McDonalds Marketing Strategies - Case Study Example

McDonald’s Marketing Plan Student’s Name Course/Number Institution Date Instructor Name McDonald’s Marketing Plan Introduction McDonald is one of the world’s leading companies in the fast food restaurant industry. It is an entity that provides a wide range of products across the country. It'sproducts include hamburgers, French fries, chicken products, sandwiches, breakfast items such as the Egg McMuffin, soft drinks, shakes, desserts, salads and other localized offerings such as fish and lamb (McDonalds, 2013). McDonald is a highly successful company, and its success is largely attributed to its business model, as well as its marketing strategy. Its marketing strategy, “think global, act local” represents a convergence of globalization and local culture (Vignali, 2001). On the market situation, the company leads the market with 40% ($680 million) of the market share (Adams, 2013). Accordingly, the company’s market share has been increasing steadily over the last fiver years. The company’s steady increase in market share is attributed to its wider product line, cheaper products as well as the regular introduction of new choices to persuade its consumers. On its competition, the company faces stiff competition from KFC and Carl’s Junior. McDonald’s current marketing strategy has been to offer value to its consumers through the provision of quality products at a cheap price. In its effort to be competitive, the company continues to develop new high quality products in the market. Marketing Objectives McDonald’s marketing objectives has been extremely essential in guiding the company attain its marketing targets. Its objectives allow the company to concentrate its limited resources on its most favorable opportunities with the aims of improving sales, as well as achieving maintainable competitive advantage. The company’s marketing objectives comprises both short term and long-term activities in marketing (Solomon, Marshall & Stuart, 2012). These activities involve the strategic examination of the initial position of the company and the creation, assessment and choice of market-oriented plans. Thus, these activities add to the company’s goals as well as its marketing objectives. In order to maintain its competitive advantage as well as to improve its success, the company developed several marketing objectives. One of the strategies is to ensure there is improved market share. Market share is an essential element in ensuring a wider market, as well as a favorable competitive edge. In order to ensure improved market share, the company seeks to continue developing and providing a wider product line, cheaper products and a regular introduction of new choices to entice the target market. The company also seeks to increase the supplies distributed to its target market through opening various distribution centers. McDonald’s main target market is families with children. In this regard, the company seeks to improve and increase the restaurants with playground and facilities to run birthday parties. McDonald’s objective is to expand across the country by opening 5 to 10 restaurants in every year (Adam’s, 2013). Included in the marketing objectives for the next one year is the focus on customers. The company acknowledges that the financial year 2012 was challenging due to various reasons, and this is expected to continue, unless strict marketing objectives are implemented. Accordingly, the company understands well that focusing on its customers is extremely crucial in the next financial year. In this regard, the company has modified its marketing objectives to be more aggressive as well as ensuring long-term worth notwithstanding pressures of the short-term marketing field. The company recognizes the fragile economy and the need to navigate from it. It has therefore, formulated marketing objectives to sustain its positive drive. Among the marketing objectives initiated to sustain, the positive momentum is the optimization of the company’s menu. In the forthcoming 12-months, McDonald will keep on improving its menu, broadening accessibility of the customer as well as modernizing its customer experiences. More so, the company plans to put a huge emphasis on factors and elements that drive and excites its consumers. In its menu, the company plans to ensure that it provides value at every price level. The company has a reasonably priced entry level and will control its mid- and higher-level products to promote sales up. Arguably, the company has also strengthened its focus on basics, the operations, marketing strategies, merchandising, and service leadership. In the forthcoming 12-months, the company will balance its famous menu pipeline with the yet to be introduced Fish McBites, in addition to new chicken entrées, new beef sandwiches, beverages and breakfast items experiencing intensive outcomes in test markets. Target Market(s) and Positioning The main targets of the company’s products are families with children and restaurants dispersed across the country. McDonald’s market is wide comprises various segments with different consumer features. These include geographic, psychographic, demographic and behavioral among others. The company has to ensure that it covers wide