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10812 Downloads1 I Published: 17 Feb ,2017
In modern era, every organization seeks for ways through which they can gain high market shares and sales. Marketing is defined as the process of promoting and selling products in the market. In the present scenario, the competition among business in every sector has become so intense that it is not easy for organizations to retain their old customers and attract new ones. Therefore, it can be stated that marketing plays very important role in businesses in order to increases their sales and profitability. The present report is based on McDonald's which is a chain of restaurants that operates in many countries of the world. Further, established in the year 1940, it is considered as the world’s largest chain of hamburger restaurants (MacDonald's, 2016). This report depicts various elements of marketing process of McDonald's. In addition to this, it also explains some of the benefits and cost associated with marketing orientation of the organization. The present report also highlights the micro and macro environmental factors which affects entire decision making process of McDonald's.
In the current scenario, McDonald's is facing tough competition from market players such as Burger King, KFC and Subway. Now, the brand is required to carry out effective marketing in order to maintain its leading position in the restaurant industry (BOSE, 2010). The major elements of marketing process of McDonald's are mentioned below as:
Market analysis- The process of marketing begins in McDonald's with analysis of market. It can be stated that before developing its marketing process, the brand identifies changing trends in marketplace. For example, it may happen that the customers are getting more affected by social media marketing instead of newspapers advertisement. Therefore, in the stage of market analysis, McDonald's try to identify the factors which affect consumer behaviour (Brassington and Pettitt, 2005).
Identifying target market- The second steps in the marketing process of McDonald's is related to identification of target customers and market. In this step, the organization determines its target market and customers. Further, it is defined on the basis of age, income, gender and other factors.
Development of marketing objectives- McDonald is also required to develop its aim and objectives regarding marketing. One of the main reasons why the brand develops objectives is that they act as guidelines and provides direction (Jobber and Ellis-Chadwick, 2012). Some of the core marketing objectives of the brand include increasing sales, market share, getting competitive advantage etc.
Formation of appropriate marketing mix: After determining all its marketing objectives, the organization develops an appropriate marketing mix to accomplish them. Further, it can be considered as one of the most important part of McDonald’s marketing process. The marketing mix consists of seven major elements which are product, price, place, promotion, physical evidence, process and people. McDonald's defines each and every factor of marketing mix separately.
Marketing orientation can be defined as the process which concentrates on manufacturing and delivering of products and services which satisfy the need of people in market at its best. In the latter half of 20th century, the concept of market orientation started to develop among companies. Most of the firms shifted their focus from product orientation to market orientation. In earlier days, one of the major strategic objectives of businesses was to enhance quality of their products and services. On a day, they operate with key aim of satisfying need and demand of people in market through their products (Nwankwo and Gbadamosi, 2010). One of the major benefits of marketing orientation to McDonald's is that it has helped the brand to carry out more focused production. Further, it can be explained that by keeping consumers on priorities, McDonald's is able to develop products and services which best satisfy the need of all its customers. It has also helped the organization to enhance the degree of its customer loyalty. Other than this, by delivering products which meet customer needs, McDonald's is able to retain its old customers and attract new ones. It has also been able integrate all its function with one core objective that is to meet the need of people in market. This has resulted in development of more concentrated strategy. In addition to this, it has also assisted the brand in carrying out more effective marketing, advertisement and promotional activities (Sheth and Sisodia, 2015). McDonald's is required to bear additional cost as it is not easy to understand the changing need and demand of people in the market. This requires large amount of human, financial and technical resources which can help in assessing the changing market needs.
McDonald's operates in various markets of the world and it is required to carry out proper market segmentation before offering its products and services in that market. At the time of operating in markets such as India, the brand needs to segments its market on the basis of income. Further, majority of people in country belong to low or middle income group. McDonald's can target these individual which belong to middle or low income group (Nwankwo, and Gbadamosi, 2010). This will help the brand to attract more and more customers along with increasing sales. All the strategies and action plan for McDonald's will be required to developed in aspect of this particular segment only. On the other side of this, at the time of operating in market such as UK, McDonald's can carry out market segmentation on the basis of age. It can be stated that the consumption of hamburgers is done mostly by people who belong to age group of 16 to 40 (Demoss and Nicholson, 2005). Therefore, in developed markets such as UK, segmentation of McDonald's can be carried out on the basis of age group.
