Discuss about the Strategic Marketing Management Skills For Mcdonald’s Company.
The aim of the report is to present the understanding and skills of the company that helps them in supporting the process of strategic marketing management. The senior manager of McDonald’s company is looking to enhance their marketing competitiveness in the fast food industry. The rise in the competitiveness of the company is possible with the help of the evaluation of the market environment that can influence the working of the company in the Malaysia market. Along with this, the analysis of the segmentation, targeting and positioning strategy which helps the company in analysing the customers of the company to whom they offer their services. The factors that influence the working of McDonald’s can be resolved with the help of the marketing mix strategies which is linked with the mission and vision of the company. After implementing the strategies the company should evaluate and monitor its effectiveness which is essential for analysing the effect of strategies. In addition, the company need to understand the consumer behaviour towards the purchase of company’s product.
McDonald’s is world’s leading quick service restaurant chain with more than 36,000 restaurants across the world. This is the reason the company has a strong customer base of 69 million customers who visit on daily in over 100 countries. The company came into existence in the year 1955 and was founded by 1955. In Malaysia, market the company is serving to more than 13.5 million customers within a month (McDonald’s, 2018). Along with this, it provides the employment to more than 12,000 employees in its restaurants across the nation providing training, development and career (McDonald’s, 2018). The major product that the company offer is Burger and along with this the company has started offering cold drinks, desserts, breakfast and many others.
Mission: – Mission of the company is to be making the customer favourite place and a way to eat. Along with this, the company promise to simple easy enjoyment to every customer on every visit.
Value: – Company inspires the people within the company who delight every customer with the unmatched quality, service, cleanliness and the value every time (McDonald’s, 2018).
PESTLE analysis is a well known analytical tool that is used by the company for strategic business planning. The managers of the company analyse and monitor the macro-environmental factors that directly lead to the impact on an organisation (Chernev, 2018). McDonald’s manager makes use of this analysis to analyse the external factors that can affect the working Malaysia market.
The political analysis includes government intervention in terms of the rules and regulations (Kotler, 2015). In the Malaysia market, it has been observed that there is stability in the politics and this is the only reason due to which the numbers of investors are increasing. Along with this, the government offer the greater portion of foreign equity ownership. These government interventions make Malaysia an appropriate tourist place due to which the numbers of visitors are increasing which leads to the opportunity for the company as they will be able to get a number of customers. Moreover, they can take the support of political interventions for further expansion of a business.
The economic factors include the influence of GDP, purchasing power, employment and many other factors on a company. The economic freedom score of Malaysia is 74.5 which make the economy the 22nd freest in the year 2018 Index. Considering the report of the HSBC, the economy of the country will rise and the country will become the world’s 21st largest economy by the year 2050 with the expected GDP of $1.2 trillion (Economic Freedom, 2018). The GDP of Malaysia of the country is $1.002 trillion (PPP 2018 est.) and it is expected to rise. The rise in the GDP of country results in the rise in purchasing power of country which is one of the advantages for McDonald’s. Along with this, this rise brings the improvement and development in the nation which helps the company to grow and expand their business (The World Bank, 2018). The rise in GDP affects positively to the company and this is the reason McDonald’s is able to manage the sales and profit appropriately.
The social factors are mainly related to the pattern and trend of demand which might take place due to nationality, culture or religions within the country. Malaysia is also a multi-religion and multi-culture country which includes 50% of the population who believe in Islam. McDonald’s understand their culture of Halal and their presence which is more towards non-veg products instead of veg due to which they are very strict while making the purchase of chicken, beef and many other products (McDonald’s, 2018). The culture of Malaysia is one of the major reason due to which the company brought the changes in menu and products along with this while the purchase of ingredients also they ensure that they implement the same culture.
This factor includes the influence on industry or company with the advancement and growth of technology within the country. Malaysia is becoming more and more technology-oriented and the presences of companies are increasing due to effective use of social media. McDonald’s Malaysia has its websites, strong Facebook network, presence on social media and effective online promotion which is possible with the effective use of social media. Though, the competitors of the company are giving tough challenges to McDonald’s in Malaysia market in terms of the delivery service (Vrontis & Pavlou, 2008). The company is not able to extend the reach of delivery of products till Kuala Lumpur areas. This shows that the company should adopt technology use which will help them in enhancing sales, revenue and accessibility in Malaysia.
The legal factors include the rules and regulations related to the operations that are must to be followed by companies within the market. In Malaysia market, McDonald’s ensure that they are meeting the obligations and following the rules and regulations. The company follow the minimum wage obligation and also provide less working hours shit to students. In addition, the company is bound by the Syariat law which states all the food served to the customers in non-veg must be Halal. This shows that they follow the laws and regulations present within the country.
The environment is considered as one of the most important element in the society where they are performing the operations. The company’s consumption of the beef, chicken and other products are increasing due to which they are in critics in the market of Malaysia. Though, the company is able to its corporate social responsibility (Yek, 2014). The company ensure that they conduct their business in terms of honesty, fairness and integrity. Along with this, the company ensure that they support the sustainability of the business.
