The marketing process

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 presents itself in a consistent way. Marketing communication methods, such as advertising and promotion, are used to create the colours, designs and images, which give the brand its recognisable face. At McDonald’s this is represented by its familiar logo – the Golden Arches.

Marketing involves identifying customer needs and requirements, and meeting these needs in a better way than competitors. In this way a company creates loyal customers. The starting point is to find out who potential customers are – not everyone will want what McDonald’s has to offer. The people McDonald’s identifies as likely customers are known as key audiences.

The marketing mix and market research

Having identified its key audiences a company has to ensure a marketing mix is created that appeals specifically to those people.

The marketing mix is a term used to describe the four main marketing tools (4Ps):

• product
• price
• promotion
• and the place through which products are sold to customers.

Using detailed information about its customers, McDonald’s marketing department can determine:

1. What products are well received?
2. What prices consumers are willing to pay?
3. What TV programmes, newspapers and advertising consumers read or view?
4. What restaurants are visited?

Market research

Market research is the format which enables McDonald’s to identify this key information. Accurate research is essential in creating the right mix to win customer loyalty.

In all its markets McDonald’s faces competition from other businesses. Additionally, economic, legal and technological changes, social factors, the retail environment and many other elements affect McDonald’s success in the market.

Market research identifies these factors and anticipates how they will affect people’s willingness to buy. As the economy and social attitudes change, so do buying patterns. McDonald’s needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future.

Market research considers everything that affects buying decisions. These buying decisions can often be affected by wider factors than just the product itself. Psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it. These additional psychological factors are significantly important to the customer. They can be even more important than the products’ physical benefits. Through marketing, McDonald’s establishes a prominent position in the minds of customers. This is known as branding.

Meeting the needs of key audiences

There are a limited number of customers in the market. To build long-term business it is essential to retain people once they have become customers. Customers are not all the same. Market research identifies different types of customers. These examples represent just a few of McDonald’s possible customer profiles. Each has different reasons for coming to McDonald’s.

Using this type of information McDonald’s can tailor communication to the needs of specific groups. It is their needs that determine the type of products and services offered, prices charged, promotions created and where restaurants are located. To meet the needs of the key market it is important to analyse the internal marketing strengths of the organisation. Strengths and weaknesses must be identified so that a marketing strategy which is right for the business can be decided upon.

The analysis will include the:

• company’s products and how appropriate they are for the future
• quality of employees and how well trained they are to offer the best service to customers
• systems and how well they function in providing customer satisfaction e.g. marketing databases and restaurant systems
• financial resources available for marketing.

SWOT

Once the strengths and weaknesses are determined, they are combined with the opportunities and threats in the marketplace. This is known as SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). The business can then determine what it needs to do in order to increase its chances of marketing successfully.

Marketing objectives

A marketing plan must be created to meet clear objectives. Objectives guide marketing actions and are used to measure how well a plan is working. These can be related to market share, sales, goals, reaching the target audience and creating awareness in the marketplace. The objectives communicate what marketers want to achieve.

Long-term objectives are broken down into shorter-term measurable targets, which McDonald’s uses as milestones along the way. Results can be analysed regularly to see whether objectives are being met. This type of feedback allows the company to change plans. It gives flexibility. Once marketing objectives are set the next stage is to define how they will be achieved. The marketing strategy is the statement of how objectives will be delivered. It explains what marketing actions and resources will be used and how they will work together.

The 4Ps

At this point the marketing mix is put together:

Product

The important thing to remember when offering menu items to customers is that they have a choice. They have a huge number of ways of spending their money and places to spend it. Therefore, McDonald’s places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers’ requirements change over time. What is fashionable and attractive today may be discarded tomorrow. Marketing continuously monitors customers’ preferences.