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Introduction to Marketing Principles
Marketing principles includes set of strategies, processes, methods and standards that help the organization to fulfill their marketing objectives like product development, customer satisfaction and attracting more number of customers. Also, marketing helps in providing best information to users so that sales of the firm can be enhanced. Business also tries to develop effectual marketing tactics in order to develop communication among large set of audience (Dibb and Carrigan, 2013).
In the current scenario, McDonald organization has been undertaken which is the best known brand in the world. Business also focuses on building its brand through listening effectively to its customers’ needs and requirements and fulfilling it in order to attain customer satisfaction. By delivering the best quality products at effective prices it helps the firm to build brand image in the market (Dinnie, 2010). Also, there are different marketing communication methods i.e. advertising, promotions etc. which are used in order to create effective color, design and images of the firm and make it a recognizable brand. Furthermore, marketing is the best way which helps in identifying customer's needs and requirements and meeting those needs in an effective way so that tough competition can be given to the rivals.
1.1The various elements of marketing process
Marketing can be stated as the business orientation that aims at satisfying needs of consumers and attaining satisfaction. The different elements of marketing process of McDonald's are as follows- Analyzing market and environment- Here, it can be stated that management of McDonald is required to carry out proper analysis by adopting strategic tool such as PESTEL, SWOT, Porter's Five Forces and Value Chain analysis etc. so that proper market analysis can be done (Glanz, Bader and Iyer, 2012). Identifying the target market- Further, business is required to specify its target market segment within UK and other countries so that suitable products can be provided to them. For instance, it can be identified that people of UK prefer Chicken burger as compared to any other variety so the company is required to focus on producing that thing to enhance sales as well as customer satisfaction. Setting marketing objectives- McDonald's marketing objectives involves profit maximization both in short and long term perspectives and increasing the sales in order to enhance the brand value image. Further, business also aims to focus on corporate social responsibility to attain desired goals. Dealing with different marketing mix elements- However, the main significance of dealing with different elements of marketing mix states that needs and wants of target customer segment needs to be fully understood by the management of McDonald's (Henley, Raffin and Caemmerer, 2011). Implementation and control- It is the last element of marketing process which helps in assessing the level of effectiveness of marketing tactic and also essential improvement is required within certain aspects of marketing strategy that requires changes within internal and external business environment.
1.2 Benefits and costs of marketing orientation to McDonald's
It can be evaluated that business enterprise is required to develop its products and services on either product oriented approach or on marketing oriented approach. Through the marketing orientation approach, business aims to react what customers require. Thus, management of McDonald's is required to make appropriate decisions on the basis of customer needs and wants to attain satisfaction (Hung and Lin, 2015). The benefits of marketing orientation approaches are business focuses on customer centric approach i.e. business aims to provide significance to client's needs and wants and produce the product which is desired by the customer so that best results can be attained. Also, firm aims to enhance brand value in front of customers that helps in increasing customer loyalty and gaining high brand image within the fast food market. McDonald's also focuses on developing its products and services as per the needs and requirements of customers so that they can give tough competition to its rivals (Das and Samanta, 2015).
On the other side, marketing orientation also includes some adverse effects as one of the main disadvantages of using this approach is that it leads to enhance the cost of the company because it involves huge market research. In terms of using marketing orientation approach, McDonald should have good experience in understanding needs of customers. Furthermore, in order to gain success in this approach, latest technology should be available as well as the unique strategy (Poolton and et.al., 2006).
2.1 Micro and macro environmental factors influencing marketing decisions
Macro and micro environmental factors that influences the marketing decisions of McDonald's are as follows-
Macro environmental factors
The political factors state that McDonald's functions in more than 100 countries and thus it faces different political factors across the world. In general, it is essential for business to comply with government regulations in regard to health and hygiene factors. Also, government is taking strict actions against certain fast food industry because it has been increasingly noticed that it leads to heart and cholesterol problems among people (Ruckman, Saraf and Sambamurthy, 2015). Further, economic factors evaluates that it is essential for McDonald to make decision whether to import raw material from outside or to buy the product loyally is one of the crucial factor while another factor is the tax rate. It is essential for the management of company to analyze the tariff involved in imported raw materials. Also, the rate of unemployment affects the business as well as people are not able to increase their spending pattern.
