McDonalds

Principles of
Marketing

Name
Contents
Introduction......................................................................................................................................2
TASK 1............................................................................................................................................2
1.1. The Elements of the Marketing Process of McDonalds..........................................................2
1.2. The Benefits and Costs of a Marketing Orientation in McDonalds........................................5
TASK 2............................................................................................................................................6
2.1 McDonaldss Macro and Micro Environment Factors..............................................................6
2.2. Segmentation for a Products of McDonalds in a New Market................................................8
2.3 Targeting Strategy for Veg McMuffin burger of McDonalds...............................................9
2.4. The Way Buyer Behaviors Affects Marketing Activities in Different Buying Situations......10
2.5 New Positioning for Veg McMuffin Burger of McDonalds................................................11
TASK 3..........................................................................................................................................12
3.1 The Way McDonalds Products are developed to Sustain Competitive Advantage................12
3.2 Distribution strategy used by McDonald has to provide customer convenience and
satisfaction.....................................................................................................................................12
3.3 The Way Prices are set to Reflect McDonalds Objectives and Market Conditions................13
3.4 Promotional Activity Used by McDonalds is integrated to Achieve Marketing Objectives. .14
3.5 The Additional Elements of the Extended Marketing Mix for McDonalds...........................15
TASK 4..........................................................................................................................................15
4.1 Plan Marketing Mixes for Two Different Segments in Consumer Markets with Reference to
McDonalds....................................................................................................................................15
4.2 Differences in Marketing Products and Services to Businesses Rather Than Consumers......16
4.3 How and Why International Marketing Differs From Domestic Marketing in Reference to
McDonalds....................................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................17

1
Introduction

McDonalds is the best-known and largest fast food brand in the world. The company serves 69
million customers every day by 2015 it operated 36,258 locations in 119 countries and claimed
and it has been incredibly successful. McDonalds business model is a modest one. The company
offers quality food, fast service and consistent dining experience in its area. They are owned by
an entrepreneur that purchases the right to use McDonalds brand and sell its products because
nearby 80% of the restaurants are franchised. Franchise owners more over advantage access to
McDonalds system of selling food and cooking and its marketing resources and extensive
advertising.

Firstly, the report presented cost of a Marketing orientation of McDonalds and both benefits and
the elements of the marketing process of McDonalds. Secondly, McDonalds microenvironment
and macro factors, division of Veg McMuffin burger, positioning strategy and targeting
strategy. Thirdly, the way McDonalds products are developed to distribution strategy, sustain
competitive advantage, promotional activity and prices setting and additional elements of the
extended marketing mix for McDonalds. Lastly, the international marketing differs from
domestic marketing in reference to McDonalds. And Marketing mixes for two different
fragments, differences customers products and businesses and in details.

TASK 1

Marketing is an executive method in responsibility to pick out, to assume and fulfill the
customers by retaining business income. On the hand, marketing is search of for brand spanking
new prospect as a way to enchain organizations profit and all about realize the customers of
company deeply, fulfill them with the services or products they want and hold accurate
connection to maintain them for long term.

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A. Elements of marketing process of McDonalds contain the following:
I. Analysis of Environment and Market: McDonalds, they follow strategic method for
sample, Value-Chain, Analysis of SWOT, Porters Five Forces and others to behavior its
environment assessment and marketplace.

II. Figuring out marketing target: McDonalds target particular phase of the whole
population and McDonalds has commercial enterprise in all over the world. The
demography of the sections are age, earning, life cycles, generation, gender, family,
nationality and etc.

III. Setting the objective of marketing: McDonalds marketing goals has two stages. Short
term marketing goals of McDonalds is growing its profit. McDonalds long-time period
marketing goals consist of developing or developing emblem price for survival and better
market percent that allows you to maximize the business corporations earnings.
McDonalds company strategies are consisted of seven specific factors. This could be as
follows: a) Accomplishment higher marketplace ratio. b) Growth McDonaldss value of
emblem. c) Issuer in cutting-edge market and build greater retail outlet d) using online of
offline channels prosperous its presence in worldwide marketplace. e) To be more
diverse. f) To generate greater charge by means of teamwork. g) To be additional social
liable company. (Aboutmcdonalds, 2015)

IV. Dealing with element of the marketing mix. Every other important method of
McDonalds is managing marketing mix factors, as marketing with distinctly focused on
wishes, and wishes and one-of-a-kind core and precise increases of purpose market.

