. Social factors are unfavourable to the company because now a days people are more
preferring the healthy food instead of fast food as they are more conscious about their health.
Technological factors are favourable to the company because today's world is full on technical
advancements so updating technology can assist the firm in better operations. Legal factors are
unfavourable to the company because there are strict laws, regulations, rules and policies
associated with the legal factors for the company to operate independently in the market.
Environmental factors are favourable to the company because the firm is less affected by the
environmental issues and does not harm environment in any way. Therefore, analysis of the
factors states that there are three factors which are favourable and three factors are unfavourable,
so if company focuses more on favourable factors more than unfavourable one then it can
overcome the unfavourable ones as well (Chernev, 2018).
Customer analysis
McDonald's customers analysis includes the high bargaining power of the customers
because of high competition in the market and more of substitutes available. For example, if
customers didn't get any desired food item from McDonald's then they can easily switch to the
another brand present nearby. If they find high prices or low quality or quantity according to the
rates of the food items, then also they jump to the another fast food restaurant. Which is not
healthy for the McDonald's to grow. But marketing strategies and target market of the customers
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are good for the company, they earn more by targeting the youngsters and by performing better
promotions on social media via digital marketing (David, David and David, 2017).
Stakeholder analysis
McDonald's stakeholders analysis includes the low bargaining power of suppliers.
Because McDonald's is a brand and produce best quality food items with best quality of raw
materials that is why they are having the good customer loyalty with the brand. So they have
good relationship with their suppliers in terms of who is providing the raw materials or who are
working in the restaurant itself. Therefore, suppliers did not bargain must because they that if
they bargain then they can loose their dealership with McDonald's which they cannot afford to
loose with a such a good brand. This depicts that McDonald's has a good control over their
suppliers and external or internal stakeholders.
Task 2
Analysing strategic marketing
decision making
Strategic goal of the campaign
McDonald's goals and objectives includes they are aiming to increase their sales
generations 5% in next six months by using effective and efficient tools of promotions.
Moreover, they are also aiming to increase the profits and revenues of the company by 3%
within next five months by providing the customers a best quality products and services offered
by the company. Because of tough competition, firm is lacking in such services and products but
now it is offering different food items with offers and discounts and heavy meals to attract the
customers to fight with their competitors by applying various traditional and internet marketing
approaches in the market for better reach towards the customers (Gupta and Nair, 2020).
Market opportunity
Market opportunity can be analysed by applying the Ansoff's growth model which has
mainly four approaches. Market penetration states that the growing of a company in an existing
market with an existing product. Product development states that the growing the company with
new product in an existing market. Market development states that the growing of a company in
a new market with an existing product and diversification states that growing of a company in a
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new market with a new product. McDonald's has chosen the market penetration approach that is
existing product in an existing market with an increase in sales and revenue by updating and
adopting the various promotional tools which can attract the customers and gain attention by
them (Hollensen, 2019).
Target audience
Target audience can be analysed by STP model that is segmentation, targeting and
positioning. Segmentation states the analysis of all the markets which are available for the selling
and buying activities. Company features all the markets by analysing the merits and demerits of
it so it can target the most suitable one according to the company products and services. After
analysing the markets, it is important to target the most appropriate one that is the youngsters and
lifestyle people for the McDonald's. Positioning is a third stage where products are placed in an
attractive manner so that it can be eye catching to the customers. It can be placed either in the
McDonald's restaurants physically and virtually on the internet on many food sites like on social
media, Zomato, Swiggy and many more. Moreover, firm can offer parties and business dealings
opportunities as well so that they can target more customers to visit their restaurant. These
promotional campaign can help the firm in gaining more customer loyalty towards the company
(Hunt, 2017).
General campaign messaging
It is defined as the message to a customers which is conveyed through advertising
content. This message must hit the customers emotionally as well as which they can relate the
content with their life so that they can be attached with the brand. For example, recently,
McDonald's has applied the marketing strategy on international women's day. They have
inverted it's McDonald's initial letter M as W to depict the encouragement of empowerment in
women which is in trend now a days. People gets emotionally attached with this content and tries
to visit the restaurant for further research that exactly what a company is conveying to the
market. These types of contents help the firm in gaining the people attached with the firm and
convince them to visit the restaurant thereby increasing the sales and revenue of the company
(Liebl, 2018).
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Task 3
Developing a strategic marketing plan
RACE model
It is model used for marketing planning for a company to grow it's sales and revenues. It
stands for reach, act, convert and engage. These are stages of marketing plan. Reach states the
exploration of the market which includes awareness of current trends and prices of the food
items, it is generally done through digital marketing which includes the search engine
optimization, pay per click, partner marketing, online advertising, online public relations and
social media marketing. Act states decision making in terms of which customers are required to
be interacted and where to generate the leads for the products. Convert states the convincing to
the customers to make purchases from their restaurant which simply means the converting those
leads into sales and profits for the company. Act and convert are generally done through the
conversion of rate optimization, management in E commerce, techniques in lead generations,
optimization of home, optimization of land page and using multivariate testing. Engage states
advocacy from the customers which means that creating the long term relationships with them so
that the firm can gain the brand loyalty, it is generally done through content marketing,
promotional emails and electronic newsletters, Strategy of E contacting, customer servicing,
mobile marketing and customer relationship management (Sahaf, 2019).
Budget
Budgeting function is mainly performed by the finance department because they are all
having the information about the company's funds, profits and expenses. But if marketing team
needs to set the budget of the new strategy of marketing then they are required to adopt the cost
leadership style from the model Porter's generic strategy. It states that the company can either
increase the profits by reducing the cost of production or lowering the prices to increase the
market share of the company. This can balance the budget of the firm by simply adopting such
strategies. Lowering the cost of production and increasing the prices can increase the profit
margin of the company which can cover the target of sales and revenue generations by 5% and
3% as stated in the goals and objectives of the firm (Sharp, 2017).
