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The marketing process

McDonald’s
01_Introduction
McDonald’s is one of the best-known brands worldwide. This case
study shows how McDonald’s continually aims to build its brand by
listening to its customers. It also identifies the various stages in the
marketing process.

Branding develops a personality for an organisation, product or service.

The brand image represents how consumers view the organisation.

Branding only works when an

organisation behaves and
The marketing mix
presents itself in a consistent
way. Marketing communication
methods, such as advertising
and promotion, are used to
create the colours, designs and
Products Prices Promotions Place
images, which give the brand its
recognisable face. At McDonald’s
this is represented by its familiar
logo - the Golden Arches.
Using detailed information about its customers,
Marketing involves identifying McDonald’s marketing department can determine:
customer needs and 1. What products are well received?
requirements, and meeting these 2. What prices consumers are willing to pay?
3. What TV programmes, newspapers and
needs in a better way than
advertising consumers read or view?
competitors. In this way a
4. What restaurants are visited?
company creates loyal
customers. Market research is the format which enables
McDonald’s to identify this key information.
The starting point is to find out Accurate research is essential in creating the right
who potential customers are - mix to win customer loyalty.
not everyone will want what
McDonald’s has to offer. The
Market research
people McDonald’s identifies as likely customers are
known as key audiences. gives accurate information about
the requirements of the target group
02_The marketing mix
and market research making it possible to create
a well thought out marketing mix
Having identified its key audiences a company has to
ensure a marketing mix is created that appeals that satisfies customers
specifically to those people.

The marketing mix is a term used to describe the four In all its markets McDonald’s faces competition from
main marketing tools (4Ps): other businesses.
• product
• price Additionally, economic, legal and technological
• promotion changes, social factors, the retail environment and
• and the place through which products are many other elements affect McDonald’s success in
sold to customers. the market.

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McDonald’s

These examples represent just

Market research seeks information about the market place a few of McDonald’s possible
Competition (what is the competition offering?) customer profiles. Each has
different reasons for coming to
McDonald’s.
Economic changes Legal changes (e.g. changes
(e.g. rising living in laws about packaging)
standards) Using this type of information
McDonald’s can tailor
McDonald’s communication to the needs of
specific groups. It is their needs
that determine the type of
Technological changes Social changes (e.g. products and services offered,
(e.g. new food changes in patterns
production techniques) of eating out) prices charged, promotions
created and where restaurants
are located.
Market research identifies these factors and
anticipates how they will affect people’s willingness to To meet the needs of the key
buy. As the economy and social attitudes change, so market it is important to analyse
do buying patterns. McDonald’s needs to identify the internal marketing strengths
whether the number of target customers is growing of the organisation. Strengths
or shrinking and whether their buying habits will and weaknesses must be
change in the future. identified, so that a marketing
strategy which is right for the
Market research considers everything that affects business can be decided upon.
buying decisions. These buying decisions can often
The analysis will include the:
be affected by wider factors than just the product
itself. Psychological factors are important, e.g. what
• company’s products and
image does the product give or how the consumer how appropriate they are for
feels when purchasing it. the future
• quality of employees and
These additional psychological factors are significantly how well trained they are to
important to the customer. They can be even more offer the best service to
important than the products’ physical benefits. customers
• systems and how well they
Through marketing, McDonald’s establishes a function in providing
prominent position in the minds of customers. This is customer satisfaction e.g.
known as branding. marketing databases and
restaurant systems
03_Meeting the needs • financial resources available for marketing.
of key audiences
There are a limited number of customers in the Once the strengths and weaknesses are determined,
market. To build long-term business it is essential to they are combined with the opportunities and threats
retain people once they have become customers. in the market place. This is known as SWOT analysis
(Strengths, Weaknesses, Opportunities, Threats).
Customers are not all the same. Market research
identifies different types of customers. For example: The business can then determine what it needs to do in
order to increase its chances of marketing successfully.
A parent with two children Visits McDonald’s to
might visit give the children a treat.
Strengths (Internal) Weaknesses (Internal)
The children want to visit As it is a fun place to eat.
McDonald’s E.g. the brand, and McDonald’s has been
detailed market research around for a long time.
A business customer Visits McDonald’s during the to create the right (therefore important to
work day, as service is quick, the marketing mix. keep innovating).
food tastes great and can be
eaten in the car, without affecting Opportunities (External) Threats (External)
a busy work schedule.
E.g. increasing numbers of New competitors.
Teenager visit McDonald’s The Pound Saver Menu is
customers looking for food Changing customer
affordable, and there is Internet
that is served in a quick lifestyles.
access in some restaurants.
and friendly way.

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04_Marketing Objectives Care is taken not to adversely affect the sales of one

McDonald’s
A marketing plan must be created to meet clear choice by introducing a new choice, which will
objectives. cannibalise sales from the existing one (trade off).
McDonald’s knows that items on its menu will vary in
popularity. Their ability to generate profits will vary at
Objectives guide marketing actions and are used to
different points in their life cycle.
measure how well a plan is working.

