Report on Marketing Principles

Report on
Marketing Principles

Table of Contents
INTRODUCTION........................................................................................................................... 1
TASK 1............................................................................................................................................1
1.1 Various element of marketing process .................................................................................1
1.2: Benefits and cost of a marketing orientation for McDonald..............................................2
TASK 2............................................................................................................................................3
2.1: Show macro and micro environmental factors which influence marketing decisions.........3
2.2 Propose segmentation criteria to be used for products in different markets.........................4
2.3: Choose a targeting strategy for a selected product/service..................................................4
2.4: Demonstrate how buyer behaviour affects marketing activities in different buying
situations..................................................................................................................................... 5
2.5: Propose new positioning for as elected product/service...................................................... 5
TASK 3............................................................................................................................................6
3.1: Product development to sustain competitive advantage...................................................... 6
3.2: Distribution strategies used by McDonald to provide customer convenience.....................7
3.3: Pricing strategies used by McDonald's to reflect objective and market conditions.............7
3.4: Integration of promotional activity to achieve marketing objectives...................................8
3.5: Additional elements of extended marketing mix for McDonald's......................................9
TASK 4 ........................................................................................................................................10
4.1: Marketing mixes for two different segments in consumer markets with McDonald's
reference....................................................................................................................................10
4.2: Differences in marketing products and services to business rather than consumers......... 11
4.3: Difference between international and domestic marketing in McDonald's case............... 12
CONCLUSION..............................................................................................................................12
REFERENCES.............................................................................................................................. 14

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INTRODUCTION
Marketing principles can be defined as a process which is helpful in finding out the needs
and requirements of the customers and accordingly providing them with solution in order to
provide them satisfaction. In this context, there are four elements involved which are product,
price, place and promotion. These elements are helpful in carrying out market research so as to
know the requirements of customer. In addition to this, marketing principles are also helpful for
the organization in making effective decision regarding the changes which they should make on
their product or services, in selecting most appropriate promotional strategy, etc. (Marketing at
MacDonald, 2011). Present report is about McDonald's which has the largest chain of fast food
restaurants and has more than 36000 outlets around the world (Grünig and Morschett, 2012).
They understand their customers needs and wants and accordingly provide them services. This
report covers different process and concepts which are involved in marketing. Further, it covers
the use of targeting, positioning and segmenting. Lastly it also includes the use of marketing mix
in different contexts.
1.1 Various element of marketing process
Marketing can be defines as the business or action which are helpful for the organizations
in introducing their products or services to the customers. Marketing is very essential in order to
convey the services and products provided by the organizations. In this context, there are mainly
four elements involved which are: identifying the product, it refers to the item which has to be
sold actually. The product delivered to the customers should have minimum level of performance
otherwise even the best work done on other element would become useless (Ataman, Van
Heerde and Mela, 2010). Next is fixing the price, this is referred to the value which is put for the
product. There are many factors which are involved in determining the price of a product. Next is

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place, it is referred to the point of sale. It is the selection of right location because of which
organizations could make their product or services easily available to their customers. Last is
promotion, it involves all the activities in order to make customers know regarding the product
services provided by the firm.
The elements of marketing process which are taken by McDonald is to determine its
brand image. For instance, planning is one main element. Determination of developing
organisational objectives is all in the hands of McDonald. For the same, they are involve in
market research as well. Decisions regarding market information is collected and analysed. The
significance of involving employees in the decision making is to make them feel motivated.
Research is another element of marketing. With the help of various tools and techniques, market
trends and information are analysed for meeting various business needs (Shimp and Andrews,
2013). Therefore, this fast food business is also involved in strategy formulation. The strategies
are designed in order to attempt the different functions in the organisation. These are planned in
order to meet the organisational objectives.
1.2: Benefits and cost of a marketing orientation for McDonald
Market orientation is considered as another tool which covers the major part of the
marketing dimension. The term 'market orientation' is defined as the exercising of various tools
and techniques in the affairs of business. The motive behind the same is to meet the demand and
desire of the customers. According to the given case study, the major element which is
considered by McDonald's is the customers. Every plan made by this organization is related with
the production and delivery of food product which is admire and demanded by the customers.
Therefore, branding is the most dominant factor which is valued by the McDonald. The rationale
behind choosing the market orientation is to render various benefits to its customers. However,

