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Case Study of McDonald's

University: Regent College London

  • Unit No: 2
  • Level: Diploma
  • Pages: 16 / Words 3983
  • Paper Type: Assignment
  • Course Code:
  • Downloads: 106
Question :

There are certain questions which are needed to be answered:

  • About the McDonald’s
  • Elaborating the role of marketing with other units
  • Overall objectives of an organisation
Answer :
Organization Selected : McDonald

INTRODUCTION

For modern business firms, marketing is an essential tool. This concept includes a brief understanding of the market, consumer demands, customer-oriented market strategies, and presenting high-quality products amongst customers (Dibb and Simkin, 2013). Business organizations have started developing innovative and effective strategies to build stronger customer relationships as it is crucial for successfully running the company. The worldwide awareness for marketing essentials in the current market scenario is presumably high.

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The following assignment is based on a case study of McDonald’s, the market-leading firm in the fast-food sector and an indisputable global leader. The assignment includes a detailed role of marketing in the company and its interrelationships with various other functional departments of the firm. It also includes a comparison in ways organizations use the marketing mix to achieve their overall business objectives and a detailed marketing plan for a new product of McDonald’s.

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TASK 1

1.1. Role of marketing and its interrelation with other functional units:

Marketing:

Marketing can be referred to the movement of products and services from a mere concept to customers. It is a management process which includes identification and development of the product, its price determination, selection of its distribution channels and development of its promotional strategies (Jobber and Ellis-Chadwick, 2012).

However, there has been a substantial shift in the trends of marketing recently. Earlier, companies like McDonald’s used the concept of one-way marketing and one-sided messages were delivered without allowing the customers to respond. Concept of product-based marketing was heavily adopted by the company. Currently, the firm adopts the strategy of consumer-based marketing. Social media has established a two-way communication between the consumer and the brands (Malhotra, Birks and Wills, 2013). Customer expectations have risen and demand for instant feedback has increased.

With increase in customer awareness and market that is heavily influenced by global citizens like Millennial's, McDonald’s need to consider it as an important part of their community. Along with this, McDonald’s should develop those marketing strategies that are flexible to the ongoing technological advancements and increase the mobility of their products. Most importantly, their strategies must fulfill their Corporate Social Responsibilities. Success of companies in future depends on their proper utilization of natural and man-made resources.

Marketing processes used by the company:

McDonald’s uses various marketing processes to retain its position as a market leader and its strong customer base:

  • Continuous analysis of the strategies used by its opponents.
  • Formulation of new policies according to customer preferences.
  • Comprehensive analysis of potential opportunities and threats.
  • Critical evaluation of set policies and market strategies (Armstrong, and et. al., 2015).

Roles and Responsibilities of Marketing Manager:

The marketing resources of an organization are managed by the marketing manager of the company. They are responsible for all the marketing operations needed for introduction of a new product of the company or survival of an existing ones (Terpstra, Foley and Sarathy, 2012). It is crucial for the marketing manager of McDonald’s to be effective so that the company, through successful planning of its products, drives out competition and influence more customers to buy their products.

The key roles and responsibilities of the marketing manager of McDonald’s are mentioned below:

Market Research: It is the responsibility of the marketing manager to keep a track of customer’s changing needs and preferences. A comprehensive marketing research would enable them to recognize market opportunities and potential threats. Moreover, the research would help the manager in identify the competitors which results in development of better products.

Customer Relationship: A marketing manager facilitates effective and long lasting customer relations through detailed surveys which assists them in discovering customer’s preferences. The outcome of these surveys aids the company in achieving higher customer satisfaction.

Performance Management: In McDonald’s, marketing managers manage the employees of the marketing department of the organization. They set objectives for the employees and evaluate their performance in achieving those objectives. They are also responsible for addressing the personal needs of the employees which facilitates better commitment of the employees for the firm.

Creating and managing brand Equity: Marketing managers are responsible for creating a strong value of company’s products. It is required of them to retain the company’s reputation in the market by providing added value to its products and services. This function enables the company to increase its sales volume.

Interrelationship of marketing department with other functional departments of McDonald’s:

It is necessary for the company to coordinate the plans of its various functional departments to achieve desired goals. Mostly, the assimilation happens after development of a business plan. In McDonald’s, the development of the business plans are coordinated since their inception. Moreover, the impact of these plans on customers is evaluated by every department of the firm.

