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Marketing Function in McDonald’s

Table of Contents

Introduction. 2

Assignment 1. 2

1.1Roles and responsibilities of marketing function in McDonald’s (P1) 2

1.2 Roles and responsibilities of marketing in wider organizational context (P2) 4

1.3 Roles and responsibilities of marketing in marketing environment context (M1) 4

1.4 Significance of relationship between marketing and other functional units in an organization (M2) 5

1.5 Key elements of marketing function and its interrelation with other functional units (D1) 6

Assignment 2. 7

Task 1. 7

1.1Comparison of marketing mix of McDonald’s and Burger King (P3) 7

1.3 Evaluation of different tactics used by McDonald’s for achieving business objectives (M3) 8

Task 2. 8

2.1 Production and evaluation of basic marketing plan of McDonald’s (P4) 8

2.2 Production of evidence based marketing plan of McDonald’s (M4) 9

2.3 Strategic marketing plan of McDonald’s using 7Ps (D2) 11

Conclusion. 13

Reference. 14

Introduction

In this assignment, there would be discussion of the marketing function and its application in an organization and the selected organization is McDonalds. Model has been given to reflect on the internal process chain of the business. The responsibility of marketing in increasing the revenue and market share of the company would also be discussed.

Assignment 1

1.1Roles and responsibilities of marketing function in McDonald’s (P1)

Market function is a very broad discipline and might include various elements that might be necessary for the marketing of any company or development of any product in the market. The role and responsibilities of marketing function whether in small of large businesses such as McDonald’s is similar. Though in large businesses such as McD ........

context (M1) 4

1.4 Significance of relationship between marketing and other functional units in an organization (M2) 5

1.5 Key elements of marketing function and its interrelation with other functional units (D1) 6

Assignment 2. 7

Task 1. 7

1.1Comparison of marketing mix of McDonald’s and Burger King (P3) 7

1.3 Evaluation of different tactics used by McDonald’s for achieving business objectives (M3) 8

Task 2. 8

2.1 Production and evaluation of basic marketing plan of McDonald’s (P4) 8

2.2 Production of evidence based marketing plan of McDonald’s (M4) 9

2.3 Strategic marketing plan of McDonald’s using 7Ps (D2) 11

Conclusion. 13

Reference. 14

Introduction

In this assignment, there would be discussion of the marketing function and its application in an organization and the selected organization is McDonalds. Model has been given to reflect on the internal process chain of the business. The responsibility of marketing in increasing the revenue and market share of the company would also be discussed.

Assignment 1

1.1Roles and responsibilities of marketing function in McDonald’s (P1)

Market function is a very broad discipline and might include various elements that might be necessary for the marketing of any company or development of any product in the market. The role and responsibilities of marketing function whether in small of large businesses such as McDonald’s is similar. Though in large businesses such as McDonald’s that operates globally,, the marketing function can be more complex. Marketing function might include different functions such as performing marketing research, making marketing plan, product development and this might also include advertisements, sales and distribution, promotion, public relations and customer service (Stark, 2015). With all the hush-hush around social media, social media advertising and marketing has also emerged to be one of the elements of marketing function.

As per the model that has been given in the figure above, it can be said that the internal process chain of a business requires three elements (Baker, 2014):

  • Making a product or service
  • Marketing the product or service
  • Managing the returns and resources

Thus on the basis of this model, the roles and responsibilities of marketing function of McDonald’s can be described by means of five core function of marketing function:

Corporate marketing: this function of McDonald’s is to set itself in the domain of global marketing for enforcing the brand standards, global infrastructure of the PR, advertising, corporate communications. It operates on a corporate marketing plan for delivering objectives.

Strategic marketing: In this function strategy for the growth of the company is set by McDonald’s and competitive landscape is assessed and product management is worked out for identifying the gaps and also mergers and acquisitions are planned by McDonald’s for growth of the company. In this function, the key relationships are targeted (Baker, 2014).

Product management: this function articulates new and innovative ways in which McDonald’s can develop its products and services. McDonald’s also communicates the positioning of stores, the pricing strategies, strategies for commercialization and go to market strategies so that the products can get more acceptance (Gummesson, Kuusela  and Närvänen, 2014).

Product and field marketing: the product management team at McDonald’s builds strategies for developing the value proposition of the products and services and communicates the message through execution of marketing programs and promotional campaign including the social media promotions.

