Unit 3 Distinction 1 In this assignment I am going to evaluate the concepts and principles applied to the marketing of products by McDonalds and make recommendations. Marketing Concept strengths and weaknesses. Production Concept: The production concept is the process of making and distributing the products to the business outlets. Some businesses only focus on its production process rather than the distribution process. The whole production concept consists of quality control of the product, testing and measurement of the product.
The marketing concepts strengths are that it allows McDonalds to focus on specific four stages. McDonalds are able to justify the stages of its products and the business. It enables McDonalds to understand their product specifications, quality of the product, product volume, product appearance and the consistency of the product. The distribution concept enables McDonalds to distribute its products to different outlets within the world and this increased demand of certain products. With the production/distribution McDonalds can satisfy customers needs regardless to their demographic segment.
This shows that they have met their aims and objectives of and these aims and objectives could have further development in order to remain successful in the fast food industry market. In reality the production concept does not really have an impact on McDonalds business activities because they do not really concentrate as they think it is not necessarily to their sector. The reason that McDonalds does not really concentrate on the production concept because it saves them additional money for distribution which is more effective and has a positive impact on McDonalds business.
Selling Concept: This is when a business persuades, informs and encourages customers to purchase their products through aggressive promotion. McDonalds uses the selling concept because customers know about their prices and products, that is because it suits every segment, the products are affordable. Also the promotion techniques McDonalds use are very effective and this increased demand of a product and a larger customer base, this is because McDonalds has always tries to keep customers interest on a high level. McDonalds use vouchers as part of their promotion, these vouchers are often given on busy days in town.
These vouchers last for a long while and this increased the customer base because McDonalds base their selling campaign of its overall brand and lifestyle. McDonalds is already successful selling its products because they make people aware of the quality of their products. Also the menu counters are also part of their promotion and this helps customers to have a clear remembrance of McDonalds products because they are descriptive and eye catching. The menu counters helps to give a feel about the product before it is been purchased. This also makes McDonalds business look more distinctive as well.
McDonalds segments its market by using policies of cheap prices and by the characteristics of its products. The selling concept plays an important role of McDonalds business because they use aggressive and rational promotion such as advertising to encourage and persuade consumers to purchase a product from McDonalds. The selling concept combines with the marketing mix and promotional mix because McDonalds adapt the products they offer, the price, the place, where it would sell best, and the type of promotion they would need to gain the specific target audience interest.
The selling concept increases the brand awareness of McDonalds. With the selling concept it enables McDonalds to increase its customer base because they use different types of methods of promotion to reach its segment and customers have become more familiar with McDonalds brand. For example at the end of 2003 McDonalds launched a new menu called the Pound Saver menu; the menu represents great value and savings on selected items on the menu. The majority of items cost ? 0. 99.
This menu was advertised frequently to refer to the price of the menu; this showed that McDonalds is for anyone regardless to their lifestyle. McDonalds obtained an additional customer base and this had a positive impact on sales. Also McDonalds have sponsored past Olympics and this increased the demand of a product especially the Big Mac, they also gained free publicity and this also increases the customer base. This avoids customers to switch to competitors and this means that they will obtain a healthy and stable profit for the future.
In the past year if a customer bought a meal from McDonalds the customer would receive a cup as part of their purchase. This increased the amount of customers they get and it also made McDonalds stand out from its competitors. A unique selling point of products differentiates McDonalds from its competitors because they will be more customers visiting the restaurant and this will result to increase of sales. Product concept: This is when a business products is part of their business brand image. The products shape the business and its unique selling point in the market.
The product concept allows McDonalds products to be on limited edition to test customer satisfaction, so if customers are not satisfied with the new product McDonalds would simply get rid of the product and it will avoid them from making a loss as well. However the product concept is rarely used at McDonalds because they sell similar products like their competitors, however they always bring in new products to increase its customer base and being ahead of competition in the fast food industry market. For example last 4 years McDonalds launched the deli meal and it consist of 5 types of different burgers.
The deli meal became a success to McDonalds business because a lot of customer were satisfied with the additional meal that has been added on to the menu. The deli meal increased the reputation of McDonalds brand because it made them look diverse; this shows that McDonalds is capable to differentiating its products from its competitors by introducing products that have a unique selling point in order to increase sales and customer base. Marketing concept: This is when a business gathers information from its customer, competitors, market environment and the economy.
McDonalds benefit from the marketing concept because it moves the target audience to some type of action; this might be to purchase a product from McDonalds, visit McDonalds, or to increase purchases of the products. With the marketing concept it enables McDonalds to distribute its products to the right segment of people. It helps McDonalds to understand its products and innovative of distribution channels. With the marketing concept McDonalds is able to achieve its aims and objectives which consist of meeting needs of their target group, being efficient when it comes to competition and to make a profit.
