Marketing Concepts Applied In McDonald’s Singapore Analysis

Marketing Mix of McDonald’s

In all around the world there are different companies are facing diverse kind of challenges. This problem even gets bigger for multinational organisations. In such an environment it has become crucial for the firms to manage all its challenges so as to strengthen their position in the market. It is seen that companies are making strategies on the basis of the challenges they are facing in any specific market. Most of the organisations are making strategies based on the contingent approach which checks the situations and then strategies are applied.  Marketing mix and concepts such as total product and solution offering along with commoditisation becomes very much essential in gaining success. Experimental marketing, customer relations and experience management plays a very crucial role in that. Since most of the business has taken the internet route hence use of Internet in the marketing campaign has become very much crucial. Cost structure and pricing are very much essential part of the modern day business. In this regards the role of the branding is also very much crucial. Along with this company should also have to focus on sustainability and stakeholders associated with it.

McDonalds is the world’s largest food chain restaurants from USA. The same is the case with McDonald’s Singapore which is one of the biggest in the Singapore food industry. This report analyses different concepts of marketing that is applied in McDonalds Singapore such as P’s and C’s of marketing, total product and solution along with commoditisation, management of service element. It also describes customer relationship management, experience management and experimental marketing in regards to McDonalds Singapore. It also elaborates about use of internet as well as cost and pricing structure, use of branding and sustainability marketing principles.

There are people from the local and international market and hence marketing has to be done with special attention to the marketing concepts. Marketing mix plays a very crucial role in making the marketing effective. 7P’s of marketing mix are:

• Product: McDonald’s is having large variety of food and beverage items available at their stores. Products includes burgers, snacks, desserts and shakes, breakfast, fries, Hash Browns, Double quarter pounder with cheese, cheeseburger, Vanilla Cone, Hot Caramel Sundae, McCafe Chocolate Shake, Kiddie Cone etc. Non-veg items like Egg Muffin, Egg White Delight McMuffin etc. are also available in the menu (Meyer, 2015).
• Price: Firms use different types of pricing so as to attract all the segments they have targeted. Going rate, price discrimination, loss leader, cost plus pricing and value pricing are some of the pricing strategies used by McDonald Singapore. The overall objective made by the McDonalds for each individual restaurant is to provide food at competitive value driven price for the consumers. Since the franchisers of McDonalds are free to set their own price structure.
• Place: Distribution strategy used by McDonalds in Singapore is different from its parent country. They have a home delivery services in these countries. It is not open 24 hours a day. They also take use of intensive distribution meaning developing products available for sale through all possible distribution channels.
• Promotion: Its advertising techniques are highly very much unique and notable. This restaurant takes use of newspapers, television, internet, magazines and other types of media so as to interact with their consumers. In recent years, McDonald Singapore has mostly focused on the digital marketing mediums for their promotions (Talpau and Boscor, 2011). Some of the highlighted promotional techniques are distributing coupons to the customers where regular consumers get eligible for free cup of tea or coffee.
• Process: Process is understood as set of activities that is done in an organisation for achieving their goals. A complete transparency is maintained at the McDonald’s units where every customer has a right to check out the way in which their food is being prepared. With effective staffing and fast customer response service they are able to provide services to the customers at very faster rate.
• People: There are large numbers of people working at McDonalds in Singapore. These are all highly trained professionals who are capable of delivering the food at quality that is prescribed in its quality manual. Their workers greet the customers in an appropriate manner. Company also spends a lot of money on their training.
• Physical evidence: They have been delivering their products and services as per the manner they have promised to their customers (Yeu, et. al 2012). This is the major reason why they have attracted large numbers of customers over the years. Quality, cleanliness and hygiene have been their major criteria for business.

In terms of marketing the 4c’s are also very much essential. The four c’s for McDonalds are as follows:

• Consumer value: They value their customers in an appropriate manner. Due to this they conduct research so as to find out the needs and demands of the market and hence they create product and services accordingly.
• Cost: They have considered all the costs included in client’s satisfaction. According to the needs of the consumers, they are offering products in different price ranges so as to attract people from all sections of the society.
• Convenience: It is easier for the consumers to avail their products hence in terms of convenience they are on the higher side. In Singapore purchase can be done in both the ways i.e. both online and offline mediums.
• Communication: This is one of the most essential parts in the modern day marketing is communication as it helps in building the image of firm.  This firm is giving lot of their time in dealing with the problems related to communication especially with the clients (Gensler, et al. 2015). A proper regional training is being provided to the employees so that effective communicational environment is maintained within the firm.

