Macro and Micro-Economic Factors That Influence Marketing Decisions - Assignment Example

A marketing environment covers the external forces that shape a firm’s capacity to develop and maintain relationships and transactions that are successful with target customers. They are classified into macro and microenvironments. In the case of McDonalds, micro environmental factors, which influence marketing decisions, include suppliers, competitors, intermediaries, publics, and customers. In order to introduce the two products successfully into the market, McDonald’s needs a business plan that is properly formulated so as to gain the confidence of all stakeholders. This way, the company shows its commitment, knowledge and skills to achieve the set objectives. It is also important to set objectives that are measurable in terms of finance, sales, operations and human resources. The products created should be unique and the human resources must always endeavor to improve efficiency. Among the key issues to consider when coming up with a marketing plan for the new products include segmentation, competitive alternatives, marketing goals, budget forecasts and tactical plans.

2.1 Macro and Micro-economic factors that influence marketing decisions

Macro-economic factors, which influence marketing decisions, include political, legal, environmental, economic, social and technological factors. The suppliers ensure that a critical link is formed in delivering the coffee products to customers. During the introductory phase, for instance, just a few samples might be needed, approximately 200 cups of mint coffee and about 200 pieces of the choc cake. The company will then have to build on this depending on how the products have been received. To avoid delays, the company has its unique suppliers who are divided into various divisions for indirect and direct supplies. Among the strongest competitors for McDonalds include Starbucks that has an equally good brans image. Further, the company has intermediaries to aid in distributing and promoting all the coffee products to the buyers. With regards to macro-economic factors, political factors are equally sensitive to the operations of McDonalds. In addition to depending on a country’s political stability, the company has to comply with various employment laws, tax issues, as well as proper licenses. The company also has to address issues of international currency fluctuations, which could significantly shape its economic factors.

2.2 Segmentation criteria to be used for products in different markets

As a way of ensuring its marketing strategy is streamlined, McDonald could use various market segmentation criteria for its coffee products. Dividing target markets that are broad-based into specific consumer groups could do this. For market segmentation to be effective, it has to be measurable, actionable, substantial, differentiable, and accessible. There has to be availability of some data that will make it easier for the market segment size to be measured. The market segment must preferably be large, especially in terms of profitability and size. It is also important that the market segment be reachable specifically in terms of communication and distribution. The expectation is that the market segment will have a value that is practical, and it must be easy to quantify the outcomes of the segment. The responsive criteria could be useful for products in different markets. This complements the behavioral segmentation that concerns itself with user behaviors. It takes into account patterns of use, benefits soughts, price sensitivity, as well as brand loyalty. Even though the demographic make up of a company might be similar, the behavioral tendencies could be completely distinct. For instance, some customers would prefer to have coffee on a daily basis, whereas others do so on a weekly basis. Low-cost models and higher-quality models must all be considered.

2.3 Targeting strategy

In a targeting strategy, a firm selects customers whom it wishes to offer services and products. Various targeting strategies are available to a business like McDonald that sells coffee. These include undifferentiated marking, differentiated marketing, as well as concentrated marketing. The targeting strategy that would best suit choc cake and mint coffee is differentiated marketing. This way, the firm can easily appeal to its distinct market segment by combing the best aspects of concentrated and undifferentiated marketing. Through differentiated marketing, the company will know that the focus is customers who prefer fast foods, and they might not necessarily be conscious about their calorie intake. By targeting a customer profile that is very narrowly ideal and defined, it will become easier for the company to continue building its client base. This way, the firm will continue to grow and master its niche market. There is also the cost-efficiency that comes with differentiated marketing, and this is especially so for new offerings. For the mint coffee and choc cake, for instance, the company can go for sweat, high-fiber or organic to target different consumers. This goes a long way in building the much-needed brand loyalty.

2.4 How buyer behavior affects marketing activities in different buying situations

Marketing activities are shaped by buyer behavior in different buying situations. There are various components that shape consumer buying behavior. These include psychological factors, social factors, as well as personal factors. Social factors are those where the input of other individuals affects the decision making of the client. These could either be in the social circles or exist in the business sector. They are instrumental in determining if a client refuses or accepts an offer. Psychological factors, on the other hand, are those that largely depend on the thought process. They include things like state of mind at that particular time, recognition, emotional disposition, as well as learning. Personal factors are those that incorporate demographic, lifestyle, as well as situational elements. Buyer behavior is therefore shaped by both external and internal factors. Routine behavior is particularly critical with regards to this. Consumers often rely on programmed responses when making certain types of purchases. There is a complex decision making that is involved, and this is normally associated with certain types of products where consumers have to conduct thorough research.

2.5 New positioning for products

For a company like McDonalds that wishes to introduce new products, there will be need to influence the perception that the market has regarding the products positively. Failure t do this will mean that customers position the products based on the information received from customers and this could prove catastrophic. The product positioning should therefore be meaningful, clear and concise for it to have any real impact in the market. There is need to differentiate the products, and address the gap that it intends to fill in the market. This process should be sustainable and credible for it to be effective. It is therefore crucial to understand both the target market and the competitors by mapping out a competitive positioning that is proven.