The marketing concept allows McDonalds to widen their marketing strategies in order to remain successful in the market. The marketing concept helps McDonalds to understand rising living standards, changes in law with packaging, new food production technique and changes in patterns eating out. The marketing concept justifies whether the number of target customers is growing or shrinking and whether their buying habits will change in the future. The market concept helps McDonalds to make effective decisions about its business by providing information that can inform one decision making process.
The weaknesses of the product concept are that it does not justify consumer needs. It can’t look onto the future of McDonalds products. McDonalds does not really concentrate on the production concept because they are concentrating on other concepts such as the product and marketing concept which has a positive impact on the business and the brand itself. The production concept does not have an impact on McDonalds business. The product concept is about having a unique product which customers will get satisfaction out of eating.
However McDonalds competitors offer similar products to attract the same segment of people and this does not make them look very distinctive. If McDonalds don’t promote enough to their target audience especially when they have launched new products, customers would not know anything about the product and this would decrease McDonalds sales as well. The marketing concept is an expensive tool because McDonalds have to employ specialist marketers if they want their marketing research to be effective and reliable. However McDonalds can still afford the costs of the whole marketing concept because they have the money.
It can be time consuming as well because some information such as past data could be outdated and some past data are not very reliable or useful for McDonalds. Recommendations Production Concept: In my opinion the production concept is vital to McDonalds business because they would still need to make sure that they have the same ingredients to make the products. The most important of all is that the products will still have to look identical and taste the same before the products get distributed to other outlets of McDonalds.
This is because if the products of McDonalds have different ingredients and different taste McDonalds would not look distinctive in customers eyes because customers would be complaining about the lack of quality of their products. This could also have a negative impact on the brand image as well. Selling Concept: In my point of view McDonalds should continue to use the selling concept as part of their marketing strategy because it has made McDonalds successful and well established, people know about McDonalds and it is spreading across the globe.
The selling concept has increased the product positioning of McDonalds and it also developed customers trust and loyalty of McDonalds brand image. It has increased the market share for McDonalds as well. It also defined the success or failure of new launched products. Product Concept: McDonalds could introduce multi cultural meals to suit ethnic minorities due to different cultures and tastes. This would make McDonalds brand image more diverse and unique in the market. This will also have a positive impact on McDonalds future profits.
Introducing multi cultural meals into McDonalds is a big advantage for them because they will be able to meet every ethnic requirements, this will also increase the number of ethnic people visiting McDonalds. McDonalds could start launching a special family feast which is at aimed at families for example a meal for ? 10 which is enough for a family of four. McDonalds would benefit from this additional meal for a family of four because there will be attracting big families, this would be another target group and this will have a positive impact on future profits.
McDonalds could also Marketing Concept: McDonalds marketing concept is already effective and well established because they are still meeting the customers needs and also they always aim to develop their marketing strategies in order to remain successful throughout the years. Marketing Principles strengths and weaknesses Understanding consumer needs: Understanding consumer needs is vital to a business because if a business fails to meet customer demands they will see a decrease in their customer base, and customers will be likely to switch to competitors.
It is important for a business to keep up to date with customer demands in order to satisfy them so that customers will keep coming back. Without meeting consumer needs a business would not be able to operate. The marketing principles strengths are that it enables McDonalds to concentrate on its customer needs and they can refer back to the marketing mix in order to meet the needs of its customers. It is an easy process for McDonalds to follow in order to meet its aims and objectives. McDonalds are able to identify specific targets that may require more attention.
It enables McDonalds to know its customers for example the customers of McDonalds are the end users. McDonalds are able to meet customer needs and this has a distinct competitive advantage for McDonalds because people still go in there, it is affordable and it suits every segment taste regardless to their preference, McDonalds is for everyone. The marketing principles makes McDonalds understand the business itself because they know what they are selling; they know the purpose of their business. With the marketing principles McDonalds are able to praise their strengths and weaknesses to its customers.
McDonalds know their competitive edge in the fast food market which allows them to plan ahead and creating new strategies in order to be ahead of their competitors. McDonalds has already established customer loyalty and this made them very unique in the fast food industry which has lead to a healthy profit throughout the years. McDonalds always manages to identify the needs of its customers and they always aim to meet the demands of customers and this creates a good relationship with customers.
Keeping ahead of competition: Keeping ahead of competition is important in a business environment because competitors will increase their strategies in order to be ahead of competitors. For example Nandos may start delivering products to their customers if their order is over ? 10, this will differentiate them from its competitors and this will the customer base of Nandos. McDonalds keep ahead of competition by having a happy meal with healthier options; the happy meal includes a toy that attracts little children.
The happy meal differentiates McDonalds from its competitors and this made them increase its customer base and the effective promotion they used by using Disney movies to distribute the products to little children. McDonalds keep ahead in competition by launching new products into the market so customers don’t get bored of their products, if McDonalds did not invest in new products they would see a decrease in customer base this is because customers would be switching to their competitors and McDonalds would get left behind.
