Segmented Marketing and Branding Big Mac - Research Paper Example

? Segmented Marketing and Branding – Big Mac Segmented Marketing & Branding – Big Mac The company selected is McDonald’s Corporation and the brand to be discussed in this paper is Big Mac. The headquarters of McDonald’s Corporation is located in Oak Brook, USA. McDonald’s leads the global chains of fast food restaurants. The company is currently operating in 119 countries encompassing more than 33,000 restaurants internationally. The fundamental strategy of ‘Plan to Win’ employed by McDonald’s has always been customer oriented. The company initiated its services in the year 1940. Today, it is internationally acclaimed and is growing to achieve even greater heights (McDonald’s, 2012). McDonald’s is known for its mouth-watering products comprising of hamburgers, desserts, French fries and various types of drinks. The basic goal of the business strategy adopted by McDonald’s is to never compromise on the quality of food delivered to the consumers. The company’s outstanding Marketing strategy with respect to Branding and Segmentation constitutes one of the reasons for its success. Marketing can be defined as recognizing the needs of the customers and then fulfilling those needs in a delightful manner that leads to customer retention and brand loyalty. Big Mac is a hamburger which was introduced by McDonald’s in Pennsylvania in the year 1967 with a selling price of 45 cents. It was promulgated on a national scale in 1968. The burger was created to contend with Big Boy sandwich, a similar type of item with a bread slice in between with the purpose of holding together the stuffing and averting spill out. Over the years, it has become a signature product of the company with an exceptional brand name. It consists of two layers of beef patties merged with molten cheese and mouth watering sauce along with an onion and munch of pickle, served together in a delicious three division sesame seed bun. Iceberg Lettuce is also a core ingredient of the burger (McDonald’s, 2012). The Big Mac is popular all over the world and is often regarded as an icon of American capitalism. In fact, the Big Mac Index is used as an indicative factor for contrasting the cost of living in countries around the world since its availability is common. This index is also considered to be Burgernomics (Carbaugh, 2008). There exist several branding theories which identify brand as a unique feature of value proposition of a company. A branding promotion initiates with the development of a value proposition and relies on inspired apparatus along with a combination of consistency, continuity and commitment. The brand of Big Mac, ever since its establishment, has not looked back. It has been able to build its reputation not only in the United States but across 119 countries in the world. The brand of Big Mac is not just a name or a symbol. It has become a vital component of the relationship which McDonald’s has established with its consumers. For the consumers of McDonald’s in general, Big Mac, as a brand, has set its place in the hearts and minds of the consumers. For any brand, its real value exists in its ability and power to retain customer’s brand loyalty by influencing their preferences. The brand strategy of Big Mac has been so successful that it has been thriving in the market as the leading hamburger choice for quite sometime. Being a powerful brand in its own domain, the brand equity of Big Mac is significant. It has been able to develop a positive differential effect upon its consumers and consequently, create a value for itself among people in different continents. McDonald’s have always made use of Big Mac’s classical taste and enriched quality in setting up its Brand Positioning. In this manner, the company has been able to devise such a competitive combination attributes, benefits, beliefs and values for the brand Big Mac that they have been able to develop the image of it in the minds of their consumers in the manner in which they wanted. Likewise, another core brand strategy decision pertains to brand name selection. Though no one would have thought at the initial stages that the name Big Mac would bring such wonders for the company, however, McDonald’s came up with this unique brand name mainly to compete with the Big Boy. However, as years passed, the name Big Mac has developed its own identity and is recognized all over the world. McDonald’s has always been proactive in protecting all its brand names, not just Big Mac. As far as Brand sponsorship decision is concerned, McDonald’s itself sponsors Big Mac. The company has never taken the help of any outside party to sponsor its products. The fourth major brand strategy decision pertaining to Brand Development involves changes and progress in a brand during the course of time. However, with reference