Another factor is social factors which state that change in lifestyle of people affects the sales performance of McDonald's. People are becoming conscious towards their health and thus avoiding eating junk foods. Thus, it affects the sales performance of the firm in market. In regard to this, technological factors may seem to play a very limited role within fast food market. It can be assessed that if business employs high technology than it helps in improving performance of management and productivity increases while saving time and resources. For instance, installing computing devices helps in satisfying consumer’s needs (Kotler, 2008). Further, it is essential for the business to care about environmental factors such as air and water pollution. For instance, McDonald's found that its polystyrene packaging are having adverse impact on environment and thus it is essential for business to overcome such problem in order to break the criticism which affects the sales performance of business. At the end, legal factors such as employment and labor law, corporate law and tax requirements etc. needs be to be considered by McDonald in an effective manner (Graa and Dani-elKebir, 2011).
Micro environmental facto
It involves internal factors that influence the functions of McDonald's. It involves the suppliers who are essential part of internal business. McDonald possesses its own suppliers and they have very close relationship with them. Thus, it is essential for the business to make timely payments and cooperate with them in professional manner so that productivity can be improved. Furthermore, another factor that influences business is its competitors (Hassan and Craft, 2005). McDonald's possess certain strong competitors such as KFC, Burger King, and Pizza Hut etc. However, all such competitor’s own good brand image and market share in order to give tough competition to McDonald's. Thus, it is essential for McDonald to analyze its competitor’s power and their marketing strategy with the aim to overcome the rivals. Moreover, McDonald's is serving wide range of customers daily. Hence, firm provides best value to their customers as they are their first priority and tries to ensure maximum satisfaction (Havaldar, 2010).
2.2 Segmenting McDonald's products in different markets
Market segmentation can be stated as the way in which the whole market is divided into varied parts such as geographic, demographic and psychographic segmentation. In geographic segmentation it states that the entire market is divided into various parts. For instance, the entire geographic area involves wide range of customers and thus from such market target consumers need to be selected by McDonald's by keeping in the mind their needs and preferences (Zhuang and et. al., 2006). However, because its wide applicability such technique has been effectively used by businesses. Furthermore, another segmentation criteria involves demographic segmentation in which the market is divided into different demographic factors such as income, education and age. For instance, McDonald is required to undertake income and religion demographic factors while providing food products to their target customers.
Moreover, psychographic segmentation can be stated as the market which is divided into different factors such as attributes, beliefs and attitude of people etc. McDonald's undertakes such segmentation techniques because it has been analyzed that taste and preference of people differs from culture to culture variation. Thus, it is essential for business to provide suitable products as per their requirements (Brooksbank, 2001). For instance, McDonald does not provide beef related products within India as it affects the culture of people living in India. Thus, because of such reason more number of people prefers to consume the products of company and in regard to this they are gaining high market share and profitability.
2.3 Choosing target strategy for a range of products and services
There is a wide range of products and services available within McDonald's menu such as Burgers, Fries, drinks, muffins etc. Moreover, there are different targeting strategies adopted by firm in order to carry out their business practice. Undifferentiated targeting strategy can be stated that in such strategy business does not serve its product within one particular market or to specific consumers (Caemmerer, 2009). However, through following such strategy business tries to capture larger market share within particular geographic area. For instance, FMCG organizations widely used such technique. Another tactic is concentrated marketing strategy that states that it is specific and within it unique consumers are targeted by business to use the products. For instance, BMW adopts such technique because its products are high price and are connected with the lifestyle of people.
At last, multi-segment strategy helps business to set wide range of products to attract target people as per their taste and preferences. Thus, such strategy has been adopted by McDonald's management as business offers wide range of products i.e. burgers, fries and desserts etc. to attract people with different needs and wants. For instance, business provides burgers to huge customer base and as per their income level and gain high sales and profits. However, through adopting such strategy McDonald's attains huge success within market (Ferguson and Hlavinka, 2007).
2.4 How buying behavior affects the marketing activities
The behavior of buyer can be stated as the pattern of people purchasing the products and services and their factors that influences the buying decisions of other people. In regard to this, it affects the buying behavior of consumers. Therefore, it is essential for the marketing manager of business to determine the different buying situations of people in order to attain profit maximization. Thus, in order to attract people business is required to develop attractive advertisement and involve effective logo and characters so that buyer behavior of people enhances (Freytag and Munksgaard, 2011). For instance, the marketing manager of McDonald is required to carry out proper market research upon the buying habit of people such as they prefer coming to McDonald with their family or friends because of its unique product line and taste of burgers. Thus, such factor influenced the buying pattern of people and enhances the brand image of firm in market.