V. Reflection, revision and control. McDonalds marketing control use mirrored image,
revision and manipulate components interrupted manner and to evaluate the ranges of
strategies of marketing usefulness and discover capability improvement.

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B. SWOT Analysis of McDonalds

Opportunities, Strengths, Threats and Weaknesses standpoints for SWOT acronym. Below is the
chart of McDonalds SWOT evaluation:

Figure: SWOT analysis of MacDonalds

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Marketing orientation meets the desire and gives attention and expectation of businesses
purchaser via operations product mix. Marketing orientation is reverse of marketing techniques
and advertising which to fulfill the customers demand thru tailoring product. Marketing
orientation and advertising is in essence, a marketing campaign and advertising coordinated
between corporation and its clients. McDonalds operates in around a hundred and twenty
worldwide locations and higher than 36,050 places and it dominant fast-meals emblem.
Although, McDonalds advertising orientation fees may be drastically excessive on the other
hand marketing orientation and advertising contribution or benefits of McDonalds to its main
goals making income is also appreciably excessive as appropriately.

I. Create better customers satisfaction.

II. Increase McDonaldss sales ratio and rate of target market widely.

III. Maximizing the income of McDonalds

IV. Modest gain in McDonalds has direct and robust and reference to marketing and
marketing placement.

V. Growth brand rate of McDonalds

VI. Create additional marketplace location responsiveness for McDonalds

McDonalds Cost of Marketing Orientation

I. More staffs schooling and development is needed

II. Fresh technical obligation for extra purchaser association.

III. Creating different methods of developing Industrial Corporation of McDonalds

IV. Advance marketing verbal exchange channels is essential.

V. A powerful orientation of marketing of McDonalds needs immoderate charge.

VI. Further significant and expensive research is needed in McDonalds (Jurevicius, 2015).

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A marketing orientation fulfillment relies upon on dynamic corporation factors effect along with
a limited developing enterprise that has better opposition might not create more rate or go back
of investment in market orientation can be much less. Further, useless facts tools and generation
can preclude in getting beneficial market intelligence to affect the costly selections of the
business.

TASK 2

Environmental factors have an effect on the McDonaldss marketing decision in straightly and
indirectly. Environmental scanning machine might be effective to select out the Macro-
environmental factors of McDonalds that consists of along with socio-subculture, monetary,
demographic, and technological and jail or political elements (Churchill & Iacobucci, 2010).

Figure: McDonaldss Micro and Macro environment factors (Armstrong et al. 2000).

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McDonalds marketing decisions are affected by a set of environmental factors in both directly
and indirectly. Macro-environment factors which affect McDonalds marketing decision is
possible to identified by environmental scanning process and that process include economic,
demographic, socio-culture, legal or political and technological (Armstrong et al. 2000).

McDonalds Macro Environment Factors

Economic Factors Economical factor of McDonalds is a more interesting that at once have an
effect on the advantage price, , demand, most importantly commercial enterprise corporation
income and charges of products.

Demographic Factors together with gender, own family, age, and population degrees have an
impact on the alternatives of advertising and marketing of McDonaldss (Cravens & Piercy,
2008).

Technological Factors -McDonalds has the brand different prospect with the advance in
technology for example home delivery, self-issuer checkpoint, online purchasing.

Legislative Factors - McDonalds commercial organization performing has directly had an

impact on government regulation and polices of working countries.

Environmental Factors McDonalds should embody actions that create more cost for the society
and those and to go out to be greater surroundings excellent enterprise, the stress for McDonalds
is elevating presently.

Social Factors - Modifications in social inclinations moreover have an impact on the

McDonalds such boom in mobile era, health attention and plenty of others (Churchill &
Iacobucci, 2010).

Political Factors- McDonald has big worldwide marketplace of its industrial corporation. This is
the cause to have an influence on by means of by means of worldwide political factors.
McDonalds overall performance influencing these factors includes; political stability, tax price,
lots of others and criminal recommendations.

Microenvironment factors of McDonalds

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Micro environment factors are close to a business. It has a direct impact on its business success
and operations and should carry out a full analysis of their micro environment before deciding
McDonalds corporate strategy businesses.