segmentation of consumers in order to optimize its sales as well as to improve and maintain its market share. In geographic segmentation, the company targets local population as well as the internationals. The company understands that, for its success, it must have to supply both the local and foreign consumers. The local population is the main component of the company’s sales with approximately 80%. Within the local population, the key target segments are the urban centers and especially those with a high number of schools and colleges. The company also targets neighborhoods and towns with high population. In most situations, the company has used Geo-cluster approach, which combines geographic and demographic information in order to formulate a more exact profile of the target market. In considering the geographic segmentation, the relevant variables normally used include the region, size of the metropolitan area, the size of the population, and climate. Region considers the country, city and even the neighborhood. The size of the city area considers population size. Population density is used in classifying urban, rural, or suburban areas. In demographic segmentation, McDonald seeks to capture all classes of individuals. It seeks to supply mostly the students between the ages of 14 years to 34 years. The main consumers of the company’s products by age are the youths with almost 43%. The other target segment is the middle income earners. The middle income earners comprise the greater percentage, followed by the high income earners and low income level. Accordingly, the company seeks to develop products that fit every income earner; manufacturing products with different prices for every income level without compromising on its high quality (Manning, 2012). Among other relevant factors in considering demographic segmentation are family size, occupation, lifecycle, education, religion, social class, and age. In psychographic segmentation, the company considers the attitudes, opinions, interest, values as well as the activities of the consumers. Therefore, McDonald seeks to target consumers with positive and encouraging opinions and attitudes towards the company’s products. Arguably, consumers that have negative perceptions and attitudes towards fast foods may not be the best target group. This is because they prefer to consume reserved and home made foods. The company also seeks to supply consumers with a tight schedule of activities. This is because such consumers may not have adequate time to prepare their foods and opt to buy ready made foods from the company’s outlets. With regard to behavioral segmentation, the company targets consumers with excellent behavior towards its products. In determining the best behavior towards the company’s products, McDonald considers the brand loyalty and usage rate on the side of the consumer. Therefore, the company targets the segment with notable brand loyalty as well as high usage rate. Among other relevant factors considered in behavioral segmentation include benefits sought, user status; whether regular or first-time. In most occasions, the company has been utilizing the approach because the variables considered are extremely connected to the products. I would position the product to the target market by considering the available variables. In considering the demographic factors, I would position the product to urban areas where there is high population. This will enable the company to sell more and to receive greater revenues. The product would also be the position in a place where middle income earners are the majority. Since most of the company’s consumers are middle income group, it advisable to them. While it is advisable to position the product in urban and areas with majority middle income earners, it is also appropriate to position the products in other areas. The suburban and its neighborhoods contribute a significant percentage to the company’s sales (Stuff, 2013). Therefore, I would position the products in rural, suburban and neighborhood areas, as well as in low and high income earners. Overall approach to an appropriate marketing mix McDonald Company has been tremendously successful in marketing its products. The company has been able to develop a successful mix of the right price, the right place, the right product and the appropriate promotion. In the product’s price, the company has been able to set the right price. The price must be appropriate because it influences a company’s sales. More so, consumers need to purchase more in order to increase profits. Accordingly, pricing is a key element in determining the company’s performance (Homburg, Sabine & Rohmer, 2009). Price is an essential element in the marketing mix and must reflect the cost of production as well as the other three P’s of the marketing mix. McDonald values its product at an appropriate price, for instance, the lamb burger is priced at $8.90 for the burger and $ 11.90 for the medium combo (Maxwell 2012). The price accorded to every product is consistent the company’s pricing strategy. Arguably, the price is a clear reflection of the company’s cost as well as the environmental situations. The price allows the company’s consumers to consume high quality at affordable prices. Another key element