Marketing Principles of McDonalds
Macro
and micro environmental factors which influence marketing decisions
Every organization has
its own business environment and ensures them run and grown in to this
environment. There are two major types of environment which are effects almost
all of the business activities. These twos are macro environment and micro
environment.
Macro
environment
Macro environment is
external environment that effects a business or company’s activities
indirectly. Macro environment has some factors which influence the business.
How these factors influence McDonalds are described below:
Figure 1: Macro
environment of McDonald
Source: Own creation
·
Political
Political
environment includes various rules and regulation established by the government
of a country and McDonald should follow these.
·
Social
When
a company wants to run business to a society they have some responsibilities
towards it so McDonald should maintain corporate social responsibilities.
·
Technological
It
is related with technology and how technology affects a company’s activity. By
using technology McDonald can deliver their product to the hand of their
customer.
·
Economic
Economic
condition of a target area or target customers so that McDonald can produce and
provide right product to the right customer.
Micro
Environment
Micro environmental
factors directly influence the company. How micro environment influence
McDonald is shown below:
McDonald should take
several steps to increase their customer. They should recruit qualified
employee to increase product quality. They should retain their existing
suppliers as well as search for new one. They should take several steps to get
competitive advantage.
Segmentation criteria to be used for McDonald's products
in different markets.
Segmentation can be define as divide a market based on demography, geography, psychographic and behavior of the customer. Each small pert called a segment of the market. Basically a company segments their market to give extra effort to their target customer and attain maximum profit. McDonald segments their market on the basis of demography, geography and so on which are stated below
·
Geographic
segmentation
Geographical
segmentation is based on the geographical division of a market. It is setting
different market strategy for different market based on their location. Such as
set a price for India.
·
Demographical
Segmentation
Demography
of different country can be separate so McDonald should carefully consider when
setting marketing strategy. Demography can be differ through race, region and
nationality of target customer.
·
Cultural
segmentation
It
means that people of different culture have different choice, have some
restriction to buy or use some of the product so McDonald should set their
marketing strategies consider these factors.
·
Behavioral
Segmentation
Behavior
of the customer is also important while setting market strategy. McDonald
should set marketing strategy regarding their customer.
Targeting strategy for a selected product
Targeting
refers to select specific group of customers to whom the company wants to sell
their product and make their marketing strategy. McDonald has their targeting strategy
to attain better outcomes from their customer and provide them the best
service. There are three types of targeting strategy which are followed by the
different company.
1. Undifferentiated Targeting Strategy:
Undifferentiated
targeting strategy refers to apply same targeting strategy to same place or
customer. It is effective for the customers who continuously use one kinds of
information tool. Such as in some are of India some people just reads the
newspaper. McDonalds should follow undifferentiated
strategy to attain their customers located in different types of historical
places like Mumbai. Companies are follows this strategy to attain their customer
for a long time.
2. Concentrated Targeting Strategy:
Concentrated
targeting strategy says that company should concentrate on a specific targeted segment
and serves it better than other segment. McDonald
follows this strategy to make their specific group of customer royal and loyal.
It ensures them get better output in future. McDonald follow this tools by
targeting customer whose age is over 50 in the segmented area and McDonald use
direct communication for such kind of customer.
3. Differentiated Targeting Strategy:
In
differentiated targeting strategy a company uses different promotional tools
for different customer. McDonald uses
this kind of strategy by providing both personal selling and TV advertising to
a segmented area. As McDonald’s product used by different types of people like
teenagers, older and Youngers, so they needs to apply different types of
promotional tools. They also communicate directly with different families to
find their needs and buying patterns.
The effect of buying behavior on marketing activities
in different buying Situations.
People
have unlimited wants but the resource they wants are limited. So people need to adjust their unlimited wants
with limited resource. Consumer buying behavior is consumer brand choice,
product feature justification, compare the product with other product when they
buy a product. There are four major types of consumer buying behavior.
High
Involvement
|
Low
Involvement
|
|
Significant differences between
brands
|
Complex
buying behavior
|
Variety
seeking behavior
|
Few
differences between brands
|
Dissonance
buying behavior
|
Habitual
buying behavior
|
Figure:
2 Consumer buying behavior
Source:
own created.
1. High involvement:
When
consumer buys a luxurious product they face this situation. When a customer buys
a luxurious product they seek different types of information from different
source so they need to involve with the product to know itself. This situation
faced only by the luxurious product company. McDonald’s have little brand
comparison so their customers hardly face this problem.