The interrelationships of marketing department with other functional department of McDonald’s are as follows:

Marketing and Production: There is a dual link between production and marketing. While production department determines the type and number of products to be marketed, marketing department provides effective sales forecast for each product line. The interrelationship between production and marketing is most apparent when new products are developed. For instance, if McDonald’s wants to develop a new line of their chicken burgers, its design and production facilities will be based on the thorough market research which would include the demand for a new product and distribution channels apt for the product.

Marketing and Finance: The marketing plans of the company must include all the financial dimensions of the firm. The marketing department of McDonald’s works closely with the finance department of the firm to ensure that there is sufficient budget for market research, product promotion and its distribution. However, there is an ongoing conflict between these two departments (Ganesan, 2012). While the finance department works towards cost effectiveness, the marketing department concentrates on increasing the sales volume and building an effective market share. McDonald’s ensure that these conflicts become constructive and efficient marketing can be achieved in a cost-effective way.

Marketing and Human Resources: HR Department recruits, selects and train the best possible employees for the firm. It helps recruiting potential employees for marketing department of an organisation. . Along with this, the human resource department would also undertake appraisal and enhancement of each employee’s performance. For example, if the marketing manager of McDonald’s wants to hire employees for marketing research, the HR department would help them in scoping out a person profile, job descriptions and advertising required for the job (Aswathappa, 2013). Their aim would be to hire intelligent and effective employees to serve the purpose.

Marketing and Research & Development: Effective research process of a company helps marketing in various ways. R&D department of an organization is responsible for generating innovative ideas and creation of new products for the firm through extensive research. For example: In India, the majority of population is vegetarian. This research via R&D department of McDonald’s helped the firm to create new vegetarian hamburgers which enabled the firm to retain the biggest share in the Indian market for years.

Importance of marketing role:

Marketing plays a vital role in of an organization. The success of a company heavily depends upon its effective marketing strategies. McDonald’s understood the importance of marketing way back in the past and since then, it keeps on developing new and effective ways of marketing its products. For instance, McDonald's used an innovative strategy by introducing their prime mascot, Ronald McDonald to attract kids as well as teenagers towards buying their products. Marketing has helped the firm in the movement of goods from the company outlets to the customers (Ilić, Ostojić and Damnjanović, 2014). Also, marketing helps the firm to raise the standard of living of its consumers by making cost effective and quality products available to them through uninterrupted supply chains. Effective marketing of its products has helped the organization in increasing its sales by adding value to its products.

Significance of having effective interrelationships between different functional departments:

For any organization to succeed, it is essential to coordinate the activities of its various functional departments. Marketing decisions, in order to be effective, needs to incorporate and consider other business functions in designing and implementing the market research, market planning and management information system. These interrelationships would allow marketing to develop new concepts, which are flexible towards achieving the other important organizational goals. Greater coordination of marketing with other departments would enable a better research for marketing the products of the firm. Hence, it is important for a company like McDonald’s to establish effective coordination between its different functional departments.

TASK 2

2.1. Use of elements of marketing mix by organizations to achieve overall business objectives:

Marketing mix refers to the elements of marketing which a company uses to achieve its marketing objectives. These elements are product, place, price, promotion, people, place and physical evidence. McDonald's uses a perfect combination of marketing mix and keep reviving their strategies as per the conditions of the market. Below is the comparison of how McDonald's use the marketing mix and how it is different from marketing mix of companies like Burger King.

BASIS

McDonald’s

Burger King

PRODUCT

McDonald’s adopts standardization as its product strategy. A wide range of standard products are produced by the company which helps it to be recognized as a global brand. For instance, Big Mac is acknowledged all around in the world. However, to cope with cultural differences, the company has adopted the policy of- Think Global, Act Local which has helped the company to adapt its food items in different countries according to their religious, legal and cultural food habits.

The product strategy for Burger King is ‘have it your way’, which helps the firm to differentiate itself from another companies. The firm gives power to the customers to individually select their orders by giving vast choices of products which includes onion rings, bacon, cheese, mustard, mayonnaise, ketchup, tomatoes, and lettuce along with some healthy food items like green salad, vegetable wraps and fresh apple slides.

