UK COLLEGE OF BUSINESS AND COMPUTING

An Assignment On
Marketing Principles

PREPARED BY:
Name: Oana Loredana Stanciu
ID: hndb11683

Table of Contents

Introduction...............................................................................................3
Task 1: Understanding the concept and process of marketing..................4
1.1: Explaining the various elements of the marketing process of
McDonalds............................................................................................4
1.2: Evaluation of the benefits and costs of a marketing orientation for
McDonalds............................................................................................5
Task 2: Be able to use the concepts of segmentation, targeting and
positioning................................................................................................6
2.1: Showing macro and micro environmental factors which influence
marketing decisions for McDonalds.....................................................6
2.2: Proposing segmentation criteria to be used for products in
different markets....................................................................................6
2.3: Choosing a targeting strategy for a selected product/service..........7
2.4: Demonstrating how buyer behavior affects marketing activities in
different buying situations.....................................................................7
2.5: proposing new positioning for a selected product/service..............8
Task 3: Understanding the individual elements of the extended
marketing mix...........................................................................................9
3.1: Explaining how products are developed to sustain competitive
advantage...............................................................................................9
3.2: Explaining how distribution is arranged to provide customer
convenience..........................................................................................10
3.3: Explaining how prices are set to reflect McDonalds objectives
and market conditions..........................................................................10

3.4: Illustrating how promotional activity is integrated to achieve

marketing objectives............................................................................11
3.5: Analyzing the additional elements of the extended marketing mix
..............................................................................................................11
Task 4: Be able to use the marketing mix in different contexts..............13
4.1: Planning marketing mixes for two different segments.................13
4.2: Illustrating differences in marketing products and services to
businesses rather than consumers........................................................13
4.3: Showing how and why international marketing differs from
domestic marketing..............................................................................14
Conclusion..............................................................................................15
References...............................................................................................16

Introduction
A business organization whether product based and services based must satisfy the customers. In
a word, customers are the core center of focus for a business organization. Every business must
build a profitable customer relationship and that is why a particular organization always exerts
on maximizing the customer value. Marketing takes this major responsibility. It makes the
customer about the product and services of a business organization, helps organization by
providing the customer feedback and attraction, enables organization to design business activities
and services according to the customer demand and satisfies the customer by meeting their
requirement. In this competitive business world, excellence in marketing mostly differentiates an
organization from its existing and potential competitors. In this report, I will try to demonstrate
how McDonalds, the world largest fact food brand, can practice basic marketing principles
efficiently to hold a better customer attention and build up a profitable customer relationship.

Task 1: Understanding the concept and process of marketing

According to Kotler & Armstrong (2010), the process of marketing starts with focusing on the
customer needs and ends with attaining returns from the customers. It is an ongoing process and
each of its stage an organization designs its strategy based on the customer needs and wants.

1.1: Explaining the various elements of the marketing process of McDonalds

Marketing is one of the most important functions of a business organization. But it is a complex
process rather than a simple function. There are many elements that are included in the
marketing process. Each of them is very important in making the process successful. (Porter,
2008)
In the case of McDonald, many elements are found in their marketing process. Success if
McDonalds marketing process depends mostly on the efficient use of those elements.
The main elements of McDonalds marketing process are:
Understanding customers needs, wants and the marketplace: All business organizations deal
with customers. As the market place is too much competitive, there is no way to ignore the
customers. Rather giving much importance on their wants, needs, satisfaction is very important.
To achieve customer loyalty and attract new customers, McDonald always gives much
importance on customers needs and wants. Again, the marketplace is also important for
McDonald to understand.
A good marketing strategy: McDonald also gives importance on the marketing mix to find out its
effectiveness in creating appeal among the selected customers. To do this, answers of the
following questions are evaluated:

What to produce?

What will be the perfect price of the products?

What are the promotional activities?

What is the suitable place?

Answers of the above questions help McDonalds to much in their marketing process.
A well constructed program delivering superior value: Market research helps the
management to gather information about current and potential customers, competitors, legal and
technological factors, economic factors and so on. Factors that affect customers buying decision
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are also selected through this system. The SWOT analysis that indicates the strengths,
weaknesses, opportunities and threats is a good strategy to find superior information.
Increasing customer loyalty: Achieving customer loyalty is another important factor that helps
an organization to face the competition and sustain in the market. McDonald always tries to
satisfy customers with standard products and services, low price and building good relationship.
Capturing value: McDonald analyzes the 4p (product, price, place and promotion) for capturing
value from the customers. Then it takes the best decisions based on the available information. In
this case, a good marketing strategy works better. (Trout, 2010)
These are the major elements of McDonalds marketing process. They are highly appreciating.