Fig: marketing function

Source: (Gummesson, Kuusela  and Närvänen, 2014)

1.2 Roles and responsibilities of marketing in wider organizational context (P2)

The overall responsibility of marketing revolves around increasing the revenue and market share that would contribute to the profitability of the company. Considering the global presence of the McDonald’s Company in different nations, the marketing department of the company has been largely responsible for the growth and success of the company. The marketing director and the other marketing executives are responsible for marketing of the products and services such as promotions, events, publications. The senior executives of the marketing department set the market strategy that might be appropriate for the company and its area of operations. The strategy also varies depending on whether is entering a new market or launching a new product. Market research is also a responsibility of the marketing department for gaining better understanding of the needs of the customers and on the activities of the competitors (Armstrong, Adam,  Denize and Kotler, 2014). It is also the responsibility of the marketing department to plan campaigns and also to communicate the core value of the products and to promote the products and launching promotional content. The marketing department coordinates with sales department for improving the sales through various tools such as sales reports, advertisements and also prepares presentation for sales team for improving the prospects of the sales (Stark, 2015).

1.3 Roles and responsibilities of marketing in marketing environment context (M1)

As it has been seen, the marketing environment is very dynamic and has been subject to change and thus the roles and responsibilities of marketing has been to adjust the marketing activities as per the changes in the marketing environment. The first role would be strategic planning that the marketing department needs to develop as per the changing opportunities and threats in the market. The marketing department would also have to plan the market activities as per the demographics in the environment such as: demands of the customer; ecological concerns; culture; economic conditions; international events; political scenario; technology (Armstrong, Adam,  Denize and Kotler, 2014). Thus the marketing department needs to assess such demographics in the marketing environment and then make necessary changes to the planning of the company. The marketing managers also needs to marketing information system for updating information on the changing environment. It also falls in the responsibility of the marketing team and marketing manager to identify the changing trends in the marketing environment to evaluate the opportunities (Armstrong, Adam,  Denize and Kotler, 2014). The marketing team might also need to hire professionals and other marketing executives that would be able to justify the need for change in the changing marketing environment and use their expertise for analyzing the risks of the changing trends. At the utmost, management practices need to develop management programs so that information on the customers can be gained that would help to customer loyalty. For instance, with the development of technology in the changing market environment, it has become easier for the marketing team of McDonald’s to conduct one-to-one marketing rather than mass marketing (De Luca and Atuahene-Gima, 2013). Logistic management is one of the key roles of marketing considering that it cannot be ascertained as to what would be the best practices for moving the product to their destination markets. Thus the marketing team would have to address the changing needs of the suppliers, manufacturers, purchasing agents, distributors and the customers.

Fig: elements of marketing environemnt

Source: (Armstrong, Adam,  Denize and Kotler, 2014)

1.4 Significance of relationship between marketing and other functional units in an organization (M2)

Theoretical developments have revealed that the relationship between marketing and other functional units in an organization remains unexplored in many situations. It has been seen that marketing is such a concept that cannot be developed in isolation from other functional units. There exists an interrelationship between marketing and other units in an organization such as planning, implementation and execution, evaluation (De Luca and Atuahene-Gima, 2013). All these elements operate in a given framework of McDonald’s and support the organizational objectives. This interrelationship is very important as marketing cannot function in isolation and would require the support of the mentioned units for success and growth of McDonald’s.

1.5 Key elements of marketing function and its interrelation with other functional units (D1)

The key elements of marketing function with other functional units can be explained as:

Research and development: unit of research and development of McDonald’s is important for generating new ideas and to create new product for attracting new customers. The marketing team coordinates with the RandD for developing a marketing plan for the new products.

Operations and logistics: the marketing department also needs to work in coordination with operations and logistics. Operations would include warehousing, packaging as well as distribution. Depending on the operations and the logistics supply, the marketing team of McDonald’s needs to determine whether the marketing campaign would be planned in future so that it is supported by the supply chain operations of McDonald’s (Ernst, Hoyer and Rübsaamen, 2013) .

Human resources: McDonald’s also need to have proper insight into the capability and skills of the staffs and managers working at the stores so as to determine if the marketing campaigns can be formulated and supported by the human resources. The human resources of McDonald’s would play a strategic role in managing the people in different outlets of McDonald’s so that workplace culture could support the marketing activities of the organization (Laudon and Laudon, 2016).