Porter’s five forces framework include the analysis of industry where the company operates its business (Hollensen, 2015). McDonald’s Malaysia applies this tool which helps them in the analysis the competitive present within the industry and how this competitiveness affects the working of the company.
(Source: Dudovskiy, 2016)
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Bargaining power of suppliers- Moderate |
The suppliers of the company play a vital role in the company. McDonald’s company is highly dependent on the quality of ingredients that are offered by the suppliers. The company has a numerous number of suppliers due to which they can face the rise in price or decrease in quality of products. In the market of Malaysia, McDonald’s face moderate bargaining power of suppliers. |
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Bargaining power of buyers – Low |
The buyers in the market of Malaysia play a vital role in shaping the demand and price of products. The buyers of McDonald’s maintain a high bargaining power because this is the way through which they can try to reduce the substitute cost of customers (Ziaie, Mohamed, Ratnasingam, Noor, & Saleh, 2012). In addition, the company can’t keep the high prices for their products as they want to make the product affordable for the customers. |
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The threat of substitute of products- High |
The threat of substitute products is high for McDonald’s in Malaysia because the competitors are offering their products in different outlets which might make the customer substitute. Moreover, these outlets of competitors are open 24 hours which allow the customer to substitute products offered by McDonald’s (McDonald’s, 2018). |
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The threat of new entrants- Moderate |
In the Malaysia market, the threat of new entrants is moderate because it needs sufficient amount of capital for expansion. Though, on the other side, the fast food industry is booming due to which new competitors are planning to enter the market with product diversification. This is the reason McDonald’s face the competition from new entrant Carl’s Junior and Wendy’s which are still considered as new in the market of Malaysia (Downie, 2018). |
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Rivalry among the existing firms- High |
The rivalry among the competitors is high within the market because there are other companies who offer fast food at the similar price with the best service. The competitors of the company include KFC and A&W that are currently present in the market of Malaysia. KFC is a major competitor of the company as it is extending its range of products which include fried chickens to burgers with snacks like potato wedges and salad (Downie, 2018). |
Market segmentation
Marketing segmentation is the process in which the company divides the market into the potential customers among the various groups and segment (Wilson and Gilligan, 2012). McDonald’s company segment the customer in Malaysia market which helps them in identifying the customers to whom they can serve their products. The segments which are done by the company are given below: –
Demographic segmentation: – This segmentation is done on the basis of age, income, occupation and other. McDonald’s company targets children, youth and working adults at the age of Below 13 years, 13-24 years and over 24 years with the middle and higher income group. The occupation of the customer includes students, self-employed, full-timers and professional people (McDonald’s, 2018).
Geographic segmentation: – This market segment includes the segmentation on the basis of region or locality. In the Malaysia market, the company segment capital and regional cities with this they open their most of outlets in the inner city.
Psychographic segmentation: – This market segment different from the customers on the basis of lifestyle and social class (Armstrong, Adam, Denize & Kotler, 2014). The company consider both middle and high social class people who follow the leisure, fast-moving and convenient.
Behavioural segmentation: – Company segment the customers on the basis of behaviour and usage of products served by customers. McDonald’s company are liked by the customers and this is the reason customers consume those products.
The market segmentation helps the company in identifying the most profitable target segment which seems to be the working adults market (Grant, 2016). Though, the company make use of multi-segment targeting strategy. In this targeting strategy, the company targets two or more segments so that they can increase the sales and revenue. Along with this, the strategy leads to customer satisfaction which accomplishes the mission and vision of the company. The primary target includes the people with age of 13-24 years and above. Moreover, these people are sensitive and conscious for their lifestyles and trends in the current culture. These target segments are working class due to which they can manage their salary and can opt for the product according to their preference (David, 2011). In addition, generally people have the eating habits of the fast food because of the work life and this segment remain loyal with the company.
The positioning of the company is making the place in the mind of the customers present in the market. The perceptual map helps to identify the underlying dimension that provides the customer to differentiate perpetuation towards the customers. The positioning of the company is done on the basis of price and service of the company.
The map reflects that the company lies in average quality with middle range price. Along with this, the map reflects the positioning of Wendy’s positioning in which the company is of low quality but high prices. The company need to bring the improvement in the positioning of the company in Malaysia market.
The marketing mix is referred to as the set of tactics and actions that helps the company to promote the products in the market (Marketing Mix, 2018). McDonald’s make use of these strategies not only to form the position but also to achieve the mission of the company.
McDonald’s is recognised brand due to which their products are recognised in the market. The company serve the products in Malaysia considering the cultural factors which affect the demand of the customers present in the market. The core product of the company is its healthy burgers with different stuffing. The company ensure that food is halal and served after considering the taste of the local people. Along with this, they also bring the change in food and their taste with the festivals and occasions. McDonald’s ensure that their products are healthy though they affect the taste of people For example; saturated oil which is replaced with Trans-fat oils.
