HI5004 Marketing process of McDonald’s
This assignment is discussing the marketing principles of McDonald’s in the UK as well as its contribution to the international market. McDonald’s is now a brand company worldwide for its pure determination to its own business. They always try to give satisfaction to its customer. Therefore, it is essential to notice that how this company is using a marketing mix strategy and meeting the needs of the customer. This marketing assignment is focusing on the clear objectives of McDonald’s, and some obstacles to run their business.
LO1: Understand the concept and process of marketing
1.1. The various elements of the marketing process of McDonald’s
Review marketing effectiveness
This part will discuss the marketing process, Business communications and developments to formulate sales techniques of McDonald's in the UK. There are various elements to compete in the growing market for any company. Those items are given below.
Optimise sales activities
Manage marketing promotion
Manage customer feedback
Conduct market research
Elements of Marketing Process
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Conduct market research:
The marketing research of McDonald's involves identifying customer needs and meeting these needs in a better way than competitors. Hence, McDonald’s is following the 4Ps rule to create a competitive market. Customer's requirements vary over time(Murray, et al., 2011). To meet these changes, McDonald’s introduces new products (i.e., foods and drinks) and will continue in the long run.
Review marketing effectiveness:
Marketing effectiveness means to meet the goal of maximizing the company's spending to get positive results in both the short- and long-term. McDonald’s finds out the current and future market trends, on the contrary, the current resources and capabilities of the company(Dibb & Simkin, 2011).
Manage marketing promotion
Psychological factors are more important that is how the customer feels when buying the product. Hence, the marketing research of McDonald’s company playing a great role to identify different types of customers. The promotions aspect of the marketing mix is a vital part of making a profit for a company. That is advertising which is conducted on TV, radio, in cinema, online and by using poster sites, etc.(Murray, et al., 2011).
Manage customer feedback
Manage customer feedback gives the tools to make a connection and build a relationship with the client for a company. McDonald's has established an excellent position in the minds of customers. Teenagers are going to McDonald's by attracting a saver menu at an affordable price; Children want to visit as it is a fun place to eat(Balmer, 2011).
Optimise sales activities
Marketing strategy plays a great role in the development of a different kind of business. Optimise sales strategy to fulfil the customers demand as well as maintain a good relationship with the client. To increase sales McDonald's is applying marketing techniques in their business, proper planning platforms. McDonald's study the manner of the clients worldwide and totally provide many menus.
That is why McDonald's has become a giant brand company in the UK and worldwide(Kim, 2016).
1.2. Benefits and costs of a marketing orientation of McDonald’s
This topic is focusing on the advantages and disadvantages of having a marketing orientation of McDonald’s. The market-oriented approach brings relatively some benefits and costs to Boosts(Mild, et al., 2008). In fact, marketing mix is covering pricing decision, distribution agreements, promotional marketing campaign growth as well as product growth. The advantages are given below.
A business strategy has advantages in pleasing customers. Hence, it is necessary to gauge customer needs so that these requirements can be fulfilled without delay.
The benefits of market research are the company can make out the customers' demands and needs. All the process provides competitiveness over its competitors.
Especially McDonald's has an exceptional keenness for the client and love to deliver, help and comfort to the consumer. That is why the current menu, which has grown 70%.
On the other hand, there is a disadvantage for a small business owner:
In a business organisation, there are few departments. The company will hire an outside company to search the market to be a successful company in the market. The costs of hiring a market analyst as well as a private marketing firm will be so much expensive sometimes(Fana & Laub, 2015). The company announced US sales fell 3.3% last quarter.
The costs of customer orientation are costly research which is not possible to perform by small organisations. Sometimes, the market researcher cannot make out consumer behaviour correctly. Customers have different preferences for the particular commodity.
Sometimes sales might be exaggerated due to an economic downturn and increasing material prices can affect McDonald.
Hence, the overall concept is for the development of a company risk should be taken.
LO2: The concepts of segmentation, targeting and positioning
2.1. Show macro and micro environmental factors which influence marketing decisions
This section will illustrate about some macro-environmental forces that can change marketing decisions. To run an industry raw materials are needed. The costs of raw material can be risen or down to produce final goods. Sometimes some target market may be formed, or old ones can be removed. McDonald’s is aware of changing Marco environmental conditions. Those are given below.