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there are various advantageous and limitations which are related with the use and
implementation of market orientation. These are stated individually.
The benefits of market orientation for McDonald are determined on the basis of
customers. Actions taken by this fast food company has to achieve the target in meeting the
customers need. By utilizing the concept orientation, McDonald gain competitive advantage. The
effective planning of market research helps the firm to know their customers properly thereby
they stay ahead of their competitors always (Huang and Sarigöllü, 2012). According to the given
case study, the company always uses customer orientated approach. They achieve this target by
analyzing deep customer survey. This is a step taken by them to attain maximum sales and profit
earning. By indulging in the same process, they gain the larger market segment. This is the
reason why company is so successful in expanding its chains all over the world.
In contrary to same, there are some cost factors as well that are associated with the
market orientation. Implementation of action plans for market research is made through the
heavy spending into the research and development. Along with the same, the company makes
use of high technology and infrastructure. It helps them to stay advance and effective outcome.
Similarly, another cost plus factor is the training of staff. Processes which are used by the
Company to train and develop its staff members are standardize. The core the behind the same is
to achieve the factor of efficiency.
2.1: Show macro and micro environmental factors which influence marketing decisions
There is a presence of varied macro and micro environmental factors that puts an
influence on the marketing decisions undertaken by Mc Donald’s. The macro environmental
factors are inclusive of political areas. Mc Donald’s while carrying out its operations in UK will
have to adhere with the health and hygiene regulations as specified by the government. UK
government has further been pressurizing fast food industry to stop adding ingredients that

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causes obesity, heart diseases as well as high cholesterol (Luca and Suggs, 2010). Hence the
company will have to abide by the same while carrying out its marketing activities.
Economic factors are a crucial factor for Mc Donald’s as the company has operations of
company are affected by inflation rate of UK. In the same manner, tariffs on imported raw
materials may put at impact on production of the products. This may make Mc Donald’s to
reduce its marketing budget so as to manage the cost factor. Social factors also play a key role
for Mc Donald’s while undertaking marketing decisions. This is as the restaurant will have to
take car about he needs and preferences of consumers while delivering the products. In the same
manner, during the process of marketing, Mc Donald’s will have to make the ads so as not to
affect the overall consumer sentiments. It should not make advertisements that are derogatory to
a particular class or race.
Mc Donald’s will have to make use of latest as well as sophisticated technology in it
marketing activities so as to garner more sales figures. This can include making use of social
media for its campaigns, advertising on the Internet among others. While taking the marketing
decisions, Mc Donald’s is required to conduct the activities in an environmental friendly manner.
It should focus on making use of recyclable material in its pamphlets etc (Carter and et. al.,
2013). This will not only make the company adhere with the concert of green marketing but also
help in creation of a green image. McDonald while carrying out its activities in UK is required to
adhere with the laws and regulations. These are related to labor and employment law, corporate
law and tax requirements etc. In this respect, Mc Donald’s is required to adhere with labor
policies and ensure that is does not make use of children in the advertisements which is beyond
the legal standards. In the same manner, the micro environmental factors that affect marketing
decisions of Mc Donald’s are as follows;
The marketing plan of Mc Donald’s should aim at attracting as well as retaining the
consumers through products that meet the wants and needs. In the same manner, the company

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should also be in a position to provide for excellent customer service to its clients (Tapp and
Spotswood, 2013). The employees must be skilled enough and should have relevant experience
in Service Sector Marketing. This will help to garner more consumer sales due to provision of
excellent customer service. The behavior of suppliers puts a direct impact on the business. It
happens as provision of poor service may enhance the time scale of product quality. Competitors
are one of the most crucial micro environmental factors that put an impact on overall working of
organization. Being a part of business it is important to examine the responses of competitors so
as to maximize the impact.
2.2 Propose segmentation criteria to be used for products in different markets
Market segmentation is all about grouping the various consumers into segment in terms
of common needs so that there can be a similar response towards a marketing action. Each of the
segments is likely to pose a different response to a marketing mix strategy. This is as each of the
proposed segment offers growth and profit opportunities
The proposed segmentation criteria for selected product being Brekkie roll is as follows.
The segmentation to be used in this respect can be demographic. The set criteria can be in the
area of family size as well as income. In this regard, the Brekki roll can be segmented on basis of
small size, medium size and family size (Metcalf and et. al., 2012). The small size can be for
kids. Medium size can be for an average adult person. While the family size can be eaten by
entire family of four. In the same way, the price range for Brekkie roll can be set as per the
decided size.

