Marketing Approaches of McDonalds and Starbucks - Research Paper Example

Both have adopted hugely divergent approaches to marketing which in both cases have resulted in huge success. This shall be at the core of the analysis below. The companies’ approaches shall be evaluated based on the four P’s of marketing (price, product, place and promotion). In addition to that, any differences in their domestic and international operations shall be under study.

Domestically

Internationally

Practice/Example

Rationale

Practice/Example

Rationale

PRODUCT

McDonald’s

A wide array of fast foods and beverages.

A one-stop shop for all food and beverage needs.

Sale of fast foods such as hamburgers and pizza.

Attract the working class to the fast food industry.

Starbucks

Coffee and accompaniments only. New products, packaging i.e Blonde Roast

Creating a niche market and specializing in a single product.

Great service, top quality coffee, stylish packaging that lives up to the brand's reputation.

Developing brand association among consumers and nurturing habits.

PLACE

McDonald’s

In all big cities via franchising.

Targeting workers during or  after work

Big towns in developing countries.

Targeting emerging classes in towns

Starbucks

Big cities, and small towns through clustered outlets.

Being the “third place” after home and work.

Only in large towns in emerging markets

Proximity to core consumers, the middle class

PRICE

McDonald’s

Affordable rates.

Attracting price-sensitive buyers.

Low-cost coffee and pastries.

Luring low and high-end buyers.

Starbucks

Premium rates.

Quality has no price.

Relatively high prices.

Attracting high-end consumers.

PROMOTION

McDonald’s

Advertising using mass media, billboards e.g. ‘I’m Lovin It’ ads

Establishing a constant presence with loyal and budding customers

Advertisements in mass media, billboards etc

Creating brand awareness among new customers

Starbucks

Word of mouth and personalized service

Quality self promotes. Unique customer

Advertisements in mass media

Introducing customers to a novel product.

Since the start of the economic crisis, Starbucks has closed several stores at home (Gummesson, 2002). This needs to inform its operations abroad. Lowering prices is the best way to attract international consumers since they are using the product for the first time, and they are not ready to pay dearly for an experience they are unaware of.

As regards promotion, both word-of-mouth promotion and mass media marketing have served Starbucks and McDonald’s well at home. However, the international market is different (Gummesson, 2002). They can not rely on the customers to spread the word about a product they do not know. Therefore, the mass media market should be the first resort.

Location or place has been a major determining factor of both companies' success. At home, McDonald’s and Starbucks have used franchising and clustering to spread their branch footprint respectively. However, abroad franchising is the tried and proven alternative. Franchising allows for local entrepreneurs who know the market well to attend to the unique needs of these consumers.

Product is the reason the business exists in the first place. At home, both companies are best known for their coffee and related products. The operations in international markets, however, need to follow a different path (Gummesson, 2002). Several products should be launched at a go. This way, even customers who do not have a coffee-drinking culture shall be welcome to the establishments. After all, the prime objective is to build a large customer base. After that has been achieved, maybe the companies can concentrate on their core competencies, coffee.

Both companies have remained fairly successful even in the days of global financial turmoil. It should be interesting to watch which steps each of them take next. However, in the meantime they remain not only the best examples to emulate, but also the best places to eat.