Introduction
Marketing is one of the most essential business functions. Producing things or offering services is insufficient; the products must also reach their intended users. Marketing is focused with determining the needs of customers, delivering product information to consumers, and developing a sales plan. Marketing discovers clients, offers them the concept of a product, and aims to satisfy and retain them. A marketing plan is always required, not only for entering a new market, but also for expanding and preserving an existing market share (Paliwoda & Ryans, 2008, p.127). There are numerous marketing factors, including the marketing mix, market segmentation, and price strategy.
McDonald's marketing strategy
McDonald's was founded in California by two brothers, Mac and Dick McDonalds. Before establishing restaurants in other countries, the company enjoyed rapid expansion across all fifty states in the United States. Effective marketing mix utilization has contributed significantly to the company's success. The corporation has utilized product, location, price, and marketing to acquire and retain customers. McDonald's has been able to weather intense competition in the fast food industry due to its efficient marketing mix.
Product
McDonald's offers a variety of fast foods, including hamburgers, chicken products, cheeseburgers, breakfast dishes, French fries, milkshakes, desserts, and soft beverages. The company has recently expanded into the realm of healthy foods, offering wraps, salads, and fruits. This is an effort by the corporation to combat the obesity problem associated with fast food consumption. To meet the needs of the target market, McDonald's products are standardized and offered under a single brand. Burgers consist of seasoned beef patties that have been cooked. Burgers such as Big Mac, Quarter Pounder, Hamburger, Double cheese burger, Big N Tasty, Angus Third Pounders, and Cheddar MacMelt are available for purchase. Prior to the introduction of other burgers, the company's most popular burgers were the Big Mac and the Quarter. Burgers were introduced at various times in response to consumer preferences. The burgers range in weight from 45 to 113 grams, while the Cheddar McMelt is only available in certain areas. Chicken, hog, and fish products are sold under a variety of brand names, such as McChicken, Premium chicken sandwiches, Snack wrap, Chicken Selects, McRib, and Chicken McNuggets. In 1977, McDonald's began offering breakfast, which consisted primarily of sandwiches. Today, McMuffin is McDonald's most popular breakfast offering. In addition, it offers a variety of breakfast sandwiches, including biscuits, bagels, and McGriddle. McDonald sells soft drinks, mostly Coca-Cola products, Coffee, hot and iced tea, milkshakes, beer, and Irn-Bru for beverages. Furthermore, McDonald's offers a variety of cheap menus, including the renowned Happy Meal.
McDonald's primary objective is to deliver standardized items throughout its restaurant chain. McDonald's items served in numerous nations where the restaurant company is active have a similar flavor (Anderson & Kroc 1987, p.15). The varied goods strive to satisfy the diverse preferences of customers. McDonald's is committed to standardization, yet it has been able to adapt to individual tastes in different nations in order to accommodate specific clientele.
Product adaptation is necessary for a variety of reasons, including consumer preferences and tastes, cultural and religious considerations, and legal requirements. McDonald's has modified their goods on numerous occasions to accommodate consumer preferences, religious and cultural difficulties. McDonald's, as a worldwide firm, offers goods that meet the cultural and religious standards of numerous countries. In Israel, McDonald's provides Big Macs without cheese to accommodate customer preferences. Due to the Hindu religion, the company does not serve meat burgers in India. Instead, McDonald's serves vegetable McNugget. Instead of Big Macs, the firm serves Maharaja Macs made with lamb. McDonald avoids offering pork products and instead offers dishes that adhere to Hindu dietary restrictions.
In addition to religious and cultural issues, McDonald has changed its menu to satisfy the needs of international clients. For instance, guava juice was introduced in tropical areas to satisfy client preferences. Due to popular preference, McDonald's in Germany sells beer with McCroissants. Thailand's launch of the Samurai Pork burger is another such. In its extensive history, McDonald's has launched new products and discontinued others in response to consumer preferences and market trends.
Place
McDonald's operates an international restaurant chain. There are McDonald's restaurants in more than 120 countries throughout the world. McDonald's operations were first limited to the United States before expanding to other countries. The majority of the more than thirty thousand eateries are located in urban regions. In 1955, McDonald's fulfilled its key expansion goals by deciding to franchise its operations. Since then, the business has expanded its operations. McDonald's restaurants provide access to McDonald's items on a global scale. This assures that McDonald's customers have access to their favorite flavors whenever they desire. McDonald's expansion continues to be guided by strategic planning. Through franchising and collaborative partnerships, McDonald's expanded its number of outlets by 1,668 in 1998. As the American fast food market is nearly saturated, the corporation has shifted its focus to investing in other markets. New markets in India have proved successful, and the company is pursuing expansion into further international markets.
