Unit 3 D1 Mcdonald's

Unit 3 D1, D2 by Dylan Orrick

Report

To: CEO

From: Dylan Orrick

CC: Fiona Lynch, Nicola Errington

Date: November 27th 2017

Re: Evaluation of the effectiveness of the use of techniques in marketing products and recommendations for improvements for McDonalds

Market Segmentation & Target Marketing

McDonalds incorporate a range of marketing segmentation and target marketing to help understand and target customer audiences. McDonalds have a lot of experience doing this and a very good at it, they are able to target markets with products they create to attract new customers, they target markets like families, teenagers, people with low income, and people who need a quick meal. McDonalds spend a lot of their time to understanding their target markets

in-depth, so that they can have a higher advantage at successfully marketing a product and attracting as many customers as possible. McDonalds used the happy meal to target families with kids, as the happy meals are a smaller portion of food, which comes with a toy and is colourful, this is very good at attracting kids, and it also is good for the parents as a happy meal is a lot more cost effective than buying a normal meal. It is also good because parents are more likely to buy a meal for themselves as it cost less for them as the kid will want a happy meal instead of a normal meal. McDonalds has also marketed a healthy menu as they understand that not all parents are happy with their kids eating all junk food so they added healthy options to the happy meal. McDonalds uses different marketing techniques to help establish their 4P’s.

Product
McDonalds is a highly successful international fast-food business, with their restaurants being built in 119 countries, this has led to them having more than 36,000 restaurants around the world. McDonalds is successful largely because they are able to sell their products at a good quality, that taste nice and that their customer base enjoys. McDonalds brand can be seen nearly everywhere, which allows a large amount of potential customers as they will have at least know a few products that McDonalds offers, this is because McDonalds has a strong brand awareness. McDonalds is largely criticized for their food that is unhealthy, this does have a small impact on how McDonald’s runs but there is still a large amount of their customer base that does not care if it is unhealthy. Customers don’t mind largely because they still see McDonalds as an easy option to have quality food at a good price that they can be served in good time, this makes them popular to a large amount of people because it easier than other options. Problems might arise if customers were to return their products repeatedly. If customers where to become uninterested or unsatisfied with the service or products that McDonalds provides, this could be bad for McDonalds. McDonalds could combat this problem by being able to provide a wide range of products that are at a good quality and also at a good price, this would be better for people who have a lower income, McDonalds could offer people with lower income with more products that are for the saver menu which can be seen in this article talking about the ADS: McDonald’s Saver Menu Ads , this would give people more choice at, which they can have that they enjoy. McDonalds should continue to gradually release new products from time to time, to keep customer interest and customer return rates, this helps against customers from getting uninterested in eating at McDonalds, and this will help to keep McDonalds from losing profits and sales. As well as McDonalds offering a variety of products, they are able to segment their variety of products, this is because they have a variety of different customer age ranges, and this helps to attract customers from all age ranges. For example how they are able to segment their products like the happy meal which is marketed toward kids, as a happy meal has toys that the kid can play with and the smaller size in all the food in the happy meal. This keeps the kids happy as they have all their needs and wants satisfied. For the other age ranges, McDonalds offers a variety of different products at different sizes, this also includes their limited edition products that come out from time to time, and these limited time additions add a different taste and style to McDonald’s menu that helps to satisfy nearly everyone. McDonalds has been very successful through their contribution to producing products that appeal to all age ranges, in this article it talks about McDonalds attempt at reaching millennials: Millennial Problem.

Price
McDonalds has strived to make their prices as affordable as possible for everyone, this has helped them to reach their success, McDonalds is recent years have increased their prices which has led to some customers being unsatisfied with their increase in prices, this has led some to stop buying at McDonalds or not as often as before. McDonalds combated this by releasing more range of products to the menu, this was done to try to meet everyone’s needs, and one of the introductions was the saver menu which is targeted to people who might not have a lot of money to spend or prefer a smaller meal. They also introduced the extra value menu meals which are targeted to people who are eating for dinner and may need more food for less than ordering individual meals. "McDonald's reports profits plunge of 15% in one of chain's worst ever Years" Guardian Report on McDonald profit plunge This is a headline from an article that came out of 2016 about McDonalds profits, it show that there was a global decline of 7% overall for McDonalds which became one of their worst drop they have ever had, this lead to some of the higher staff team members leaving the company. One reason for this can be lead to new fast food chains being started and becoming popular, they offer stuff like lower food prices and some even have table service.

