Marketing is considered as the most important part of any organization. In this regard, most of the companies require setting of effective marketing principles. With the help of this, they are able to achieve their target market objectives. One of the common goals of any association is to identify the needs and demands of their customers and then develop services to fulfil those requirements. However, most of the firms are acquiring different strategies to enhance their competitive advantage. According to the American Marketing Association (AMA), marketing is a crucial element for the success of every business organization and it is having direct relation with performance of company (Brassington and Pettitt, 2006). With this respect, there are several aspects that have to take into consideration at the time of planning strategies for business in order to attain desired results.
Here, the present study covers the important aspects of marketing principles. For this, McDonald’s is taken into consideration. It is one of the best known brands worldwide. They always put their customer’s needs first. It is the world’s largest chain of hamburger fast food restaurants having their stores worldwide. Due to their best food quality they always stand as recognized brand and serve around 68 million customers daily. Potential start-up of company is to find out their likely customers and enhance their market share. With respect of McDonalds, this study presents the overall concept and process of marketing as well as its segmentation, targeting and positioning strategies. Here, this study gives appropriate description about the individual elements of extended marketing mix within different context and changing buyer behaviour with respect to food industry as well.
One of the most essential business strategies of company is to identify most appropriate and effective elements of marketing. With the help of this, they are able to identify and set better marketing strategies than their competitors. It helps them in attracting huge base of customers and enhances their profit margin as well.
Objective of McDonalds is to identify the changing needs of their customers and provide them high quality services as per their demands. For this, their whole marketing process starts with the situational analysis through which company is able to do the complete investigation of their internal and external marketing situation (Esopo and Almquist, 2007). On the very next step, they can set their marketing strategy by developing best marketing plan. In this stage of marketing strategy, McDonalds need to focus on the Segmentation, Targeting and Positioning. At the last stage of overall marketing process, company requires to set their Marketing Mix. It is a process through which they are able to identify their customer’s needs regarding price, promotion and product as well. McDonalds is serving their fast food chain in more than 119 countries in more than 36,000 outlets (Cass and Julian, 2003). Some of the most common marketing process elements used by them are as follows:
SWOT Analysis: It is the most effective technique or a process which is also known as internal analysis of company. With the help of this firm can easily identify all the points regarding their internal situation. It helps them in evaluating strengths, weaknesses, opportunities and threats of the company. Further, McDonalds is able to identify their favourable and unfavourable conditions for their firm.
Integrated Marketing: This concept is highly focused with the enhanced brand image of company. By acquiring this concept in their business strategy, McDonalds can easily able to provide consistent brand experience to all their customers (Geyer, Van and Atasu, 2007).
Target Marketing: At the time of developing appropriate marketing process, company need to select their target customers to which they want to satisfy. It can be determine as a specific group of people whom McDonalds target mainly for all their food products. They can be selected by the way of appropriate marketing techniques such as segmentation as well as targeting.
With the help of setting appropriate strategies for marketing orientation, McDonalds can easily meet the needs and demands of all their customers.
Marketing Orientation in McDonalds: Marketing orientation is a technique which is used by McDonalds in order to become more customers centric. They are highly focused with building long term relationship with their customers and retain them for making huge profit as well. They are highly focused with the changing tastes and needs of customers and introduce new products accordingly (Rinas, 2007). It enhances the interest level of customers and attracts them towards the newly launched food product of company. However, they offer food and hamburgers for both the types of people i.e. vegetarian and non-vegetarian. Company tailors the communication needs of specific groups and try to meet them. For the same, it is essential for company to identify the internal strengths of company. Due to the increasing competition in food industry, it is becoming more essential for McDonalds to go through the appropriate development of marketing orientation (Patterson, Scott and Uncles, 2010). By this huge level of competition also, company has developed its strong presence in the market which helps them in overcoming with the existing weaknesses.
Customer Profitability: With the help of adopting best marketing orientation techniques, company is able to make great revenues from their food zone. Prices of all the food products such as Burgers, Mac Puff etc. are not high but the quality which they offer is very good. They are facing competition from other similar high brands such as KFC, Pizza Hut and Dominos etc. These are other largest food companies due to which McDonalds requires to maintain its quality services so that customer profitability and loyalty can be enhanced (Kotler, 2010). In addition to it, company assess the needs of the customers and then delivers products through which they are able to gain attention from varied customer base. McDonald’s offers different sort of burgers in different countries on the basis of culture and taste of people. This helps in boosting the overall sales of the company in effectual manner.