Moreover, the different feedback collected from buyer behavior and business unique selling price helps the marketing team of McDonald to develop an advertisement approach that stimulates the target people to visit the restaurant. Further, there are different other factors such as influence groups, opinion leaders etc. that influences the buying decision of people. Therefore, marketing team of business also focuses upon such factors by providing them good quality taste and service that is not given by other competitors (Gönül and Carter, 2012). Thus, it helps in increasing the brand value of firm in terms of market share and profitability.
2.5 Proposing a new positioning strategy for selected product or service
It can be evaluated that positioning a product helps in creating a distinct image in the minds of consumers. Thus, through developing a unique image of product or business among target market helps in differentiating the product and services that from others. For instance, taste and price range of Burger is the best positioning strategy that influences the target people to consumer the product. Technology is one of the important way that helps in positioning the product in the minds of consumer (Yannopoulos, 2011). For instance, McDonald undertakes innovative technology such as computing devices for billing so that customer does not have to wait for long time.
Further, quality is another factor that is used by business in order to differentiate the products from that of competitors. For example, McDonald advertises their products by adopting the features of quality and taste to grab attention of clients. Thus, quality is the best positioning technique which influences the target market to purchase the product. Also, quality of service influences the positioning the product. It is essential for business to provide best quality of service delivery to clients as it creates a good image on the minds of clients (Cooke, 2000).
3.1 How McDonald's products are developed
It can be evaluated that businesses are required to bring continuous changes in the product and services so that competitive advantage can be attained. Thus, in order to sustain competitive advantage within McDonald firm is required to expand its product line instead of focusing on same product. By following product development company will be able to beat their competitors and get major position in the market. Furthermore, they need to conduct market research in order to get information about the market trends as well as the needs of customers. At the last stage, McDonald is focused on monitoring the ability of its products that are available in the market in order to identify the loopholes exist in their product and services (Belohlavek, 2008). Due to this aspect, pilot testing is conducting by the organization that helps in launching new product in the market. By considering these all the aspects that are mentioned above, organization will be able to gain competitive advantage over rivals.
3.2 Explaining distribution strategies
There are different methods that help in distributing the product and service to consumers with the objective to gain customer convenience and satisfaction. McDonald is required to undertake such distribution methods that help in satisfying the needs of target market. McDonald's uses franchisee distribution channel which is commonly used within chain stores in order to distribute products as it avoids investment and liability of operating a chain. Here, ownership is not sold to the person who operates the chain. Thus, the main advantage of undertaking such type of method helps in reaching target base and providing them products conveniently (Codita, 2011).
Also, it fulfills the main aim of business i.e. of reaching the clients quickly and enhances sales. Thus, McDonald is using such model for distributing the product line and which is the main reason behind its success. While, there is another strategy such as indirect channel of distribution in which it involves intermediaries i.e. wholesalers and retailers. There is wide range of FMCG businesses who sells their products through such distribution channel in order to reach the customers (Doyle, 2009).
3.3 Explaining pricing strategies
It is essential for business to undertake best pricing strategy so that it influences customers to regularly visit the store. Thus, the marketing team of firm is required to set such prices of their products that attract consumers to purchase the product and improve the profitability of firm. Also, McDonald should analyze its objectives and market conditions such as if there is prevailing recession within the country then firm is required to penetrate its prices so that more number of consumers can be attracted to buy the burgers at cheap prices (Ennew and Waite, 2013). McDonald's undertake price penetration strategy in which it sells the products at a low price with the aim to capture larger market share. It is also feasible for businesses whenever they are entering into new market with new product. McDonald undertakes such strategy and provides products such as burger and fries at affordable prices in order to gain satisfaction. Also, setting prices as per market conditions and analyzing the purchasing power of individual helps firm to gain success (Hoffman and Bateson, 2010).
3.4 How promotional activity is integrated to achieve marketing objectives
Promotional activity is the best method that helps in carrying out effective marketing strategies through advertising, sales promotions and mouth publicity. Thus, all such methods helps firm to effectively promote company's products among target consumer in order to attain marketing objectives. McDonald promotes its products by producing television advertisement so that wide range of products can be promoted in order to enhance sales. With the help of advertisement in television it influences wide range of customer by showing unique images of products that are appealing in nature (Kardes, Cronley and Cline, 2012).