1.2: Evaluation of the benefits and costs of a marketing orientation for

McDonalds
Marketing orientation is very important in marketing activities. Through marketing orientation
an organization build a good relationship with its customers. It creates superior value for
customers and tries the best to maintain a good relationship with them for long term period.
(Avlonitis, 1997)
McDonald has a large market all over the world. It has millions of loyal customers. It provides
customers with high quality foods at the perfect price; sometimes it prepares new items and also
prepares cultural food items on different cultural program. All of these activities are included in
marketing orientation.
So, these activities help McDonald to build a strong relationship with the customers.
Summarized feedback:
Different elements influence the marketing process that leads to a good position in the market. In
this case, marketing orientation also contributes a lot.

Task 2: Be able to use the concepts of segmentation, targeting and

positioning
It is quite difficult to satisfy all the customers or providing services to all. For this reason, a
business organization usually segments the customers, targets a customer segment and
undertakes plans and program to get position in the target segment (Dibb&Simkin, 1997).

2.1: Showing macro and micro environmental factors which influence

marketing decisions for McDonalds
According to Whitlock& Jobber (2004), macro environment of McDonalds can be defined as
the set of forces that influence the activities of McDonalds.
The components of macro-environment are natural, cultural, political, technological, economic,
and demographic. McDonalds cant control these forces rather these factors highly influence
McDonalds. For example, McDonalds must maintain natural environment and in planning this
factors must be ensured. McDonalds give priority to these factors while planning but unable to
control this factors. Like natural environment all the forces are significant in developing
marketing plan.
Micro-environment of McDonalds includes a set of actors; company, intermediaries, suppliers,
customer, competitors, and publics. Unlike macro environment, McDonalds has some control
over the micro actors. These actors influence the planning of McDonalds. For example,
intermediaries or retailers are delivering the ultimate services to the customers. McDonalds may
help the intermediaries about how to approach and provide the best to the customer. In opposite,
McDonalds will also get direction to wards product and services from these intermediaries.

2.2: Proposing segmentation criteria to be used for products in different

markets
STP (Segmenting, targeting, and positioning) is a method for identifying the customers an
organization will be able to serve well and gain profitable margin in return. This process starts
with segmentation. McDonalds is a worldwide fast food chain. It has 36000 restaurants in
100countries serving about 69 million people each day (McDonalds, 2015)). There are available
criteria to segment customers like geographic, demographic, behavioral, psychographic, etc.
Among this I suggest McDonalds to choose geographic criterion.

McDonalds is providing its services worldwide. Attitudes, cultural norms, values, tastes, choices
are not same over the world. Through geographic segmentation, McDonalds will be able to
identify the variations due to geographic location and find the target segment fit for the
organization. Using this criterion, McDonalds will segment the customer on the basis of region,
urban or rural areas, population density, etc. (Yankelovich, 1964). From this segment in each
region, McDonalds will be able to pick the target segment. Further, McDonalds will adopt a
positioning strategy for the identified target segment.

2.3: Choosing a targeting strategy for a selected product/service

After segmenting the entire customers, an organization chooses segment/segments. This is called
target customer segment. Various targeting strategies are available like differentiated marketing,
concentrated marketing, and niche marketing. Suppose McDonalds selects organic food items to
serve to the customer to achieve additional value from the customers.
As McDonalds has decided to adopt a selective approach in case of selecting target market, it is
suggested that McDonalds to choose concentrated marketing as the targeting strategy. This drink
item seems to be popular and can be applied to maximum portion of segments across the various
regions. As a single product for major part of segments, it can be expected that sales will be
higher and the production cost because of huge amount seems to be lower. Marketing strategy in
this targeting strategy will be easier and cost effective. Using concentrated marketing,
McDonalds will be able to deeply assess a segment and then introduceorganic food to those
segments (Trout &Ries, 2000).

2.4: Demonstrating how buyer behavior affects marketing activities in

different buying situations
Customer behavior influences a customer to buy the products and services that very much fit
with the customer behavior and attitude. That is why an organization at first assesses behavioral
approaches of the customers and then design marketing plan and programs (Webster & Wind,
1972).
Once McDonalds has identified its target segment, it should analyze the behavior of the target
customers. Customer behavior is influenced by many factors such as cultural factors, social
factors, personal factors, psychological factors, personal belief, etc. Usually customers develop
their behavior learning from the mentioned factors and interpret their real world according to the
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behaviors. So, McDonalds must consider this issue into marketing activities. For example, target
customer of McDonalds want organic food items with fresh ingredients. McDonalds now need
to circulate and promote that the company is introducing organic food items only considering the
customer expectation. Thus, customer behavior may affect marketing activities of McDonalds
and need to be addressed in marketing policy.