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2.3: Choose a targeting strategy for a selected product/service
After the segmentation has been carried out the need is to make a child of proposed
targets. This is as a single strategy may not suit to all the client groups. Hence he is to develop
specific strategies for target markets
The targeting strategy in the present scenario can be Multi-Segment Targeting for Brekki roll.
The approach can be best utilized in the present context as the technique will help to focus on
well-defined markets so as to develop strategies as per them (Rosenbloom and Dimitrova, 2011).
His strategy can be beneficial for the selected product being Brekkie roll as the market has been
segmented on the basis of family size as well as income. However, making use of this strategy
can be costly as there is a need to generate greater input from management. There may further be
a need to focus on increased market research followed by using too much of promotional
strategies.
2.4: Demonstrate how buyer behaviour affects marketing activities in different buying situations
The behavior exhibited by the buyers has a significant impact on the marketing activities. This
also applies to the different buying situation that is exhibited by the buyer.
New buy
This buying situation occurs when the consumers purchase Aussie Brekkie roll for the
first time. In this scenario the marketers are required to provide a competitive argument about
Aussie Brekkie roll so as to make the consumers consume the product for at least once. The
information generated may help the consumers to make the decision regarding purchase option.
Straight Rebuy
This is the easiest kind of buying situation where buyer makes a routine purchase. Here,
the behavior of buyer is with respect to buying (Stone and McCall, 2004). Hence, the markets in
this scenario do not have to take in many efforts to confirm the sales once the order has been

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satisfied. For example, if the person buys Aussie Brekkie roll on an ordinary basis then he can be
easily satisfied by the ongoing marketing strategies.
Modified Rebuy
In this situation, the buyer makes an option to buy a same product but there is a
significant difference from the previous purchase. The difference may occur of there is slight
change in ingredients of Aussie Brekkie roll. This noising situation requires a substantial amount
of marketing activities in order to make the consumers purchase the product. They are required
to be convinced with respect to new ingredients that are added in Aussie Brekkie roll.
2.5: Propose new positioning for as elected product/service
Positioning strategy is all about developing a brand image in the minds of consumers. It
entails for improving the perception of consumer while they make a choice for a product or
service. In this regard, Aussie Brekkie roll can be positioned in the minds of consumers through
many ways. One can be with the help of its taste factor (Glynn, 2011). The products of Mc
Donald’s have always been known for taste and quality. Same aspect can be applied in case of
Aussie Brekkie roll as well.
3.1: Product development to sustain competitive advantage
Every organization filters some objectives in order to gain some extra advantage. This is
made through the continuous efforts which are infused by the firm in its working and operations.
This is same with the case of McDonald's where along with all the other objectives, product
development is also one of the main (Jobber and Ellis-Chadwick, 2012). The motive of
McDonald is to attain the benefit of competitive benefit. With the rise in number of various fast
food restaurants, McDonald has to continuously involved in developing its products and services
to an additional level. Therefore, product development is taken as a major aspects. For the same,

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Michael Porter, product development strategy is implemented by this fast food chain. The core of
using this strategy is to understand various strategies that are used by this enterprise in different
market segments.
According to the above stated illustration, this model has four main partitions. These are
cost leadership, differentiation, cost focus and differentiation focus. This company has been
developing its products on the basis of its leadership in the market. Since years, it has it has its
own principles on the basis of which it has been working on its development strategy. The
rationale behind the same is to consistently maintaining its leadership. This is the reason this fast
food company focuses on quality as well as quantity. Differentiation is the another strategy
which is a factor that plays role in development of product. According to the given case study,
McDonald is having a strong base of taste which is the major factor that helps in attracting and
appealing its customers. Cost focus is another product development strategy which majorly plays
role in gaining competitive advantage. By effectively considering the cost factor , McDonald
always tries to gain the things from its niche markets (Rimal and Creel, 2008). Similarly, the last
factor of the Michael Porter strategy is the differentiation focus. According to this element, the
concentration of McDonald is to produce the food products different from the competitors.
Thereby develop a way to occupy major portion in the whole market dimension.
3.2: Distribution strategies used by McDonald to provide customer convenience
Distribution is the another element of the marketing mix. This is one among its four
major elements in which various channels are determined for the delivery of goods and services.
The ultimate objectivce of every manufactuirer or retailer is to make the availability of its
products and services to its customers. This is the reason various channels are developed which
continuously aims to provide quick and easy availability of products to its target customers.
Selling of goods are achieved through market channels (Gielens and Geyskens, 2012). These are