Place
McDonalds built restaurants by researching the area and analysing what kind of people live around that area, they also research what other companies are in that area also, this helps McDonalds to ensure that they are able to make the most profit possible in that areas, if the area was to have a negative cash flow in their analysis due to the location, this would lead to McDonalds not building their and then they would go on to reanalyse to find a more suitable area to build at.

McDonalds has added extension to previous restaurants that are very popular and added their McCafe, this helps to attract more customers, McCafe also offer more variety of products that can be selected at McDonalds, and for example a customer can pick smaller products like snacks from the McCafe like muffins. McDonalds is also known for situation their restaurants around already developed car parks, this save them building a car

park.

Promotion
McDonalds is a very well-known brand and is seen to be very successful as business their name and logo is well known, however this has not stopped McDonalds from continuing to promote their products more, this also is done to their new products to help people become aware they are releasing a new product, this help prevent the product failing at launch. McDonalds employ a multitude of techniques when it comes to marketing and promoting, they use TV ads newspapers and social media to reach the highest possible number of customer’s. These adverts help them to reach as many market segments as possible. McDonalds are very successful when promoting new product’s which gain the business high profits when they are introduced to the menu. McDonald’s promotions are very successful in reaching target markets and boosting the growth of the company’s sales. When the 2012 London Olympics were happening McDonalds was the main sponsor this was a really good way for McDonalds to promote their brand, as the Olympic Games was broadcasted worldwide the brand was seen constantly by the viewers. McDonalds 2012 Olympic Games This article states that McDonalds paid $100 million to sponsor two more games, they previously received $1 billion in revenue from the sponsorship itself.

Branding
McDonalds is a well-known worldwide brand, this can largely be contributed to the companies very successful used of branding techniques. The McDonalds sign is very iconic with its golden arches, which is known globally, and the sign can be understood by every language which is an advantage as if someone is on a trip to a foreign country, they would be able to easily identify the sign and would be familiarised with home, as they know what to expect. The slogan is also globally recognised, however there are some languages that can’t properly translate the slogan. This article shows research on the slogan. Slogan around the World. McDonalds has never changed their brand name or face, this is largely because of their popularity, which they worry if they changed their brand or face it would be impactful on their recognisability of their company.

¬¬Relationship marketing

McDonalds continues to keep their relationship with their customers and suppliers at a very good level, keeping a good level with their customers and suppliers is a highly important, if they would not do this, the business would not run smoothly, and it might decrease profits. McDonalds listens in to their customers opinions and suggestions and they used them in consideration to creating any new products or changes to products, which can help to make customers feel more valued. It is important that they keep a good relationship with their suppliers as a bad relationship could result in orders not being filled on time or in full, this could be bad for McDonalds if they don’t have the right amount of stock, which will result in them not being able to fully serve the customers. Another good reason to keep a good relationship with the suppliers is that if any specific orders with certain delivery times and date that McDonalds might order, they would be more likely to arrive on time and on date if McDonalds keeps a good relationship with their suppliers. Another thing to do is making sure that McDonald’s staff are polite and kind as it is important as they are the face of the company and is also the way that McDonalds get to know their customers and understand them, some staff serve customers that are regulars for years and which are loyal to McDonalds due to the kindness of the staff. McDonalds successfully build relationships but this is not their most successful segment due to the amount of customers that get served on a daily basis.

Planning, Control and Evaluation Process
McDonalds plan new strategies and products very successfully, as very few of their new things fail.

When McDonalds are creating anything new they do a large amount of research done on the idea before it is fully launched, this is done to ensure that the product or strategy will be as successful as possible with positive profit. McDonalds check at the end of the year all the trends that have been happening over that year, this helps and is very successful as they can monitor what has been working and what hasn’t, which helps them to understand how to improve the business based on information they have gathered.

Market

Research
McDonalds make’s sure that the data that they collect by research is valid and reliable, this is very important as it insures that the data is fully trustworthy. Having fully valid data is an effective way for McDonalds to be able to fully understand their customers and be able to act on feedback, McDonalds have to make sure that any research they do is valid and not just a waste of time. This is one of the many techniques that are used by McDonalds to understand the customer’s wants and needs.
Primary research is one of the types of research the is used by McDonalds to gather information on their customers, McDonalds also have many ways they can improve their way of using this technique