Mcdonalds Corporation Is Listed In The New York Marketing Essay

Mcdonalds Corporation Is Listed In The New York Marketing Essay Introduction: In this coursework, I would like to talk about the famous worldwide brand McDonalds Restaurant. The reason I chose this brand for my marketing strategy and marketing planning coursework is the best known brand worldwide and the powerful marketing strategy applied through all over the world. In this chapter Id like to explain the company profile, aim of this coursework, overview of the coursework. In the chapter 2, Id like to explain the learning outcomes of Strategic marketing. Finally there is a conclusion and recommendation chapter followed by references. Company Profile: McDonalds Corporation is listed in the New York Stock Exchange, USA (NYSE: MCD) is the global company headquartered in Illinois, USA. McD (McDonalds) is the biggest chain of fast food restaurants in the world. McD serves about 60 million people every day. McDonalds sells various flavours of burgers, fries, soft drinks, desserts, chicken products worldwide. McD is founded by Maurice McDonald and Richard in 1940 in California. Ray Kroc is the person who founded the McDonald corporation. Presently, McDonald has 31,200 locations in 120 countries worldwide with the staff force of 1,702,000 in 2009. James skinner is the CEO and Chairman of McDonald. McDonalds revenue in 2009 was US$24.2 billion. Mission and Vision of McDonald: McDonalds mission is to be our customers favorite place and way to eat. McDonalds global operations are structured a common worldwide marketing strategy named plan to win focusing the marketing mix of the organisation which includes the prominent Product, Price, Place, Promotion and People. McD is dedicated to develop their business worldwide and increasing the value of consumers experience in stores. Aim of the Coursework: The aim of this coursework is to explain the marketing strategy and marketing plan of McDonalds. For this aim we should identify the marketing planning process of McDonalds, PEST analysis, SWOT analysis, Ansoffs product-growth matrix, marketing mix of thee company. These are the objectives of the coursework. Overview of the coursework: In the chapter 1, I would like to introduce about the company profile and the objective of this case study. In the chapter 2, I would like to talk about all the learning outcomes which is covered in the Strategic marketing course. The learning outcome1 is all about understanding how the marketing plan supports the strategic objectives of the organisation (McDonalds). In this chapter I would like to include the marketing planning process, key planning questions of the marketing planning process followed by marketing audit of the company which is macro environment (PEST analysis), task environment and the most important concept of marketing strategy SWOT analysis of McDonald followed by Ansoffs matrix. In the learning outcome 2, I would like to explain about the marketing mix of McDonald. This part explains the construction of the marketing plan which is the second learning outcome of the course. This will be explained by 6Ps of marketing mix which are product, price, place, promotion and people and process. Product life cycle stage is also the vital part when we talk about product in the marketing mix. This will be explained in this part. Also I will include the main four important questions about action programmes followed by controlling the action programme. In the learning outcome 3, most of this part will talk about market planning implementation, four step processes for marketing control, barriers to implementation and finally evaluation and review of the marketing planning. In chapter 3, there will be recommendations and conclusions of this coursework followed by references and reflective diary. Chapter 2: Learning Outcomes Introduction: In this chapter, well see the learning outcomes of this course Strategic Marketing. There are three learning outcomes covered in the coursework. 2.1 Learning Outcome1: Understand how the marketing plan supports the strategic objectives: In this learning outcome1, Understand how the marketing plan supports the strategic objectives of the organisation. In this coursework, the researcher took McDonalds as the corporation. The objective of the corporation is to satisfy the customer needs with their products. Customer has to choose McDonalds as the favourite place to eat. For this, the marketing strategy of the company should support to achieve the objective of the company. There are various marketing theories and concepts will be explained here in this chapter. The marketing objective of the organisation, marketing planning process, key marketing planning questions followed by PEST analysis, task environment, SWOT analysis of the organisation and Ansoffs matrix. 2.1.1: Marketing Strategic objectives of McDonalds McDonalds sets crystal clear marketing objectives. It then enhances a marketing strategy that would support to achieve the objective of the organisation. Marketing involves identifying consumer needs and wants, and meeting those needs in an excellent route than other competitors in the market. This directly results to create a loyal customer to the organisation. McDonalds marketing objective is to identify the customer needs and satisfy them with their products by giving excellent customer service throughout the world. Apart from this, McDonalds wants to achieve more market share by opening more stores worldwide. They want to be the market leader in the food industry in the American markets. 