to Big Mac, there has not been any major change in its outlook or features. The class and style associated with it has always remained consistent. Though, certain subtle changes have been made in terms of ingredients but its ultimate quality remains unswerving (Kotler & Armstrong, 2008; McDonald’s, 2010). The Market Segmentation theory calls for dividing markets into smaller categories on some rational basis such as different needs, wants, attributes, beliefs, values, dimensions, etc. In this manner, Market Segmentation is a very important part of any company’s marketing strategy which enables it to figure out the existence of different groups in the market and cater to their specific requirements. Once the company completes the market segmentation process, it then targets those groups which it believes that it can serve most efficiently (Kotler & Armstrong, 2008). After that, marketing mix is carried out which will be discussed later in the paper. Though there are various types of Market Segmentations, however, with regard to Big Mac, McDonald’s has divided the market primarily on the basis of two dimensions: Demographics and Geography. Demographic segmentation involves dividing the market on the basis of parameters such as gender, age, income, education level, occupation, family size, etc. In terms of demographics, McDonald’s brand Big Mac focuses and targets children, young people in addition families. Children are believed to be a very potent target for marketers especially in case of fast food restaurants. Children love McDonald’s as it comprises of all the ingredients that catch their attention, namely games, toys and of course, delicious food (McDonald’s, 2012).McDonald’s has very aptly devised its marketing policy with regard to children by coming up with Happy Meals in which they not only provide food which is relevant for children but in addition to that, also provide toys and other products which children can enjoy, varying from “Hot Wheels” to cartoon characters. In many places, McDonald’s have also organized play places where children can play video games and entertain themselves. Furthermore, the character of Ronald McDonald, which serves as the clown character of McDonald’s, has always been a traditional symbol of McDonald’s. Kids have always found its presence amusing. These arrangements for McDonald’s have worked quite well to supplement their brand Big Mac. Apart from children, McDonald’s focus has also been on young people under the age of 30 including teenagers. This age group is quite modern and represents fashion and style (McDonald’s, 2010). Big Mac is favoured by the youth around the world as the premiere hamburger. To cater to the needs of this trendy age bracket, McDonald’s provides the adequate environment for young people to enjoy Big Mac. The atmosphere of McDonald’s is believed to be ideal for teenagers and young people to spend time with friends. They find McDonald’s as a pertinent visiting destination for reasons more than only food. The stylish atmosphere of McDonald’s in addition to its excellent services makes it their favourite visiting spot. Such an internal environment of McDonald’s complements its quality food especially Big Mac in several ways. Apart from young people, families also come to McDonald’s to eat its delicious products. This is because the products of McDonald’s including big Mac are not only high quality wise but are also available at affordable prices which most of the urban population can pay. In McDonald’s, the calm and amusing atmosphere provides families with an opportunity to relax themselves after heavy workload of the day. Businessmen and high ranked officials also stopover McDonald’s frequently due to its swift and speedy services, which their interests. Consumers trust McDonald’s to provide them food which is hygienic and safe. Furthermore, the brand name of Big Mac and its reasonable price makes it all the more popular among people of all age groups (McDonald’s, 2012) McDonald’s has also segmented its market geographically for all its products particularly Big Mac. McDonald began its operations in one country and has now expanded to 119 countries. This has been possible because McDonald’s has not only segmented its market geographically as well. With the aid of research, it has identified regions and countries in the world where the demand for fast food items is high. Consequently, it has focused on those regions and developed its franchises. Though McDonald’s has expanded globally but it has been very careful to keep in mind the cultural nuances of different countries. McDonald’s was clever enough to recognize that the demand of fast food items such as burgers and fries is not only in Europe and America but also in countries like South Africa, India, Pakistan, Middle eastern countries, etc. Hence, before any other company