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direct or indirect channels. The objective is to make the final delivery very suitably by focusing
customers.
Direct channel is one way of distribution of products. The purchase of products and
services are made directly by engaging with the retailers straight forwardly. No channels are
required to be addressed while making any sale or purchase. For example, when customer is
feeling hungry and he went to McDonald. The direct ordering of food product from the seller in
exchange of cost is the direct selling.
Indirect channel is the another form of distribution strategy. There are involved various
number of middlemen who support and facilitate the delivery of goods and services. The work of
these agents is to make customers available with the goods and services. With respect to the
McDonald, there is not involved any middlemen.
Onlinbe distribuition is the another form of distribution strategy, with the developmebnt
of Information and Technology, there has been shown tremendous growth in the use of internet.
Now a days, the buyinbg and selling process has been met online (Wilson and Gilligan, 2012).
With the rise in number of people who are using internet for almost inquiry or information are
now relaying on internet as a delivery of goods as a service as well. McDonald is one in this
respect who has its own online distribution channel.
3.3: Pricing strategies used by McDonald's to reflect objective and market conditions
Marketing mix is one of the major tool which is being extensively used in studying the
concepts. In a streamline of four P's of marketing mix, Pricing is another P. The objective of
every business organization is to earn profits (Fitter, 2001). Accordingly, the costing of goods
and services are made. The setting of pricing is made with respect to the product and services
being offered. The ultimate aim lies in gaining the outcome of revenue. This is the reason various
strategies are practices by the marketing department team of the McDonald as well.

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According to the provided case scenario, this fast food restaurant always aims to provide
its customers with the best of quality products at very affordable prices. This is the reason, the
low pricing products are the major advantage enjoyed by the people. However, among the
various strategies of the pricing are studied so that with the change in various situations,
McDonald can work upon different pricing strategies available to them.
Penetration pricing is one strategy which works on the principle of low pricing method of
the products and services. This is initial plan which focuses on imposing low cost for the
products. The objective is to gain the larger market share with the use of more number of
customers as a powerful foundation (Jarvis, MacKenzie and Podsakoff, 2003). The objective of
using this strategy is to attract the audience so that by seeing the low prices for the products,
large customers can come and get familiar with the goods and services. For example, whenever
McDonald comes up with its new product, it keeps low price for them. This attract the customer
to get the new food product and gradually this later turns for them with the larger market
segment.
Price skimming is the another strategy which is planned for the sale of products and
services. This is a strategy where high prices for the goods and services are defined. The
marketers plan this demand and supply of products or services for increasing the sales.
3.4: Integration of promotional activity to achieve marketing objectives
Promotion is the another P of marketing mix. This has been taken as one of the most
imperative element. Without proper planning of how to make product awareness with the people
is critically planned, designed and implemented here. Various tools are put to promote goods as a
part of their marketing objective. As revealed from the given case study. Customers are the
major target of the Mc Donald. This is the evidence of quality goods and service which is
provided by this fast food restaurant chain (Patterson and et.al., 2010). This organization is