2.1.2 Marketing Planning process: Marketing planning process is the vital process in the marketing plan. This process consists of many methods with many stages. Marketing planning should identify the business mission of the company. After finding this business mission we need to identify the marketing audit. This marketing audit consists of two methods called internal audit and external audit. PEST analysis is the external marketing audit whereas task environment and SWOT analysis are the internal level marketing audit. Then it leads to strategic thrust to identify what customers want what kind of products, this is explained by Ansoffs product-growth matrix. Then target market and competitor of the company is illustrated in the core strategy. Diagram of Marketing Planning process: Source: Principles and Practices of Marketing by David Jobber (2001) Key Planning questions of the marketing plan: There are five important questions of the marketing plan needs to be answered in the marketing planning process. They are as follows: Where are we now? This means where McDonald is at present scenario in the world fast food restaurant sector and UK fast food business. Where would we like to be? In terms of McDonald, they want to be the market leader in American fast food restaurant business and they want to expand all over the world How do we get there? For McDonalds, they have the well established core strategy for their business development Are we on course? McDonald has the clear objective with high-calibre management, excellent employees with the competencies. All these factors are leads them to achieve their objective. Marketing Audit: McDonalds has a crystal clear marketing strategy which is to focus on excellent customer service with good quality food at faster service. They have created well established foundation of fast food restaurant service. McDonalds is the market leader in fast food restaurants all over the world. McDonalds has spread all over the world with 32000 locations worldwide. They want to capture more market share and they want to satisfy all their customers with fast service and good quality food at cheaper price better than their competitors. To achieve this core marketing strategy McDonalds should identify their internal and external marketing environment of their business. For external environment audit we need to apply the PEST analysis and for internal environment should apply task environment and SWOT analysis. 2.1.3. Macro Environment: PEST analysis of McDonalds: The following diagram shows that the picture of PEST analysis. PEST analysis is the very phenomenal concept in marketing. This concept is used to identify the external environment of the business. When analyzing the external environment of the business then we can easily eradicate the threats of the external. PEST is an acronym of Political, Economical, Social and Technological. Pest Analysis Source: http://www.dreamstime.com/royalty-free-stock-image-pest-analysis-image14771406 POLITICAL FACTORS Global operations might be affected due to different policies enforced by governments Human resource policies are different from country to country. This will affect the human resource policies of McDonalds. In India, there are political policies are against for the fast food and beef related food products. ECONOMICAL FACTORS Due to Financial crisis and economic crisis in Europe and American countries there are lot of negative growth in business in terms of revenue and profits. Due to volatile stock markets all over the world, the stock prices of McDonalds are heavily plummeted Due to increase of VAT in UK the sales going to drop down. This affects huge loss in revenue Interest rates, Exchange rates also affects the international operations SOCIAL FACTORS Due to health conscious and huge awareness of obesity, there are big threats for fast food restaurants throughout the world Consumer preferences are changing day by day. Due to this, McD needs to introduce many new products TECHNICAL FACTORS Fast services due to increased technical abilities of new machineries Thanks to information technology growth for the fast customer service. Many competitors also involving the same strategy. Task Environment of McDonalds: In the task environment of McDonalds we should have a look on financial data and McDonalds competitors in the worldwide market. Worldwide McDonalds Ownership The following table shows that the ownership holding by McDonalds worldwide. The total number of stores has been increased from 30497 in 2007 to 32487 in 2009. But this data shows that number of stores owned by McDonalds (direct ownership) has been drastically reduced from 8082 stores in 2004 to 6177 stores 2009. Franchisees list has been increased in the data provided. McDonalds 2004 2005 2006 2007 2008 2009 Number of McDonalds 30,497 30,767 31,047 31,477 31,977 32,487 Franchisees Owned 22,415 22,592 22,884 24,457 25,485 26,310 Direct owned by Company 8,082 8,175 8,163 7,020 6,492 6,177 % of Direct owned by McDonalds 26.50% 26.57% 26.29% 22.30% 20.30% 19.01% Chart: Number of Stores owned by McDonalds and its Franchisees in the World The following table and chart explains the sales revenue of McDonalds worldwide from 2007 to 2008. All these data shows that the sales have been declined in 2009 all these countries