Customer Retention: Market orientation is a technique which helps in understanding customer needs in a more effective way. For retaining their customers, McDonalds offer quick services with various discount coupons to them. To all their regular customers company provides them happy meal service; in which customer can get different gift items such as toy for children’s etc. In addition to this, appropriate feedback forms are also taken into consideration from all their consumers so that better services can be entailed (Shoemaker and Shaw, 2007). Furthermore, company comes with lucrative schemes and offers for its existing customers which aids in retaining more of customers. This practice also helps in influencing customers to buy product repeatedly from McDonalds.
In order to survive in this highly competitive environment it is quite essential for companies to go through their internal as well as external environment which affects their business operations. Macro environment of McDonalds cover all those external factors which indirectly influence the marketing decision of firm.
These are the external factors which can be determined by incorporating PESTLE approach such as:
Political: McDonald is serving their business operations in more than 113 countries so its political stability is very broad in terms of different countries. There are various political factors which affect their strategies. Like other restaurants, McDonalds comply with government regulations and concerning to health and hygiene. Customer’s health and safety are the main motive of food industries. Further, several government strategies are required to be followed by company as fast food industry have been seen as junk food that is leading to obesity (Donovan and Henley, 2010). Each country has its own rules and regulations which might hamper the overall business operations of McDonalds.
Environmental: Nowadays, majority of population are highly caring about protecting the environment. In this regard, McDonalds found itself in the crosshairs of ecologist wrath over the polystyrene packaging (Wood, 2013). They are highly in the favour of paper packing in order to save environment.
Economical: The suppliers are McDonalds are from local and regional in the Arab world. However, economic condition of countries might affect the decisions and growth of company. Under this, due to the increasing tax rates and VAT on bills highly affects the buyer behaviour. In addition to this, interest rate as well as exchange rates is affecting the sales of company.
Social: Due to the changing needs of customers there is a huge impact on the sales of company. According to the different culture of countries people prefer different food such as: In Asian countries people prefer rice while in western countries individuals prefer hamburgers and French fires. McDonalds requires making their strategies as per these needs (Mesdag, 2000).
Technological: With the help of the increasing technological advancements McDonalds is able to improve their management as well as productivity. It makes their processing faster and attracting huge number of customers as well.
Legal: Company is highly focused with the various rules and regulations and try to put their customers’ needs first by providing health and hygiene environment. McDonalds serve their business operations in fast food industry due to which they must adhere to many legal requirements, such as the labour and employment law, corporate law and tax requirements etc. (Tălpău and Boşcor, 2011).
Suppliers: In order to serve their business operations effectively it is essential for the management team of McDonalds to pay proper attention on their suppliers. They are the solid supporter of economy. The majority of suppliers are from local area in the Arab world.
Customers: McDonalds always put their customers need first. They identify the desires of their clients and try to meet those requirements in a better way than their competitors. They are another important constituent of marketing process (Eid and Trueman, 2002).
Competitors: In order to identify the competitive advantage it is quite essential for business to adopt some of the best strategies. McDonalds always undertakes different competitive marketing strategies in order to enhance their consumer base.
Segmentation can be defined as a practice of dividing market on certain basis so that exactly segment of customers can be identified for which products and services need to develop. Basis of segmentation can be geographic, demographic, psychographic, behavioural and multivariable. Segmentation is considered as a most important strategy for the firm through which they can easily achieve their objectives. There are several products of McDonalds offered to its customers.
While launching any new product it is essential for company to set their STP strategy. In which Targeting is considered as most effective process through which McDonalds can focus on its target customers.The targeting strategy adopted by McDonalds for their new beverage i.e. crunchy cold shake is highly focused on kids, teenagers and family of different age groups between 10-45 age groups. For this purpose, company need to adopt undifferentiated targeting strategy in which same set of marketing efforts will incorporate for attracting more of customers towards it. It is a type of mass marketing that will aids in boosting the overall sales of the company. However, only undifferentiated strategy is focused for targeting because shakes is a category of one of the most likely food product and it is liked by majority of people. Through this type of targeting they can easily focus on their particular market segment and cover large market share. For this, McDonalds can adopt multi targeted segmentation strategy which requires appropriate promotion and identification of needs of customers (Hopklns, 2013). In order to attract large base of customers towards its market they can start several outlets in different areas as well as crowded places such as shopping malls etc. Through this, they are able to enhance their brand image and develop better clientele relationships.