Price
At McDonald's, price has been a big marketing factor. When the company first began, its items were sold at inexpensive prices to attract more customers. Standardization has decreased the price of McDonald's items, allowing them to be sold at reasonable costs. The corporation has adopted a localized pricing model in which prices are determined based on individual markets as opposed to the mass market. This price approach is a result of the company's globalization and the varying market conditions in different regions. Instead than having a pricing policy that is based on specific products, such as Big Mac, the corporation has tailored its prices to each country.
Promotion
Promotion is a crucial aspect of marketing. According to Kotler, the promotion mix includes advertising, sales marketing, direct marketing, personal selling, as well as public relations and publicity (Ohmae, 1999, p. 79).
McDonald's market communication appears to be country-specific in light of the aforementioned variables. The objective of localizing market communication is to use numerous cultural characteristics to grab the attention of buyers. McDonald's must assess diverse cultural variances in the nations in which it operates. McDonald's market communication strives to depict the corporation as a global one, but it also aims to satisfy the specific market needs of individual regions.
McDonald's utilizes both institutional and product advertising. Individually advertised products, such as Big Mac, are contrasted with commercials that promote the corporation as a whole. In marketing, direct marketing, personal sales, and public relations are also utilized.
Market Segmentation
Market segmentation is finding segments of a market with comparable features in order to meet the needs of these segments' consumers. A market segment is a portion of the market with distinct, independently-servable demands. A market segment consists of individuals or institutions who have a comparable preference or demand due to one or more criteria (Sandler & Shani, 1991, p.39). To be genuine, a market segment must be distinguishable from other market segments. In addition, there must be homogeneity within the segment, meaning that its responses to market stimuli must be similar and it must be accessible. Identifying market segments is one of market segmentation's greatest issues (Walker 2003, p.89). In addition to identifying market groups, another problem is developing products that meet the specific requirements of each market category.
Despite the fact that there are several market segmentation criteria, a market segment may be classified into four primary categories: demographic, geographic, geodemographic, and psychological (McCarthy, 1975, p. 56). Geographic segmentation divides the market according to geographical borders. Demographic segmentation analyzes market segments according to demographic factors including age, gender, income, and education (Wedel & Kamakura, 2000, p 45.). Psychological segmentation identifies market segments based on emotions, culture, and way of life. In contrast, geodemographic segmentation employs both demographic and geographic variables to establish market groupings.
McDonald's has evidence of using market segmentation. Utilizing geographic, demographic, and psychological criteria, the market is segmented and goods are developed to serve certain market niches. McDonald's primarily uses demographic segmentation, with the majority of their items aimed at children and their moms. McDonald's, unlike eateries that attempt to serve whole meals, focuses in fast food. Over time, numerous children's products have been developed and marketed to the target demographic. Additionally, products aimed at various age groups have been produced. McDonald's initially catered to children and their moms, but has since broadened its product line to accommodate other age groups as well (Love 1999, p. 156). Happy Meal was designed specifically for children, but Big Mac is marketed to all age groups. McDonald's has further segmented their market based on additional demographic variables. For instance, the McDonald's breakfast package was created to serve employed individuals. The objective of the program is to provide breakfast to working individuals who leave their houses early in the morning.
McDonald's global expansion necessitated geographic division. While McDonald's initially provided identical goods to all of its markets, the company's expansion into additional nations necessitated that it meet the specific market requirements of each country. Although some of McDonald's goods are global, the company has created products for specific markets (Love, 1999, p. 156). For instance, Cheddar McMelt is exclusively available in Brazil, whereas Guava juice is sold in some tropical nations but not in others. McDonald's attempts to cater to market-specific client preferences (Ohmae, 1999, p. 79). For instance, burgers in India differ significantly from those in the United States and Thailand. This segmentation will be the most crucial market segmentation factors to consider as a result of globalization.