of the marketing mix is product. The company’s products are developed with right features and in excellent appearance that suit the requirements of consumers and entire market. This is depicted in the companywide wide range of products that suit the wide range of consumers. Included in the company’s product range are hamburgers, French fries, chicken products, sandwiches, breakfast items such as the Egg McMuffin, soft drinks, shakes, desserts, salads and other localized offerings such as fish and lamb. McDonald’s products have been marketing successfully because their quality meets the consumers desired needs as well as offering them their value for money. Place is another element of the marketing mix. The products must be in the right place at the right time ensuring that goods or services arrive when they are needed by the consumers. In order to ensure successful marketing, goods and services must be delivered using appropriate distribution channels and must be at the right place at the appropriate time. McDonald’s marketing strategy has been able to ensure that its goods and services are supplied in due time and place (Doole & Lowe, 2008). Promotion is the final element of the marketing mix and represents the means of making consumers and other probable consumers aware of the existence of the products. Promotion is exceedingly essential as it provides consumers with information that leads them to buy the company’s goods or service. More so, successful promotion activities improve sales and ultimately increase the company’s profitability. Links between marketing plan elements The marketing plan elements have a direct or indirect relationship. They are interrelated as most of the elements depend on each other. Arguably, the marketing elements work in the direction for the benefit of the organization. In most situations, the marketing plan element works in conjunction with one another as well as in supporting each other. A good example to demonstrate the interrelationship between the marketing elements is the relationship between the elements of the marketing mix. According to Laermer and Simmons (2007), there is a close link between product, price, place and promotion. The product is related to price as it has a price value in it. Various products have different price values depending on the product quality (Ward, 2004). On the other hand, place and promotion are interrelated. Promotion relates to advertising of products while place refers to movement and distribution of products. Conclusion- Role of the Marketing plan The marketing plan will be very essential for the company because it allows the company to understand itself more on marketing strategies and marketing mix (Cohen, 2005). Understanding its marketing objectives will be very crucial in guiding the company achieve its marketing targets. The plan will also guide the company to focus its limited resources on its best opportunities. The plan is a vital document for the company as it guides it to efficient as well as to gain competitive advantage. The marketing plan also guides the company in identifying appropriate target markets and positioning. Target market is an important aspect in any business as it denotes the segment where revenue generates. Therefore, the plan guides the company in identifying specific target market for specific products. Accordingly, it enables the company to understand on how much it can invest its resources in pursuit of identified target market. More so, the plan outlines relevant factors that are to be considered in every segment. The marketing plan has the role of guiding the company in putting in place appropriate marketing mix. It identifies appropriate elements which must be achieved in order to ensure that every marketing mix variable is success. References Adams, C. (2013). Macca's main man predicts price war. The New Zealand Herald, 3 March. Retrieved on March 5, 2013 from www.nzherald.co.nz Homburg, C., Sabine, K. & Krohmer, J. (2009). Marketing Management - A Contemporary Perspective. London. Routledge. Cohen, W. (2005). The Marketing Plan. New York: John Wiley & Sons Inc. Doole, I. & Lowe R. (2008). International Marketing Strategy: Analysis, Development and Implementation. London: Cengage Learning. Laermer, R. & Simmons, M. (2007). Marketing. New York: Harper Collins. Manning, B. (2012). Mike moore's lamb burger idea becomes reality. Retrieved from The New Zealand Herald: www.nzherald.co.nz Maxwell, J. (2012). Lamb burgers mean more than just a quick snack for farmers. Waikato Times, 21 August. Retrieved on March 26, 2013 from www.stuff.co.nz McDonalds (2013) Our story. Retrieved from March 29, 2013 from http://mc.donalds.co.nz/about-us/our-story Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2012). Marketing : Real people, reall choices. New Jersey: Prentice Hall. Stuff (2013), McDonald’s pulls claim 95 c in dollar stays in NZ, Accessed on 27th March 2013 from http://www.stuff.co.nz/business/8171241/McDonalds-pulls-claim-95c-in-dollar-stays-in-NZ Vignali, C. (2001). McDonalds: “Think global, act local”- the marketing mix. British Food Journal 103(2): 97-111. Ward, K. (2004). Marketing finance - Turning marketing strategies into shareholder value. Burlington: Elsevier Butterworth-Heinemann. Read More