After carrying out market segmentation, companies are required to develop effective strategies for targeting. McDonald's can use various kind of targeting strategies such as undifferentiated targeting, concentrated targeting and multi segment targeting. It can be stated that one of the best and most suitable strategy for McDonald's hamburgers can be the strategy of multi segment targeting. The rationale behind this is that it will help the brand to focus on one more than one target market segment (Hills, Hultman and Miles, 2008). The organization operates in many markets of the world and its market segmentation differs from country to country. Another reason why multi segment targeting is more suitable for McDonald's is that it is cost effective. This strategy of segmentation will require great input from the management of McDonald’s. Other than this, the brand will also need to increase its activities related to market research and promotion. As compared to other two strategies, multi segment targeting strategy will be more effective for McDonald’s. In undifferentiated targeting, businesses are required to adopt a single targeting strategy and there is no market segmentation done (Lilleker, 2013). On the other side of this, concentrated strategy deals with niche market which is also not suitable for organizations such as McDonald's.
McDonald's is an international chain of restaurant which has millions of buyer all across the world. Buyer behaviours consist of several factors which encourages people in market to buy products and services of one particular firm in the market. In the present scenario, social media has developed as one of the most potential platform for businesses to promote and advertise their products and services (Pomering, 2014). By creating official page on social networking sites such as Facebook, McDonald's can interact with all its customers on more personal basis. Further, before launching any kind of new product, McDonald's can post it on social media sites in order to identify reaction of people. It can be explained that buyer behaviour has a direct impact on all the operations and activities related to the marketing. Organization is required to understand the important factors which affect the decision making process and behaviour of all its customers. Along with this, it is also required to make changes in its existing marketing plan in order to meet those factors which affects buyer behaviour. Personal factors such as age, lifestyle, personality have great influence on the entire decision making process. It can be stated that before developing any kind of marketing strategy, the brand is required to identify the factors which affects the behaviour of people in market (Sodhi, 2011). McDonald's is required to develop all its marketing plans and strategies on the basis of those identified factors.
Strategic positioning can be termed as the process in which companies carry out same activities differently or do different activities as compare to what other market players are doing. McDonald's is facing very tough competition from market player such as Burger king and Subway. The brand is required to adopt new positioning strategy in order to maintain its existing market share and sales. As per its existing strategy, McDonald's has positioned itself as a very low cost restaurant for all the people in market. It can be stated that in last few years, the perception of customers in fast food industry has been changed. Now people have started looking forward to consume more healthy food products (Wilson and Gilligan, 2012). Therefore, McDonald's has an opportunity to position itself in market as a healthy food providers in the market. As per the new positioning strategy, the brand will be required to make changes in its existing and will need to introduce more healthier products which do not have negative consequences. This strategy will not only help the brand in increasing its sales but will also provide competitive advantage to McDonald's.
sustainable competitive advantage can be termed as those attributes and skills of a business enterprise which cannot be easily duplicated by other market players. The market in which McDonald's operates is highly competitive. This means that people in market have wide variety of option available with them. At the time of developing products, the brand makes sure that it uses best quality of raw material and other ingredients (Zikmund and Babin, 2012). Further it can be stated that two factors which provides the brand with core competency includes its fast customers services and high use of technology. McDonald's keeps on implementing new machines and tools which posses advanced technology. This helps the brand to lower down its entire cost of production and make all its process more effective. The organization has always been successful in delivering all its products and services on time. This has resulted in creating more satisfaction among all the customers of McDonald's. In addition to this, products and services on time has also resulted in encouraging customers to repeat purchase (Naik, Raman and Winer, 2005). In some of its market such, McDonald's has also introduce offers such as delivery within 2 minutes else get the entire order for free. No other market player has introduced such kind of services or offerers. Therefore, it can be stated that it is the use of effective technology which has helped McDonald's to deliver products and services at fast rate.
In the present era, there are various factors which supports an organization to achieve all its aim and objective. One of these factors includes distribution system which plays a very significant role in success of any business enterprise (Constantinides, 2006). Organizations such as McDonald’s are required to make sure that effective strategy and system related to distribution is established in the brand. Effective distribution is necessary because it helps McDonald’s to make sure that its products are available to customers on time. At the time of carrying out its operations in any country, the brand distributes its products with the help of physical store. One of the most interesting fact about McDonald’ is that it opens stores many places to make the process of purchasing very convenient. As per its distribution strategy, majority of the times McDonald’s will have its outlet on public places such as shopping malls, airports etc. Along with this, the brand has also developed its online store from where it provides products to people in the market (Kumar and et. al., 2011). McDonald’s is well aware of the fact that if the products are not available to customers on time then they will move to other restaurant brands available in the market.
