Marketing Mix of Mcdonalds The marketing mix of a company consists of the various elements as follows which form the

core of a companys marketing system and hence helps to achieve marketing objectives. The Service marketing mix in the case of McDonalds is as below Product :- McDonalds places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers requirements change over time. In order to meet these changes, McDonalds has introduced new products and phased out old ones, and will continue to do so. Care is taken not to adversely affect the sales of one choice by introducing a new choice, which will cannibalise sales from the existing one (trade off). McDonalds knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their cycle. In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian. The happy meal for the children is a great seller among others. Price :- The customers perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item, it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity. In India McDonalds classifies its products into 2 categories namely the branded affordability (BA) and branded core value products (BCV). The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-3 This has been done to satisfy consumers which different price perceptions. Promotion :- The promotions aspect of the marketing mix covers all types of marketing communications One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item.

At McDonalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. Place :- Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. McDonalds outlets are very evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonalds products further convenient to the consumers. People :-The employees in Mc Donalds have a standard uniform and Mc Donalds specially focuses on friendly and prompt service to its customers from their employees. Process :-The food manufacturing process at Mc Donalds is completely transparent i.e. the whole process is visible to the customers. In fact, the fast food joint allows its customers to view and judge the hygienic standards at Mc Donalds by allowing them to enter the area where the process takes place. The customers are invited to check the ingredients used in food. Physical evidence :- McDonalds focuses on clean and hygienic interiors of is outlets and at the same time the interiors are attractive and the fast food joint maintains a proper decorum at its joints. We would be pleased if you can add your own points to the Marketing Mix of Mcdonalds. The article will be duly updated. Thank you.

Service Marketing Mix

The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail. Product The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogenous, perishable and cannot beowned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be. Place - Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Promotion Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously. Why is that? It is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions. Pricing Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies. Here on we start towards the extended service marketing mix. People People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service

marketing, people can make or break an organization. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services. Process Service process is the way in which a service is delivered to the end customer. Lets take the example of two very good companies Mcdonalds and Fedex. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer. Physical Evidence The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. Thats physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator. This is the service marketing mix (7p) which is also known as the extended marketing mix.

Marketing Mix Paper

McCarthy (1975) formulated the concept of the 4Ps - product, price, promotion, and place marketing mix. For many years these have been used as the principal foundation on which a marketing plan is based.

Pricing:

Determining the price for a product is a complex and inexact task, frequently involving trial-and-error decision-making. This process is often even more complex in international marketing.
Prices may be quoted in the companys currency or in the currency of the foreign buyer. Here we encounter problems of foreign exchange and conversion of currencies. As a general rule, a firm engaged in foreign trade whether it is exporting or importingprefers to have the price quoted in its own national currency. If the company deals in a foreign currency and that currency declines in value between the signing of a contract and the receipt of the foreign currency, the seller incurs a loss. Similarly, a buyer dealing in a foreign currency would lose money if the foreign currency increased in value before payments were made. The risks from fluctuations in foreign exchange are shifted to the other party in the transaction if a firm deals in its national currency.

Product
This mix defines the characteristics of product or service that meets the needs of customers.

Promotion

The goal of advertising is the same in any country, namely to communicate information and persuasive appeals effectively. For some products, the appeals are sufficiently universal and the markets are sufficiently homogeneous to permit the use of very similar advertising in several countries. It is only the media strategy and the details of a message that must be fine-tuned to each countrys cultural, economic, and political environment. However, care must be taken to recognize when differences in national identity and characteristics are sufficient to require specialized advertising in a particular country.

Place
The route of distribution or the distribution channels shall be well defined for getting the product or service to the customer. The strategy shall include location,

as it holds true for new products more so than any other type of product. The consumers have to be well familiarized with the product and the ways they can buy it.

4-Ps in McDonalds
Product One of the aims of McDonalds is to create a standardized set of items that taste the same whether in Singapore, Spain or South Africa. McDonalds learned that, although there are substantial cost savings through standardization, being able to adapt to an environment ensures success. Therefore the concept of think global, act local has been clearly adopted by McDonalds. Adaptation is required for many reasons including consumer tastes/preferences and laws/customs. There are many situations where McDonalds adapted the product because of religious laws and customs in a country. For example, in Israel, after initial protests, Big Macs are served without cheese in several outlets, thereby permitting the separation of meat and dairy products required of kosher restaurants. McDonalds restaurants in India serve Vegetable McNuggets and a mutton-based Maharaja Mac (Big Mac) (Web, 1). Such innovations are necessary in a country where Hindus do not eat beef and Muslims do not eat pork. There are also many examples of how McDonalds adapted the original menu to meet customer needs/wants in different countries. In tropical markets, guava juice was added to the McDonalds menu. In Germany, beer is sold as well as McCroissants. In Thailand, McDonalds introduced the Samurai Pork Burger with sweet sauce. These are all examples of how McDonalds has adapted its product offer in international environments.

Place McDonalds currently has over 30,000 restaurants in 119 countries across the world (Web, 2). McDonalds continues to focus on managing capital outlays more effectively through prudent and strategic expansion. In 1998, the company added 1,668 restaurants system-wide (whether operated by the company, franchisee or joint venture), compared with 2,110 in 1997 and 2,642 in 1996. McDonalds realizes the

potential for growth in international markets and plans to benefit from lessons that they learned in the USA.

Price McDonalds has realized that, despite the cost savings inherent in standardization, success can often be attributed to being able to adapt to a specific environment. This is indeed the case with its implementation of its pricing strategy, which is one of localization rather than globalization. McDonalds has had to come up with different pricing strategies for different countries. More importantly, rather than just having a different pricing policy for the Big Mac, McDonalds has had to select the right price for the right market.

Promotion Promotion, or the marketing communications mix, was seen by Kotler (1994) as consisting of five major tools: (1) Advertising; (2) Direct marketing; (3) Sales promotion; (4) Public relations and publicity; and (5) Personal selling. Using these tools, McDonalds looks to localize its marketing communications strategy as it needs to consider the enormous range of cultural and other differences that it would be faced with in each country (Web, 3). It needs to analyze consumers attitudes towards its product, usage patterns and ethnic, moral and religious considerations in that environment. Although the idea is to promote McDonalds as a global image, McDonalds focuses on the needs of the communities they are entering. In a communications context, the maxim brand globally, advertise locally (Sandler and Shani, 1991) is the McDonalds promotional strategy.

Conclusion After analyzing the marketing mix of McDonalds, it is clear that the company can be said to be `global, i.e. combining elements of globalization and internationalization. McDonalds have achieved this through applying the maxim, `think global, act local (Ohmae, 1999), to all the elements of the marketing mix.

References

McCarthy, J. (1975), Basic Marketing: A Management Approach, Irwin, Homewood, IL

Ohmae, K. (1999), Managing in a Borderless World, Harvard Business Review, May/June,

Sandler, D.M. and Shani, D. (1991), Brand Globally but Advertise Locally? An Empirical Investigation, International Marketing Review, Vol. 9 No. 4

Web, 1: McDonalds India http://www.mcdonalds.com/countries/india/index.html (August 30, 2003)

Web, 2: McDonalds USA http://www.mcdonalds.com/countries/usa/corporate/info/faq/index.html (August 30, 2003)

Web, 3: McDonalds Approach to Marketing http://www.bized.ac.uk/compfact/mcdonalds/mc29.htm (August 30, 2003)