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McDonald's Marketing Principles

Marketing Principles of McDonald

Introduction to Marketing

Marketing is regarded as one of the most significant tool employed by every business in the modern era where main motive is on enhancing awareness in the market so that sales volume along with profitability of the enterprise can be enhanced easily (Naik, Raman and Winer, 2005). Further, it is well known fact that every enterprise carries out operations in the market where competition level is quite high and due to this reason need for effective marketing planning management is must for business. Marketing principles takes into consideration different elements of marketing which are product, price, place and promotion. By undertaking all these range of elements it is possible for business to carry out overall operations in appropriate manner. Principles of marketing supports organization in building its brand image and provides large number of opportunities. For conducting the present study organization chosen is Mc Donalds which is one of the world’s largest chain of hamburger fast food restaurant serving 68 million customers in 119 countries (Nwankwo and Gbadamosi, 2010). At present business has more than 36000 outlets all over the world. Various tasks have been covered in the study which are elements of marketing mix, benefits of marketing orientation, segmentation criteria etc.

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Various elements of marketing process of McDonald's

Marketing is an important process of business that allows corporate entity to create a better image in the marketplace. McDonald's is the leading fast food retailer of world's market and it is focused towards satiating the needs and wants of customers (Nwankwo and Gbadamosi, 2010). The effective marketing requires to collect specific market information which is called as a marketing process.

Following points explains the different elements of marketing process of McDonald's:

Market analysis- The foremost elements of marketing process is market analysis in which McDonald's with analysis of market (Pomering, 2014). It can be stated that before developing  marketing strategies companies have to plan for market analysis. The company major focused towards conducting marketing research via social media marketing so as to known customers behaviours.  
Identification of target Market : To identify target market is the major concept of business in which company identifies the needs of different segments and choose the market to which , it serve (Sheth and Sisodia, 2015).  The market of McDonald's is targeted on the basis of age, income, gender and other factors.

Designing marketing objectives-  To design the marketing objectives is the most required task of business entity (Sodhi, 2011). Being a brand, MacDonald designs objectives so as to follow guidelines and provides direction to the success. Major objective of business are  to   increase sales, market share as well as gaining competitive advantage.    
Formation of appropriate marketing mix: Developing of appropriate marketing mix is the most important tactic attain the objectives of business. Further, it can be considered as one of the most important part of McDonald’s marketing process. On the basis of marketing research, company designs marketing mix such as product, price, place, promotion, physical evidence, process and people (Wang and Pizam, 2011).

Benefits and cost of marketing orientation for McDonald's

In the corporate world , there could be seen various concepts of marketing such as product oriented concept, sales oriented concept, production oriented concept and the market oriented concept. The marketing oriented concept is focused towards designing the product and services in accordance with the needs and wants of customers (Wilson and Gilligan, 2012).  This is to be being into notice that  there are four major concepts of marketing concepts such as target marketing, integrated marketing  needs of consumer, and profitability. The mentioned entity is witnessed for adopting marketing oriented  for serving the target market as well as to attain higher profits and sales. The major benefit of marketing concept is noted that MacDonald is world's leading fast food retailers which has created a image as a low cost product provider. The brand is famous for its quality and low prices. The mentioned entity is witnessed not for providing food but also experience in the ways of cheerful environment, air-conditioned, friendly restaurant with innovation (Zikmund and Babin, 2012). However, this concept has came up with cost as well as benefits for the company. The major benefit of this marketing oriented concept is that MacDonald's can retain the customers by satisfying their needs and wants.  Due to this the customers are ready to pay the prices asked by the company  in case the product has value added quality. To aware with the needs of customers the business has to pay monetary resources for conducting marketing research. have to spend more on marketing research. This is considered as a cost of adopting marketing oriented concept for MacDonald.   In addition to that, market is rapidly change and market orientation strategy allows company to take a marketing decision as per customer market demand. Hence , the marketing orientation concept has benefits as well as cost for the company (Ali and Talwar, 2013).