Buyer behaviour can be referred to a sum total of consumer’s preferences, attitudes, intention and decisions with regards to purchase of the product or services. One of the most essential needs of any organization is to fulfil their customers’ needs in order to make them happy. In this regard, changing needs and perception of customers are considered as a most difficult phase of marketing planning. McDonald’s is highly focused about developing a menu which customers want. However, buyer behaviour is changing day by day as what is attractive today may be discarded tomorrow. These changing taste preferences of customers are highly affecting the marketing activities of company. It is further evident that technology also influences the customers and hence it is required to involve new technology while developing product in order to gain attention from customers. In this context, McDonalds always try to introduce new products over their old one. Company knows that items in their menu will vary in popularity. For this, they are highly aware with the timely changes that must be taken into consideration (Schultz and Gordon 2011). Another concern for McDonald is influence of customer’s behaviour from culture factors. In this context, company develops tailored product as per the culture and beliefs of customers so that actual needs and wants of customers are satisfied in effectual manner. Further, due to the higher competition within the food industry most of the people prefer hygienic food items with high quality service. This is one of the most essential requirements of customers and for this McDonalds always follow healthy cooking environment with their open kitchen area. Thus, it can be determine that marketing activities can be changed as per the changing buyer behaviour in different situations.
With the help of this technique, company can easily change their customer’s perception about their product. As far as McDonalds is seen they different varieties of food products which they have targeted families as well as kids and youngsters. In order to enhance their market share they have launched a new food beverage crunchy cold shake in the market. For this, demographic segmentation takes place for families, kids and teenagers. For this particular product, they can select the competitive positioning strategy such as celebrity endorsement, banners and posters in crowded places as well as shopping malls. It is the most effective way to differentiate the products offer and create value in the market (Mourdoukoutas and Siomkos, 2009). Through this, company can capture the huge market share and attract the intended target audience in an effective way. In addition to it, company can even take support from viral marketing for the purpose of positioning new product. For this, video can be posted on Facebook and YouTube just like done by Nike for developing unique image among competitors.
Attaining higher competitive edge is one of the most important aims of any organization. Through this, they can differentiate themselves from their competitors and develop positive brand image in the mind-set of customers. For this, there are various most important factors of McDonalds marketing mix which makes sure that competitive advantage is sustained such as:
Price: customer perception of value is an important determinant of the price charged. McDonalds have gained huge segment in the food industry and became the top most brands due to their high pricing strategy. They mainly target middle as well as high income group people and try to provide them quality services with hygiene factors on a high price. Customers are still ready to pay for it due to its quality (Kotler, Bowen and Makens, 2010).
Place: Company has selected the crowded place for introducing their new product and opening a new store. Shopping malls, new colleges and schools are the main places where company wants to introduce its new beverage.
Promotion: McDonalds have seen very well within the part of their promotional strategy. It clearly determines that their competitive advantage is highly sustained due to the appropriate advertisements through televisions as well as banners in different areas of city.
Product: Company is trying to grow up their market by introducing its new product crunchy scold shake. Offering such product helps them in attracting huge base of customers from different segment identified. Further, by investing lot in R&D Department Company is able to make its product more beneficial for psychographic segments (Hall and et. al., 2008). Through this they are able to add certain substances and making it more beneficial for those people who are health conscious.
For their appropriate distribution strategies of crunchy cold shake McDonalds can start its consumer packets of shakes and make it available to various stores and franchises of the same. These packets will also be available for customers at their door steps after ordering it online. Hence, company will apply two types of distribution strategy i.e. level zero (delivering packets at door steps) and level one (offering product at retail outlet). This is the most effective distribution channels which highly fulfils the demands of customers. Also, it declines the cost of distribution from which company is able to offer right product at right time with high quality. These services will be avail to customers on the option of take away as well as free home delivery options (Boddy, 2014). Thus, it helps them in attracting huge base of customers and enhances their market share through the online product delivery as well. With the help of this option customer can choose their nearest location of the store.
