This BTEC HND marketing planning assignment report will discuss about the report McDonald’s case study which discusses how the company saw the growth since the starting and expanded all over the world and marking its existence all over the world. It is said that the sun never set for the company and their business is still expanding (Kotler, 2011). But in late 1990s the company started to see downfall because of multiple reasons and the report will look into the multiple reasons of its slowdown and what all strategies the company adopted to make sure that the company can rebound in some or other way. The report will also go into the detail about the company & Business environment and the various strategies the company is adopting to improve the present situation.
Task 1 (LO1)
Explain the potential barriers to MacDonald’s marketing planning activities and propose solutions for overcoming the barriers identified.
There can be a lot of barriers which a company can face during its operations and when it is an organization like McDonalds which is there all over the world has to take extra care while dealing with various potential barriers which are discussed in detail as follows: -
- Environmental barriers: - all the external environment features which constitute of social, legal, economic, political and technological factors may act like a major barrier for the company’s existence and can affect the business activities of the business (McDonald et al, 2011). Like in case of McDonalds, there are many countries who do not welcome the entry of the company in their country as they view it as a barrier to their culture and youth. That is why many legal bodies of various object the entry of McDonalds in their country.
- Cultural barriers: culture of any country consist of many factors like knowledge of people, basic beliefs, customs, value system, attitude towards the things and any other type of general habits shared by a group of people. Culture prevailing in a firm influences the overall performance of the organization in a big way (Young et al, 2010). It is very important to understand the culture and beliefs of the targeted audience because it will lead to effective marketing plans specifically in the case of global marketing. Like for example, in case of McDonalds, the company has its presence in all over the world and it is very essential for the company to understand the culture of every country before entering into it. In fact this organization makes sure that they change the menu completely to match the local taste perfectly. For example in many countries like India and other traditional countries eating pork, beef is considered to be a sin and they object the entry of such food items into the country. So, McDonalds completely changed the menu and introduced more veg items into the menu and in non-veg only served chicken and fish. Similarly in many countries like France and Germany the food outlets served beer as people in such countries like to have beer with the food.
- Behavioural Barriers: the traits related to the personality of the workforce of the organization affect the planning related to marketing in a big way. For example if there is a conservative and orthodox people in a marketing team them the approaches adopted in the plan will be more cautious and tried and tested marketing methods. These type of people will fear to take risk in the future in any type of endeavour and when the marketing team is a risk taker and more aggressive in approach then the team will take big risks and will take more experiment and will be innovative in approach.
The marketing team of the McDonalds is selected with extreme care because the team needs people who are more forthcoming and risk takers (Young et al, 2010). With every country they enter, the company selects a local manager and an international expert who together with local manger work on the marketing plans to be pursued in that specific company. Every country has different marketing planning as the targeted audience vary with every country.
- Cognitive barriers: very often when a marketing plan fails, the prime motive of such failures is lack of skills or basic knowledge of the employees. For effective marketing plan a company needs efficient team of employees and those who understand the products and services provided by the customer, competitors, changing trend of customers taste and preferences and the varied culture in which they are about to enter.
Having the right skills and experience is very important in case of McDonalds as the company is taking risk of entering in so many diverse culture and to establish in so many markets at the same time, it is important that an effective team should be at place who have adequate skills and experience to handle the diversity in the market (McDonald et al, 2011).
Task 2 (LO2)
Based on your analysis in Task 1, develop a marketing plan for the launch of a new product / service for MacDonald’s. The marketing plan should include the following:
a. Propose and develop SMART marketing objectives for the new product / Service.
SMART is a marketing approach which can be used as the perfect method to create an efficient marketing plan and this approach also help in addressing various issues of marketing which a company might face. SMART can be defined as specific, measureable, achievable, realistic and timed goals and objective which helps in formulating the successful marketing planning (Baer, 2013). Therefore it is important to understand each and every component of this marketing approach in order to use it efficiently.
