The Role of Marketing
Marketing is a managerial process where a customer’s requirements are identified, anticipated, and met in a manner which is profitable (Ferrell and Pride, 2010). Marketing functions to recognize the needs of the customers and setting in place systems in which their needs are met. Marketing is a function which must occur in synergy with other business functions to be successful (Ferrell and Pride, 2010). It is very important for businesses today to dedicate resources to marketing because the success of the business is pegged on the realization of its organizational objectives. Understanding consumer behavior can allow the company to be able to maximize profits by offering the clients what they need or want (Valentini et al., 2011).
For McDonald’s, marketing is very important because it will attract customer’s to its establishment. Marketing is customer-oriented, and being a new opening in a new locality, it is important that McDonald presents itself as being able to satisfy the culinary needs of its target clients better than the competition. It is vital for McDonald’s to market itself because there is great competition between different fast foods establishments. Marketing is a function which permeates all aspects of the business (Cohen, 2006). In essence, it should not be carried out in isolation but should be coordinated with all other aspects of the business. This means that every employee in the business must understand the company’s marketing philosophy at all times (Cohen, 2006). This implies that each member of an organization must work synergistically towards anticipating and meeting the needs of the client.
Micro and Macro-environmental Factors
Certain micro and macro environmental factors may influence how McDonald’s carries out its marketing. Demography is a factor where human populations are studied with regards to population, gender, race age, location, or size (Cohen, 2006). These factors are studied so as that the marketer can be able to define his target market and market segment (Ferrell and Pride, 2010). Since McDonald’s is moving into a new location, it will need to research the population to find out what the demographics are. In case the majority of the people in the locality seem to be young, or maybe it is a busy business centre, McDonald’s would have to offer and market fast food which would be most suitable for them. After understanding the demographics of the new locality, McDonald’s will be able to craft its marketing strategy in line with the demographics represented in the locality.
The economic standing of the members of the locality is another macro-environmental factor. This factor examines how the purchasing power of the target client while also examining how they spend their money (Valentini et al., 2011). McDonald’s would have to determine whether the locality’s economy is subsistence (agricultural and consume their own produce) or industrial (diverse with a large variety of products). These two economies determine how target clients spend their money and how their wealth is distributed. Since McDonald’s is venturing into a highly industrialized locality, with a majority of the population being middle class, it may emphasize the convenience, speed, and affordability of its products.
Since it is establishing itself in a new environment, McDonald’s would have to seriously consider the suppliers who deliver foods and vegetables to them. It will need to closely examine the suppliers who are within the locality and analyze what factors are likely to cause changes in their environment. This is because unexpected changes in supplier environment can have very bad effects on McDonald’s business operations. After carrying out an analysis, McDonald’s will be able to predict and organize contingency plans in cases where there may be adverse developments (Vazifehdust et al., 2011). McDonald’s will also need to examine the competitive environment in the new locality. It must be aware of any companies which manufacture similar or substitute products either domestically, or foreign. It will need to survey and know who its competitors are and what they offer to the clients. By having comprehensive information about what competitors offer and the overall competitive environment, McDonald’s would be able to design its marketing environment in such a manner that it will compete effectively in the market (Ferrell, 2011).
Another key macro-environmental factor is the socio-cultural environment. This examines the changing tastes and the purchasing power of the clients. In addition, it takes into consideration the cultural values in the society (Vazifehdust, et al., 2011). Core cultural are firmly implanted in the society and may be present as a function of family or religious values, education, and others. An organization is usually forced to operate within the core values of a society. Secondary values are subject to change either with time or changing circumstances. For example, a society’s attitude may change towards credit, health, or other factors. As McDonald’s ventures into a new environment, it will have to consider the values which are entrenched in that community. With the growing interest and concern over fast foods and the change into healthy eating, it will have to examine how to present and make its food much healthier while retaining the element of affordability and convenience.