Finance: the finance works out if there is adequate budget required for the research and development programs, promotion campaigns and distribution. The marketing department of McDonald’s has to be ensured if the activities that it is engaged in would be supported by the budget and whether it would be profitable for the organization to undertaken such activities keeping in mind the volume of resources, market share and investment returns.

Assignment 2

Task 1

1.1Comparison of marketing mix of McDonald’s and Burger King (P3)

McDonald’s

Burger King

Product

It has a strategy for standardization of products so that the products are recognizable all over the world and emerge as brand. One such example is the Big Mac. After facing cultural issues, it adopted the belief of ‘think global, act local’ and served Big Mac as per the local habits in which the product was served. 

There is also high product differentiation.

Product

It has great product differentiation and through its ‘have it your way’ theme customers can individualize their orders. It also provides many healthy and ‘less fat’ items in its menu. The health choices includes wraps, fresh apple slides and green salad (Kraak, Englund, Misyak and Serrano, 2017).

Price

McDonald’s has a local strategy for pricing and change their prices as per the purchasing capacity of the country in which it is operating (Harrington et al. 2017). They have also adopted ‘small price’ strategy, selling some products at cheaper price.

Price

Following McDonald’s, Burger King has also launched value meals like the $1 double cheese burger, ‘mix and match’ $5 for 2 meals. It balances premium and value products and offers budget products. It also gives ‘stunner deals’ and ‘penny pincher’ value menu.

Place

McDonald’s is an internationally recognized, global brand and has operations and has over 34000 restaurants in over 120 nations (Mathur, 2017)

Place

Just like McDonald’s, Burger King operates through franchisees. Reportedly it has 12,667 restaurants operating in about 73 nations. More than 60% of its stores are located in USA and its international locations are in Asia, Africa and Middle East (Harrington et al. 2017). Most of its stores are strategically located near shopping centers.

Promotion

McDonald’s spends about $2 billion every year on promotions. The global strategy for promotion is done through its tagline ‘I’m lovin it’. It also uses celebrity faces for endorsement and provides sports sponsorships and invest a lot in creative advertisements (Harrington et al. 2017). It believes in ‘brand globally, advertise locally’.

Promotion

Burger king involves the customers in their promotion campaigns such as Big Value Menu $1 “Talent Show”, inviting customers to exhibit their talent through video in return of winning any menu item. Burger king also uses social media advertisement for involving the customers.

 

1.3 Evaluation of different tactics used by McDonald’s for achieving business objectives (M3)

McDonald’s has been very successful in using the best tactics for achieving its business objectives and garnering success in the fast food industry. The most basic tactics used by McDonald’s is the marketing mix through which it has taken adequate measures for developing the most differentiated products at the most affordable prices in the form of ‘value menu’. It has also globalised its brand at various international locations (34000 restaurants in over 120 nations). Its ‘happy price’ menu and belief in ‘brand globally, advertise locally’ have also been regarded as effective tactics that have worked for the company for a long term now. Its globally recognizable tagline ‘I’m lovin it’ and its logo that is one of the most recognizable logos have also been hailed as one of the most successful tactics of the organization that has yielded great revenue and success for the company. Compared to other companies in the fast food industry, McDonald’s has always believed in the power of advertisement and promotion campaign as the most important and strategic tool for meeting its objectives and thus has got celebrities on board for advertising its products and deals (Harrington et al. 2017).. One of the tactics that has worked very well for McDonald’s is creating new value menu, engaging in CSR activities and $1 items on the menu.

Task 2

2.1 Production and evaluation of basic marketing plan of McDonald’s (P4)

In the market plan of McDonalds, the marketing plan would include the SWOT analysis of the company that would provide the background upon which the marketing plan would be formulated. A competitor analysis would also be conducted which is very essential for making the market plan as this would shed light on the competitor’s position in the market and the marketing objectives need to be formulated on such analysis. Moreover on the basis of the information gained, market strategies, market penetration strategies, program development and budget of the market plan would be made.

2.2 Production of evidence based marketing plan of McDonald’s (M4)

Mission statement: “To be our customers' favourite place and way to eat”

Vision statement: "To be the best quick service restaurant experience"

Based on the vision and mission statement, it can be stated that McDonald’s puts the customer experience as the priority and is committed to the people (Press and Cooper, 2017). Thus the marketing plan needs to be developed from the customer perspective.