Demographics: Demographic condition reflects the study of factors like age, race and sex,etc. However, companies focus on demographics such as household size and occupation and education. McDonald’s is aware of changing the general population in the UK.
Economic: TheEconomic condition of a country isacrucial factor for makingthestrategy of a company. The recession that came to the UK, then many companies faced many problems. The common people did not want to spendmore of their disposable income. McDonalds’ marketing department started to think about it. They began to sell new menus at affordable prices.
Cultural: Another factor is cultural changes like entertainment, eating habits. For developing successful marketing, the industryneeds to follow on the cultural influences of the society. The preferences for a product depends on culture.All of it is producing new requirements and lessening past needs.
Government: The government has the power to control monetary policy. Some industry changes their future policy for the government’s interference. Especially,thepolicy of the UK government is the main factor influencing the McDonald’s marketing policy day by day.
2.2. Segmentation criteria to be used for which influence marketing decisions
Another strategy for McDonald’s for targeting markets into some specific groups of customers for selling products. This market segmentation process of McDonald’s helps to understand age group, socio-economic condition and brand perception. On the contrary, this process contributes to developing outdoor advertising, social media campaigns, etc. Before planning the marketing strategy McDonald's can choose five market segmentation strategy, those are as follows.
Differentiable: Every company should differentiate their market according to customer preference. That is the market of every company should be internally homogeneous.
Substantial: There are many unified characteristics like brand perception, socio-economic background and age group. Wasting the marketing budget on only market segmentation will not be right. Another important part of a market is longevity.
Accessible: The process of accessibility of the market is a vital thing to consider. The company can access the market by television infomercials, social media campaign and outdoor advertising. It is one of the capabilities of the marketing department.
Actionable: The engagement of the public and the customer is influenced by the abilityto take action in the market of the company. Actionable brings the lawsuit of the market. Many types of action can be taken by a company like to target a specific customer, provides value to customers, goal oriented, through the integration of brands build the brand, etc.
Measurable: The measurement of market segmentation is done by the volume and value of sale and business. The company should recognise the size of segmentation of a market to decide the proper marketing strategy,
2.3. The targeting strategy for selected product/ service
Targeting strategy is one of the crucial factors of the marketing strategy of McDonald's. At first, the company has to choose its target customers to whom the product or service will be sold. If the company select their target customer, marketing will be easier for them. There are many procedures to under the target customer for a company; those are as follows.
1) The company determines how their product or service affects their potential customer. They will also identify the characteristics of their customer. How and when the client will use the product is also an important thing for targeting strategy.
2) The company has to consider the type of their customer. Type of customer means- gender, occupation, ethnic background, marital status, income level and age. Which type of customer uses the company's product more is an essential part for determining the targeting strategy.
3) The company has to consider; the customer is interested in which product. As McDonald is a multinational corporation, they have to choose the base of the customers.
4) At first, McDonald's have to identify the features of the product. The company has to recognise which product meets the needs of the customers more. It will be easy to determine the targeting strategy if they make a list of the superior product.
2.4. How buyer behaviour affect marketing activities in different buying
Buyer behaviour is the crucial factor that affects the marketing activities in a different situation. In the case of introducing a new product the consumer's behaviour also affects the marketing strategy of that product. For various buying situations, the effect of consumer behaviour is as follows.
Pricing: The customer always prefers a lower price or discounted price for all the product and service. For this cause to attract the client, the company always try to set their price relatively lower than the other company. Therefore, the company have estimated their budget before any marketing strategy.
Advertising: Advertising of a product is also affected by the behaviour of the consumer. According to the preference of the product and service to the customer, McDonald's advertise their selected product.
Social media: Social media is very useful tools for a company. Today, the customer becomes easier to choose the product through any social media sites like Facebook, YouTube, etc. Therefore, the company thinks it is more useful to advertise via social media sites than any other sites.