than 2008. Due to the economical and financial crisis in Europe, USA was the predominant reason for this sales decline in this period all over the world. Among these countries Europe sales was heavily affected due to this financial crisis in this period. But when compare to 2007 data, 2009 sales revenue data was slightly increased. Worldwide McDonalds Sales Revenue in $m 2009 (US$ Millions) 2008 (US$ in Millions) 2007 (US$ in Millions) Europe 9280 9930 8930 USA 7944 8080 7900 APMEA 4340 4231 3600 other countries 1200 1295 2365 Total 22764 23536 22795 APMEA: Asia Pacific/Middle East/Africa Source: http://www.wikinvest.com/stock/McDonalds_(MCD) Sales Revenue in 2009 by McDonalds and its competitors: The following table and chart shows that the sales revenue of McDonalds and its competitors in the year 2009. This data shows that McDonalds is the market leader in the fast food restaurant sector with the net sales revenue of US$ 22764 million in 2009 compared to its next competitor YUM restaurants holding only US$ 10840 million. There are huge difference about 100% variance between these two biggest fast food competitors. Company Revenues in US$ in Million McDonalds 22764 YUM 10840 Starbucks 9785 Darden 7300 Burger King 2700 Dominos 1490 Source: http://www.wikinvest.com/stock/McDonalds_(MCD) Source: http://www.wikinvest.com/stock/McDonalds_(MCD) SWOT analysis of McDonalds SWOT is an acronym of Strengths, weaknesses, opportunities and threats. This analysis helps to understand the internal and external environment of the organisation. Internally, an organisation can able to reveal its strengths and weaknesses whereas externally they could reveal the opportunities and threats. Hill et al.,(2003) After done this analysis, every organisation should convert their weaknesses to its strengths and match their strengths into the external opportunities. This SWOT analysis is a helpful tool for strategic marketing planning of the organisation. http://hrmadvice.com/assets/images/swotanalysis.jpg SWOT analysis of McDonalds The following table shows that the SWOT analysis of McDonalds. In this table, strengths and weaknesses are internally existed, whereas opportunities and threats are external factors. STRENGTHS International Brand awareness Worldwide market leader in Fast food restaurant sector Strong cash flow financial resources International quality awards Competent skills in their staff force Significant experts in top management WEAKNESSES McDonalds been a 65 years old company. Due to this they should have an innovation in their food products Lack of local country knowledge Since the market leader in the industry, profit might be very less due to tough competition OPPORTUNITIES Entry to international markets with the strong financial resource Excellent brand image worldwide. This creates more business opportunities in international market MA with international competitors Mounting views of customers about fast foods with quick service THREATS Huge competition in the local and international markets Mounting cost of raw material Economic crisis in the world Decreasing power of customer spending Stock prices are plummeted in the stock markets Health conscious about fast foods worldwide 2.2. Learning Outcome2: Understand the construction of a marketing plan In this learning outcome, Understand the construction of a marketing plan explains the detailed marketing mix of the organisation. This concept is predominantly phenomenal for every organisation to meet and satisfy the customer needs. The following concept shows that the marketing mix of McDonalds in worldwide. 2.2.1 Effective Marketing mix of an Organisation: CIM (Chartered Institute of Marketing) defines that the marketing mix is the combination of marketing inputs that affect customer motivation and behaviour. These inputs are 7Ps: Product, price, place and Promotion, people, process and physical evidence. Last two factors are absolutely pertinent to service industries. https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1QVy3a0Y3OtEXJEN1d0-86aTzMGLmjQew2Lf4BCLwjwyIC71qpaWuZFjMsR8g5btcAD_KiVRVL9zmqwZIrKFyOUUirMqRQOPwbbeHXvZPkXjgD3zMJlvj3NQSREtCjN7ILABJ7KeaS00/s1600/Marketing_Mix_Diagram_-_7Ps_L.jpg Source: http://mantra4marketing.blogspot.com/2010_06_01_archive.html Marketing mix of McDonalds Marketing mix is the mix of imperative factors to identify the key customers of the organisation. An organisation has to make sure a mix of these factors implied the customers appeals. Product: When we talk about McDonalds, there are hundreds of food products starting from hamburger, cheeseburger, chicken burger, salads, desserts, corns, ice creams, French fries, coffee, tea, etc., these products are favorites for all kinds of customers. Especially when they create this product mix they should keep in mind that these products are attracted the customers and satisfy their needs and requirements with good quality. Product Life Cycle: http://billyfire.com/images/ProductLifeCycle.gif Source: http://billyfire.com/product-life-cycle.php The imperative process of product life cycle is when the product is reached the maturity stage, then company needs to introduce the new product to compete the market. In McDonalds there are many products are in growth and maturity stages. So they need to concentrate on new product development to capture more market share and compete the other competitors in the market. Price: Pricing strategy should be very clear and