MARKETING PRINCIPLES BY
TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................................ 3 TASK 1 ......................................................................................................................................................................... 3 1.1 Explaining various elements of marketing process ............................................................................................ 3 1.2 Evaluation of benefits and costs of marketing orientation ................................................................................. 4 TASK 2 ......................................................................................................................................................................... 5 2.1 Micro and macro environmental factors that influence marketing decisions in McDonald's ............................ 5 2.2 Proposing a segmentation criteria for McDonald's ........................................................................................... 7 2.3 Targeting strategy for McDonald's products ...................................................................................................... 8 2.4 Demonstrating how buying behavior affects marketing activities ..................................................................... 8 2.5 Proposing a new positioning strategy for McDonald's burger ........................................................................... 9 TASK 3 ......................................................................................................................................................................... 9 3.1 Explaining how McDonald's products are developed ........................................................................................ 9 3.2 Explanation of distribution strategies used by McDonald's ............................................................................. 10 3.3 Explanation of pricing strategies used by McDonald's .................................................................................... 10 3.4 Integrating promotional activity to achieve marketing objectives ................................................................... 10 3.5 Analysing the additional elements of extended marketing mix ....................................................................... 11 TASK 4 ........................................................................................................................................................................ 11 4.1 Marketing mixes for two segments of consumer markets ................................................................................. 11 4.2 B2B marketing v/s B2C marketing. .................................................................................................................. 12 4.3 Difference between international marketing and domestic marketing .............................................................. 13 CONCLUSION ......................................................................................................................................................... 14 REFERENCES ........................................................................................................................................................... 15
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INTRODUCTION Marketing principles comprise of the various concepts related to marketing. It includes various processes that an organization employs for determining the needs and wants of the customers and fulfilling them (Jobber and Ellis-Chadwick, 2012). These cover important aspects such as segmentation, targeting, positioning and marketing orientation which form the basis of the growth and success of an organization. Apart from that, 4 Ps of marketing are also included in the marketing principles. These include price, promotion, place and product (Lees-Marshment, 2009). The present report is based on a case study of McDonald's. It is the largest chain of fast food restaurants which serves more than 100 countries. McDonald's operates at more than 36, 000 locations all over the world (Our company, 2016). In the report, the concept and process of marketing has been understood. An attempt has been made to apply the concepts of segmentation, targeting and positioning. The report discusses individual elements of the extended marketing mix for McDonald's. Lastly, marketing mix has been used in different contexts. 1.1 Explaining various elements of marketing process Referring to the case study of McDonald's, various elements of marketing process can b explained as follows: Situation analysis The first element is situation analysis in which a thorough evaluation is done of the situation in which McDonald's finds itself. This is important for identifying the opportunities with the help of which customer needs can be fulfilled (Dann, 2008). In the situation analysis, external environment of McDonald's is evaluated. This comprises of macro and micro environmental factors that affect the activities of the fast food chain. Situation analysis also includes analyzing the past, present and future aspects. Through this element of marketing process, McDonald's is able to identify the gap between what customers want and what is actually being offered to them. Marketing strategy This is the second element of marketing process. The marketing strategy of McDonald's comprises of strategic plan which is developed for fulfilling the customer's needs. The marketing strategy involves aspects such as segmentation, targeting, positioning and value proposition (French, 2010). For all these aspects, market research is carried out. Marketing mix decisions This is the third element of marketing process. McDonald's takes detailed tactical decisions for various elements of the marketing mix such as product, price, place and promotion. While making decisions related to the product, McDonald's remembers that the customers have a choice. Hence, it emphasizes on its menu and introduces new products. Similarly, while making price related decisions, the chosen organization takes into account customer's perception of value. In the promotions aspect, all types of marketing communications are covered (Deshpande and Rundle-Thiele, 2011). Lastly, in this element, McDonald's makes decisions about place.
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SAMPLE ON Marketing Principles FOR ASSIGNMENT HELP KINDLY CONTACT AT: HELP@GLOBALASSIGNMENTHELP.COM Implementation and control This is the last element of marketing process in which implementation of the marketing plan and the product is done (Parker and et.al., 2011). Along with implementation, this element also requires McDonald's to carry out continual monitoring. 1.2 Evaluation of benefits and costs of marketing orientation The benefit and costs of marketing orientation to McDonald's can be evaluated. Marketing orientation is concerned with the provision of products to the customers which have been design according to their needs, requirements and desires. This provides several benefits to McDonald's. However, it also brings various costs for the company. Benefits of marketing orientation. The following are the benefits of marketing orientation to McDonald's: 
Adaptability- This includes adopting those strategies which respond to the feedback provided by the customers. Marketing orientation provides the benefit of adaptability to McDonald's. This helps the firm to adjust its products and services as per the desire of the customers (Henley, Raffin and Caemmerer, 2011). It is important to note that when companies focus on product, they are extensively involved in research and development. During this process, the firm is notable to focus on aspects related to consumers. However, marketing orientation is effective at enabling McDonald's to emphasize on research and development for producing a product which is adapted to the needs and wants of customers.