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known for its established 30000 outlets in more than 100 nations of the world. This giant food
product company is identified as the best as compared to its competitors. It has been known for
its advertisements and marketing initiatives for promotion of its food products. Brand awareness
is however, considered as the most vital facet which determine the effectiveness of company to
work and satisfy its customers. The focus of Mc Donald is always been on youngsters and adult
people. This is the reason, which compel them to make use of various social networking sites.
Mc Donald make use of You tube, Facebook etc. for attracting and making people aware about
their brand and products. The company is also involved in conducting various marketing
campaign and survey. This is a way to win million of people with respect to their taste,
preference, lifestyle and many more things. In the same vein, the management of McDonald's is
involved in arranging WiFi free of services for its visitors. This is a step taken by them as a part
of its marketing strategies for making promotion at global level as well.
The marketing manager of the Mc Donald is highly responsible in taking newer
initiatives for building its brand image (Zikmund and Babin, 2012). They regularly conducts
marketing and advertisement campaign . Along with this, being focusing on their expansion
plans, McDonald opens their new chains in different regions of the nations throughout the world.
Moreover, the promotional methods of McDonald is not limited to one or two methods. Rather,
they use Television, radio, posters etc for gaining larger target on pleasing and magnetizing
audiences.
3.5: Additional elements of extended marketing mix for McDonald's
Marketing mix is a major dimension which is not limited to four P's. Rather it takes into
account additional elements which are called as the extended marketing mix. According to the
given scenario, these extended P's are stated and have been evaluated with respect to the
McDonald.

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People are the major reason for which an organization functions. Alike every company,
McDonald also aims to formulate its objective according to the need and demand of the
customers. The efforts that are required to be made by them are inclusive of planning of different
ways which can help in attracting mass. The influence capacity of company thus, paves major
part. In a streamline, use of tag lines is one way to catch customers eye on product. Getting into
innovation practices is one of the common habit of this fast food organization. 'I am loving it' is
one very common and famous business line of McDonald (Porter,2011). The company has
different age group people following their food products. People are attracted for birthday party,
casual meetings, business gathering, internet access and simply for fun or spending leisure time.
Process is another marketing mix part which refers to the supply management chain. The
functions and operations of McDonald also works in some arrangement. Ample of employees are
part of McDonald who have been effectively trained to meet with the standards process of the
organization. The employees are so talented and professionally trained to meet the demand and
customers. They are adhered to maintain good relationships with them in order to manage good
and friendly environment.
Physical evidence is another extended marketing mix. McDonald is very dedicated in
timely and happily providing the ordered food products to its customers. This is one of the
reason which enable the location of its stores at the prime locations. Proper accessibility from the
residential areas, offices, schools and colleges is there for its all stores. Similarly, there is good
parking zone which develops positive image of the organization.
4.1: Marketing mixes for two different segments in consumer markets with McDonald's
reference
Marketing mix have been appropriately viewed with the four P's and extended P's as well.
Now, with respect to its applicability has been done with regards to the McDonald. The place is

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not restricted for any age group. However, by taking segmentation as the major aspect,
McDonald has analyzed on the basis of four P's for its two segments.
Marketing mix: Segment 1
In the first segment, McDonald has been targeted by taking old age generation as the first
criteria. Commencing from Product, the taste and preferences of older generation have been
taken care. McDonald will produce the food product with taste which is traditional. The reason
behind the same is to integrate the presence of ingredients that makes up their mood towards
McDonald (Hargrave, 2012). Secondly, there is pricing which is setting of cost factor for the
food propduts made for the old age group. Attitude and behavior of that old age griouop people
are taken care. Generally, they possess the idea of psychological pricing into their mind.
Therefore, penetration pricing strategy has been kept. In a next line, there is place. Generally, old
age people cannot walk or prefer less of distance. Keeping this criteria, segmentation is made
regarding food restaurant location. Therefore, for them, home delivery has been taken as most
viable option. Promotion is again the next P of marketing mix. Old people are fond of devices
such as radio, newspaper, magazines, television etc. These media are all utilized effectively for
promotion of products and services.
Marketing mix: Segment 2
In the next segment, younger generation of people are there. Innovation and newness are
the key requirement of them. They are always pleased with the new flavors. This has been
considered while planning product for this segment. Pricing is another part which is adopted.
McDonald's in order to attract younger generation generally keeps bundle or line pricing for
selling the products. In the same line, the another P of marketing mix is place. Location of stores
near to the schools, colleges, etc. is located by McDonald. Promotion is the major criteria for
every business organizations. In similar fashion, in order to attain the attention of larger market
segment which is inclusive of young population, there is need to focus on some innovative and

