Higher National Diploma in Business Management
Unit Title: Marketing Principles
Assignment Title: Assignment 1
Chosen Organisation: McDonald’s
Table of Contents
Company background (McDonald’s)
1.1 Various elements of the marketing process.
What is marketing?.
Evolution of marketing.
Marketing planning process.
1.2 Benefits and costs of a marketing orientation for McDonald’s. 6
What is the marketing orientation?.
Benefits of marketing orientation.
Cost of marketing orientation.
2.1 Macro and micro environmental factors which influence marketing decisions of McDonald’s
PESTLE Analysis of McDonald’s macro-environmental factors.
Microenvironmental factors which can impact McDonald’s business.
2.2 Propose segmentation criteria to be used for products in different markets.
What is Segmentation?
Market Segmentation for McDonald’s Coffee -2015
Market Segments Characteristics for McDonald’s-2015.
McDonald’s Market Segment in Grid.
2.3 Targeting strategy for a selected product or service.
McDonald’s targeting to offer its Coffee for 2015.
2.4 New positioning for McDonald’s Coffee.
2.5 How buyer behavior affects marketing activities in different buying situations.
Buyer decision process.
Factors that affect our buying decisions.
Impact of buyer decision on McDonald’s marketing activities.
A business’s success depends on its effective marketing campaigns and strategies. As a result, an organization must clear the concept of marketing and its principles, and have to apply it appropriately in the business operations (Lorette, 2014). This report has explained and evaluated different aspects of marketing based on a particular organization named “McDonald”.
Company background (McDonald’s)
McDonald’s, a leading brand in the world’s restaurant industry, was founded in 1954 by 52 years old salesman called ‘Ray Kroc’ in the US, which has been growing fast gaining a strong brand appeal and reaching the current momentum in the global restaurant industry. It serves millions of customers every day in its more than 33,000 restaurants by about 1.5 million dedicated and devoted workforces. McDonald’s is more popular in the US and EU than the rest of the world due to its healthier alternative such as salads, wraps, fruits. The key products of McDonald’s are hamburgers, cheeseburgers, breakfast items, chicken products, different kinds of hot and soft drinks, sweets, and desserts (McDonald’s Corporation, 2014).
McDonald’s is gaining 13% sales revenue alone in the fast restaurant industry, where its seven main competitors are gaining only 47% of total sales revenues. The main competitors of McDonald’s in the United Kingdom are Burger King, Star Bug, Greggs, Subway, Prêt Manager, local and high street restaurants, including Indian restaurants and local supermarkets such as Tesco, ASDA, Sainsbury, Morrison, Co-operative, etc. McDonald’s is available in consumer’s convenience locations including high streets, parking areas, shopping malls, visiting spots, close to historical places, motorways, Tube, Bus stops, Undergrounds, and places where people come for leisure and recreations (McDonald’s Corporation, 2014).
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1.1 Various elements of the marketing process
What is marketing?
According to Kotler (2012), marketing refers to a social and managerial process whereby groups as well as individuals gain what they expect and need through creating and delivering products and added values with others. In a word, this is a managerial process made and implemented by an individual or group organization. The key aims of marketing are to meet the needs and expectations of the deploying companies through improved sales target and market share, maximized profit and reduced costs, changing needs, and expectations of other individuals and groups.
Figure 1.1: Core marketing concept Source: Kotler et al. (2012)
Evolution of marketing
As Kotler et al. (2012) notes, the concept of marketing first started in the pre-industrial revolution which is called a simple trade era. Then, it promoted to production-oriented from the 1860s to the 1920s known as the production era. Following this, sales-oriented marketing came under practices from the 1920s to 1940s. From the 1940s the marketers introduced separate departments for marketing, which continued until the 1960s. After that, the marketers were
Figure 1.2: Evolution of marketing Source: Kotler et al. (2012)
thinking to practice marketing activities as a company, which was continued from the 1960s to 1990s. Next, the relationship marketing concept came under the consideration of marketers from the 1990s to 2010. Finally, since 2010 marketers have now been focusing on the newly proposed marketing concepts of social media and mobile marketing.
The marketing process in the following figure shows marketing’s roles and activities in organizations, as well as the forces influencing the marketing strategies. In the core of the marketing process, a marketing key target is consumers. Following the target customers, marketers define the marketing mix including product, price, promotion, and place. Then, the marketers focus on the marketing planning process including analysis, planning, implementing, and control. Next, the marketer’s emphasis on key stakeholders including marketing intermediaries, the general public, competitors, and suppliers. Finally, the marketers concentrate on business external environmental factors including political, economic, social, technological, legal, and environmental issues (Kotler et al., 2012)……….