Setting pricing strategies of any organization reflects the marketing condition and objectives of McDonalds. Company is highly focused with high income age group people as well as middle income age group people. In this concern, it is quite essential for them to select pricing strategy which provides maximum return to clients. At the initial stage company needs to keep its product pricing low so that they can easily attract huge base of customers. One of the most effective ways is to develop appropriate market for its newly launched product. In this respect, company will adopt psychological pricing in which prices will be set as £0.99, £1.99 and so on which will help in boosting the sales volume. However, company is serving their business operations in different countries due to which they are facing different economic conditions as well. By providing best taste as per the customer’s preference customers are able to provide maximum value for their money (Till and Nowak, 2000). In this regard, it can be stated that, McDonalds is favouring its strategy to create loyalty low pricing at initial stage and attract varied customers.
This is considered as most important strategy for gaining higher sales margin for the newly launched product. In order to make proper marketing for their new beverage company can put banners at shopping malls and different city areas near by franchises of McDonalds. It is taken into consideration for higher publicity as well. In this concern, it can be determine that company can also go through the brand endorsement from the popular celebrities. It is the best way to attract more number of people. Other than these methods, distribution channel for this product is online delivery as well (Moore, 2006). In this regard, company can promote the products on social media such as Facebook, Twitter, YouTube so that awareness can be increased. Beside this, discount voucher will be offered to regular customer through SMS in order to retain majority of customers. In this concern, company can make appropriate strategies for promoting its hygiene factors as well as exciting offers for their customers.
There are various extended factors which are more important equally important for the success of business firms other than price, place, promotion and product. Other factors are people, physical evidence and process management. These are highly important factors for company which helps in making their customers happy and satisfied.
1.Physical evidence: It is the environment which company provides to its customers at the time of refreshment and spending quality time as well. McDonalds has always tried to maintain its store ambience by providing happening environment to all people as well as clean atmosphere. All the hygiene factors must be considered by them at the time of making food (Jang and Jung, 2013).
2.Process: Process shows that how product is made for this McDonalds are having open kitchen area so that customers can easily go through the process. Cited company follows the process of self service and self ordering in which orders are placed and collected by customers itself over the counter.
3.People: Company recruits employees and train them to the core so that they can offer quality and standard product to customers every time. Employees are the key resource of McDonald that helps in boosting the competency in the market and also aids in attaining an edge over the rivals.
McDonalds latest launched beverage crunchy cold shake
Product: In order to make its presence in existing industry McDonalds have launched this beverage. It helps them in attracting huge base of teenagers.
Price: At the initial stage they keep their product prices low by targeted both high income and middle income class people.
Place: For launching this product company have selected franchises stores of McDonalds within the shopping malls. Other than stores, company also sell product online on their website and provide free home delivery.
Promotion: They can use celebrity endorsement as well as banner advertisements in shopping malls to attract wide range of customers.
McDonalds Mac Puff
Product: This product is made by company by keeping in mind the needs of kids and families. It is the considered as a light food product.
Price: Price of this product is very nominal due to which company is able to attract huge base of customers.
Place: This product is available at every store of McDonalds by providing wide range of facilities to them.
Promotion: To promote this promote, company uses above the line techniques in which they make advertisements by showing all its hygiene’s factors.
Selling products to consumers and selling products to business are slightly different to each other. While selling the product and services to any company it should be highly focused with its USP (Unique Selling Proposition) as business class people are highly focused with the profit margin. All the things required to takes place in professional manner and no emotions are involved in this. On the other hand, at the time of selling products to customers the main focus is one the value for company (Alexander, 2007). Organization can enhance their customer satisfaction by providing them value for money products. McDonalds always listen to their customers first and provide them quality services as per their desires. At this time company must focus more on marketing and value for money to their customers rather than anything else (Dalgic, 2006).
International marketing can be defined as all those activities in which company can transfer all its goods and services from 1 country to another. On the other hand, domestics marketing refer as advertising of products within the country only. It covers a huge difference in terms of brand enhancements as well as profit margin of company. There are several trade barriers such as exchange of currencies etc. which companies have to follow at the time of international marketing. On the other hand, at the time of domestic marketing there are no such things like in domestic marketing (Marshment, 2009).
From the above study it has been articulated that management team of McDonalds need to follow all the essential marketing activities in an effective way. For this, they have launched their new beverage crunchy cold shake and for this they have targeted teenagers, kids and families from the age group of 10-45 on the basis of demographic and psychographic segmentation. Moreover, they have adopted low pricing strategy and brand endorsements and banner advertising for the purpose of better promotion of this product. Further, it has been founded that by fulfilling their customers’ needs they can easily enhance their sales and profit margin.