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Constant improvement- Marketing orientation provides the benefit of constant improvement to the McDonald's. With this approach, the processes and systems of company can be constantly improved (Hills, Hultman and Miles, 2008). This is because marketing orientation provides a culture of experimentation. Through constant improvement, the chosen fast food chain is able to gain competitive advantage.
Along with the benefits, there are also certain costs associated with marketing orientation to McDonald's. These have been explained below:
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High investment- Marketing orientation implies high investment for McDonald's. This is because, this approach requires carrying out a thorough market research to determine the needs and wants of customers (Kokemuller, 2016). McDonald's would require a powerful market intelligence to respond accurately to the market conditions. As databases are used for collecting, analysing and interpreting data; these require technological infrastructure,. All these considerations bring additional costs to the company.
Lack of predictability- Marketing orientation has another cost associated with it. With marketing orientation, carrying out advanced planning activity for product development become complicated (Thompson, 2008). This is because, by adopting marketing orientation, McDonald's will only be able to respond to the perpetual changes in the customer needs. Hence, there is lack of predictability.
2.1 Micro and macro environmental factors that influence marketing decisions in McDonald's Various micro and macro environmental factors influence marketing decisions of McDonald's. These have been explained below: Macro environment factors These are important to be considered to gain knowledge regarding potential opportunities and threats for McDonald's in future.
Political factors- Political factors significantly influence the marketing decisions of McDonald's. Political system of UK and its taxation policies affect the marketing strategies of fast food chain organization (Sharma, Iyer and Raajpoot, 2009). Further, presence of monopoly restrictions and trade union power have impact on marketing decisions of McDonald's.
Economic factors- Various economic factors such as business cycles, money supply, unemployment, consumer spending etc. influence marketing decisions of McDonald's. If the economy of the nation is on a downturn, then the spending power of consumers is less (Vrontis and Pavlou, 2008). In response to this, McDonald's has to promote its products in a way so that the customers are convinced to purchase them. In contrast to this, if the economy is experiencing a boom, the spending power of consumers increases. Then McDonald's takes decisions accordingly.
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Social factors- Social factors include demographic changes, new lifestyles, attitudes to work, education levels, social mobility etc. which influence decision of McDonald's. If there are changes in values of customers of UK, McDonald's has to bring changes in its marketing mix. Its marketing decisions also changes with the demographic changes such as ageing population (Light and Kiddon, 2009).
Technological factors- McDonald's has to take into account developments in the e-commerce and internet. In response to this, it needs to take decisions for incorporating these developments (Dibb, Simkin and Wilson, 2008).
Legal factors- Like all other organizations, McDonalds also operates within a framework of laws and regulations. Laws and regulations formulated by self- regulatory bodies such as Advertising Standards Authority and Independent Television Commission influence the marketing decisions of McDonald's. Sales of Goods Act and Consumer Credit Legislation also impact the chosen organization's marketing decisions (Lin, 2011). This is because, the company has to undertake marketing activities abiding by the laws.
Environmental factors- McDonald's has to take steps regarding the conservation of environment. This is because, the consumers have become increasingly aware about the impacts of organizational activities on environment (Smoyer-Tomic and et.al., 2008).
Micro Environmental Factors
Competitors- This micro environmental factor comprises of the competitor strategies, new product development and marketing activities adopted by rivals of McDonald's (Luan and Sudhir, 2010). In response to them, McDonald's has to adopt strategies so that it is able to retain its customers.
Suppliers- Suppliers influence marketing decisions of McDonald's through their prices, polices and operational activities.
Employees- These form an important stakeholder group and influence marketing decisions of McDonald's.
Customers- McDonald's has to take its decisions towards the direction of fulfilling the needs of customers (Goi, 2009).
