Segmentation and Marketing at McDonald's - Research Paper Example

? Assignment Byline Segmentation and Marketing There are few American companies that have had as much impact on society and business as the king of fast food joints, McDonalds. According to the company’s official website, McDonalds has over 32,000 restaurants in 117 countries and serves over 64 million people every single day (“Our Company”, 2011). Perhaps one of the biggest reasons that McDonalds has proven to be so successful is due to the fact that this particular company has mastered the art of marketing to its consumers. In order to better understand McDonald’s marketing strategy, it is important to define several elements of marketing itself. According to the book entitled “Principles of Marketing,” the primary method of evaluating a company’s marketing strategies is by way of SWOT analysis. SWOT stands for strengths, weakness, opportunities, and threats (Kotler and Armstrong, 2010). According to the article entitled “Marketing at McDonalds,” the company’s strengths lies in its brand and the extensive marketing research that the company performs (“Marketing at McDonalds”, 2011). Additionally, the company’s main opportunity is the continued population growth which provides more customers (“Marketing at McDonald’s,”2011). The weakness of the company is the brand maturity which means that as the company ages, they still need to make important changes in order to keep up with the competition (“Marketing at McDonald’s,” 2011). Finally, the threats to McDonalds include the growing health awareness and the connection between fast food and obesity as well as competition from other fast food establishments (“Marketing at McDonald’s, ”2011). Perhaps the genius behind McDonalds lies in the fact that there does not appear to be a specific target market when it comes to advertising and marketing. The book “Principles of Marketing” defines a target market as a “set of buyers who share common needs or characteristics that the company decides to serve”(Kotler and Armstrong, 2010). For some companies, there is a very specific target market that they are trying to reach. McDonalds, on the other hand, markets to all different types of races, languages, and lifestyles. The only common need that the consumers all appear to share is that of wanting affordable, tasty, and quick food. Therefore, these are the elements that McDonalds must play up within their marketing mix. According to the article entitled “Marketing at McDonald’s,” the company utilizes four main components for its marketing strategy: product, price, promotion, and place (“Marketing at McDonalds,” 2011). The company has an overall objective of setting itself apart from its competitors by effectively meeting the goals for the marketing mix. For product and price, the company must look at what they are providing and determine what needs to be revamped and what is performing at expectations. Additionally, price must come into play as the company determines how much value the customers place on the product that McDonalds sells as part of the restaurants popularity is associated with low prices. Determining the physical positioning of the McDonald’s restaurant takes a lot of research as locations must be scouted in order to find the one with potential consumers and less competition. Finally, promotion involves the media advertisements that the company puts out in order to draw in consumers. The company must position itself in such a way as to make their ads stand out and apart from the multitude of other advertisements that people are bombarded with on a daily basis. Currently, McDonalds has been in the midst of changing their product line in order to secure their position as one of the top fast food restaurants in the world. According to the article entitled “McDonald’s adds oatmeal to the menu,” in the beginning of 2011 McDonalds began adding healthier breakfast items to their menu such as oatmeal, yogurt parfaits, and fruit salads in order to help combat some of the negative press the restaurant receives for its typically unhealthy food (Brownell, 2010). Additionally, the article states that McDonalds is adding these more sophisticated items to their menu in order to compete with other places such as Starbucks who are attracting consumers with these more healthful and seemingly gourmet options(Brownell, 2010). This competition with Starbuck can also be seen with the addition of McDonald’s coffee line, McCafe which present hot and cold coffee beverages that are comparable to those sold by Starbucks. In this way, McDonalds is attempting to attract new customers as well as keep the old ones who might be seeking innovative and health conscious products which the company is now trying to provide. However, McDonalds also has to keep in the mind that part of their positioning is cheap prices, so while adding these new products, prices must remain lower than that of the competition. According to the article entitled “McDonald’s McCafe Drinks Now in 60% of U.S. Locations,” this update to its menu has been relatively successful in part due to the free samples that were handed out in order to promote the new product line(“McDonald’s McCafe Drinks Now in 60% of U.S. Locations,” 2009). The product line of McCafe drinks has continued to expand and is bringing in a nice profit for the company(“McDonald’s McCafe Drinks Now in 60% of U.S. Locations,” 2009). The McCafe product is a good example of how McDonalds is constantly evolving its marketing strategy in order to keep in line with their target market and their expectations. McDonalds is a fairly unique company in that it has been able to thrive since its inception over 50 years ago. Other companies have come and gone, but McDonalds has been able to remain a viable and popular franchise. Its two biggest competitors include Burger King and Subway. Burger King sells a similar product of burger and fries, so the main difference between the two is the atmosphere. Subway markets itself as healthier than McDonalds and Burger King and offers customizable sandwiches as its main fare. It provides easy access to nutritional information as well and openly compares its food to McDonalds on its napkin. Although McDonalds is considered a mature company, it has managed to continue to experience growth. According to the 2010 Annual Sales Report, the company was able to increase its global sales by 5 percent(“2010 Annual Sales Report,” 2010).This is impressive considering that so much of the world was severely impacted by the economic downturn. The success of the company can be attributed to its ability to keep tabs on its customers and to market their products by way of positioning and market strategy. If McDonalds continues this trend, it is likely that the future of the company is ensured. References 2010 Annual Report. About McDonalds. Retrieved July 13, 2011, from www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/investor_relations3.Par.56096. File.dat/2010%20Annual%20Report%20%28print%29.pdf Brownell, M. McDonalds Adds Oatmeal to the Menu Business & Financial Headlines and Advice Mainstreet.com. Retrieved July 13, 2011, from http://www.mainstreet.com/article/lifestyle/food-drink/mcdonald-s-adds-oatmeal-menu Kotler, P., & Armstrong, G. (2010). Principles of marketing (13th ed.). Englewood Cliffs, N.J.: Prentice Hall. Marketing at McDonalds. Mcd Marketing . Retrieved July 13, 2011, from www.mcdonalds.co.uk/static/pdf/aboutus/education/mcd_marketing.pdf McDonald McCafe Drinks Now in 60% of U.S. Locations Bloomberg - Business & Financial News, Breaking News Headlines. Retrieved July 13, 2011, from http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=JMBA:US&sid=adstCWCrGmig Our Company - About McDonald's. About McDonald's. Retrieved July 13, 2011, from http://www.aboutmcdonalds.com/mcd/our_company.html Read More