2.5. New positioning for a selected product/service of McDonald's
New positioning indicates doing the same activities differently than any other company or doing different activities about other events. By doing this, McDonald's can be best on a particular product. For example, the adult males are targeted customer for McDonald's burger. Low cost and differentiation are the two essential factor of positioning. The company have to follow these two to achieve its targeted growth.
In the fast food business, the family friendly low-cost restaurant is made by McDonald. To appeal to more customers, the McDonald has acquired the low-cost positioning in recent years. McDonald made their focal point on cutting the cost of food and cutting the time of delivery also. To reduce the cost of the product, McDonald uses computer operated machinery. It will take a small time and few employees. For the rest of the food, fast food industry McDonald puts its standard. McDonald established itself to the forefront of the food industry.
LO 3: Individual elements of the extended marketing mix
3.1. How products are developed to sustain competitive advantage:
The competitive advantage of a company is needed for developing and maintaining the reputation in the competitive market. This advantage enables a company to earn aprofit and give better products to the customer at a lower price. It enhances the attraction of the client for that particular product. The competitive advantage involves cost leadership that is it enables a company to produce a final good and give services to the customer than its competitors. Another thing is differentiation strategy where through differentiation; the company can create a good reputation in the mind of the client. McDonald controls service standardisation and product development to sustain competitive advantage. The competitive advantage depends on the following issues:
It is a fast food restaurant. McDonald is the famous for the quick customer service with maintained quality of the service and the quality of the food.
The most significant comparative advantages of McDonald is a low price. It is involved in the overall utilisation of economies of scale to gain the cost advantage.
Another competitive advantage of the McDonald is absoluteness of the taste of the food. The McDonald food is the famous for the standardised process of cooking. It uses same quantities and same ingredients for preparing the food. As a result, it gains a positive indication of consumer loyalty.
3.2. How distribution is arranged to provide customer convenience
McDonald Company is promised to meet customer requirement as soon as early. It adding more value for gain profit adds more option to the menu and fast and affectionate service and provides a convenient and comfortable restaurant service to all customers in all the counter of the McDonald. This company invest a lot to train their employee. McDonald's spend a lot make their employees more qualified and trained. They also create lots of new jobs to make a growth of the business. At the location of their restaurant, McDonald plays a vital role in the local communities via football programmes. McDonald also donates their share of returns to the Ronald McDonalds charity house. McDonald desires that their restaurants should be standing on beside of High Street. The company also want that their restaurants will be modern and fresh and clean. They will make food Park across the entire UK. The food delivered by McDonald's will be great tasting food, and it will give good value for money. They will also support the farmers who do a great deal for them.
3.3. How prices are set to reflect an organisation’s objectives and market conditions
Pricing for a produced product of a company is more important.Pricing shows that how long the company will stay in the market. There are many strategies to set theprice of the product and services such as.
A business owner can set ahigher price for the product and need to reduce prices gradually to survive in the market.
The owner needs to set prices of the produced product in comparison to the competitors. The company will adjust theprice of the goods either at a lower price, the same price or higher price for the expansion of the enterprise.
Another method is bundle pricing that buys one and gets one free method. Otherwise, the company can give complementary product free for purchasing a particular product. McDonald’s started to offer free coffee with breakfast sandwiches. McDonald’s is bundling such products with the selling goods to thecustomer. The mental approach is playing a great role in setting theprice. Pricing may give the quality of the product. Pricing of a product depends on the final cost of distribution and the company apply a markup for making aprofit.
3.4. How promotional activity is integrated to achieve marketing objectives
Different companies have adifferent promotional aspect for their product. Advertising of different products is acommon strategy for surviving in this changing time. The customer wishes to buy that product what they see in the advertisement through the online commercial, TV and media. McDonald’s take help from celebrity spokespersons for the promotion of their foods and drinks. McDonald’s have started menu upgradationlike sandwich, burgers. Home Delivery system plays a crucial role in direct marketing. On the contrary,the employee of McDonald’s has a good impression on the customer. They communicate with the client face to face to keep count of client satisfaction. Sometimes, McDonald’s conducts functions and goes live on social media. Those activities raise consumer’s preference for McDonald’s product.