McDonald’s have price reduction comparing it with the other competitors that are burger king and KFC. In Malaysia market, the company make use of the make use of competitive pricing strategy in which they keep the price of products after considering the price of competitors products. Along with this, McDonald’s have Value Mc saves and Mc Value Meal which includes diverse food products with competitive pricing (McDonald’s, 2018). Similarly, KFC does have their value meal which is known as Jom Jimat Everyday and other brands also have some sort of fast food offers. This shows that the competition in the market affect the pricing strategy of the company due to which they follow the competitive pricing strategy within the market.
The place is the location which is one of the most important elements for the company. McDonalds Malaysia needs to take the decision for the availability of outlets. In Malaysia, the company open their store outlets in retail areas which include shopping malls due to the trend of all Malaysia as they love to shop in malls (Chernev, 2018). Moreover, the company want to make their products easily accessible not only in the market of urban areas but also in rural areas. The company has the stores in a location like local gas station such as PETRONAS Mesra. In these locations, company serve very popular and required products which help the customers to meet their needs in the market.
Promotion of the product or service is one of the major elements that support the company to achieve the mission and objective of the company. The company make use of different tools to promote their products in Malaysia market. Some of them are discussed below: –
The company need to analyse the behaviour of the buyers while operating the business activities. The buyers of the company influence the working of the company because the purchasing decision of buyers gets affected due to some of the factors. The analysis of the factors that bring the change in consumer decision for buying the products are discussed below: –
All these factors make the company lead to customer satisfaction because one D-Sat customer might affect the decision of 10 new customers.
Conclusion
In the end, it can be concluded that McDonald’s is effective and efficient in managing their business operations in the market of Malaysia. The report is based on the strategic marketing planning of company which shows how the company face the influence of different external factors. These factors are discussed with the help of the PESTLE analysis framework. Along with this, this can be said that the company faced tough competition in the market which is evaluated by Porter’s five forces. Considering the analysis, the analysis of the strategies is done with the help of marketing mix strategy. All these strategies help the company to perform their operations within the market. In the end, it also reflects how the company understand the behaviour of the population of Malaysia and their strategic planning for the same.
References
Armstrong, G., Adam, S., Denize, S. & Kotler, P. (2014). Principles of marketing. 6th edition. Welbourne: Pearson Australia.
Boehe, D.M. and Cruz, L.B. (2010). Corporate social responsibility, product differentiation strategy and export performance. Journal of Business ethics, 91(2), pp.325-346.
Chernev, A. (2018). Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011). Strategic management: Concepts and cases. Pearson/Prentice Hall.
Downie, R. (2018). Who Are McDonald’s Main Competitors?. Retrieved from: https://www.investopedia.com/articles/markets/102815/who-are-mcdonalds-main-competitors.asp
Dudovskiy, J. (2016). McDonalds Porter’s Five Forces Analysis. Retrieved from: https://research-methodology.net/mcdonalds-porters-five-forces-analysis/
Economic Freedom. (2018). Malaysia. Retrieved from: https://www.heritage.org/index/country/malaysia
Grant, R.M. (2016). Contemporary strategy analysis: Text and cases edition. New Jersey: John Wiley & Sons.
Hollensen, S. (2015). Marketing management: A relationship approach. India: Pearson Education.
Kotler, P. (2015). Framework for marketing management. India: Pearson Education.
Marketing Mix. (2018). The Marketing Mix 4P’s and 7P’s Explained. Retrieved from: https://marketingmix.co.uk/
McDonald’s. (2018). About Us. Retrieved from: https://www.mcdonalds.com.my/company
McDonald’s. (2018). History. Retrieved from: https://www.mcdonalds.com.my/company/history
McDonald’s. (2018). Mission and Vission. Retrieved from: https://www.mcdonalds.com.my/company/mission-vision
McDonald’s. (2018). Our Halal Commitment. Retrieved from: https://www.mcdonalds.com.my/halal
McDonald’s. (2018). Promotions. Retrieved from: https://www.mcdonalds.com.my/promotion
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The World Bank. (2018). Overview. Retrieved from: https://www.worldbank.org/en/country/malaysia/overview
Vrontis, D., & Pavlou, P. (2008). The external environment and its effect on strategic marketing planning: a case study for McDonald’s. Journal for International Business and Entrepreneurship Development, 3(3-4), 289-307.
Wilson, R.M. and Gilligan, C. (2012). Strategic marketing management. New York: Routledge.
Yek, H. K. (2014). The Effects of Macroenvironment and Sociocultural Factors on the Marketing Strategy of Retailers-A Case Study on AS Watson Pharmaceutical Stores in Malaysia and Taiwan.
Ziaie, M., Mohamed, S., Ratnasingam, J., Noor, A., & Saleh, R. (2012). Unsteadiness of the resource-based competitive advantage in absence of competitive strategy: Lessons from the Malaysian wooden furniture industry. Journal of Applied Sciences(Faisalabad), 12(2), 113-124.
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