or fast food chain installed its services in any of these countries, McDonald’s capitalized, taking advantage of the situation and launching its products in the above mentioned countries. The company’s product was welcomed in all of these countries; however McDonald’s had to make certain adjustments and variations to Big Mac to suit the culture and the environment of different countries. These adjustments will be discussed later under the Marketing Mix. Thus, McDonald’s market segmentation strategy has been based on targeting those regions where the people savor eating fast food. Furthermore, McDonald has been very prudent to carry out its operations in mostly urban areas. It has not taken the risk to move to rural areas. This is a very tactful strategy of McDonald’s as it realizes that though the price of Big Mac and other products are affordable by the urban population, but it would certainly be expensive for most of the rural population areas. Hence, McDonald’s played safe and only targeted those market segments where it was confident of its performance (McDonald’s, 2010). KFC, Burger King and Pizza Hut are some of the other renowned global fast food restaurants that give McDonalds a hard time in its business. Nevertheless, McDonald’s has been very prudent in all the steps which it has taken. The company not only identifies the weaknesses and threats affecting it, but also works on its strengths and opportunities to further enhance them. After a thorough analysis of all the contingencies, the company has set its marketing targets on the basis of a strong 4P’s Marketing Mix. Though the company has always adopted the policy of being uniform and standard in its procedures and activities, yet it has been rational and sensible enough to respect diversity and differences. Its motto ‘think global, act local’ is reminiscent of its objectives. McDonald’s has always paid due reverence to differences in culture, consequently, it equally respects the cultures of all the 119 countries in which it operates. In fact, the company aims at shaping itself into different cultures in order to get a better understanding of cultural diversity. In India, McDonald’s was quick to realize that Hindus do not eat beef. Therefore, keeping this aspect in view, the company pondered heavily upon devising new and innovative tactics, and it finally succeeded to replace its Big Mac with Maharaja Mac which is basically a mutton burger. A very recent edition is the Chicken Maharaja Mac which has also received very good response from most of the quarters in India. Likewise, McDonald’s is known for devising numerous variants of its own products to cater to the needs of diverse markets. Place factor of the mix takes into account not just the physical setting but also the policies and operations which lead the company towards growth and prosperity. It is essentially due to the company’s brilliant marketing strategies that McDonald’s has been able to grow from a tiny Barbeque in California to an international fast food restaurant chain carrying out its activities in 33,000 restaurants and 119 countries. Moreover, this phenomenal development has happened in just around seven decades (McDonald’s, 2012). McDonald’s prosperity has been because of the faith it holds in its ability. The pricing ‘P’ has been applied very effectively and wisely. The company has been intelligent enough to set distinct prices in distinct countries, depending on the economies of the countries. As mentioned earlier in the paper, Big Mac index has become quite popular in the field of economics for comparing the economies of different countries in a very accurate manner. Yet, McDonald’s has illustrated astuteness by not dropping prices very low as such a policy might have backfired. The ‘P’ of promotion has also been made use of wisely by McDonald’s. The advertisements of the company on various communication mediums such as print, television, pamphlets, brochures, internet, social media, etc have been designed very carefully over the years, and have been successful in grabbing the attention of the people (Kincheloe, 2002). McDonald’s success as a worldwide leader of fast food restaurant chains has, for the most part, been because of the effective implementation of the Marketing Mix which entails the 4 P’s discussed above. In this manner, McDonald’s has been able to focus its attention on the requirements of the customers and consequently, in the satisfaction of those requirements. The advertising of Big Mac has a history of itself. It mainly began with advertisements in the print media along with posters and brochures. However, as time passed, McDonald’s began its advertisements through television with a Television ad which was telecasted in 1969. In this ad, the ever popular song “Ballad of Big Mac” was sung by Hoyt Axton. Similarly, Charles Rosenberg