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Micro and macro environmental factors influencing marketing decisions

Large number of macro along with micro environmental factors is present which affects marketing decisions being taken by McDonald's (MacDonald's UK, 2016). For conducting Macro analysis PESTLE has been carried out which has been shown below:

  • Political: This factor is associated with government laws and regulations where employment along with tax law directly affects operation carried out by McDonalds. Apart from this, health issues such as obesity along with cholesterol also affect company.
  • Economical: unfavorable situation such as recession is affecting entire economy due to which McDonald has to offer products at low price and the overall fluctuation in the currency rate also affects price of commodity (Darley and Blankson, 2008).  
  • Social: This factor is linked with change in taste and requirement of target market. Further, Mc Donald complies with changing need of customers where healthy food items are provided to them along with WIFI system.  
  • Technological: For performing efficiently company uses advanced tools such as machine display to alter their menu etc.
  • Legal: Mc Donald strictly complies with the legal laws such as employment and labor, working hours etc.  
  • Environmental: With the motive to save environment business has taken various measures such as recycling food, using disposable materials etc.
  • Micro factors  
  • Consumer: Taste and preference of target market changes rapidly due to which time to time new products are added in the existing range and this supports business in performing better. Further, healthy food is being offered to customers at an affordable price and this influences buying behavior of customers (French and Bennett, 2015).
  • Employees: It is one of the major factor affecting McDonald as skilled workforce can enhance business productivity and need of customers can be satisfied efficiently.

Segmentation criteria for different markets

McDonald carries out its operations in different markets and for the same it is necessary to undertake different segmentation criteria (Hughes, 2002). Further, while serving in the market of china it is required for brand to segment its market on the basis of income level of consumers. Majority of the people living in the society belongs to lower of middle class. Therefore, by segmenting target market on the basis of their income level business can target market in efficient manner and this can boost sales volume of the company. On the other hand, another segmentation criterion which is beneficial for business in the selected market of UK is on the basis of age as usually hamburger is consumed by people lying in the age group of 16 to 40. Therefore, by targeting individuals lying in this age group it is possible for business to target its market in appropriate manner (Korotkov, Occhiocupo and Simkin, 2013).

Targeting strategy for range of products

After undertaking segmentation criteria it is necessary to adopt effective targeting strategy so that business can easily target customers in appropriate manner (Onkvisit and Shaw, 2002). Further, company like Mc Donald’s can consider different type of targeting strategies such as concentrated, undifferentiated etc. In short one of the best strategy which company can adopt for targeting its customers is multi segment targeting. One of the main reason behind selecting this targeting strategy is that it can help business enterprise to focus on more than one target segment. Business carries out operations in large number of market and segmentation criteria differs from one market to another. Apart from this, recommending multi segment targeting will provide another benefit to firm such as it is cost effective. This strategy will provide ample of opportunities to business and it will become easy to meet with the expectations of the target market in every possible manner (Kotler and Armstrong, 2013). On the other hand, other type of targeting strategy is not appropriate for the business such as undifferentiated one as by adopting this company is required to adopt single targeting strategy. Further, concentrated as a strategy supports business to focus on niche market which is also not applicable in case of McDonald. Therefore, with the help of this it can be said that multi segment as a targeting strategy can have positive impact on sales along with profitability of business (Ferrell and et.al., 2014).

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How behaviour affects marketing activities in different buying situations?

McDonald’s has high presence at global level and firm is indulged into practices of serving large number of customers. Further, it is well known fact that buyer behavior is affected by large number of factors which business has to consider so that target market can be easily influenced to purchase products (Richter, 2012). In the present era, every business has started to promote its products with the help of social media and it is enhancing sales volume of company. Moreover, by promoting commodities with the help of facebook and other networking sites McDonald is attracting its customers and this is supporting in influencing their purchase behavior. Further, marketing activities of company are quite effective through which large amount of information is being shared by business with its target market. For instance if any customer prefers to consume hamburgers and different types of brands are present in the market who are offering this product. So, in this case marketing activities of McDonald attract customers in this case and they prefer to consume hamburger of firm rather than other brands in the market (Tapp and Spotswood,  2013). Apart from this, it is necessary for business to consider personal factors of customers such as age, income, taste and preference of target market. Therefore, in this buying behavior of customer is affected by marketing activities of enterprise.

