In this assignment I will explain the marketing techniques used by a given organisation and analyse how and why these techniques have been chosen. The marketing techniques I will talk about are SWOT and PESTLE analysis and also the Marketing Mix. The organisation I have chosen for the purpose of this assignment is McDonalds.
a) PESTLE analysis Marketers use PESTLE analysis to investigate the outside environment in which an organisation is operating. SWOT analysis A common approach by marketers is to use SWOT analysis to draw together all the evidence from the various analytical techniques used.
It is a way of producing a summary which then provides the basis for developing marketing objectives or aims and ultimately strategies or plans. Marketing mix The marketing mix provides an excellent framework for developing marketing plans. The marketing mix is considered to be made up of four parts price, place, product and promotion.
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Source: BTEC national business book 1, 2nd edition, etal David Dooley Now I will explain how marketing techniques have been used by McDonalds. PESTLE Political factors
McDonalds have used PESTLE analysis to identify ways in which their business is affected by the outside environment in which a business is operating. PESTLE helps McDonalds to identify the political policies such as the national minimum wage and the amount of tax McDonalds has to pay this can help to identify McDonalds profit and it's values. Economical factors Also McDonalds may look at the performance of their organisation and how it is affected by the economy in a good way or a bad way as all economies go through cycles of prosperity which means that McDonalds can identify the demand for their products etc. You may also be interested in Ansoff Matrix McDonalds
Social factors The social factor can help to identify the characteristics of the society this helps McDonalds to identify the people of the society's values and beliefs, this method also states information about size, age, gender and income levels and this can determine how the business prices their products and where to locate their stores as this contains key information about their target audience. Technological factors
Also read Burger King SWOT Analysis
The technological factor is nowadays affecting every organisation as the internet is becoming and increasingly popular way of buying and selling however McDonalds do not sell over the internet as they sell fast food however McDonalds do have a website where you can view all their products and you can find out information about their products and company history etc over the internet. Legal factors The legal factor constantly changes as the government is always introducing new laws as this can affect how their business is run e. g. the government may decide to make a law stating fast food company must clearly display their nutritional information on their menu so that they are of what their eating this means McDonalds has to adjust and react accordingly and comply. Environmental factors The environmental factor helps McDonalds to identify ways in which the organisation can become environmentally friendly such as using recycled paper bags and using solar machinery as people are becoming more concerned about the condition of our planet and big organisations like McDonalds are considered to be investing in the protection of the planet.
McDonalds used their strength factor to promote their products. Their brand is their strength as is recognized across almost every country. They use their strength because when their advertising a product it always has a McDonalds symbol nearby the picture and also when it is TV advert when the advert finishes they have the brand on the screen for five seconds and then a voice speaks out saying 'I'm loving it'.
McDonalds weakness is their product however they are trying to turn their weakness into strength as they are now starting to promote healthier foods such as fruit and salad etc also they are now starting to display nutritional information clearly on their menu's. Opportunity As McDonalds is criticized for the rising obesity levels they have turned this factor into opportunity and are now promoting healthy food and schools to eat healthily. Also McDonald's sponsor big sporting events which are an opportunity to end the criticism, they sponsor events such as world cup and Olympics.
McDonald's threat is that there is a lot of competition in the fast food industry which means that mangers need to be more innovative towards staff and make them feel motivated. Also more people are becoming Social aware and consumer groups encouraging balanced meals, 5 a day fruit and vegetables. Also the current economic climate means that people are not able to spend as much money as before this means that McDonalds may have to analyse prices and put some products on special offers as for the people who are becoming more socially aware in some meals in stead of chips their offering carrots and fruit bags.
Product McDonalds try to use a wide range of products to the potential customer in regards to how they wish to spend their money. In order to meet these new products over time and slowly got rid of the old products such as introducing new healthier options and slowly getting rid of the cheeseburgers. Pricing McDonalds uses the physiological pricing method as it's pricing strategy for the milk shake as this makes customers believe that as it does not roll on to the next digit the Mcflurry is cheaper for example large Mcflurry - 1. 59 medium Mcflurry - 1. 19 and small is 99p.
customers then believe that is the way to fool customers into buying their products as customers get fooled by the penny that makes a difference to the digits which makes it look as if the product is cheap. Promotion McDonalds use the promotion factor to introduce a new product into the market and get it familiar with customers for a couple of weeks. McDonalds promote their products by doing special offers and advertising new food on the TV and internet. Also McDonalds aim to make sure that you remember their product, service and brand through their promotional methods.
Place McDonalds use the place factor in order to get their product delivered to the end customer in the most convenient way. McDonalds do not place their business anywhere they place their business where they believe they will catch their target customer and their products can be delivered to their target customers which still has quality and value. Also read about factors affecting globalization
B) Analyze, using examples, why these techniques might have been chosen.
PESTLE helps the business to adapt to the market environment. And make changes according to the changes of the environment.
McDonalds use PESTLE to help adapt to the environment and comply with their rules and regulations. McDonalds use PESTLE analysis especially nowadays with politics as there is a lot of change to the working environment because of the current status of the economy as the government has decide to increase national minimum wage and therefore McDonalds have to comply. McDonalds also uses the economy factor to them notify what products are lowering in terms of demand and what marketing strategies could they use to bring that product back into the market.
SWOT involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. This factor is important to McDonalds as it helps them to identify what their strengths are and they can keep expanding on their strength and comply it with their weakness. They can also identify their weakness using this technique which is their product and always make amendments in order to become successful there are ways in which McDonalds can amend their weakness such as providing healthier option such as fruit in stead of nuggets etc.
S: McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales, with more than 31,000 restaurants serving burgers and fries in almost 120 countries. Sales, 2007 (11,4009 million), 5. 6% sales growth
W: McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales, with more than 31,000 restaurants serving burgers and fries in almost 120 countries. Sales, 2007 (11,4009 million), 5. 6% sales growth
O: Consolidation of retailers likely, so better locations for franchisees
T: Social changes - Government, consumer groups encouraging balanced meals, 5 a day fruit and vegetables
The marketing mix helps an organisation to identify generally the use and specification of the four P's describing the strategic position of a product in the marketplace as this it helps to identify the ingredients to a successful business as this determines the convenience of the distribution of an organisation where they should locate their business, what products are they aiming to sell according to their target audience and also how they should promote their products.
McDonalds promote their products by offering such products as buy one get one free. McDonalds promote their slow sellers in order to get it selling to customers and try to boost revenue of this product. Also they price their product according to their target audience's average budget. McDonalds locate their branches nearby shopping centre and on high streets as this is where their target audience is most likely to be situated. In all its markets McDonald's faces competition from other businesses.
Additionally, economic, legal and technological changes, social factors, the retail environment and many other elements affect McDonald's success in the market. Market research identifies these factors and anticipates how they will affect people's willingness to buy. As the economy and social attitudes change, so do buying patterns. McDonald's needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future.
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