McDonalds while introducing a marketing plan must consider every component of SMART as it helps in focusing on the every objective individually since each objective needs its own plan which should be effective and efficient. The company is going to introduce a new burger McPanner Royal in India. Following is detailed discussion of a marketing plan which will take SMART into consideration: -
- Specific: it is essential to target one goal at a time and this will result in maximum efficiency. Many time the company make a mistake of dealing with various goals at the same time because of which they could not come up with an effective plan (Baer, 2013). For this, it is important that they focus on the specific goals and work on individual plan for every specific plan to make it effective. In case of McDonalds, the company will first focus on introducing the new product effectively and how to reach to right audience who may adapt the taste and may like it. There should be separate plan for every goal which is needed to be achieved.
- Measureable: now to have an effective plan, it is also important that the target set can be measureable and the company can set a milestone for it. It can be defined as number of unit of sold can be defined as measureable goals in which reaching a milestone will determine the success and failure of any goals (Perese et al, 2005). The launch of new product pose a challenge in front of the company to set a target where the product can establish in the mind of the customer and they come back to the shop keeping in mind the new product.
McDonalds have launched a new burger so the main focus of the company should be to convince the customer to taste it once and review it as per their opinion. This will initiate the word of mouth promotion because of which people will come and at least try it once.
- Achievable: the growth which any company wanted to achieve cannot be reached in overnight and it is slow and gradual process. So while creating a marketing plan, the manager must set an achievable goals which are practical and possible (Perese et al, 2005). Launch of new product requires a secure planning and McDonalds must set some goals for it which can be easily achieved like for example the initial goal should be the focus on children and the new product must tried by maximum children as they are the one who will spread the most and more children will try to have it.
- Realistic: the realistic objective is based on the resource planning and any company should set some realistic goals after analysing the resources available to achieve that goal (Perese et al, 2005). McDonalds make have resources to produce a new product but they might not have funds to promote it and distribute it properly. In such case the plan is not realistic and it is important to strike a balance between all the resources as soon as possible.
- Timed: every plan must be started with a deadline to achieve as it cannot go forever and it is important to set some deadlines and within which marketing objectives must be achieved (Perese et al, 2005). The manager must work on creating a timeline for each objective which is mentioned in marketing plan. It will also help in calculating the progress and future growth of any project.
b. Development of appropriate marketing strategies that will lead to the achievement of the specified marketing objectives for the new product / service.
Following are the marketing strategy that will lead to the achievement of the specified marketing objectives for the new product: -
- Building customer awareness: the first step or strategy should be reach the customer and make them aware about the new product and include strategies related to building customer awareness by drawing the attention of the customer towards the new product (McDonald & Wilson, 2011). It is a crucial step as in a day customer get to hear millions of marketing message throughout the day so it is big challenge for the company to prepare marketing strategies which can catch the attention of people at large. If the company succeeds in creating awareness about the product then customer will be curious to try the new product and will search more about it and in case of McDonalds they will come and try it once to decide about the benefits of the new product.
- Introducing the advantages of new product: next step is to make the customer understand the various benefits of the new product and the reasons why should a customer try a new product. Moreover, the company should also focus on meeting the customer needs or even exceeding the needs of the customers and make them realizes the benefits of new product. In case of McDonalds the main focus of the company while launching a new product must try to communicate the varied taste which the company will provide in new burger and the customer will enjoy even more after having the new burger.
- Positioning the new product vs. the competition in the market: McDonalds is facing a lot of competition from the local market and international food chains as well. So it is very important for them to determine what aspect of the product they wanted to promote and give importance to (McDonald & Wilson, 2011). For McDonalds, the company can launch the product by differentiating it on the basis of taste and healthy nutrition added to it at the same time. The new burger must also be positioned using the strength of the brand value the company carries in the mind of customers.