Fast food chain Commercial Corporation is widely enthused it means of the micro-environment
elements that can be related to competition within the marketplace that detail includes the every
internal and external shareholders of the McDonalds. Such examples are clients and to
commercial enterprise employer consumers belief, Vendors (buyers, farmers, eating-places,
monetary intermediaries etc) and intermediaries have an impact at the McDonalds marketing
choosing.

All services or products offered via McDonalds to the purchasers will not be interesting to all as
there may be a versions within the taste of people which lead an employer to segment and goal
the market (Kotler, 2013). McDonalds can practice subsequent criteria in segmenting the
market.

8
Figure: McDonaldss proposed bases of market segmentation

However, McDonalds want to create positive the future marketplace part should be substantial,
possible, measurable, distinguishable and available.

Market target is a set process of that includes selecting potential customers to whom the
company will sell their product or service. Targeting strategy includes segment market, choose
perfect segment for the company and determine the service for each segment that will they serve.
Selecting a targeting strategy in McDonalds involves process of company resources, variability
of the products, products life-cycle, and variability of market and marketing strategies of the
competitors.

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To the prospect consumer who will purchase the goods of the organization the targeted on
approach is used. Target strategy method consists of locate ideal phase, section market and
determine the products for the specific segment.

Selecting a targeting strategy

In McDonalds consists of technique of resources of the commercial enterprise organisation,

products variability, lifestyles cycle and opposition techniques and so on.

Figure: (Mangold & Faulds, 2009)

McDonaldss Veg McMuffin product strategy of target is probably psychographic

segmentation and differentiated and undifferentiated advertising strategies (Mcdonaldsindia,
2015). The goods is made based very completely the taste and cultural choices of India. In which
because of spiritual ideals red meat, red meat burger is not eaten. However, the phase includes
younger and person, each gender, personnel, specialists and students of India. The profits of
employer of the target marketplace could be top, top-middle and middle class employer of the
India.

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Maximum extensively used client behaviors are; complex buying behaviors, habitual buying
behaviors, variety seeking buying behaviors. The shopping behaviors can be consult with
recognize of organization, individuals and businesses and way to select out, offerings and
comfortable, expertise and mind divulge to satisfy the customers by meeting their goals. In
America, UK and Europe individual, many people take burger for lunch that constitute routine
shopping for behaviors and marketer need to remember the fact that scenario. Marketer ought to
consider complicated buying behaviors situation in India in which humans notion community
fast meals store will be more appropriate and further they incorporate others in times of putting
out in a remote places rapid meals chain. Variety seeking behaviors need to remember in frozen
dessert, breakfast cereals.
Supply and Demand- The availability or amount of supply vs availability or amount demand of a
particular product derives the marketing an organizations. This demand and supply situation
can affect the marketing types McDonalds is currently using for its products. The situations
include; demand is higher and supply is supply and lower supply and lower demand and so on.

Routine Behavior- is the type of responses of buying that customer may be to a particular
products or service. These products types are not typically expansive for example a product or
service that bought on every week.

Internal Factors - a few internal factors such as personal, social and psychological can affect
the McDonalds marketing decisions.

McDonalds has the rapid implications on its marketing practices in the complex variety of
buying situations.

Positioning offers with marketing combination significantly in terms of attracting intention

market effectively. McDonalds commonly use positioning method together with fee positioning,

11
experiential positioning, beneficial positioning, purchaser positioning, competitor positioning,
product elegance positioning, symbolic positioning and so forth.

Figure: Price Positioning

Price positioning can be for McDonalds Veg McMuffin Burger product. McDonalds can use
price positioning and competition positioning as there are numerous different competition who
promote vegetable burger in Indian marketplace. To appeal unique clients who need extra rate
advantage product in comparison to exceptional logo with excessive fantastic.

TASK 3

To obtain sustainable competitive advantage McDonalds has applied different types of

techniques that can ensure their sustainability in market. McDonalds is a worldwide restaurant
company that supply healthy food to their customers. McDonalds tries to listen to its customers
to build brand. Bu building brand in the market, it tries to hold the competitive advantage

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among the competitors. It also uses advertising and promotion strategy. McDona1d's has its
familiar logo - the Golden Arches that is known to all. McDonalds provide better services than
other competitors (Yoo et al. 2000).
The other key strategy to achieve sustainable competitive advantage is product development that
is used by McDonalds. McDonalds is updating their product day by day. When they supply
product, they think to satisfy their customer. As customer is the main target of a company, so
McDonalds try to reach to the customer. McDonalds follow the following product development
strategy:
1 Ideas generate
2 Screening out the idea
3 Development and testing of concept
4 Technical implementation
5 Commercialization
6 Product pricing