2.5: proposing new positioning for a selected product/service

To attract a target segment differentiation is vital. Any product, service or marketing strategy
which is unique significantly attracts the customer attention. From this point, an organization
tries to create a meaningful and fruitful brand difference to sustain the target market (Westbrook,
1980).
McDonalds has proposed organic food to the target market segments. Now, the organization
needs to create a perfect positioning of this product in the target segments. For this purpose,
McDonalds needs to make the customers understand that the product carries some unique values
for them. Maintaining the quality of the new product, McDonalds may add some exceptional
value like flavor and taste in the new proposed organic food as proposed in the marketing
promotion. McDonalds needs to convey the message to the customer that other organizations or
competitors are unable to imitate the product quality, the superiority of the new product over the
substitute product oforganic food. Price level should be affordable and set as per the pricing
policy.
Summarized feedback:
So, there are many environmental factors that affect McDonald much. For a good marketing
strategy, target marketing is also required. Proper positioning strategies and buying behavior of
the customers draw attention.

Task 3: Understanding the individual elements of the extended

marketing mix
The extended marketing mix is generally known as 7ps that include 7 factors; product, price,
place, promotion, process, people, and physical environment (Melewar& Saunders, 2000). These
7 components are vital in an integrated marketing strategy. An organization meets the customer
requirement through these 7 factors.

3.1: Explaining how products are developed to sustain competitive advantage

McDonalds can avail competitive advantage through some ways. If the production cost is
minimized, it can deliver product at a lower cost than the competitors which will provide
competitive advantage. On the other hand, it can provide a solely new experience to the customer
that differentiates McDonalds. Thus, while developing a product, McDonalds may ensure that it
is according to the customer requirements, production process is cost efficient, product contains
the highest quality, the product will be able to satisfy the perceived value of the customers, and
McDonalds must avoid marketing myopia or lack of foresight (Porter, 2008). The developed
product is needed to address to the customer. So McDonalds may promotional strategy like
advertising, public relations, online circulation, and personal selling that catch the customer
attention as well as McDonalds need to make sure availability of products to meet customer
demand. These entire things will differentiate McDonalds and provide competitive advantage.
In case of developing new food items McDonald follows some steps such as:
Generating ideas,
Idea screening,
Testing the items,
Comparative analysis of profit and loss,
Developing new food items,
Evaluating customers feedback,
Further development
In case of competitive advantage, McDonald follows some steps such as:
High quality for customers,
Differentiation of food items in taste.
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 High quality service.

Ensuring home delivery within 30 minutes.
Variety of items for different people, (Agmon, 1977)
These are the various strategies adopted by McDonalds in case of new product development and
competitive advantage.

3.2: Explaining how distribution is arranged to provide customer convenience

Distribution of products falls into the place factor of extended marketing mix and thus raises the
question of customer convenience. Product development will not work if the distribution system
fails (Piccoli, Spalding & Ives, 2001). So, distribution factor carries some weight. McDonalds
produces the world famous quality fast food items. It provides food to the customers at its own
outlets and through various regional agents. Importance must be inserted in this case.
McDonalds have many regional agents and these agents must be efficient and respond to the
customer needs. Customers are to be easily knowledgeable about the location where the products
of McDonalds are available. Promotional strategy may serve this purpose well. Customers will
be convenient if the products are available in the departmental stores in domestic and foreign
countries. Customers may have the scope to avail the product online and in this case
McDonaldss customized website does well. In a word, McDonalds must ensure that product is
available on demand and order.

3.3: Explaining how prices are set to reflect McDonalds objectives and
market conditions
McDonalds has the opportunity to select a pricing strategy among the strategies of cost based
pricing, value based pricing, value added pricing, and good value pricing (Lee &Staelin, 1997).
Cost based pricing states that McDonalds charge prices after the final production. This system
charges prices adding margin with the production cost.
Value- based pricing states that McDonalds set the prices on the basis of customer value. Value
added pricing is pricing the products along with some added feature and good value pricing is
pricing a set of products.
Among all these strategies I prefer value based pricing for McDonalds. This strategy starts with
assessing customer need and perceived value, then setting the prices based on customer
perceived value, predetermine the probable cost of product, and at last manufacture product that
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satisfies customer need and in return McDonalds do have the desired price. This strategy will
enable McDonalds to set the price level based on customer value.