Products go through a life cycle, which is illustrated

These can be related to market share, sales, goals,
below:
reaching the target audience and creating awareness
in the marketplace. The product life cycle
Maturity
The objectives communicate Decline
what marketeers want to
Sales
achieve. Growth

Long-term objectives are broken

down into shorter-term Development
Introduction
measurable targets, which
Time
McDonald’s uses as milestones
along the way. The type of marketing undertaken and the amount
invested will be different, depending on the stage a
Results can be analysed product has reached. For example, the launch of a
regularly to see whether new product will typically involve television and other
objectives are being met. This advertising support.
type of feedback allows the
company to change plans. It At any time a company will have a portfolio of
gives flexibility. products each in a different stage of its lifecycle. Some
of McDonald’s options are growing in popularity while
Once marketing objectives are arguably the Big Mac is at the ‘maturity’ stage.
set the next stage is to define
how they will be achieved. The ii. Price
marketing strategy is the The customer’s perception of value is an important
statement of how objectives will determinant of the price charged.
be delivered. It explains what
marketing actions and resources will be used and how Customers draw their own mental picture of what a
they will work together. product is worth. A product is more than a physical
item, it also has psychological connotations for the
05_The 4Ps customer.
At this point the marketing mix is put together:
i. Product The danger of using low price as a marketing tool is
The important thing to remember when offering menu that the customer may feel that quality is being
items to customers is that they have a choice. They compromised. It is important when deciding on price
have a huge number of ways of spending their money to be fully aware of the brand and its integrity.
and places to spend it.
A further consequence of price reduction is that
Therefore, McDonald’s places considerable emphasis competitors match prices resulting in no extra
on developing a menu which customers want. Market demand. This means the profit margin has been
research establishes exactly what this is. reduced without increasing sales.

However, customers’ requirements change over time. iii. Promotions

What is fashionable and attractive today may be The promotions aspect of the marketing mix covers all
discarded tomorrow. Marketing continuously monitors types of marketing communications.
customers’ preferences.
The methods include advertising, sometimes known
In order to meet these changes, McDonald’s has as ‘above the line’ activity. Advertising is conducted on
introduced new products and phased out old ones, TV, radio, cinema, online, poster sites and in the press
and will continue to do so. (newspapers, magazines).

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McDonald’s

What distinguishes advertising from other marketing

Effective communication
communications is that media owners are paid before
the advertiser can take space in the medium. The right message

Other promotional methods include sales promotions,

point of sale display, merchandising, direct mail, and the right medium
telemarketing, exhibitions, seminars, loyalty schemes,
door drops, demonstrations, etc.
to reach the target market.
The skill in marketing communications is to develop a
campaign which uses several of these methods in a
way that provides the most effective results. For For example, to reach a single professional woman
example, TV advertising makes people aware of a with income above a certain level, it may be better
food item and press advertising provides more detail.
to take an advertisement in Cosmopolitan than
This may be supported by in store promotions to get
Woman’s Own. To advertise to mothers with
people to try the product and a collectable
children, it may be more effective to take advertising
promotional device to encourage them to keep
buying the item. space in cinemas during Disney films.

It is imperative that the messages communicated The right media depends on

support each other and do not confuse customers. A who the viewers, readers or
thorough understanding of what the brand represents listeners are and how closely
is the key to a consistent message. they resemble the target
audience.
The purpose of most marketing communications is to
move the target audience to some type of action. This
iv. Place
may be to: buy the product, visit a restaurant,
Place in the marketing mix, is
recommend the choice to a friend or increase
not just about the physical
purchase of the menu item.
location or distribution points
Key objectives of advertising are to make people for products. It encompasses the management of a
aware of an item, feel positive about it and remember it. range of processes involved in bringing products to
the end consumer.
The more McDonald’s knows about the people it is
serving the more it is able to communicate messages 06_Conclusion
which appeal to them.
Once the marketing strategy is in place various
responsibilities are given to different individuals so
Messages should gain customers’ attention and keep
that the plan can be implemented. Systems are put
their interest. The next stage is to get them to want
what is offered. Showing the benefits which they will in place to obtain market feedback which measure
obtain by taking action, is usually sufficient. The right success against short-term targets. McDonald’s has
messages must be targeted at the right audience, to ensure that this is done within the confines of a
using the right media. tightly controlled, finite marketing budget.

Benefits: aspects of products and services Marketing mix: an appropriate combination of

GLOSSARY

designed to meet specific customer needs.

OF TERMS

the 4 Ps – product, price, promotion and place.

Brand: representations of a product or
company. Marketing strategy: plan designed to meet
needs of customers.
Key audiences: customers identified as being
likely purchasers of specific products.
Objectives: ends that a business seeks to
Market research: a systematic process of
asking questions to find out about customers achieve.
and market.

For more information about McDonald’s please browse:

www.mcdonalds.co.uk

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