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new methods. There is need to find the method where larger youth mass is readily available.
Therefore , online marketing is one way as major of youngsters are addicted and spends majority
of their time there.
4.2: Differences in marketing products and services to business rather than consumers
Marketing covers the various aspects which has been developed with respect to the
products and services delivery. Business has been now flourished to the larger market arena. It
has now covered the area of marketing of products and services to business rather than customers.
There are several points which shows the clear distinction between marketing products and
services to business rather than customers.
Business to business (B to B) marketing is made with respect to the availability of
information to the customers. They functions and operates by the sales and marketing team of the
organization. However, business to consumer (B to C) marketing is another type. Here, the
objectives lies in meeting the general and basis need of the customers. For example, McDonald
is the business enterprise who performs the function of marketing under business to consumer (B
to C) marketing. In B to C marketing, there is need to influence and appeal customers up to
specific level only. They takes into account the aspect of providing suggestions and
recommendations to meet the need of customers.
In relation to B to B marketing and its use by organization such as McDonald, the idea
always remain behind is to focus on characteristics and attributes of products rather than product
itself. This is vital in order to gain the long term benefit to and for the organization. While
making or taking use of Business to Business marketing type, the more shorter and effective
mode of distribution of products delivery has been taken (Cadogan, 2012). The objective behind
the same is to focus on distribution channels which are more direct and reachable to the target
audiences. However, in contrary to the same, with the use of B to C marketing, longer

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distribution channels are involved. These are time consuming and are sometime not feasible in
the fastest business operation environment.
4.3: Difference between international and domestic marketing in McDonald's case
The expansion of every business organization is one of the step that has been taken. The
jump of domestic organizational working to an international level has been characteristic as
growth. However, there are associated ample of challenges as well which are required to be met.
There are certain points which differentiate domestic marketing from international marketing.
Domestic marketing is associated with the practice of business operations at home nation.
However, if the operations are expanded to a foreign level, then it is termed as an international
marketing.
With relevance to the McDonald, domestic marketing is all about doing business by
taking local markets and arenas. When it has all its working in its home nation, it is said to be
working at domestic level. However, since with the rise in number of markets in the international
markets, the suppliers, customers and employees extended to a broader level. In domestic
marketing, the affect is observed from micro and macro environment factors. But are all limited
to similar nation. However, while doing business globally, McDonald is required to produce its
goods and services which according to the customers who are of different lifestyle and food
habits. For example, In UK, the food at McDonald is available which is according to the demand
and need of the UK population. However, if the chain is operating in India, then accordingly the
taste is modified (Armstrong and et. al., 2014). In similar pattern, when the working are at
domestic level, the less of financial or manpower resources are employed by McDonald.
However, in contrary to same, there is need of large mass of varied nature and characteristic that
support the business expansion of McDonald at various nations and cities of the world.

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CONCLUSION
In a nutshell, this report has been achieved to address the marketing concepts and
strategies. The role of marketing principles are of core significance in identifying various things.
It has been assessed that marketing is a wider term which primarily takes customer as its major
target. Role of employee of the organizations are heavily seen in achievement of customer needs
and demand. Both organizational and marketing objectives of the McDonald are seen to defined
and formulated on the basis of customer satisfaction. It has been observed that marketing mix has
its core significance. Along with the same, extended marketing P's have been studied. The report
has been made by considering the marketing tactics and methods. The effective use of
segmentation as a criteria have been planned to achieve the organizational goals. In similar way,
various strategies have been found to be of great use which are used by McDonald's. These are
steps that are taken to gain the competitive advantage and competitive position.

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REFERENCES
● Armstrong, G. and et. al., 2014. Principles of marketing. Pearson Australia.
● Ataman, M. B., Van Heerde, H. J. and Mela, C. F., 2010. The long-term effect of marketing
strategy on brand sales. Journal of Marketing Research.
● Cadogan, W. J., 2012. International marketing, strategic orientations and business success:
Reflections on the path ahead. International Marketing Review.
● Christopher, M. and Peck, H., 2012. Marketing logistics. Routledge.
● Fitter, R., 2001. Who Gains from Product Rents as the Coffee Market Becomes More
Differentiated? A Value‐chain Analysis. IDS Bulletin.

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