3.4: Illustrating how promotional activity is integrated to achieve marketing

objectives
Like other business organization, McDonalds operate its activities for the purpose of earning
profit through delivering customer better value and quality product and services. It has all the
things focusing the customers. But customers need to know about McDonalds and its
characteristics and quality before purchasing its goods and services. This major task is
implemented by marketing promotional strategy. This is an important part of the extended
marketing mix. The traditional promotional mix has five criteria; advertising, publicity, personal
selling, sales promotion, and public relationships (Belch & Belch, 2003). All these things are
integrated with marketing activities as those things establish good relationship with customer,
help McDonalds to know about the customers, enable customers to learn about McDonalds.
Actually these things create a platform where or through which McDonalds interact with the
customer. In recent days, technology is so much advanced. McDonalds must ensure
technological efficiency and e-communication to attain the valuable customer attractions.

3.5: Analyzing the additional elements of the extended marketing mix

The additional elements of marketing mix are people, process and physical environment. In case
of service preparation and provision these elements are important. McDonalds needs employee
to operate its business effectively and efficiently. Employees prepare product and services,
provide them to the customers. Efficient employees provide better service provision and impress
the guest. Every product production and provision has processes. When McDonalds produce
food items it follows a process, when it adopts marketing strategy it follows a process, it delivers
it to the customers it follows a process. The physical environment means the atmosphere in
which the product and services are provided. The splendid decoration of McDonalds makes the
customers delighted and attracted (Yoo, Donthu& Lee, 2000).
Summarized feedback:

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In this part, the 4Ps of marketing mix are focused more. Efficient way of developing new
products, efficient pricing, promotion and efficient placing are ensured for sustaining in business
environment.

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Task 4: Be able to use the marketing mix in different contexts.

According to Grnroos (1994), customers are segmented on the basis of some criteria. Different
customers have different dimensions of needs and wants so their segmentation varies. Marketing
mx may vary the basis of customer segmentation, and region whether it is domestic or
international.

4.1: Planning marketing mixes for two different segments

Customers can be segmented on the basis of income level. Suppose McDonalds segment the
customers in two classes based on income; one is middle income level and higher income level.
Marketing mix will be some different for these two segments (Ayal&Zif, 1979).
For the customers of middle income level, McDonalds may provide middle class service and
products at a lower rate. For the product distribution, McDonalds have regional agents that
distribute the products or from whom customers can get their necessary products. For this
segment McDonalds can adopt feasible promotional tools that cost less.
For the customer of higher income level, McDonalds needs to provide high quality product and
services at premium rate. The distribution channel must be wide and have to huge coverage. The
physical environment of McDonalds must be gorgeous and processes must be smooth.
McDonalds need to adopt highly organized promotional measures for this segment. Ecommunication must be enriched.

4.2: Illustrating differences in marketing products and services to businesses

rather than consumers
B2B marketing model means transaction between buyer to buyer and B2C marketing model
means transaction between buyers to consumers (Berry, 1995). In marketing products and
services, emotion will do little. Here the McDonalds will make transaction with another
business organization. In this case, both the business organizations search for more information
because both the business organizations have the same tendency to make profit. Business
organization will not consume the products. They further utilize to add benefits. In designing
promotional tools McDonalds will give importance on cost effectiveness, profitability, and
prospect of the product.
In case of marketing products and services, McDonalds will give emphasis on satisfying the
customer expectation. Customers are influenced by emotions. So, McDonalds can address
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emotional appeal while marketing products to the consumers. Consumers will not search so
much information like a business organization. They are the ultimate user of products and
services.

4.3: Showing how and why international marketing differs from domestic
marketing
Fundamentally marketing strategy is same in international and domestic boundaries. But in case
of international marketing things seem to be more complex than domestic market.
In domestic market, McDonalds is very much aware about the customer demand, face little
political issues, design products and services for domestic people, can easily capture the markets
only by delivering better customer value of domestic people.
In case of international marketing, McDonalds has little knowledge about the customer
perception and demand trends. For indenting true scenario, it engage regional supervisor. This
regional supervisor communicates to the head location of McDonalds. Political situation is
complex there as McDonalds conduct business overseas. It has to maintain legal procedures set
by the authority.
Competition is much more higher here than the domestic market. Update technology is highly
required. Establishing a profitable brand image seems to be harder (Agmon&Lessard, 1977).
Summarized feedback:
There are various segments in the market. They follow different strategies. Strategies also vary in
marketing expansion both in domestic and international market.

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Conclusion
In todays competitive business world the success of an organization highly depends on how
much an organization is able to meet customer needs and fulfill customer satisfaction. An
effective marketing process serves this purpose. Using effective marketing process starts with
understanding the present market situation and identifying customer needs. After this an
organization adopts marketing plans and strategy, ensures customer satisfaction and better value,
at last capture value from the customers. An organization segments, targets, and takes position in
the target market. Marketing mix, promotional mix, pricing strategy all contribute to build up a
profitable customer relationship. The efficiency of creative marketing enables an organization to
spread its uniqueness in product and service provision which contribute to have competitive
advantage over the competitors.

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