McDonald Going to Russia - Case Study Example

McDonald Going to Russia Key Tasks in Segmenting the Market Introduction A market is usually referred to as a collection of people who may have needs for products, both as individuals and as groups of individuals, and are willing and have the ability and authority to purchase those products. Market segmentation on the other hand refers to the act of dividing the market into various groups, also known as segments, in order to provide the marketers with an easy way of defining the particular requirements of the various market segments so that they can be easy to provide them with the right products, at the right time, in the right quantities and price using the most effective marketing strategies. For this project, the market to be segmented here is an international market of Russia where McDonalds is entering. In order to carry out market segmentation, there are key tasks that need to be considered and such include tasks like analyzing the demands of consumers, targeting the market and developing the marketing strategy (Udel, 2014). This phase of the project will basically focus on these three tasks that are considered to segment a market. Analyzing Consumer Demands To analyze consumer demands involves grouping consumers together with respect to their needs. In this phase, consumers with similar needs are usually grouped together. To be more precise, McDonalds deals in fast food restaurant. They will need to carry out a market research that will inform the types of foodstuff that are highly demanded in the Russian restaurants. As such, they will be able to know the types of foods to supply their selected consumers with. Through the market research, McDonald will also have the opportunity to demand pattern of its focused consumers in Russia. Demand patterns can sometimes be clustered while others can be similar. This is to mean, some customers can may be having similar demands while others may have clustered demands. Once the company has known about this, it will be able to select the most appropriate strategies to handle them with. Types of Demand Patterns Homogenous Demand This is a demand pattern where all the consumers have a similar demand for a particular kind of products. For instance, McDonalds might be making buggers and they might be expecting that the consumption of buggers be similar across Russia. That is, the Russian like bugger a similar way. This makes the demand to be homogenous. Similarly, homogenous demand is also taken to mean that all the consumers will have to demand the products for the same purposes or reasons. Such a demand is usually very rare considering the fact that different consumers usually have different reasons why they need particular products. It therefore, means that, not every consumer will purchase foodstuff from the McDonald’s restaurant for the same reason. Some may require to do the purchase because they want fast food. Others may need the food when they go out to the restaurant during holidays. Some consumers will only use the company’s products when they decide to have their families take food from outside their homes (Weaver, 2013). Homogenous demand will require that McDonald makes their products while focusing on only single line of customers with a particular demand. This may be making food for those who visit the restaurant and take their food from there. Clustered Demand In the case of clustered demand, different consumers will be considered to go for the products of McDonald due to various reasons. For instance, in the case of foodstuff, there could be those consumers who may want organic foods, traditional foods, fast food, drinks and real meals. At the same time, there could be these consumers who will require to take the food at the restaurant while the others will want to carry the food and consume it somewhere else. Some other customers will need the food to be delivered at their offices or homes. In such cases, the company will have to change their production a bit in focus of the different groups that they need to satisfy their various demands. Diffused Demand This third type of demand is where McDonald will focus on various customer with various demands of their products differentiated by the various amounts and prices. There will be this particular group of consumers who may be willing and able only to purchase product in small quantities. At the same time, there could be this group of customers who will be able to afford large quantities. The difference in the quantities that consumer are willing to pay for, sometimes will depend on the income levels of the customer. This is so, because the various quantities of products produced will vary also in cost. It means, therefore, that McDonald will have to consider those who will be able to purchase in large quantities as well as those whose income levels are low and only able to purchase in small quantities since they can only afford that. This point can also be considered under pricing strategies. Targeting the Market After the McDonald will be able to analyze the demands of its consumers by considering the various categories above, they will end up with various distinct markets to target. These markets will be in undifferentiated form, concentrated and multi-segmented forms. These market segments will give the company an easy way to focus their marketing strategies on various markets. Undifferentiated Approach This is also referred to as a total market approach. In such a case, McDonald will only have the option of applying a single marketing mix for the whole market. This will apply only when all the consumers will have similar needs or demands in the entire market, and for a specific kind of product. For instance, for those who will be ordering food to be delivered to their offices, an undifferentiated approach will be used to target this particular group of consumers. In this case, the market is homogenous that makes the demand so diffused that it cannot be differentiated. For this reason, a single marketing mix that would consist of a single pricing strategy, a single product type that will have only little variation, one promotional program as well as a single distribution system, will be adopted (Bennett, 2014). Various elements will be developed for all consumers. Such an approach is not very common in the current market environment since due to the stiff competition that require the companies to differentiate their products and services so as to stay on top of the competitive edge. Market Segmentation Approach McDonald will apply this approach to handle the consumer groups that have heterogeneous demands or needs. The Russian market will, therefore be divided into various segments through grouping consumers with similar product needs or cluster of needs in the same segment. After this, a particular marketing strategy is applied to give a similar focus to this particular segment of the market. This is usually very important as it will enable an application of a similar set of marketing mix strategies to a particular segment of the market. Two market segmentation strategies are commonly applied and these include concentration strategy and multi-segment strategy. Concentration Strategy Under concentration strategy, McDonald will group customers with a particular set of market demands in one segment and apply similar sets of marketing mix strategies to these focus market. The various market segments that the company might come up with include dividing the customer demands into organic, inorganic, fast food and beverages. Another set of concentrated market segments could be on the basis of income levels of the consumers. However, the company will just apply a single set of marketing strategy to all the market segments. In most cases, the various market segment usually contain customers with similar needs and demands. Multi-segment Strategy Unlike in the concentrated strategy, here the company will have to come up with two or more segments in the market that contain different customers with heterogeneous kinds of demands. Given this as the case, various sets of marketing mix strategies will be formulated to suit the various market segments developed. It also seems like the company will require to have different marketing plans for the different segments. It, therefore, will combine both the best attributes of undifferentiated and concentrated marketing strategies. Developing the Marketing Strategy This becomes the third and last task that need to be considered when the McDonalds decides to segment their Russian market. This task comes after the two tasks which are analyzing the consumer needs and targeting the market. At this stage, the company knows particularly the needs of the customers in the market and they also know the various markets they need to focus their products on and through the use of various marketing mix strategies. Here, they will now develop the particular marketing strategies that will be used for the various market segments developed. To develop the marketing strategies, the company will be asking itself questions about the products that a particular segment requires, the quantity of the products, the cost and the place where they want the product and at what time. As such, various marketing mix strategies will be developed to ensure that consumers from various market segments are reached and served well with their kinds of needs to provide them with the fulfilment of such needs in the right way. Conclusion In conclusion, for McDonald to enter the Russian market, they will need to carry out an international market segmentation. Before they carry out such a market segmentation, they will need to consider various tasks to allow them do the segmentation in the right way. Through a thorough market research, McDonald will need to analyze the demands of its prospect consumers. With this information, they will then go ahead to target the markets formed and finally to develop specific marketing strategies to allow them target such markets. Bibliography Bennett, T., 2014. 7 Types of Markt Segmentations. [Online] Available at: https://blog.udemy.com/types-of-market-segmentation/ [Accessed 16 May 2015]. Udel, 2014. Chapter 9 Class Notes. [Online] Available at: http://www.udel.edu/alex/chapt9.html [Accessed 16 May 2015]. Weaver, J., 2013. Marketing: Market Segmentation. Foundation Degree South West: Bournmouth University, 4(3), pp. 1-5. Read More