New positioning strategy for selected product

In order to perform efficiently in the market it is required for McDonalds to have effective positioning strategy so that level of customer satisfaction can be enhanced easily. Selected product is hamburger of McDonald for which the suitable positioning strategy is on the basis of quality (Priya, Baisya and Sharma, 2010). Further, it is well known fact that company like McDonald strongly focuses on quality of its products and this is one of the main reason due to which business is able to enhance its overall presence at global level. Positioning on the basis of quality and other type of attributes in the market will be one of the most appropriate positioning strategy for the business and this can assist in accomplishing overall aims and objectives of the company. Further, McDonald carries out its operations in the market where competition level is quite high and due to this basic reason product differentiation is necessary which is possible by representing quality in the product (Naik, Raman and Winer, 2005). By strongly focusing on quality of the hamburger company can develop its brand image at global level and this can assist in grabbing large number of opportunities which are being present at international level. Therefore, the proposed positioning strategy will be fruitful for the business in every possible and can allow to respond towards the changing need and requirement of the target market in every possible manner.

How products are developed to sustain competitive advantage?

The company attain competitive advantages as leading the market and enjoying huge customers base. Sustainable competitive advantage is mostly meant to be powerful when it exist in the market for longer duration of time and the business who maintain the same for longer time is said to be Sustainable competitive advantage. Cost leadership is successfully attained by the company as the operational cost is reduced and MacDonald is generating higher returns and profits (Sodhi, 2011). This allows MacDonald to have earning per share and return cash dividends to their shareholders as earning long term returns. The adoption of this strategy has allowed company to increase there more brand image in the market by becoming consumer favourite food chain ,. it also allowed retaining customers and attaining market share. It has also adopt the new marker technologies as user are becoming more savvy to new techniques. And by providing them time to time good innovative quality food products at reasonable price.

Explain distribution strategies used by McDonald’s

With the motive to deliver appropriate products to the target market as per their expectations it is required for company to have proper distribution strategy. Company like McDonald’s has employed large number of distribution channels so that best product can be delivered to customers as per their expectations. For delivering products physical stores are used by firm through which convenience is provided to target market and this has enhanced brand image of business in the market. This distribution strategy of business allows business to understand need and overall requirement of target market and in turn act as development tool for the entire company (Hennig-Thurau, Gwinner and Gremler, 2002). All the physical stores of McDonald are effective enough in attracting customers and it has also enhanced sales volume of the business. Majority of the customers prefer to visit stores of company on continuous basis and this is one of the main reason due to which firm is regarded as leader in the market. Time to time business has opened new stores in the market with the motive to provide more convenience to the target market. All the stores are located in the middle of the city so that customer satisfaction can be enhanced easily and it is acting as a development tool for the business.

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Pricing strategies used by McDonald’s

For sustaining in the market for longer period of time McDonald has adopted competitive pricing strategy where prices for the range of products are decided by firm keeping in view prices set by competitors in the market (Kuratko, 2013). This allows business to gain competitive advantage and acts as development tool. Further, this also encourages target market to purchase products of McDonald’s and firm is able to deal with its major competitors in the market (Swoboda, Elsner and Morschett, 2012).  Value added pricing is the most focused by MacDonald so as to attain the customers towards the products. This is to be noted that the company provides value of products by offering quality at the valued prices. For the quality of products the customers provide the best quality.   

How promotional activities are integrated to  achieve marketing objectives?

Promotional activities play an important role in making a business successful. It will enable the company managers in reaching the potential customers of customized clothing and influence them in making a purchase decision or be a repetitive customer.(Riggs,2011) The marketing managers of MacDonald can achieve their marketing objectives by promotional activities which are as follows :

Advertisement : It is a paid form of promotional activity through mass media which helps in reaching a large number of people. The benefit of doing advertisement is that it helps in reaching a wide audience and enhance brand recognition.. MacDonald's can advertise heavily about its new food product on Television, radio, newspaper and can also go for online advertisement (Kuratko, 2013).

Online Marketing : At present there is rapid increase in the use of internet for getting information about anything and everything. The managers of MacDonald can use online marketing for their new customized products that they are planning to provide. Through online marketing company can communicate the benefits of customized products and how they can get it (Nwankwo and Gbadamosi, 2010).

Direct Marketing : It is one of the most powerful method used for spreading awareness about the product. It is method used for connecting customers personally rather than having indirect connection between the company and the consumers. The company can do direct marketing through messaging on mobile phones, emails or by interacting to customers through sites.

