Introduction to Marketing Principles
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.
Various elements of marketing 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.
Benefits and cost of marketing orientation for McDonald's
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.
Segmentation criteria used for McDonald's products in different markets
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.
Targeting strategy for McDonald's hamburgers
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 M