2.2 Proposing a segmentation criteria for McDonald's Segmentation criteria can be proposed for McDonald's products in different markets. There are different segmentation criteria such as demographic, geographic, psychographic and behavioural segmentation (Ivy, 2008). McDonald's can segment its market by using demographic segmentation criteria. Using this criteria, the market can
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be segmented on the basis of age. It can provides products matching to the needs of customers belonging to different age groups such as 3- 12 years, 12- 19 years, above 19 years etc. People of different age have different preferences regarding taste, flavour and texture of fast food. By segmenting the market into customers of different age groups, McDonald's will be able to satisfy their needs in a better way.
SAMPLE ON Marketing Principles FOR ASSIGNMENT HELP KINDLY CONTACT AT: HELP@GLOBALASSIGNMENTHELP.COM McDonald's can also segment its market by using Psychographic segmentation. In this segmentation criteria, the customers can be classified according to their lifestyle. Personality can also be used as a basis for dividing customers into different segments (Chen and Xie, 2008). Market can be segmented int customers who focus on a healthy lifestyle and those who focus more on taste. Depending upon the personality and lifestyles, McDonald's can design its products. Likewise, there can be two segments such as vegetarian and non vegetarian customers. Interests and opinions can also be used for dividing the market according to psychographic segmentation. It can provide fast food products according to the varied interests of its customers. 2.3 Targeting strategy for McDonald's products Targeting strategy can be defined as the process of selecting potential consumers to whom any business intends to sell its products and services. It entails for carrying out a market segmentation, choosing them and determining the products or services that can be offered in it (Smoyer-Tomic and et.al., 2008). McDonald's offers a range of products. It is a quick service restaurant which provides burgers, French fries, milkshakes, soft drinks and desserts. Targeting strategy can be selected for the burgers provided by McDonald's. There are three types of targeting strategies such as undifferentiated, differentiated and concentrated marketing (Huang and Sarigöllü, 2012). For Burgers, McDonald's can use differentiated marketing strategy. This will enable the firm to adopt a multi – segment approach. For example, McDonald's has divided its market in a number of segments on the basis of age by using demographic segmentation. Differentiated targeting strategy will involve targeting all the segments of customers belonging to different age groups. A separate marketing mix will be Toll Free No. +44 203 3555 345 Mail Us: help@globalassignmenthelp.com Global Assignment Help provides best assignment writing services to college and university students at an affordable price.
prepared for each segment. For example, the segment comprising of age group 12 – 19 years consists of all the teenagers. Hence, the products will be spicy burgers with a twist in taste. Place will also be decided as per this segment. Decisions related to price will have to be made in a manner so that the products seem to be affordable by the teenagers (Webb and et.al., 2011). Promotion will be done by social media sites as teenagers are more active on the web. Hence, through differentiated targeting strategy, McDonald's will treat each segment differently. 2.4 Demonstrating how buying behavior affects marketing activities
Figure 1 Buying behaviour process Buyer behaviour affects marketing activities in different buying situations. This requires the marketing managers of McDonald's to consider various buying situations. For example, there can be a buying situation known as straight re – buy. This is the easiest buying situation in which a customer purchases standard products from a familiar supplier (Srinivasan and Hanssens, 2009). In this situation, the buyer behaviour is intended towards purchasing the product which the customer has been enjoying for a while and is familiar with it. Hence, the marketing activities of McDonald's will be aimed at gaining customer confidence and trust by providing the original fast food items with their familiar taste. There can be another buying situation known as new buy. For example, McDonald's has introduced a new burger or fast food item and consumer is purchasing it for the first time at its outlet. Here, the marketing managers of McDonald's will have to consider this situation. It affects marketing activities of the chosen fast food chain. This is because, McDonald's will be required to provide adequate information about the product through its promotional activities so that consumer is attracted towards the product (Jobber and Ellis-Chadwick, 2012).
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2.5 Proposing a new positioning strategy for McDonald's burger Positioning can be defied as a kind of marketing strategy that aims to make a brand to occupy a distinct placer in minds of consumers. A new positioning strategy can be proposed for McDonald's burger. Positioning is the process which an organization uses for marketing its brand with the aim of creating a differentiated idea in the minds of customers (Ashe-Edmunds, 2016). McDonald's can adopt positioning strategy based on product process. McDonald's uses standard process for making burgers. The ingredients and raw materials used for making burgers are the same irrespective of the location of the outlet. This provides it consistency and stability. It can position itself as a company that meets the needs of all groups of customers. This will differentiate it from its competitors in the minds of the customers (Lees-Marshment, 2009). Positioning strategy which positions McDonald's as an organization meeting needs of key audiences will make customers value the chosen fast food chain. Children, parents, a business customer, teenagers all consider McDonald's as capable of meeting their needs.