SWOT analysis of McDonald’s

Strength

  • Worldwide presence
  • Market leader in fast food industry
  • Long term economic growth
  • Aggressive marketing promotions

Weakness

  • Market saturation
  • Slow product innovation

Opportunities

  • More value added service and expansion of outlet chains
  • International expansion of franchisees
  • Speedily developing fast food industry

Threats

  • Fluctuation in foreign currency
  • Health concerns and cases  of obesity

 

Competitor analysis

McDonald’s have to compete with major companies such as Yum!, Burger King, KFC, Pizza Hut, Wendy’s international in the fast food industry market.

Strategic objective

  • Increase sales by at least 40% in 6 months
  • Increase brand awareness
  • Increase ROE ratio by 10% in 6 months
  • Increase in retailers, outlets in new targeted markets

Major strategies

  • McDonald’s has planned to increase the market penetration through market promotions target the children and youth especially in the urban area (Dibb, Simões and Wensley, 2014).
  • Market development need to be accomplished through expansion of franchisee outlets and also to increase target promotions, launching sales offices (McDonald and Wilson, 2016)
  • Intense importance need to be given to service development programs as the focus of the marketing plan has been on providing the best consumer experience.

 

 

2.3 Strategic marketing plan of McDonald’s using 7Ps (D2)

The strategic marketing plan of McDonald’s can be explained with the help of 7Ps:

Fig: 7Ps structure

Source: (Harrington et al. 2017)

Product

Product profile and attribute

  • Vegetarian and non vegetarian menu , beverage and desserts
  • Happy menu, value menu and $1 meal
  • Care for  culture and religion of customers
  • Separate cooking equipments and areas

Price

  • Affordable menu
  • Happy menu, value menu and $1 meal
  • Low cost food franchise
  • Cost leadership

Place

  • Outlets located at prime locations: shopping complex
  • Easily accessible
  • Drive in and drive through facilities
  • International locations in over 34000 restaurants in over 120 nations (Mathur, 2017)

Promotion

  • Advertisement through radio, TV, online, social media, news paper magazines
  • Point of sale display; merchandising; loyalty schemes; direct mail; feedback system; door drops (Rad, Akbari, Ghorabi and Motevaselian, 2014)
  • “happy meals” targeting children; small toys given with meals
  • Hoardings and banners
  • Scratch cards and lucky draws

People

  • Quality, service, value and hygiene guides the service at the outlets.
  • Fast and friendly service
  • Standard uniform for the employees
  • Focus on customer satisfaction

Physical evidence

  • The physical evidence reflects the impression to the outsiders and the customers that the company is having successful business functions: trained staff members; appearance of locations; interior.
  • Cleanliness of outlets
  • Spped of service
  • Quality of service and product
  • Transparency of service and pricing

Process

  • Transparent food packaging
  • Customers invited for checking ingredients
  • Efficient cooking system and equipments.

Conclusion

It can thus be concluded that in this assignment, there has been discussion of the marketing function of McDoanlds’s and its role in the market share and profitability. SWOT analysis has been conducted to reflect on the business environment of McDoanlds’s. Moreover with the use of 7Ps the strategic planning of the company has also been discussed.

 

Reference

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De Luca, L.M. and Atuahene-Gima, K., 2013, May. Market knowledge dimensions and cross-functional collaboration: Examining the different routes to product innovation performance. American Marketing Association.

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Kraak, V.I., Englund, T., Misyak, S. and Serrano, E.L., 2017. A novel marketing mix and choice architecture framework to nudge restaurant customers toward healthy food environments to reduce obesity in the United States. Obesity Reviews.

Meyer, P., 2015. McDonald’s Marketing Mix: 4Ps Analysis. Panmore Institute. October7.

Mathur, S., 2017. Glocalization in Fast Food Chains Glocalization in Fast Food Chains: A Case Study of McDonald’s. In Strategic Marketing Management and Tactics in the Service Industry (pp. 330-347). IGI Global.

Rad, H.S., Akbari, Z., Ghorabi, M. and Motevaselian, M., 2014. The Role of Brand and Advertising in Marketing Mix (A Review of Marketing Mix). Interdisciplinary journal of contemporary research in business6(7), pp.114-127.

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