3.1 Product development to sustain competitive advantage

Most companies seek to ensure that their products sustain a competitive advantage. One of the proven and most popular ways of sustaining a competitive advantage is through product differentiation. This way, a company easily differentiates its services and products, and in the process creates the all-important customer loyalty. Differentiation seeks to presents a product to customers that will be interpreted as being unique, and this further underlines its viability as a strategy. A competitive advantage that is sustainable is also achieved through multiple source advantage. At McDonald’s, for instance, there are numerous departments dealing with diverse products such as fast food, electronics, groceries, apparel, and even toys. Reputable customer services are also critical in sustaining a competitive advantage. Addition, a company could engage in positive vendor relations so as to gain exclusive rights that might enable them to trade with specific regions. Location is also a critical factor for any company seeking to sustain the much-needed competitive advantage. This is a strategy that McDonald’s has perfected by targeting one area before expanding gradually until they conquer the entire location. Other ways include patenting the product or the ingredient used to make it, and continually encouraging the process of innovation.

3.2 How distribution is arranged to provide customer convenience

Distribution should be arranged in such a way that customer convenience is prioritized. Products should be availed to customers whenever they are required, and for this to be successful, it is necessary to engage in proven distribution channels. This will, however, largely depend on the specific nature of the product. Distribution, it must be noted, directly impacts the performance of a product in the market. It relies on channels like delivery, service and sales. One trend that has been gaining popularity with regards to this is e-commerce where customers can place their orders in the convenience of their homes. They do not have to go the stores because they can see samples online before placing their orders.

3.3 Price setting to reflect organization’s objectives and market conditions

As far as the marketing mix is concerned, the role of pricing cannot be underscored. Setting the pricing correctly directly shapes a business competes with its rivals, as well as its ability to yield good returns. This implies that setting the prices either too low or too high goes a long way in influencing the ability of a corporation to survive market forces. Corporations have to contend with price battles by reading the mood of their customers before going ahead with their actual price setting. This way, they are able to break even effectively without disrupting operations. There are various strategies that can be used with regards to tis. They include penetration pricing, skimming pricing, as well as differential pricing. Corporations, however, have to appreciate the fact that the strategy that works in another industry might not necessarily work in certain industries.

3.4 How promotional activity is integrated to meet organizational objectives

For any company like McDonalds that constantly seeks to introduce new products, promotional activities play a leading role in achieving the marketing objectives. Through promotional activities, corporations give themselves the ability to ensure customers get the needed information that will enable them base their purchasing decisions. Through such aspects like advertising, public relations, personal selling, or even sales promotion, it becomes easier to introduce new products into the market without interrupting operations. Effective promotional activities are those that give customers the incentive they need to go ahead with their purchasing decisions.

3.5 Additional elements of the extended marketing mix

The extended marketing mix has additional elements, which can also not be underscored. In addition to the regular elements of the marketing mix, which are product, place, price and promotion, there are other elements that are equally important. These include people, physical evidence, as well as processes. The people working in a firm form a critical part, and this explains the importance of training and recruiting the right talent because they are the people that will interact with clients on a regular basis. Physical evidence is also important because it shapes the presentation of a product to the clients, its surrounding included. Process is the final element and it concerns itself with the ability of a firm to foresee issues and address them before they occur.

4.1 Marketing plan in two different segments in consumer markets

Product

Price

Promotion

Place

Mint Coffee

$ 1.59

Special offers and Loyalty schemes

McDonald’s outlets

Choc Cake

$ 2.39

Special offers

McDonald’s outlets

Example of a marketing mix for two products

4.2 Differences in marketing products and services to business rather than consumer

There are obvious differences when marketing products and services to consumers and business. In business to customer sales, the sales cycles are often shorter compared to business-to-business sales. There is also the question of rationality whereby business to customer sales are made on the basis of emotions, whereas business to business sales are evaluated and planned making them more rational. On average, marketing products to customers is cheaper compared to marketing products to other businesses because corporate services are known to be more costly. Most often, sales between businesses and customers are done without any ongoing relationships or prior contact. The same cannot be said of business-to-business transactions where trustful relationships are mandatory.

4.3 How and why international marketing differs from domestic marketing

International marketing and domestic marketing differ in various ways. This is especially so in factors like area served, government interference, mode of business operations, use of technology, as well as the risk factors involved. Other differences between the two come in the form of capital requirements, nature of customers, and the research needed to connect with the target customers. It must be noted that when operating in international markets, companies have to invest heavily in research so as to be armed with the knowledge required to thrive in those markets. The financial climate of domestic and international markets also differs significantly. Domestic markets are more homogeneous, while international markets are diverse in nature.

Reference List

Pattanayak, S., 2015. Synergizing Business Process Reengineering with Enterprise Resource Planning System in Capital Goods Industry. Procedia - Social and Behavioral Sciences, 189(15), pp. 471-498.