Also visible at McDonald's is psychological segmentation. McDonald's has designed goods to meet consumers' specific psychological demands. For instance, the rise in obesity has increased people's concern for their health. McDonald's has developed products to address the health concerns of this market sector. For this factor, healthy items such as fruits, fruit salad, and juices have been produced. In reaction to psychological variables, McDonald's has also introduced and removed numerous goods.
McDonald's can utilize demographic groupings more effectively. McDonald's has started targeting preteen youngsters. This has resulted in numerous goods that cater to the tastes of children. Due of the restricted size of this market niche, McDonald's should also target other demographic subgroups. McDonald's success in the United States has been greatly influenced by baby boomers, but a shift in lifestyle among this demographic could damage the company's sales (Love, 1999, p. 137). To combat this, McDonald's could offer products that appeal to a broader age range. For instance, McDonald's can boost the number of alcoholic beverages to attract more senior citizens. McDonald's can also respond to rising health concerns by offering healthier options. By building specialty restaurants, McDonald's may also instill a sense of status. The family is another market sector that McDonald's can target. McDonald can attract more families to its restaurants by offering menu items that the entire family can enjoy.
Strategy and Objectives for Pricing
Pricing strategy is crucial for market access, promotion, and profitability. The pricing strategy must not only ensure profitability, but also contribute to other marketing factors. McDonald's pricing strategy incorporates multiple market factors and production costs. McDonald’s first exploited prices as a primary marketing factor. By focusing on youthful consumers, McDonald's was able to sell their goods in large quantities at affordable prices. The low prices were intended to attract and keep clients. McDonald prices are set by both the parent corporation and the franchise.
McDonald's franchises charge varying prices. The prices of McDonald's products are decided by the local costs and expenses. McDonald's prices were generally based on profitability and consumer affordability (Jeannet & Hennessey, 2001, p. 123). The rates are chosen to guarantee that the company makes a profit while remaining affordable for customers. Theo proprietors are educated on how to operate in a cost-effective manner in order to keep pricing affordable for customers. The company's pricing policy strikes a balance between profitability and consumer affordability (Eichmann & Maze 1998, p. 78). McDonald's pricing policy takes into account both the costs of manufacturing a product and the customer value of that product. The policy presupposes that consumers are willing to pay a specific price for a product of comparable value.
McDonald's pricing policy is not worldwide, but rather specialized. McDonald's goods are priced differently in several regions. Instead of basing prices on the products themselves, prices are tailored to each country's market (Love 1999, p. 156). For instance, the price of a Big Mac varies between countries based on market conditions.
Pricing strategy is an essential aspect of marketing. McDonald's pricing strategy was successful in ensuring profitability and expansion, as well as in marketing its prices. Utilizing entry prices, the corporation entered a new market. The corporation has also modified its prices in response to those of its competitors. In addition to adjusting its rates for promotions, the corporation has acquired client confidence by doing so.
Recommendations
McDonald's is a leader in the fast food market. However, developments in the fast food sector, globalization, and the emergence of new competitors necessitate increased marketing activities. McDonald's should be capable of adapting its offerings to market changes. As health awareness increases, McDonald's should develop more nutritious products. McDonald's can also alter their products to create the appearance that they are healthy. McDonald's can also capitalize on particular locales. For instance, the corporation can establish eateries in educational institutions such as schools and colleges. With a rise in competition, McDonald's should strive to increase product royalties from customers. As part of its pricing plan, the corporation may issue a royalty card, for instance. In order to attract guests having royalty cards to frequent the restaurant, it may offer them discounted prices.
Conclusion
McDonald's is the most established fast food chain. The company currently operates in over two hundred countries and services over forty million consumers. Analysis of the company's marketing mix reveals that it is multinational and consequently targets the international market. McDonald's has multiple market categories, including geographic, demographic, and psychological. The company can profit by addressing a broader market niche. As a worldwide enterprise, it is vital to employ pricing methods that are tailored to specific regions. McDonald's marketing mix and price strategy have contributed to its success in a competitive market. By concentrating on meeting the needs of new market sectors in the global fast food industry, the company is certain of expansion.
Reference
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Ohmae, K. "Managing in a Borderless World," Harvard Business Review, vol. 4, no. 1, 1999, pp. 71-87.
Paliwoda, S. & Ryans, J. 2008. "International Marketing". Edward Elgar Publishing, New York.
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Wedel, M. & Kamakura, A., 2000. “Market segmentation: conceptual and methodological foundations”. New York: Springer.
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