Legal and political factors also play a great role in determining the macro-environment of a business. A business must consider what legal factors affect it and what the legal requirements are for it to operate in the region. These may be enforced by government agencies, or legally empowered groups. McDonald’s must therefore be aware of the legal requirements of the new locality and strive to fulfill all of them. It must find out if any restrictions exist on any products that they may be offering. Legal factors may be influenced by politics. For countries which engage in international operations like McDonalds, it is wise to consider political developments on an international scale and how they will affect business (Cohen, 2006). Though political factors may not play a very major role in the developed world, in certain regions, like the developing nations, politics greatly influence the business environment (Ferrell and Pride, 2010).
Technology is also an important macro-environmental factor. Technology changes the way a business operates by increasing efficiency in its operations (Cohen, 2006). This can also be an important edge in marketing as technological advances may assist in the marketing process for example, in carrying out market research (Valentini et al., 2011). It is important for McDonald’s to be aware and keep up with technological advancements which may even result in new ways of presenting or cooking their food. This would result in new markets and marketing techniques that they would employ to promote their products (Valentini et al., 2011). The natural environment is also a great consideration in business. This is because a company may use natural resources as raw materials or in other processes. Due to the renewed and vibrant interest in environmental conservation, it is important that McDonald’s takes effort to ensure that it preserves the environment through proper disposal of waste. It may also consider sponsoring environmental-related activities as a marketing tool. McDonald’s should make great efforts in regions where they are located to conserve the environment because a perception that they are not environmentally conscious could ruin their reputation and subsequently reduce their clientele.
Internal Environmental Factors
Non marketing factors also make a great contribution to the success of McDonald’s. Location defines the physical location of the business. It is important that McDonald analyze the geographical setup of a new location and acquire a location which will position it strategically to attract the largest number customers (Cohen, 2006). For example, it will be very strategic for McDonald’s to locate its establishment at a corner of a business street. It is also important that great attention to human relations within the organization and this extends how customers are treated. There is need for a healthy relationship amongst the employees of any organization and their relationships with clients. Healthy and respectful relationships result in a good business environment where employees can work cohesively as a team and organizational goals can be met and surpassed (Cohen, 2006). Finally, the company image must be upheld and represented by the employees at all times (Cohen, 2006). McDonald’s must always strive to ensure that its operations and employees constantly uphold the values and image of the company. It is imperative that the management of McDonald impress upon its existing and new employees the values of the company and the image it wishes to project to its clients.
“The business of business is business”- this statement in relation to marketing ethics may imply that the very essence of carrying out and operating business is a preoccupation in itself. The way business is pursued and marketed requires special attention in itself. McDonald’s has had to deal with various ethical issues in the course of time. Most notably is the growing interest in healthy eating due to the high and growing rates of obesity and eating disorders (Ferrell, 2011). McDonald’s is a fast food establishment which like many other such restaurants is often blamed for the convenience food which is usually unhealthy. Many consumers are therefore concerned about their weight and health and are interested in their calorie intake. As a result, McDonald reviewed its menu to include healthy meals for the health conscious and also began to display the nutritional information and allergen information available to the customers.
A marketing plan is usually part of a business plan which outlines the marketing strategy of a business (Cohen, 2006). The marketing plan clearly defines the steps which will be taken to ensure that the marketing goals are met. It contributes to the success of a company because writing it requires a careful analysis of the business environment and that of its competition. The business will therefore be able to have well defined marketing goals and specific steps which it will take to achieve them (Cohen, 2006). It is important to have a formal marketing plan because it acts as a point of reference throughout its valid period and can be updated from time to time.
When prospective franchise holders of McDonald’s are writing their marketing plans, they will have to come up with marketing objectives which measure their success using non-financial metrics. These marketing objectives usually cover the following areas: target market; promotional; distribution; market research; research and development.
Proposed Marketing objectives
Segment the target market into different groups like: families; individuals; and takeout
Segment the market and determine how to appeal to the target demographic
Carry out at least one major promotional activity each month.
Engage in interactive promotional activities which promote client interest and loyalty.