Customer convenience means what the customers want from a business organization. By
providing a good service, McDonalds can satisfy their customers. Customer satisfaction is the
main service of a business organization. McDonalds achieve customer convenience and
satisfaction by following distribution strategy:

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McDonalds offer foods for example chicken, burger, beef etc. and they have many retailer and
suppliers etc. McDonalds uses two types of distribution strategy and sells their own product.
Firstly, McDonalds produce goods and directly sell to their customer. Then they supplies
product as a wholesaler (Wenderoth, 2009). McDonalds collect their raw materials from their
supplier and also provide franchising to supply and distribute their product to worldwide.

There are various kinds of pricing policies like focused based pricing, penetration pricing,
discount pricing, price skimming and product life cycle pricing etc.
Penetration pricing: Setting lower the price than competitors is called penetration pricing and it
is too helpful to attract the customers. The clients will be fascinated easily to buy McDonalds
products, if McDonalds can set low price.
Price skimming: Price skimming means tend to keep price high than any other business
company. The customer will switch to another company, if McDonalds makes high price.
McDonalds will make a great loss.
Premium pricing: To provide quality products with higher price than the competitors means
premium-pricing. It is good for fresh organization in the market. McDonalds has no need to
follow premium pricing as it is an established business organization.
Economy pricing: Economy pricing means the quality of the products and services are low;
prices are kept low too that is also called minimum pricing (V. Kumar, 2012).

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A good pricing have to follow the companys conditions and strategy of the market. They ought
to also include; current reseller relationships, market demand, economic nature and companies
strategies and portfolio mix of the product.
Characteristically McDonalds set its product price by following common strategic objectives;

A. Maximizing the Profits of McDonalds Although it may have negative impact on

McDonalds customers connotations but profits creates new market entrance for
McDonalds . Profit helps McDonalds differentiate its product for the other competitors.

B. Meeting the target of Return on investment (on net sales)

C. Achieving the target level sales volume

D. Maintaining or Enhancing the Market Share

E. Meeting or Preventing Competition- McDonalds set its product price that best suit with
other competitors standards.

McDonalds frequently used pricing strategies are; focused based pricing, penetration pricing,
price skimming, discount pricing and product life cycle pricing

Promotion is the most important element of marketing mix and a lot of promotional activities we
have for example, public relations, personal selling, sales promotion and advertising. By
integrating its promotional activities marketing department wants to achieve its marketing
objective. Repetition, coordinating, reach and consistency are some other promotional strategies.
Marketing organizations spends huge amount of money in advertising to reach its messages to
customers. Television, radio, websites, magazines, city transports, social media newspaper etc.
are some common mediums of advertising (Schaeffer, 2008). Personal selling is another
effective promotional activity and individual gathering such as correspondence, telemarketing

15
and message are some common form of personal selling. McDonalds offer some promotions
such as McDonalds bonus machine, McDonalds card, double triple points weekends and other
deals and occasionally organizations offer different sales promotions to customers.
To communicate service or product with the target customers promotional activity is used. To
achieve marketing objectives McDonalds integrated promotional activity;

Advertising- Advertising is a paid promotional form globally. McDonalds uses advertising to

communicate the benefits of the product to many potential prospects or consumer. McDonalds
advertising development follow Five Ms decisions that includes; Message, Mission,
Measurement, Money and Maida.

Sales Promotion- Sales promotion is to increase an organization sale in short period and it is one
of the best tools. McDonalds try to increase sales through offering free product samples,
coupons, allowance, trail, certain percentage price off for the sellers.

Personal selling - Selling a product service by selling agents.

Direct Mail - The organizations different stakeholders get direct E-mail from McDonalds.

Public Relationships -Public relationship techniques are to connect with its various stakeholders
for example, support publicity of the products, maintain corporate images, activities and press
release and manage legal issues. McDonalds use public relationship techniques too.
Personal Selling and Direct marketing - McDonalds practice telemarketing, F2F selling,
personal selling promotion tools etc.

McDonalds develops its marketing policy by not only advertising but also its goods quality. By
advertising a McDonalds spread out its popularity but reputation depends on its goods quality.
McDonalds have to ensure the quality to the customers by the way businesses become in strong
position.

