Marker Audit Analysis – McDonald’s

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Table of Contents

Executive Summary
Introduction
Mission
Market Objectives
Financial Objectives
Target Markets
Positioning
Strategy Summary
Conclusion
Works Cited

Executive Summary

McDonald’s began with the two brothers opening a restaurant in 1940 and the only things they served at that time were hotdogs and shakes though later they came to increase their menu to 25 items.

In the past the company has faced some challenges which included competition from other industry players such as the King Burger, poor management, and lack of response to the changing tastes of the branches and consumers in general about their products both in the motherland and other countries where they are conducting business.

For continued success of the company and increase in its market share, going global was a very important consideration. In analyzing the company the study focuses on objectives and the strategies the company needs to implement to expand its market share and retain the current market share. The study also tries to summarize the company marketing strategy, segmentation, and targeting.

Introduction

The firm (McDonald’s) is among the most performing restaurants in the globe and has really improved the living standards of many. The restaurant has been making huge proceeds from the sale of their products making it a very successful venture. The restaurant was pioneered in the year 1940 by two siblings (Mac and Dick McDonald) in California.

Initially, they owned a hotdog stand, and later they increased to around 25 items, little did they know that one day what they were making could become one of the leading restaurants in the world touching the lives of both the old and the young everyday (Anon, Pg 1).

The restaurant grew immensely acquiring huge business expansion strategies. Then in 1954, Ray Kroc a distributor of milk shake maker headed west on hearing of the mc Donald’s brothers, he gave them the idea of opening up several restaurants to the Mc Brothers to sell 8 of his multimixers to each and everyone (Rangnekar 1).

Mission

The company’s mission is complete commitment to quality, service, cleanliness and value. with their global strategy being to be a customer driven, goal oriented, and achieving sustainable growth and designed to increase restaurant visits and grow brand loyalty among new and existing customers (Rangnekar 1).

Market Objectives

In marketing the company has simplified its marketing objectives and has elaborated them through the seven Ps of marketing

Product

The company products are standards in all franchises however the company adjusts according to the culture of the different countries they seek to penetrate. For example in India they offered vegetarian burgers since their culture does not believe in eating beef. In other places of the Asian continent their love for spicy tastes saw the introduction of spicy burgers, chicken, and seasoning. This provides options for all tastes thus they are able to reach larger number of customers (Yousaf 9).

Price

Their products differ in the different branches they have due to the difference in the expenses incurred and their geographical locations. The main company’s objective when determining the price is the product profitability and consumers affordability.

Placing And Distribution

This is mainly influenced by the consumer population demanding their products, and income trends among other factors. This objective aims at distributing the company products according to how it is demanded. For example it would be irresponsible of the company to open a branch and distribute its burgers to a war torn country like Somalia where bombings take place any time.

Promotion

The company promotions are made internationally and locally by the mother company. The aims of their promotion are to attract new user into their products thereby increasing their market share. The promotion has really boosted the company’s sales thus ensuring steady growth.

People

The main aspects of this objective are about the service personnel (those who are employed by the company and the customers who buy the company products). The company has been keen to create a favorable environment for business and to promote the service aspects of their products.

The staff stands by the customer i.e. here the client is always right. This approach is very adorable as the friendly environment created between the customers and the company staff ensures that the market share remains secure.

Process

The process involved in the delivery of the company products and it is advisable to find ways in which the service provision can be made better. The quality control standards and the extent of customer contact.

The last P which the company considers in its objectives is the physical evidence. This is how the customer judges and evaluates the company products from those of their competitors. It entails understanding how the customers feel about certain products and involves both the tangible and intangible aspect of the product. Which characteristic or quality the customer judges to be better than the other (Anon 4).

Financial Objectives

A company financial objective is always based on the marketing objectives which the company seeks to fulfill.

One of the company short term objectives is that the company intends to cut its capital expenditure. The company’s short term objectives will be cutting its capital expenditures and the extra money saved be used to pay the shareholders by repurchasing the shares and paying more dividends while the company long term objectives were to increase annual growth sales and increase the operational capital of the company.

Target Markets

For a company to reach its customers and satisfy their needs, a company always divides its market pool according to the various targets existing. There are three considerations in target marketing that the company considers and they are market segmentation, market targeting and market positioning.

To reach the target markets, the company has divided its market into segments. This procedure entails categorizing broad (product) markets and dividing them to decide on target markets and build up the theoretical market mixes.

A key objective of marketing is always to satisfy the needs of specific group within the market pool. Ideally a good market segment should meet the following criteria:

Homogenous: the customers within a similar market segment should have as similar tastes as possible with respect to their marketing mix.

Heterogeneous: clients respond differently to the market situation.

Substantial: investing in any marketing segment should be profitable thus the segment should be big enough to make some positive results

Any market segment should be finally operational in that the dimensions should be useful for identifying customers and deciding their mixes. The trait which aids in dividing the market (segmentation) includes age, income location, and family size.