KPI
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Key performance indicators are defined as the sign of of good or poor performances of
the company which indicates the level or standard of the firm and it's strengths and weaknesses.
It can be better attained by using SMAT goals strategies which states that how the objectives are
specific, it can be measurable or not, is it that much relevant and it must be in a particular time
frame. KPI are majorly measured by analysing the company's products are either defective or
perfect, profit making percentage of the company, cost of goods sold, how much the customer is
satisfied and satisfaction of employees as well. In context of McDonald's, as per recent statistics
and data, profits of McDonald's is $5.9 billion per fiscal year, cost of goods sold is 9,961,
satisfaction level of customer is good and satisfaction level of employees are great because they
are given the proper training and development so that they can achieve their personal as well as
professional goals.
Task 4
Control mechanisms to measure marketing strategy
Return on investment
This is one of the measure through which the success of marketing strategy is analysed. It
is important to make such records that which marketing strategy is providing how much return
on investment to the firm (Varadarajan, 2018).
Sales number
This is another criteria to measure the marketing strategy succession that which
marketing strategy is providing how many number of sales to the firm. This calculates the
amount of profit as well so that company would be able to know it's strengths.
Customer feedback
This is one of the important criteria to measure because customer feedback either positive
or negative means a lot to the company because it helps to analyse the firm the scope of
improvement and where it is lacking in it's services.
Market expansion
It is also the criteria to measure the marketing strategy performance where company can
analyse that how much it can expand more with the new target customers so that it can be
expanded to the wider people.
Sales people feedback
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It is one of the essential criteria to measure the marketing strategy of the company
because sales people are in direct contact with the customers so they get the direct feedback
about the product and services of the company, then the same feedback is given to the company
that is why feedback by sales people are important in measurement of marketing strategy.
Competitors actions
It is necessary to analyse the competitors actions so they company can be able to know
their power or weaknesses so that they can improve accordingly to the competitors actions.
Competitive analysis is important in every aspect for the firm.
Annual plan
Developing an annual plan helps the firm in measuring the marketing strategy because it
consist all the statements about profits, losses, expenses, bad debts and all those things which are
necessary to look out for the company to measure it's marketing strategy.
Brand goodwill
It is considered as the significant criteria for the measurement of marketing strategies of
the firm. Calculation of goodwill can easily help the company in adopting it's new marketing
strategies or to continue the older one as per the most suitable concept for the firm (Varadarajan,
2019).
Recommendations
Annual plan can be the most effective methods to measure the efficiency of marketing
strategies of the company. Because it states all the financial records for the firm which clarifies
the fund and cash flow statement in the company, due to such criteria, overall analysis can be
done for an organizational marketing strategies.
CONCLUSION
It is concluded that strategic marketing is very important for a business to adopt such
function in an organization. Because it helps the business in improving it's operations and
smooth functioning of it. It assist the company in forecasting and examining the market trends of
a particular industry and competition analysis which supports the firm in generation of more
sales and revenues. This report covers the business environmental factors which includes the
market size, competitor analysis, PESTLE analysis, customer analysis and stakeholder analysis.
Observing the decision making strategy of marketing which includes the strategic goals and
objectives, market opportunity, target audiences and campaign messaging to the customers.
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Developing a marketing plan which includes the RACE model, budgeting and key performance
indicators. Last is the control measure in marketing strategy which includes recommendations in
appropriate control mechanisms to measure and monitor the implemented marketing strategy.
Therefore, market analysis is an essential tool to apply in any business for better operations, sales
and revenue generations.
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References:
Books and Journals
Brooksbank, R., Subhan, Z. and Miller, S., 2018. What differentiates successful strategic
marketing among manufacturers in an emerging vs developed market?. Asia Pacific
Journal of Marketing and Logistics.
Brown, T., Abduljabbar, M., Englund, S. and Treen, E., 2018. Twenty-five years and counting:
an analysis of the Journal of Strategic Marketing. Journal of Strategic Marketing. 26(2).
pp.125-139.
Chernev, A., 2018. Strategic marketing management. Cerebellum Press.
David, M.E., David, F.R. and David, F.R., 2017. The quantitative strategic planning matrix: a
new marketing tool. Journal of strategic Marketing. 25(4). pp.342-352.
Gupta, C.B. and Nair, R., 2020. Marketing Management, CB Gupta & N. Rajan Nair. Sultan
Chand & Sons.
Hollensen, S., 2019. Marketing management: A relationship approach. Pearson Education.
Hunt, S.D., 2017. Strategic marketing, sustainability, the triple bottom line, and resource-
advantage (RA) theory: Securing the foundations of strategic marketing theory and
research. AMS Review. 7(1-2). pp.52-66.
Liebl, F., 2018. What Is Strategic Marketing in an Innovation Society?. In Innovation Society
Today (pp. 165-181). Springer VS, Wiesbaden.
Sahaf, M.A., 2019. Strategic marketing: making decisions for strategic advantage. PHI Learning
Pvt. Ltd..
Sharp, B., 2017. Marketing: theory, evidence, practice. Oxford University Press,.
Varadarajan, R., 2018. Advances in strategic marketing and the advancement of the marketing
discipline: The promise of theory. Journal of Marketing Management. 34(1-2). pp.71-
85.
Varadarajan, R., 2019. Theoretical underpinnings of research in strategic marketing: a
commentary. Journal of the Academy of Marketing Science. 47(1). pp.30-36.
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