PRICE

During pricing their products, the firm implements local pricing strategy instead of global. The pricing of the products is adjusted according to the country and the location of company outlets within the country. The pricing is affected by the economic scenario of the country.

The brand adopts competitive pricing strategy due to heavy competition with companies like McDonald’s, but to further increase the demand of its products, it is further modifying its pricing due to economical conditions of the countries it serve. The aim of the company is to balance between premium and value products but can introduce better offers in future.

PLACE

McDonalds is a global brand with more than 36000 restaurants in 119 countries. It has its market in places like US, Europe, Asia, Africa, Middle East, etc. On an average, McDonald’s establishes itself in almost 5 new countries every year. It generally opens it outlets in areas that attract huge crowds and that are easily accessible to the customers.

Burger King is rapidly expanding is market in various countries with almost 13000 outlets worldwide. It operates in places like Europe, Japan, Taiwan, Singapore and South Korea. The firm conducts its business operations considering the cultural aspects of the nations. Along with outlets, burger king uses online portals to effectively sell their products.

PROMOTION

McDonald’s emphasize on promoting its product to a great extent. The aim of the company is to make themselves familiar in every corner of the country it has its market in. To achieve this, it adopts diversified marketing tools in promoting its products according to the cultural preferences of the countries. These tools include TV, cinema, radio, internet, posters, press, etc. It has adopted the strategy of – Brand Globally, Advertise Locally.

To increase the customer base, Burger King adopts an interactive promotional strategy which helps them establish a better connection with the customers. It hosts various impressive programs like ‘talent show’ and ‘the next best move’ on the internet to let customers showcase their talents in return for excellent offers on the menus. Different promotional strategies for different products are used by the firm to attract its target customers and increase the sales.

PEOPLE

McDonald’s has almost 97,000 employees in UK and a majority of their businesses are owned and managed by local business people. Interactive training and development programmes are held every year in UK to enhance employee performance (Marketing Mix Of McDonald's, 2018). The main aim for the company is to achieve satisfaction of both the people aspects of the company, employees as well as customers.

Burger King is an expanding business with almost 34,000 employees worldwide and about 11 million guests per day. The reason for such a huge number is that the company emphasizes on professionalism. Moreover, it motivates its employees to behave in culturally accepted manner which strengthens their customer base.

PROCESS

The process of McDonald’s is quite unique, as it ensures a complete transparency while preparing the food items for the customers. Customers can witness the whole process as the food is prepared right in front of them. Another aspect, on which the companies pay attention to limit the time frame in which a customer places the order, waits for it and finally acquires it.

Since the firm exerts pressure on developing competitive strategies, like McDonald’s, the firm uses transparent methods of product manufacturing. Moreover, the firm uses efficient and technologically advanced cooking equipment's and keeps on reviving their methods for packaging and distribution. Burger King also conducts effective training programs for the licensees to smoothen the process of the restaurants.

PHYSICAL EVIDENCE

The interiors of the outlets are attractive, with great emphasis on cleanliness. In bigger countries like UK, the company considers its presence as a priority. There are vast improvements in the restaurants recently as they provide services like music, automated order machines, free Wi-Fi, Drive thru, special space for McCafe, etc.

Burger King aims at retaining its customers and indulge its resources at developing a well maintained environment in its outlets, effective seating arrangements, air conditioning, uniformed staff, disposal cans and dustbins, accessible water coolers and electronic facilities like Wi-Fi, Television screens, trendy music and colorful themes to refresh the customers.

TASK 3

3.1. Development and evaluation of a marketing plan:

Marketing Plan:

The current marketing plan is to introduce an innovative product from McDonald’s under the brand name McPunch which is a non-alcoholic mixed fruit drink along with syrups and soda. The value strategy of McDonald’s of offering the products at lower price and differentiating the products through effective brand campaigns will be implemented in the case of this product too (Westwood, 2013).

Company Overview:

McDonald’s is one of the biggest fast food restaurants founded by Ray Kroc. The first outlet was situated in US in 1955 and in 1974 it opened its first restaurant in UK. Currently, there are almost 38,000 restaurants of McDonald’s all over the world which sells variety of products such as hamburgers, breakfast items, chicken sandwiches, soft drinks, French fries, and desserts.