The additional elements of marketing mix are people, physical evidence and process etc.

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People: People are the most important elements for all business. No business organization can
run successfully without managing skilled staff. On the hand, McDonalds has expert staff to run
its business effectively.Human Resource department of McDonalds privides different coaching,
mentoring to increase the skills, knowledge, efficency and training of the staffs (Paul, 2008)
Physical evidence: Physical evidence is related infrastructures, facilities, service deliver etc.
Service and product would be delivered in easy and friendly. Nice, tidy, healthy and safe physical
appearances are acceptable to all products.
Process: Process includes service delivery, service consumption, offerings etc. and it is on more
important element of marketing mix. Marketing process should be reliable and easy to all
employees and customers and it should be effective to reach the target customers.

TASK 4

Price, product, place, promotion are the four elements of marketing mix and the extended
marketing mix include three others elements such as people, physical evidence and process.
McDonalds run their business all over the world. There are some different products between
Islamic and Hindu countries because of culture. Prices can be different country to country and
marketing activities (Michael Czinkota, 2012). Service and product of McDonalds can be
different with geographical location. On the hand, the physical evidences and marketing process
are same in all countries but employees and people are not same for all countries. Old and child
product are different and prices are different for those products. Different countries the world
McDonalds has different service and products.

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Business marketer need depth understanding on consumers requirement, these marketers are
global in nature as in various country acceptability of product depends only technical govern.
There are significant in the marketing products and services to Businesses and Consumers
market. These are;

Figure: Consumer market VS Business market (Kumar, 2012).

KFC, Pizza Hut etc. are the different types of Food Company like McDonalds in the world.
They serve various types of product for different countries customers to fulfill their demand.
Also product variation depends on market demand such as Pizza hut sells for their customer in
the market and McDonalds sells mutton, burger, beef etc. Various organizations like
McDonalds and KFCs use different types of promotional activities and promotional activities
are different. On the hand, various organization uses same process of targeting markets and
customers (McDougall & others, 2003). Price can be different from company to company like
KFCs price is normally higher than McDonalds product and services. McDonalds focuses not
to customers but product quality because fascinating consumers depends on quality and loyalty
of the product.

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Domestic marketing may be defined to sell the product of the company in local or domestic
market. It is more convenient and easy to continue as deals with economic issues and one
completion set. There are no barriers in languages in domestic marketing, to collect and interpret
data on local customers and trends demand is fast and easy for the marketing. Increasing
marketing policies so that to do business proficiently and effectively is easy in local market.
Domestic marketing demands less risk and resources is not higher. McDonalds has business
operations in all accords the UK.

Local marketing is not wider than international marketing as company operates in more than one
of different countries. International marketing companies have to follow lots of law. Cause every
country has its own laws and regulations (McDougall et al, 2003). The customers preference and
tastes are different in international marketing thus marketing striges have to satisfy the
requirements of different consumers.

Domestic market is the market which selling of a companys products within a local market or in
a specific local territory. The economic issues and local competition are existed in internal
marketing. It has no limit. International marketing is the promotion and sale of a company
products or different countries or worldwide. It has some other barriers and more complexity.
(Joshi, 2005)

1. The differences between domestic marketing and international are described in below:
2. The range of local marketing is smaller than global marketing.
3. Global marketing has faced more obstruction than local marketing.
4. Global marketing has higher profit margin than local marketing.
5. Global marketing use most modern technology than local marketing.
6. global marketing have to maintain good political relation with political parties but local
marketing has no care about political relations.

Conclusion

McDonalds still has a strong brand that can attract large numbers of royal customers and it is a
very good company that generates a lot of profits. McDonalds should survive as the dominant

19
fast-food brand for decades to come, if it can positively reform its business and menu to adapt to
changing times. McDonalds should remain a very money-making company and a solid
investment which its business will continue to shrink for the predictable future.

Macro-environmental of McDonalds can be easily determined by using environmental scanning

process though micro-environment factors are both internal and external stakeholders of the
McDonalds. In McDonalds, they follows strategic techniques such as Porters Five Forces,
PESTEL, Value-Chain, Analysis of SWOT and others to behavior its environment assessment
and marketplace. To identify its market fragment the market have to be accessible,
distinguishable, substantial, feasible and measurable. Domestic market is the market which the
selling of a companys products within a local market or in a specific local territory. The
economic issues and local competition are existed in local marketing. It has no limitation.

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