Business also promotes its products on social media in order to deal with brand management among people. McDonald uploads its menu items upon its Facebook page and regularly updates the offers and discounts so that it attracts people and also influences them to visit the store. Moreover, McDonald also adopts sponsorship program in which firm sponsors particular sports events that by placing hoardings of visual advertisements on t-shirts, trophies etc. to provide information to people regarding the product range and thus integrate in order to attain marketing objectives of firm (Greenberg, 2010).
3.5 Additional elements of extended marketing mix
There are varied additional elements available in the extended marketing mix such as people, process and physical evidence. People involve the human resources and management of McDonald that helps in exposing the organizational culture to customers and other people to attain marketing objectives. However, HRM is highly responsible in regard to select dynamic employees for working within different departments so that best customer services can be delivered (Martin, 2009). Also, proper training, mentoring and coaching should be given time to time in order to enhance the skills, knowledge and capabilities of employees.
Further, process is the way through which the product is delivered to consumers. For instance, McDonald is required to undertake systems such as uniformity of offering products, service delivery and service consumption. However, business is required to develop its processes and simplify it so that they can reduce the waiting time for clients and gain satisfaction. Another method is physical evidence that involves infrastructure and ambiance of restaurant which should be neat, tidy and safe (O'Cass and Julian, 2003). Also, the services delivered to people should be friendly and quick so that it attracts customer to visit the restaurant regularly.
4.1 Plan marketing mixes for two different segments in consumer markets
Following are the two different marketing mix segments within consumer market for McDonald involve both for high income and low income people. Firstly, for high class people, costly products will be served to them as per their lifestyle. While, the price will also be kept high for such products that are targeted to high class individual. However, in order to distribute the product McDonald owns franchisee model so that it can conveniently reach the target market and enhance the sales of business (Julian, 2003). In addition to this, business here focuses on promoting the products through social media and business magazines to attract targeted people.
On the other hand, marketing mix for low income people states that here the product provided are of low prices as people cannot afford high range products. Also, price of the product is kept to be minimum in order to ensure that lower class people can afford it. However, the place of distribution is the same i.e. franchisee method because firm does not want to lose its market share and brand image. At the end, promotion of product is done through newspapers, leaflets and television so that McDonald can attain customer satisfaction (Rhodes, 2011).
4.2 Illustrating differences in marketing products and services
Marketing of products and services in terms of business and consumers are different from each other. Main difference between both type of marketing is that organization needs more investment to attract customers by making promotional plan, while, in case of business clients McDonald needs less amount of investment as compared to attracting customers. In terms of conducting marketing for business clients, products has been sold in bulk quantity, while, customers purchases products in single quantity or more but less than business clients. At the time of doing marketing for customers, emotional factors is considered as it helps in attracting more number of customers while in case of business clients, emotional factor does not work and both parties need to make practical decisions. Thus, these are the major differences in between consumer marketing and business to business marketing.
It can be evaluated that there are wide differences between international and domestic marketing as the scope of international marketing is high as compared to domestic marketing. In international market, business has a chance to provide wide range of products to satisfy the needs of clients. While, at the time of doing domestic marketing availability of wide range of products is less as compared to international marketing. In terms of political factors organization needs to follow all the rules and regulations of the government of that country while operating in international market (Marketing strategy. 2009). Whereas, political factors have minor importance at the time of conducting business in the domestic market. In case of international marketing many languages and different types of culture are needed to be considered as they put its impact on the success of business. While, in domestic market single culture and language is needed to be considered (Salkin, 2009).
From the above study it can be articulated that marketing is the way through which business can identify the needs and wants of customers and then providing the same to them in order to gain satisfaction. However, marketing team of McDonald's is required to carry out effective market research so that desired information can be collected about the taste and preference of consumers. Thus, such method assists in enhancing sales and profitability within firm. However, once the marketing strategy has been executed, different responsibilities have been assigned to different individual so that actual plan can be implemented effectively. McDonald also aims to obtain feedback or reviews from consumers that help in measuring success against short term goals. However, it needs to done within effective control and bounded marketing budget.
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