Marketing Mix + McDonald's Case Study

Marketing is a strategy available to all businesses which aims to design, promote and reaffirm their product in the mind of the consumer. The role of marketing is vital in achieving a competitive advantage as it can determine whether a product stands out to consumers within a competitive market. McDonalds uses marketing mix and target market in order to sustain their position in the market. Price is an essential part of marketing and falls within the category of the marketing mix. Price is the money value of which sellers are willing to accept and consumers are willing to pay for a product on the market. Price can be detrimental in gaining a competitive advantage as it determines whether the consumer will purchase the product. Brands use 3 main pricing methods including competition based pricing, marketing pricing and skim pricing to determine the final cost of their product. Brands also use multiple pricing strategies behind these methods in order to persuade a customer to purchase their product. McDonalds uses the pricing strategy of loss leaders to gain competitive advantage. They do this by setting the price of their output below the price of producing the product. With the introduction of the loose change menu, McDonalds has successfully implemented the loss leaders strategy as it persuades customers to purchase a cheaper item such as the $1 frozen coke with a more expensive item such as nuggets. The loose change menu ultimately aims to provide affordable options for customers of all backgrounds, therefore satisfying a wide range of customers’ needs. This gains consumer recognition, further increasing income and therefore leading to a competitive advantage against other fast food chains. Through the use of pricing methods and strategies, all businesses can meet their goal of reducing cost, maximising profits, increasing efficiency and gaining customer recognition to achieve a competitive advantage. Promotion is another vital aspect of marketing that falls under the category of marketing mix. Promotion aims to reaffirm the businesses product in the mind of the consumer through reminding, persuading and informing them of the product on offer in the market. Businesses use many promotion strategies including personal selling, publicity, sales promotion and advertising to gain a competitive advantage in the highly competitive market. McDonalds uses promotion strategies to persuade customers to purchase their products, however in some cases, this has taken a turn for McDonalds. McDonalds has received negative publicity (free news articles and stories for the public) which have completely tarnished their reputation. McDonalds received negative publicity from the series ‘Super Size Me’, the ‘McLibel’ case and also the China Meat Scandal. All of these instances have put McDonalds in a threatening position, leading to a competitive disadvantage as it pushed customers away from purchasing their products. However, through positive advertising, sales promotion and publicity, McDonalds has been able to bounce back and regain a competitive advantage. This has been achieved through strategic TV and radio advertising, discounts such as ‘30 days 30 deals’ and charitable work such as ‘Ronald McDonald House’. The implementation of charity also links to McDonalds ethical business behaviours, further impacting their success of a competitive advantage. Therefore, through the use of promotional strategies, businesses’ can ultimately persuade and remind loyal or future customers to purchase their products, resulting in the achievement of business goals and overall gaining and competitive advantage. Product is also part of the marketing mix and is the output (good, service, or idea) of which a business displays on the market. It aims to meet the needs of customers' expectations and overall generate income for a business. McDonald has used geographical location as a product strategy as they have expanded their menu depending on cultural and religious factors. This strategy has allowed McDonalds to expand their target market, ultimately gaining attention of a variety of customers and therefore generating increasing income globally. McDonalds also uses contraction to remove products that aren't successful. McDonald's decided to remove the choc top from the menu as it was not generating a continuous income. Instead, they focused on the improvement of quality and rejuvenation of other popular ice cream products such as the McFlurry. Through using operational analysis and data of their successful and unsuccessful products, McDonalds has been able to attract many customers as well as reducing manufacturing costs in order to sustain and generate greater income, ultimately leading to a competitive advantage. Through the use of marketing mix; promotion, price, product and place, businesses are able to broaden their target market and generate greater profitability, leading to a competitive advantage in the market. Through using pricing strategies such as loss leaders, promotion strategies such as advertising and sales promotions, and product strategies such as contraction, rejuvenation and geographic location, mcDonalds has successfully expanded their target market. This expansion has led to the achievement of business goals such as reducing costs, generating income and satisfying a broad range of customers, therefore resulting in a competitive advantage against similar businesses within the market.