Idea screening – In order to develop an idea for potential product, the need is to focus on customer preferences and develop accordingly. It can introduce new products to suit the changing demands of customers (Thompson, 2008).
Detailed investigation – A detailed investigation may then be required to be carried out on how to ensure that competitive advantage is sustained, designing an efficient menu and using standard procedures for preparation of the fast food products.
Development of product – Then comes the time to develop the product. This stage will lay emphasis on the areas that came out after the detailed investigation was carried out. The development stage will focus on quality parameters (Deshpande and Rundle-Thiele, 2011).
Testing in the market – This is one of the most essential stages where the products prepared by McDonald's will be tested so as to understand the probable reaction from consumers.
Market launch – If the tested products meet the requirements then it can be introduced in the market. If not then some modifications can be done in it.
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3.2 Explanation of distribution strategies used by McDonald's Distribution strategies used by McDonald's can be explained as follows. McDonald's operates its outlets in the form of franchisee, or affiliate or the corporation itself. McDonald's serves more than 36, 000 locations all over the world,. The distribution strategy is such that it arranges the products to the various outlets in different countries. The stores are located at areas which prove to be convenient for the customers (Parker and et.al., 2011). McDonald's has an extensive distribution process which makes the raw materials reach at the locations on time. There are a number of distribution centres which supply to 250 top 700 restaurants. The organization regularly keeps a track of restaurant stock and daily sales data. It has an efficient supply chain management strategy. The largest distributor of company, Martin-Brower Company LLC, is given the task of delivering supplies to 15, 000 locations in North America (Our company, 2016). Two to three deliveries are made per week in most of the restaurants. The strategy is most appropriate for Mc Donald’s due to its presence in almost all nations of the world. It is likely to aid in covering more profits as well as consumer base. 3.3 Explanation of pricing strategies used by McDonald's The prices set by McDonald's reflect organization's objectives and market conditions. The objectives of the chosen fast food chain are to create an experience for the customers to remember by innovating new tastes and choices. While setting prices, the organization also considers market conditions (Hills, Hultman and Miles, 2008). The price charged by McDonald's is determined by customer's perception of value. Consumers formulate a mental picture regarding what is worth. Apart from being a physical item, a product also has psychological connotations for the customer. McDonald's understands that using low price as a marketing tool has danger. This is because customers may feel that the organization is compromising on quality. Moreover, if the prices are reduced, then competitors may match it thus resulting in no extra demand (Sharma, Iyer and Raajpoot, 2009). Hence, McDonald's sets its prices according to the market conditions and objectives. For this, it makes use of penetration pricing strategy. 3.4 Integrating promotional activity to achieve marketing objectives McDonald's uses integrated promotional activity for achieving marketing objectives. The promotions aspect of organization covers all types of marketing communication (Vrontis and Pavlou, 2008).
Personal selling - With the help of this approach, McDonald's are to reach greater number of customers and make them aware about the new products of the fast food chain.
Sales promotion – This is done by launching of loyalty schemes, vouchers etc so as to ensure that consumers are attracted to product offering of Mc Donalds (Thompson, 2008).
Public relations - McDonald's uses Public relations to make provide them detailed information about its products.
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3.5 Analysing the additional elements of extended marketing mix The additional elements of extended marketing mix for McDonald's have been analysed below:
People- At McDonald's, the employees have to wear a standard uniform. The chosen organization lays emphasis on providing friendly and prompt service to its customers (Light and Kiddon, 2009). In order to develop the people element of Mc Donmalds, focus is further given on making the employees developed by undertaking there training sessions. These can be related to handling clients, communication and presentation skills among others.
Process- McDonald's keep its food manufacturing process transparent. The customers can see the whole process. It uses standard processes for manufacturing food items. Hence, this provides consists taste to the customers irrespective of the location of the outlet. It further focuses on fast billing system so as to ensure that consumers do not have to face any waiting period.
Physical evidence- All the outlets of McDonald's focus on providing clean and hygienic interiors. McDonald's also makes its outlets attractive and relaxing. Proper decorum is maintained by the fast food chain at all its joints (Dibb, Simkin and Wilson, 2008). Other than the human resource personnel are also presentable.