3.5. Analyse the additional elements of the extended marketing mix
Various elements of marketing mix related to the 4p’s are leading Brand Company like McDonald’s. These are discussed below.
Customer's requirements vary day by day. Indeed, McDonald’s is trying to pay attention to thedifferentage group. Hence, they are introducing new products and services to give satisfaction to the customer. The attraction of the food depends on the culture, the customer belong. Therefore, McDonald’s has arranged diversified food and drinks worldwide.
There is apsychological factor of the customer for the product. If the company use low marked price, the buyer may think that the product is not of good quality. That is why McDonald’s has introduced anew strategy to classify its products into two categories like BA of Rs 20-30 and BCV of Rs 50-60.
McDonald’s take advantage of social media for advertisement of their product. Apart from this, this company started door drops and direct mail to make people aware of their products.
Another specific factor representing McDonald as an excellent brand company is a public interaction regarding thechecking of the food product ingredients.
Therefore, the marketing strategy of McDonald’s refers that how this secret plan for each customer can be implemented. The short-term target of McDonald’s is to get better feedback from the client. The greatcompliments come from the customer due to broad marketing strategy, direct marketing, and a huge budget for the implementation of their products. Although, McDonald’s is trying to give more advantage to their customer all over the world for achieving more profits. They have targeted all type of age group. Hence, they can make out the changing requirements of the age group. It is possible only when the employee helps the firm, on the contrary the firm also pay attention to their employees.
The marketing mix strategy of McDonald is discussed in this section of the assignment. There are many similar type of product in the market as the product of McDonald. So McDonalds wants to segment its market to raise its sale. Hence, there are different strategies in the mind of McDonald’s marketing management team. McDonald’s introduces different foods and drinks to the customer.
LO 4: Be able to use the marketing mix in different contexts
4.1. Plan marketing mixes for two different segments in consumer markets
McDonald’s has invested more money for the stabilisation of their company. There are similar products in the market as McDonald’s produces. Therefore, MacDonald’s makes some special products from the other goods in the market. Hence, McDonald’s has the potential to create real images in the minds of their customers. The marketing mix helps McDonald’s in staying in the market. With the support of the marketing mixes McDonald’s developed menu cards for the consumer, tried to set a stable price for the different foods and drinks, and took help of the direct marketing through online advertisement. The market segmentation is the core criteria in the commercialization strategy. The market segmentation depends on the geographic, demographic and behavioural matter. Hence, McDonald’s focused on the low and middle income grouped and new married couples, religion, and children,etc.
4.2. Illustrate differences in marketing products and services to businesses rather than consumers
Buying products for ourselves and purchasing products for the company from the market give a different point of views. It is our thoughts that marketing products and services to business rather than theconsumerare somehow related to the people. The various marketing programs have the different outcome. The goal for the business that sells to customers is to thelarge target market, maximiseprofits,etc. On the contrary, the aim for the firm that sells to business is to increase the relationship, and to thelarge sales cycle,etc. Besides it, the business buyers do not spend their own money. Therefore, business marketing means that sale of products and services to another organisation for getting thesupport of their company only. The consumer marketing means the direct relationship between the consumer and the company. McDonald’s is doing both kinds of marketing for their interests.
4.3. Show how and why international marketing differs from domestic marketing
The international market and domestic market concept arise for the involvement in such kind of business. There are different market strategies for national and international market. McDonald’s is famous as theglobal company now. Hence, the company changes it brand images and strategy from country to country. McDonald’s is focusing on the cultural side, tastes and preferences of the people about their products. The McDonald’s has the more growing markets outside the United Kingdom. This brand company can adjust the domestic demand properly because McDonald'sis accustomed to the local traditions and rituals. Hence, the biggest challenge is to know the international demand and serve expected qualities.
Mcdonald's has the sufficient stock management that enables this company to run smoothly. Hence, it helps McDonald’s to reduce costs. The hygiene service and good quality reduce the waste materials. Actually, McDonald’s has many trained employees to serve the customer in new style. They are capable to know the requirements of the client, and fulfil basic needs without delay. This peaceful mind of the service provider is the key of the McDonald’s success story. That is why McDonald’s is well known to its customer all over the world.
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