McDonalds keep ahead in competition by promoting new products with different methods of promotion such as TV, magazines, newspapers and even on the internet (hotmail). McDonalds also promote long term vouchers to its customers which last about at end of the year; this differentiates McDonalds from its competitors because they are the only fast food business who promotes long term vouchers. These long term vouchers are given in busy places to attract more customers. McDonalds keep ahead of competition by using cheap policies of pricing to suit the segment they have targeted.
It is effective because McDonalds is able to explore its opportunities in the market. For example if McDonalds is experiencing good growth in the market they would have the ability to develop its breakfast menu to attract potential customers who are likely to visit McDonalds before work. This will increase the customer base of McDonalds and customers are not likely to switch to competitors. Keeping ahead in competition enables McDonalds to update its brand by making their outlets look more modern and welcoming.
Keeping ahead in competition helps McDonalds to target new markets which may have a positive impact on future profits. McDonalds can also expand their offers in order to attract more customers and this again increases customer base because customers are not likely to switch to competitors. McDonalds can look into the future because McDonalds always plan for growth and to remain successful in the market and they could invest in new technology, following consumer trends in order to satisfy them.
Communicating effectively with customers: Communicating effectively with consumers relates to promotion which relates to other elements of the marketing mix. Without promotion a business would not be able to sell its products to its customers because there would be no place or price of promotion. Customers would not know anything about the business. Promotion influences customers to visit and purchase products from the business. The product has to be advertised to show its quality, features, packaging and brand name of the business.
The price of the product needs to be advertised in order to attract the customers. The place of where the product is being sold needs to be advertised because it shows how distinctive and the business brand looks. Communicating effectively with customers increases demand of a product and this leads to increase in sales. This makes it hard for competitors such as KFC and Burger King to compete with McDonalds and this is why McDonalds is successful because they are always thinking ahead.
McDonalds communicate effectively with its customers through promotion and their promotion is very effective because it creates awareness of McDonalds products. McDonalds have already built a reputation under the brand name and it is growing more respectable across the globe. For example with the McDonalds Yorkie McFlurry advert, McDonalds worked with Cadbury and Nestle and they are both leaders in the market. This shows that McDonalds its brand of the confectionary to influence the concept for its McFlurrys. Communicating with customers effectively makes McDonalds business and products look more distinctive.
McDonalds are able to compare strategies that may have worked in the past to increase customers attention and getting their marketing more noticed. It strengthens McDonalds competitive position and the brand image itself because they can grow and expand. The marketing principles weaknesses are that McDonalds does not make good use of technology as they may feel like it is not necessarily to their business, however technology can also increase future profits because technology is used very often today by business and this makes them more successful and competitive in the market.
The marketing principles can be expensive as well and time consuming however McDonalds has the money to have these principles adapted to their business. Recommendations Understanding consumer needs: As population trends are changing all the time McDonalds could segment customer’s life cycle, so that they will be up to date with customer demands and meeting the requirements of what the market wants. This would allow McDonalds to spend less money overall because if they know a certain product is not going to sell in the future, they would simply get rid of it.
McDonalds would be able to have effective marketing campaigns. Keeping ahead in competition: McDonalds could introduce digital media kiosks for burning CDs, downloading mobile phone ring tones and printing photos for the young people segment. I believe McDonalds would benefit from this digital media kiosk as they will be attracting more younger people. This will differentiate McDonalds from its competitors and differentiation avoids customers from going to their competitors and this would also have a positive impact on future profits.
Communicating effectively with consumers: McDonalds could start newsletters via email for consumers who wish to sign up for it. The newsletter will give consumers information about new upcoming products that McDonalds will offer. Consumers who sign up for this newsletter would receive discounts for the new upcoming products. This will have a positive impact on McDonalds brand image because it gives McDonalds a higher chance of increase in sales and it will improve the customer retention of McDonalds. The information in the newsletters will help customers to understand McDonalds business more.
The newsletter could be another way of advertising and promoting new upcoming products and developments of current products. This will also get the message across of McDonalds. The newsletters will show the qualities and the value of McDonalds. It would also increase the brand loyalty of McDonalds because they will be known as a trusted brand. Newsletters are a low cost of promoting products; this will allow McDonalds to save additional money as well. That additional money could be used to develop its promotion techniques and this would also increase the communication between McDonalds and its customers.
McDonalds could set up pages on social networking sites for customers to join. McDonalds could add polls, discussions, and reviews about products they offer. The more McDonalds communicate with customers the more customers will feel attached to their products. Utilising new technology: McDonalds could start utilising new technology more by allowing customers to order online products; this would create an additional customer base for McDonalds and being ahead of their competitors such as Burger King, KFC and Subway.
McDonalds could have deals with mobile phone networks because mobile phone networks can receive customers location by using the SAT Navigation. McDonalds could use this method to promote its new offers they offer. I believe this method would be effective because they would see an increase in their customer base and also they would be ahead of their competitors. Although the deal would cost McDonalds a lot of money but they can afford this additional method that may have a positive impact on the business. McDonalds would be likely to see a large increase of sales.