Ways of developing market oriented strategies for McDonalds should either:

Single target market approach: this involves segmenting the market and then picking the homogenous segment which seems profitable.

Multiple target market approach entails dividing the market and making a choice of more than one segment thereby treating each division as a diverse (market) target that requires varied marketing mix. Consequently, the organization can employ the joint (target) market strategy, which joins more than one submarkets.

Of late the firm has been targeted on obtaining social responsibilities thus generating vigorous marketing campaigns geared towards on a lifestyle that is healthier and fit. The campaigns are as well meant to make a distinction among the many target clients. As Weinheimer (1) asserts the organization is employing (psychographic) segmentation and social responsibility in attaining its marketing objectives.

McDonalds are also in the verge of finding new markets in Africa and Asia as noted by Smith (1). The company has 1000 branches in China and intends to build another 1000 branches within the next 4 years this is due to the growing market of their products in China.

India and South Africa were also indicated as other countries having critical masses that can attract Oakbrook a branch of McDonalds to invest there. Thus, opening new branches in the places with the suitable markets is another way of reaching unexploited markets.

The changing age structure in Australia is another course for McDonald to change their market orientations. Like many nations of the world, birth rates in the region has gone down with the number of dependants (the aged) swelling by the day. This implies that other market territories need be sought since market is declining in this region.

The final target marketing stage is coming up with a market mix which is essentially a set of (controllable) marketing variables that the firm blends to yield the reaction it would wish for from the particular target markets. Different market segments require different market mixes since they have different tastes and preferences due to the variation of age, gender, and even demographic locations.

Positioning

For a long period of time McDonalds have been the market leaders in America and through out the world and though there has been competition from other companies such as the Hungry Jack, the company has all along succeeded in keeping its competitors at bay. To achieve that fete the company has been doing the following:

Execution

In order to reach the target market the company will improve customer experience world wide, offer the consumer greater varieties of their products and maintain a good quality of their products. For example, the company has been too innovative in their production process with the recent installation of EFTPOS machines.

This has enabled the firm manage differentiating itself from the market rivals. This among other processes is viewed as convenient and makes the product consumption easier.

To retain its world wide customers the company has devised other strategies for example when they offered 2 dollars burger to its customers its competitors did nothing to counter that move. This shows that as the largest industry players the company receives revenues which allow it to have these special offers.

Expansion

The company intends to add to their already established McDonald branches, stretch its customers’ perception about the brand and then promote their brands.

With the company intention of opening more branches around the world as already being experienced in China, this will position the company as the market in the fast food industry with the other competitors having to copy McDonald in order to expand their markets also.

Strategy Summary

We can summarize the company strategy by indicating that the company is fully determined to capture more customers by offering its customers convenience, variety and value in its products. The offer of the two dollar burger is such an example that the company intends to retain and even expand its market share both at the present moment and in future.

The strategy of using low priced menus is another way which intends to increase the number of customer visits to their restaurants all over the world as they will be affordable to many. The company also intends to increase their branches to reputable sites offering conveniences to customers and profitable to them and invest deeply in such places.

To increase their products awareness has been another publicized strategy for example as many people become health sensitive the company has been using sports personality such as the William sisters to show if you eat the burgers and still do the excises you can still remain fit and not be obese or have any sort of healthy disorder.

Another strategy has been to teach their personnel of being courteous and understanding to its customers and also offering them reasonable wages to avoid complains or even strikes which can tarnish the image of the company (Payne 17).

As the company strategize on how to expand more and more globally it is best to note that cultural forces influence markets. For example, in India they have introduced the burgers suitable for the vegetarians and also the chicken burgers for those who do not eat beef burgers.

Conclusion

The firm is among the most performing restaurants in the globe and has really improved the living standards of many. The restaurant has been making huge proceeds from the sale of their products making it a very successful venture. The idea of starting this business was initiated by two brothers (Mac and Dick) in the year 1940.

As the company strives to increase its market shares, it has experienced several changes both positive and negative which have helped it in pursuance of greater achievements throughout the world. What is positive to note is that whenever the company has been faced by any challenge, the situation creates an opportunity to improve and prove to its customers that it can adapt to their needs.

The introduction of the broad market strategy made of the 7Ps has been a success and will continue to be a success as the company strives to provide for its customers. As the market becomes diverse so has consumer tastes and preferences changed and thus the company is aiming at producing what the customers need and this is a positive response from the company.

We can also conclude that the segmentation based on demographic variables with most of the segments targets broken-down into age and lifestyle stage will prove to be a success to the company’s expansion through out the globe.

Works Cited

Anon. History of McDonald’s. Web.

Payne, T. The strategic management process. 2007. Web.

Rangenekar, A. Mc Donalds India launch. 2007. Web.

Smith, N. McDonald’s Targets Emerging Markets with Restaurants in Africa, India. 2010. Web.

Weinheimer, B. McDonald’s Segmentation Shift. 2005. Web.

Yousaf, R. International marketing strategy for a company. Web.

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