- High customer satisfaction: the company must also focus in meeting the needs and wants of the customers and satisfying them to the core so that the customer comes again for the sheer experience (Pride, & Ferrell, 2011). In case of new product launch, the first few customers are very important and of they are satisfied and then word of mouth promotion from the satisfied customer is one of the best and most in-expensive modes of promotion. This mode is very powerful as customer look for reviews and opinion of other people before trying any product.
c. Application of the marketing mix elements to support the new product / service.
Marketing mix elements consists of four Ps which stands for product, price, place and promotion. These four Ps are discussed in detail as follows: -
- Product: the product holds the utmost importance as on the basis of this product, the company will move forward. It is extremely important for any company to manufacture the product keeping in mind about the taste and preferences of the customer (Huang & Sarigöllü, 2012). McDonalds launches new product in India, then the new product must be made keeping in mind the taste and preferences of the customer.
- Price: the new product must be appropriately launched especially in a country like India where customers are very price sensitive which means they have a tendency to switch the product if the price changes (Huang & Sarigöllü, 2012). So price should not overly price and should be decided keeping in mind the middle-class people who usually eat at these food outlets.
- Place: place consist of two unique features. The first feature is efficient channel of distribution through in the form of outlets which become a medium of selling the good and services provided by the company. In case of McDonalds the company has a big food outlet where people come and eat the food manufactured by the company (Yeu et al, 2012). Another section which comes under place is logistics. It related to warehousing the raw material and transporting the new product to the outlet where the customer can buy product. McDonalds make their warehouse in the country itself where they have opened the outlet. The company is very specific about the quality of the raw material they use for making burgers and they even export the raw material if they didn’t get the quality which they are looking for. Read more about: Business Skills for E-commerce
- Promotion: every company comprises of activities which consist of advertising and various sale promotion activities which take the product in mind of the customer (Yeu et al, 2012). Promotion is an important aspect of any business as it helps in establishing a place in the mind of the customer. In case of McDonalds, the companies make separate marketing plans for every country since every country has different audience and has to be dealt in a different manner.
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Task 3 (LO3)
Examine the ethical issues that can affect the marketing activities of MacDonald’s and discuss how these can impact upon consumer behaviours. Propose recommendations that MacDonald’s can adopt in order to improve its ethical practices.
McDonalds is facing a lot of ethical issues from past many years and many organizations have objected the kind of food the company is selling. The main protest came from many environmentalists and health professionals who objected on the basis of ill effects of the food McDonalds is selling which may increase many health issues (Jue et al, 2012). Moreover there is entry of new competitors who sell healthier options to customers and many health cautious people are switching because of this reason. The company has reached its maturity and no price cutting strategy is affecting the sales of the company. So fast food alternatives which focus on healthier options of food and are transparent in the content they offer are more successful these days.
There are many objection like many outlets are selling beef which is prime cause of bird flu disease and then there is increase in obesity level among teenagers and the McDonalds contributes in a big way in this direction. Obesity leads to many other diseases like heart problems and diabetes (Jue et al, 2012).
There was one more issue when some parents complained about the concept of happy meals provided by the company in order to attract the children. Parents complained that this is the wrong way of entering into the mind of a child and they could not teach their child about the quality of food and importance of nutrition as all children care about the toys which they get in a happy meal (Jue et al, 2012)..
Following are the recommendations in order to address these problems: -
- The company should focus on introducing some healthy substitutes for their products (Jue et al, 2012). Changing the menu is not an easy job and the company had to bring changes in the menu and include more salads and healthy options for the people.
- More than changing the menu what is even more difficult is changing the perception of the people (Jue et al, 2012). The company has to launch a new business strategy where have to establish themselves as a healthy option of fast food in the mind of the customer which is very difficult step and the company has to move in a planned manner.
Marketing is the most important aspect of any business and these activities should be planned with extreme care. The report has discussed in detail about a product should be launched and should be communicated to the targeted audience. The report took McDonalds as a case where they have expanded all over the world, saw boom in the sales at one time and then declined sales at one point of time.