2. Low involvement:
When
the consumer buy a product of low price then this situation happens. When
people buy a cheaper product they compare less. McDonald is a first Food
Company and most of their products are low prices so people hardly compare
their product.
3. Significant differences between
brand:
When the customers compare significantly a
company’s product with others then this situation happens. Significant
differences are occurs when a customer a luxurious product like a motor cycle.
McDonald deals with fast food so there customers are have low brand comparison
when buy the product.
4. Few differences between brands:
When there have very little differences
between the brands then this situation happens. It is suitable for the products
which are used daily by a customer. McDonald deals with fast food so they have
lower brand comparison.
When there have
significant product differences in buying and the buyers are highly involved
then the situation is complex buying behavior. If there are significant product
differences and the customers are in low involvement then the situation is
variety seeking behavior. Consumers are highly involved in purchase but there
have few differences between brands in dissonance buying behavior. There have
low involvement and few differences between brands in habitual buying behavior.
Propose new positioning for a selected product or service.
Positioning is to set the
name of the product to the heart of the customer. For positioning a company
selects a segment and applies industry attractiveness to make the product more
acceptable to the customer. If McDonald wants to make a position in customer
minds they should focus their pizza to the customer, they should make it highly
featured and better than the competitor and they also should keep its price
affordable to the customer. McDonalds needs to apply attractive promotional
tools to capture their customers and they should concentrate on their product
quality. They need well trained and qualified home delivery personnel to serve
their customer. It also needed for them to focus on building strong customer
relationship via direct communication with them. McDonald should produce and
provide hygienic food to make their customer more loyal. McDonald uses a slogan
that is "I’m loving' it" to positioning their product. By this they
meant that customer love their product for their better quality.
Marketing
mix is the blending of 7ps as product, price, place, promotion, people, process
and physical evidence. Almost all of the organizations have to consider these
7ps very carefully to be successful in the competitive competition. An
organizations success is mostly dependent on introducing a right product to a
right group of customer, establishing a fair prices based on quality of the
product, perfect segment of the market, use of best media as promotional tools,
effective and skilled employees for better performance. McDonalds consider all
these marketing mix carefully. Like most of the organization McDonalds segment
their total market based on three criterion. These criterion are demographic,
psychographic and behavioral. McDonald sets different price for Australia and
India because of income level of the people and their standard of living. They
charge lower price for India and higher price for Australia. Salary for Indian
employee is comparatively lower than that of Australia. Because the living
standard of India is not as higher as Australia.
Illustrate
differences in marketing products and services to businesses rather than
consumers
There are
many company exist in the market and they produce same product such as Samsung
and iPhone produce smartphone. Now which product will accepted mostly by the
buyers. It’s fully dependent on which benefit is provided by the each of the
company. For instance McDonalds, KFC and Pizza hut have the same customer. But
which one customer prepares most? To choose a product a customer first seek its
differentiation with other brand then they goes for its quality. Then they ask
for lower price. So the company should produce quality product at a lower
price. To capture the market McDonald should produce quality product at a lower
price than their competitor’s price. By this customers will attract and start
buying their product. McDonald also can provide fast food to the customer’s
home through home delivery service through qualified home deliver personnel. They
can also establish higher prices for society’s top-level people whose income
level is higher like businessman, banker, teacher they want high quality
service and environment. They should also ensure product quality and feature
for high price customers.
How and why international marketing differs from
domestic marketing in the case of McDonalds.
A domestic marketing refers to a company’s business
activities in its own country or own region. On the other hand when marketing activities
is designed based for out of domestic market and international market situation
then it is called international marketing. When a company seek for earning
higher profit and wants to enlarge their business then they try to enter
international market. Most of the organizations starts their business first in a
domestic region. Marketing activities for international market is totally
different from domestic one.
·
Obstacles
To enter a
country’s market is not easy. It needs to overcome some rules and regulation by
the government of the country but domestic companies’ faces this problem
hardly.
·
Scope
Domestic
companies are got lower benefit than that of the international one.
International Companies got many duty free benefit that domestic one hardly got.
·
Profits
International
company earns more profit than domestic one because scope for earning more
profit is greater for international one than domestic. International company
have more customer than domestic one.
·
Technology
International companies have
to use newer technology to serve their huge number of customers than domestic
one.
·
Political
relations
International
companies have to build good political relation in many countries to run their
business risk free. It is not mandatory for domestic company.
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