The additional elements of extended marketing mix

Following are the additional elements of marketing mix which can also be taken into consideration while adopting a marketing strategy:

Physical Evidence: It depicts the quality of service the provider provides to its customers . It act as an evidence that the service was delivered. The physical evidence of MacDonald tells about the validation that is about the looks, sitting area, and format of the company which creates a unique image of organisation in market (Ali and Talwar,  2013).\

Process: MacDonald follows the systematic process of offering its products to its customer by proper planning and distribution process to sell the products in market.

People: It refers to the employees of the company who are integral part of the organization. MacDonald gives training and development to its staff and employees to know how better services are to be provided to customers and fulfil the wants and desires of customers (MacDonald's UK, 2016).

Marketing mix for two different segments in consumer markets for  McDonald’s

Every organization designs a marketing mix to attain the market shares and to attract the customers towards the products and different offerings (Nwankwo and Gbadamosi, 2010). There are four different elements of marketing mix that are to be arranged in two different segments so as promote sales  and attaining good profits..

Differences in marketing products and services to businesses rather than consumers

MacDonald deals in both B2B and B2C marketing in which operates with customers as well as corporates (Wang and Pizam, 2011). The marketing of products to customers come under business to business market as well as the marketing of products to corporates of third party is refereed as business to business marketing. This is to be noted that company deals with customers hence, it is more focused towards the customer to customers dealing, in addition to that the company has given various franchisee to operate the business. The products are to be exchanged between customers and McDonald's. Within business to business (B2B) marketing the product and services are to be distributed among different markets (Sodhi, 2011). This is to be said that the final goal of business to customers marketing is to make customers satisfied as well as to make long terms revelations with them.  In business to customers marketing, the company is attached with the customers in a more efficient manner with an aim to attain customers loyalty. In other words, B2C marketing the customers are to be satisfied whereas in B2B, company focuses on making corporate relations.

Difference in domestic and international marketing

International marketing is regarded as the process of promoting products and services at international level where its main attributes are crossing boundaries of the country and is implemented as per the global viewpoints (Sheth and Sisodia, 2015). On the other hand, domestic market takes place when commodities are promoted within the country where market size is not wide. In comparison between the two international and domestic marketing differs from each other which company like McDonald’s has to consider necessarily (Pomering, 2014.).  
While promoting products at international level McDonald has to consider taste and preference of large number of customers as people living in the society belongs to different culture, religion etc. On the other hand, at domestic level less culture differences are present due to which it becomes easy for business to sustain in the market for longer period of time (Nwankwo and Gbadamosi, 2010). Further, at international level more effective marketing strategies are required for promoting products as competition level is high but on the other hand at domestic level competition level is moderate due to which business can easily sustain in the market for longer period of time. Apart from this, political laws along with other type of barriers also differ at domestic and international level (Naik, Raman and Winer, 2005). Therefore, in this way domestic and international marketing differs and firm has to consider large number of factors while marketing its products at both levels.

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Conclusion

The report above presented the marketing principles in relation to a leading fast food retailer. This was witnessed that company was focused towards satiating the needs and wants of customers for with market research is made to identify the specific needs. From the above report , it can be concluded that the marketing decision taken by the company are affected by micro and macro factors. McDonald's is found able to carried out  marketing practices with the help of different elements of marketing. Segmentation is a crucial strategy that helps in attaining  attract customers and it is the major success factor that provides products and services at the low prices. The company has competitive advantage in the form of fast services as well as the best services and quality of products.

References

  • Ferrell, C. O. and et.al., 2014. Marketing Principles PDF. Cengage Learning Australia.
  • French, J. and Bennett, R., 2015. A hierarchical model of social marketing. Journal of Social Marketing.
  • Hennig-Thurau, T., Gwinner, K. P. and Gremler, D. D., 2002. Understanding relationship marketing outcomes an integration of relational benefits and relationship quality. Journal of service research.
  • Hughes, J. T., 2002. Marketing principles in the application of e‐commerce. Qualitative Market Research: An International Journal.
  • Korotkov, N., Occhiocupo, N. and Simkin, L., 2013. Simulated test marketing in emerging markets: the need to re-think. Marketing Intelligence & Planning.
 
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