shaped the all time memorable jingle of the two all-beef patties song. He deliberately made the combination of words in such a manner that they were easily coalesced with music formed by Mark Vieha, who had come up with the unique tune. Finally, the jingle was telecasted in a television advertisement known as “In a Word”. Soon after the success of the jingle, McDonald designed a new promotion with its consumers impulsively undergoing a “Big Mac Attack”. Then franchises took the initiative to run an interesting campaign in which the customers who could rehearse the jingle in the given time were awarded a free burger. The campaign proved to be such a hit that McDonald restaurants in New York City were short of Big Mac buns. This hugely successful advertising campaign related to the Big Mac was replicated by the McDonald franchises of Australia and Brazil though they offered free Coca Cola instead of a Big Mac. The two all beef patty was transformed into different versions in different countries. The jingle phrase underwent several revisions and finally in 2008, the phrase was edited by McDonald’s in Malaysia. Under this edition, the customer was awarded a free Big Mac if he or she was able to recite the jingle within the duration of four seconds (Skalar, 2009). McDonald’s packages Big Mac in biodegradable boxes which are very convenient to hold in addition to being ecologically friendly. Furthermore, customers are also provided with napkins. In recent times, McDonald’s has shown greater concern towards Corporate Social Responsibility and the company is taking even further steps to ensure that not only is its food hygienic but also that the company’s activities do not pollute the atmosphere (Packaging Network, 1998). The Big Mac is labelled in an uncomplicated manner as the focus is on delivering quality to consumers. Over the years, McDonald’s has been able to develop exceptionally sound distribution networks. The communication and interaction between the suppliers and the company is very fluent and swift, enabling the company to meet the needs of its consumers in the best manner. Ever since McDonald’s launched its franchises in different parts of the world, the distribution networks of the company expanded on a tremendous scale along with the level of operations. However, the franchises are connected to the company’s regional offices which are in turn connected to the headquarters of the company. This smooth distribution network and communication process facilitates the marketing and sale of not only Big Mac but other products of McDonalds as well (Morden, 2004). McDonald’s has its own website which contains details of all its activities and products. Information related to Big Mac is also present there which can be accessed by people from all around the world. Apart from the main website of the company, a McDonald’s website has been allocated to each country with variations to accommodate the cultural differences. McDonald has not been behind in advertising Big Mac on social media networks. McDonald has been constantly advertising Big Mc on social networking websites such as Facebook and Twitter. Apart from that, a new venture by McDonald’s is to launch a Facebook application dedicated to Big Mac in which a party will be conducted by Big Mac, which Facebook clients will be requested to attend. It would be a virtual party organized on the basis of photographs of Facebook users. Moreover, a deal has been signed with LivingSocial which McDonald is regarding quite highly. LivingSocial has also accepted the offer gleefully primarily because of the brand name associated with Big Mac (Wasserman, 2011) References McDonald’s. (2010). Annual Report 2010. Retrieved from: http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/C-%5Cfakepath%5Cinvestors-2010-annual-report.pdf McDonald’s. (2012). Official Website. Big Mac. Retrieved from: http://www.mcdonalds.com/us/en/food/product_nutrition.sandwiches.255.Big-Mac.html Carbaugh, R. J. (2008). International economics. Mason, OH: South-Western Cengage Learning. Kincheloe, J. L. (2002). The sign of the burger: McDonald's and the culture of power. Philadelphie, PA: Temple University Press. Kotler, P., & Armstrong, G. (2008). Principles of marketing. Upper Saddle River, NJ: Pearson/Prentice Hall. Morden, T. (2004). Principles of management. Aldershot, Hants, England: Ashgate. Packaging Network. (1998, October 6). McDonald's to Launch Biodegradable Big Mac Packaging. Retrieved from: http://www.packagingnetwork.com/article.mvc/McDonalds-to-Launch-Biodegradable-Big-Mac-Pac-0001 Skalar. (2011, December 5). Big Mac. Retrieved from: http://bizcovering.com/business/big-mac/ Wasserman, T. (2011, December 1). McDonald’s Serves Up Big Mac Deal With LivingSocial. Mashable Business. Retrieved from: http://mashable.com/2011/12/01/mcdonalds-livingsocial/ Read More