SAMPLE ON Marketing Principles FOR ASSIGNMENT HELP KINDLY CONTACT AT: HELP@GLOBALASSIGNMENTHELP.COM 4.1 Marketing mixes for two segments of consumer markets Marketing Mix is a marketing tool to market companies products or services. The following table depicts marketing mix for two segments of consumer markets for McDonalds. The customers have been segmented on the basis of their vegetarian and non vegetarian habits. For vegetarians Product - McD have to pay attention on the vegetarian aspect of the product while marketing it. The product must strictly be made keeping in mind that the customers are vegetarians (Smoyer-Tomic and et.al., 2008). Toll Free No. +44 203 3555 345 Mail Us: help@globalassignmenthelp.com Global Assignment Help provides best assignment writing services to college and university students at an affordable price.
Price - The price depends upon the net weight and the consumers ability to pay certain product. The pricing of the product must be low as vegetarian items are not costly as compared to others (Chen and Xie, 2008). Place - The company must be careful while placing their products separate from the non vegetarian section. As it might hamper the image of the company. Also each product under this section must be easily accessible by the consumers. Promotion - McDonalds can use heavy sales promotion techniques to attract vegetarian customers towards it. For non vegetarians Product - The product under these can marketed by the use of different meat done by the company. It will be useful for McD if the company markets the product on the basis of non vegetarian element used by the company (Luan and Sudhir, 2010). Price - Pricing affects the demand of the product in consumer. Mc Donald's have to be careful while pricing products. As non-vegetarians unfinished products are costly it may increase the cost of the product. Place - The marketer have to make sure to highlight the visibility of place where it acquires its resources for the unfinished products (Huang and Sarigöllü, 2012). It is important to differentiate each non vegetarian product from one another (Thompson, 2008). Promotion - Advertising technique will help to differentiate promotional technique used to promote this category of product of McDonalds.
4.2 B2B marketing v/s B2C marketing. B2B marketing and B2C marketing differ from each other in the following way.
Size of the markets – B2B” Markets are niche and comprises of limited number of sales. In case of B2C” Marketing product has to be sold to the consumer thus the size of sale may be even in millions of number.
Brand's value – in “B2B” Marketing relationship between the business leads to the generation of brand value among them (Webb and et.al., 2011). While in “B2C” Marketing McD have to use advertising and promotional tools to create brands value among its customers.
Purchase decision – In “B2B” Marketing Purchase decision in this category is carried with the help of strategic decision making on the budget and the requirement of the products or services from McDonalds. On thoe other hand, in “B2C” Marketing Consumers have a emotional connection with the McD which is generated over the time. Also the purchase decision basically consists of the availability and the price of the product (Srinivasan and Hanssens, 2009).
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Sale process - Selling in “B2B” Marketing is done as per the needs and requirements of the clients. Thus the selling process differ from one client to the other (Lees-Marshment, 2009). It also is pendant upon the relationship between McD and the client. On the other hand, for “B2C” Marketing The sale process is done directly or consists of a retailer. The sale process is entirely based on the to convince the customer to purchase McDonalds products or services (Dibb, Simkin and Wilson, 2008).
4.3 Difference between international marketing and domestic marketing Domestic marketing is marketing and promotion of goods and services in the home country. Whereas international marketing is a wider field as it consists of marketing in different international boundaries.
Language is the major point of difference between international and domestic marketing. As in domestic market the seller have to focus on limited range of languages which are generally known by him/her (Thompson, 2008). Whereas in international front more then one language are used thus McD have to focus on understanding the diver language spoken in different countries.
Another point is the risk factor that is very high in the international market. As McDonalds has to invest a large amount of money while expanding and conducting business activities in the international market. In the home market there are fewer risk due to companies understanding of the domestic factors (Lin, 2011).
Political influence is very high in the international market as the company has to identify various political significance which differ from one country to other. Whereas in domestic market McDonalds has lower issues related to the understanding of political environment of the home country.
The cost of products is low in the domestic market as McDonalds is familiar with the resources of the market, In international market due to lack of familiarity research is essential which increase the cost of goods ad services (Goi, 2009).
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CONCLUSION From the report, it can be concluded that marketing strategies form an important determinant of the success of McDonald's. The marketing process comprises of four elements namely situation analysis, marketing strategy, marketing mix decisions and implementation and control. Marketing orientation provides the benefits of adaptability and constant improvement. However, it requires high investment and there is lack of predictability. Psychographic and demographic segmentation criteria can be used by McDonald's. It develops products to sustain competitive advantage. McDonald's uses integrated promotional activity which helps in achievement of marketing objectives.
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