Read also:
Managing Food & Beverage Operations - Burger King

Mission and Vision:

Vision: The vision of the firm is to be the best restaurant in UK, and follow the guiding principles and core values necessary to enhance customer satisfaction. With McPunch, the vision of the company is to reinstate its position as a market leader by providing the product at customer friendly price and top most quality considering the customer perspective.

Mission: The mission of the company is to satisfy each customer on their doorstep and maintain top quality cleanliness, unmatchable service and extraordinary food items at prices that are light on the customers’ pockets.

Strategic Objective:

The strategic objective of the firm through McPunch is to attain 7-8% increase in sales in the span of one year. And to achieve this objective, the firm is planning to set its price lower than the average beverages available in the UK market (Ahlemann, and et. al., 2012).

Products and Services:

McDonald’s is the biggest name in UK when it comes to fast food. It offers variety of different products such as Big Mac, chicken nuggets, chicken sandwiches, hamburgers, salads, desserts, soft drinks, etc. Along with these products, it offers excellent services like free Wi-Fi, arch card and play places for kids and space for parties. Get the best online teaching assistant level 2 coursework help for UK Students at the best price.

Market Research:

Market research is an ongoing process to gather detailed information about the tastes and the preferences of the customers. McDonald’s through ages has been way ahead in market researching. Through aggressive analysis of the market, McDonald’s determine the needs of its customers and channelizes its resources in fulfilling these needs by creating innovative products with utmost consideration of customer perspective (Burns, Bush and Sinha, 2014).

Target Market:

It refers to the potential customer group within the availability of the company towards which the company aims its marketing strategies (Mobin, Dehghanimohammadabadi and Salmon, 2014). The segmentation, targeting and positioning of McDonald’s is mentioned below:

Segmentation: Segmentation is the process of dividing the customers into groups based on certain characteristics (Tanner and Raymond, 2015). For McPunch, the segmentation will be based on four factors: Geographic: United Kingdom; Demographic- general population above 10 and below 60 belonging to lower, middle and upper class: Physiographic- Mainstreamer, resigned and individuals who are sophisticated and value oriented; Behavioral- customers with their degree of loyalty ranging between hardcore to switchers;

Targeting: This part deals with targeting a specific group of customers from segmentation at a time to sell the product. This is an essential part for the firm as the success of the product in this group affects the expansion of the target segments. Teenagers and young professionals will be the potential target customers for Mc Punch.

Positioning: After targeting, the company moves on to establishing effective and accessible positioning strategies through which customers can easily acquire the product. In UK, the company outlets are easily approachable and would be a viable plan for a new product. Currently in this market, the demand of a product like Mc Punch is high, so it will give an opportunity to the firm to strengthen its positioning.

Marketing Mix:

Marketing mix refers to the 7 P’s of marketing: Product, Price, Place, Promotion, People, Process, and Physical Evidence. McDonald’s is known to have used these elements to their full potential in order to make their products successful (Huang and Sarigöllü, 2014). Mc Punch would also need to use these elements to make a strong perception about itself in the eyes of customers and to hold a significance place in the market above its competitors. For Mc Punch, aggressive marketing strategy will be used with emphasis on effective advertising and online marketing.

Marketing Budget:

Particulars

1st Year

2nd Year

3rd Year

4th Year

5th Year

Initial money

5000

8000

10000

13000

15000

Investment

2000

3000

5000

7000

9000

Total

7000

11000

15000

20000

24000

Marketing outlay

         

Promotion

4000

7000

8000

10000

14000

Sales publicity

5000

6000

10000

11000

13000

Total

9000

13000

18000

21000

27000

CONCLUSION:

It is thus concluded by the report that marketing is essential for organization from its inception till the end of its business life. The marketing manager plays a significant role in helping the firm achieve its marketing objectives (Brassington and Pettitt, 2013). Also, to have a competitive edge over the competitors and to build an impressive market share, it is important to facilitate effective interrelationships between all the functional departments of the company. McDonald’s as well as Burger King use the elements of marketing mix effectively to achieve their organizational objectives. Lastly, it is crucial for a new product in the market to effectively plan its marketing strategies through aggressive market research. The managers should plan the strategic objectives and efficiently use the blend of marketing mix and formulate adaptable strategies to target the potential market for the product to make the product a success.

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