affordable by all types of customers. They also need to focus on competitors pricing strategy. Since McDonalds been the market leader of this fast food sector they will compromise the pricing strategy by giving low price products with good quality. Due to the financial crisis all over the world, customers are very conscious about spending power, they dont like to spend enormous money on food products. All these factors lead to reducing the cost of the product for the company. Place: Place is the imperative factor in the marketing mix. Without this factor, organisation cannot be the successful in the competitive market. When we come to the place, that should be easily accessible by all kind of customers. There should be lot of parking facilities and also they should have wheel chair access in their restaurants. Location is the phenomenal for success of every business Promotion: Promoting the business leads to winning in the competition. Without doing promotion, the business can get success in the cutthroat competition. For promotion, McD offers various kind of promotional activities like TV ads, online ads, hoardings, sponsorships, sport activities, social based programs, health care sponsorships. Graham et al.,(2001) suggests that They are following above the line and below the line promotional activities. Instore they are promoting their products by offering BOGOF (Buy one Get one Free), reduced prices, combo offers, etc., McDonalds promotional activities are absolutely better than its competitors. People: People are the main part of successful marketing mix for the success of McDonalds. Their main and core strategy is to satisfy the customer needs with their good quality foods at cheaper rate by providing excellent customer service with soft and friendly approach in the store. All employees are well trained in terms of customer queries and customer satisfaction. If theres a need of training for the employees company never compromise to give the tailored training. Process: Process is also very essential for running the organisation very effectively and efficiently. For this, all the equipments, tills, machineries should be updated. The process should be very quick by serving the customer needs. Customers shouldnt wait for a long time to get their preferred menu. Physical evidence: For the service sectors, physical evidence is absolutely required. How convenient and comfortable is how sales growth is. So, convenient and hygienic environment creates more revenue growth for the business. McDonalds always stick with this effective factor. 2.3 Learning Outcome3: Understand how to promote the marketing plan in support of strategic objectives In the learning outcome3, understand how to promote the market plan to support the strategic objectives of the organisation. In this coursework, the core objective of the organisation is to meet customer needs and satisfy them with the McDs product at low cost with effective and efficient customer service in worldwide markets. 2.3.1 Implementing Marketing plans: Implementing marketing plan is not very easy to achieve. There should be proper planning to achieve the implementation process. There are four step process for marketing control and its implementation. The successful implementation of a marketing plan should address the following Who need to be involved? All the top management and all the employees of the organisation need to involve in the implementation process How should the strategy and plans to be implemented? There are core strategy needs to be identified by the top management What activities need to be carried out? Imperative process of customised training need to be deployed in the organisation What time-frames do the activities need to be completed by? Time frame is designed by the organisation with the help of top management. 2.3.2. Four step process for marketing control: Set Goals: What do we want to achieve? In terms of McDonalds they want to achieve the excellent customer service and they want to capture more market share. Measure the project Performance: What is happening? This means is what is going on currently in the market and in the McDonalds. Evaluate the Performance: Why is it happening? What was the main reason for this performance is happened. Is there positive performance, then management should give more rewards to them if not take some corrective actions. Take corrective action: what should we do about it? What are the corrective actions should we take to ensure the process of planning and implementation. Chapter 3: Conclusion and Recommendations 3.1 Conclusion and Recommendations: From this coursework, we come to know that the McDonalds marketing strategy is pertinent to its core objective of the organisation. This present scenario in the world market, there are customers are not preferred to spend more on fast food products. Also, spending power of customers has been reduced. Keeping this factor in mind, McDonald needs to concentrate on promoting their products in the local market by reducing their prices. Apart from this reason, they need to concentrate on culture of the international markets, procedures and policies followed by these countries and McDonalds put aggressive training to its employees to provide absolutely good service with friendly approach. Since they are the market leader in the worldwide food sector, they need to concentrate to capture more market share and profit and sales volume as well.