McDonald’s is the brand which has been always careful regarding its pricing strategy. It has developed its image as a very low cost restaurant in the market. Therefore, it can be stated that the brand has adopted for a low prices strategy (Nwankwo and Gbadamosi, 2010). This has helped the brand to attract individuals from all income group. The result of this was increase in sales, profitability, market share and customer base of McDonald’s. With the help of using modern and advanced technology, the brand become always successful in lowering down its entire cost of production. Along with this, low price strategy has also provided the organization with competitive advantage. The prices of products which are offered by McDonald’s are so low that it attracts people which even belong to lower income group. At the time of operating at global market, business are required to make sure that they have adopted an effective pricing strategy. Prices of products and services has an direct impact on demand of the same. MacDonald's low prices strategy has helped in generating more demand of all its products in market.
The promotional activities adopted by the McDonald are mostly through communication channels such as:
Process: McDonald's follows the systematic process of offering its products to its customers by using proper planning and logistic process to sell their products in market. In other words processes mean that everybody knows what to do and how to do it (Brassington and Pettitt, 2005). All services need to be clearly defined. This will avoid confusion and promote a consistent service.
Physical Evidence: The level of comfort and attractiveness of a service location may make a lot of difference to the user experience. Physical evidence of McDonald's states about the validation of the company that is about the look and ambiance of the brand which creates the differential image of organization in market.
People: People are an essential ingredient in service provision recruiting and training the right staff is required to create a competitive advantage. Customers make judgements about service provision and delivery based on the people representing your organization. It refers to the employees of the company, McDonald's gives training and development to its staff and employees that how they should offer the products and satisfies the wants of consumers (Sheth and Sisodia, 2015).
Marketing mix consists of four major elements which are products price, place and promotion.
Marketing of products and services in context to customers refers to the business to consumer (B2C) marketing. In this marketing the exchange of products and services takes place between the McDonald's and consumers (Ali Talwar, 2013). In business to business (B2B) marketing that is exchange of product and services between two different businesses (Demoss and Nicholson, 2005). The ultimate goal of B2C marketing is to convert people in market into consumers as aggressively and consistently as possible whereas, the goal of B2B marketing is to convert prospects into customers, the process is longer and more involved.
B2C marketing the business target on the needs and desires of the customers on the basis of which they satisfy their consumers (Hills, Hultman and Miles, 2008). In B2B, company focuses on relationship driven marketing where the products and services are offered according to the requirement of business.
In B2B products and services are exchanged between the manufacturer and retailer whereas in B2C products and services are exchanged between retailers and consumers. In B2B marketing the transaction of goods and services takes place on huge volume or on wholesale basis (Pomering, 2014). In B2C the transaction takes place on retail basis where the customers purchase limited quantity of products.
International marketing refers to the marketing of products and services at global level that outside the boundaries of the country and it is planned and implemented in accordance with the global viewpoints whereas, Domestic marketing refers to the marketing of the McDonald's in its own country that is at national level only (Zikmund and Babin, 2012).
International marketing will gives the opportunity to McDonald's to cover large market area with the large number of customers of the market (Demoss and Nicholson, 2005). The brand will also get the advantage of availability of cheap labor and using of advance technology in their business. In domestic marketing company has less challenges and risk as they have to operate their business at domestic level only whereas in international marketing company has to perform according to the international level.
From the above report it has been concluded that using of marketing principles assist the company to satisfy the needs, demands and desires of the customers. It can be concluded that the different component which affect the marketing decisions of the market is micro and macro factors. It can be stated that before operating in any kind of market, McDonald's effective carry out its analysis. Proper market segmentation is done and on the basis of which strategies to attract customers in target market are determined. It can be concluded that McDonald's has been successfully because of its ability to provide products and services at very low prices as compared to all its competitors. Other than this, it ability to deliver fast and accurate services has helped the brand to get competitive advantage over other market players. From the above report it can be also concluded that there is lot of differences in marketing products and services to business and the consumers.
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