Carry out a comprehensive market research biannually.
Research on local and global market trends in the food industry.
Develop meals which reflect the evolving tastes and preferences of customers.
Adopt the latest technologies which make business more efficient.
McDonald’s was established in 1955 and has been flourishing since then. It is therefore an established and recognized brand.
McDonald’s is committed to social responsibility and community service. It offers board facilities for poor families, sponsors athletes, and provides medical care to children.
There is a high rate of employee turnover which results in large amounts of money being spent on training.
McDonald’s has not yet adjusted its processes to include organic foods which is currently a popular trend.
They face much competition from pizza chains because their attempt at offering pizza was not successful.
McDonald’s should invest in more upscale settings to appeal to an upscale market; most of its restaurants use the industrial Formica settings.
They could offer healthy hamburgers with FDA approval for low fat hamburgers; this would make it the first fast food restaurant to offer healthy hamburgers.
They have been sued many times for unhealthy food and been accused of adding addictive substances to their food.
They had several cases of having food contaminated by e. coli bacteria.
McDonald’s faces stiff competition from other fast food chains like Wendy’s, Taco Bell, Starbucks, and KFC.
They have been accused of promoting unhealthy eating in children because many of their adverts entice children who begin eating fast food and continue into adulthood.
Market research is a deliberate effort to collect information about customers, and the market (Ferrell, 2011). When this data is collected, it is interpreted using statistical means and analyses utilized in social sciences so that decision making is facilitated and supported. When market research is conducted, an organization is able to access valuable information from the market about what it needs, the competition, and the size. As a result, the company is able to devise an effective marketing strategy.
When collecting data, primary and secondary research methods may be employed. Primary research is carried out when there is no available data and the researcher needs to collect data himself (Ferrell and Pride, 2010). This can be done through means like questionnaires or experiments. Secondary research is carried out when there is data available and the researcher only has to access it. This data may be available in books, scholarly journals, publications, or organizations (Ferrell and Pride, 2011).
When carrying out research, certain pitfalls should be avoided to maintain the integrity of the research study. These include misusing modes and averages (means) when carrying out activities like rankings because they may be differences in the distances between what is ranked first, second, and third- it is better to use frequencies (Ferrell and Pride, 2011). Correlation errors should be avoided because sometimes correlation is confused with causative factors. It is also important to ensure that sampling is carried out well during research; care must be taken to ensure that the samples suit the purpose of the research study.
Performance indicators help to measure how successful a marketing plan is. When writing the marketing plan it is important to have controls which are able to assign metrics to the key factors to measure its progress (Vazifehdust et al., 2011). For McDonald’s controls may include customer feedback about its food, promotional activities, and innovations. McDonald’s can also use target sales as a control to measure whether their marketing campaigns are successful or not.
A breakeven analysis is used to determine the sales volume required before a business goes profitable. At McDonald’s it would be important to work this out especially since it is a new establishment. It is useful when devising a pricing strategy for products.
Fixed costs for producing $ 100,000 meal packs is $20,000
Variable costs (for each meal pack) may be- $ 5 for supplies, $ 3 for labor, and overheads- $ 1 (total- $9)
If each meal pack is valued at $ 15
20,000/ (15-9) = 3,333.33 meal packs would need to sold to breakeven.
Cohen W. (2006). The marketing plan. New Jersey: John Wiley & Sons
Ferrell L. (2011). Marketing ethics. Available at http://college.cengage.com/business/modules/marktngethics.pdf
Ferrell C. and Pride W. (2010). Foundations of marketing. Ohio: Cengage Learning
Valentini, S., Montaguti, E., & Neslin, S. (2011). Decision process evolution in customer channel choice. Journal of Marketing, 75(6), 72-86. doi:10.1509/jmkg.75.6.72
Vazifehdust, H., Taghipourian, M., & Gharib, Z. (2011). Social Marketing, Green Marketing: The Extension of Marketing Concept. European Journal of Economics, Finance & Administrative Sciences, (41), 20-33.