Marketing mix is an essential part of the modern day marketing. In this regards both P’s and C’s have to manage in an appropriate manner. By involving all the stakeholders into the decision making process, a company will be able to improve the c’s of marketing.

Commoditisation refers to process whereby competition removes differentiation in products hence leading to creation of market having price-based competition. In McDonalds commoditisation is maintained in an appropriate manner as they do not have different types of products when compared with competitors rather they lead their customers in terms of the prices at which different products are available at the firm (Paul and Roy, 2014). They are providing products at such reasonable cost that it dwarfs all other purchasing factors.

7p’s of marketing

McDonalds can improve its low cost pricing strategy by reducing the cost of franchising or bringing innovation in the company’s portfolio. These innovations can also be in terms of the ways in which different processes are conducted within the firm.

McDonalds does not offer many products from different food segments. Numbers of products are 145 only. These products are capable of providing all the type of solution that is demanded by the company. All the products made in the organisation are consumable and it is as per the company has promised to its customers. In the management of Total Product and Solution offering, McDonald’s has been continuously adding to its product range. Due to this, innovation has become the major part of the business (Montgomery, et al. 2012). Total product and solution offering is also relatable to the business that is provided through online mediums. All its products are marketed in such a manner that it creates a positive impact on the minds of the people and the products are also designed accordingly. Total product and solution offering is enhanced within the organisation by the help of combined efforts done by all the stakeholders within the firm.

Managing service element has been a tedious job for the organisations. Service elements are considered as an optional unbundled feature that is associated with making the arrangements for serving. They are providing the best of services to the customers. For which they had to take effective measures to manage their service element. In this regards the most crucial role is played by the technology. They have used different types of technology so as to improve the services provided at the workplace.  In terms of managing the service element, they have a highly skilled workforce that is capable of dealing with different types of situations (Al Badi, 2015). Their workforce is highly skilled and trained which adds value to the service element that is used within the organisation. There are people that are from the local and international markets working at the McDonalds. Their experiences add to the company’s way of doing business.

Regular trainings are being provided to the employees based on their requirements. These requirements is analysed based on both company’s plan for its future growth and changing customer demands. Quality which is one of the major service elements in any industry has a role in improving the sales of the company and having edge over the rivals. McDonalds at each step of its different processes maintains a set of activities that helps them in maintaining their quality. Quality becomes more important in the case of services as it has a direct relation with the quality of the output that will be produced in the company.

4’c of marketing

Along with this there are many risks attached with the business. These risks have to be evaluated on regular basis and hence react with a plan so as to mitigate plans accordingly. Cleanliness and sanitisation is taken proper care so that no such problems reduce the quality of the services (Akaka, Vargo and Lusch, 2013). This can be improved by the help of setting service quality parameters. These parameters need to be designed seeking the benefits that organisation aims to achieve.  

This is the form of the marketing that is gaining trends in the Singapore and other markets. This has a strong influence on the minds of the consumers. Experiential marketing involves marketing services and products on the basis of their experiences. It engages people to create an emotional attachment with the products and services. McDonalds do it by the help of guerrilla marketing, live marketing, event marketing, on-ground marketing. This is done with some kinds of events or special events (Wood, 2012). The franchises of McDonalds in Singapore do not only looks for customers as passive receiver of the messages rather they involve them in creating and producing marketing program. This is also done widely through the help of online sites especially the social media sites or through one-to-one interaction.

This is also done within McDonalds in a smarter way by reacting towards the people’s requirements. Experience management is basically considered as the practice of designing and reacting towards the consumer’s conversations so as to meet or stay ahead of the expectations of the consumers. It helps in increasing loyalty, advocacy and satisfaction of the consumers (Jie, 2012). At McDonalds there is high use of technology so as to manage the experience of the consumers. They continuously make process alterations so as to accomplish the targets.

Customer relation is one of the core concepts of modern day marketing and it aims to make more effective relation with the consumers. In order to maintain healthy customer relationship company apply different types of Initiatives such as localisation. For example they do not serve beef or port in India. They are highly active in the social activities which include child education, vaccination programs (Verma, Gupta and Nangia, 2014). They also help people from every section of the society so as to understand their product demands. Based on the data received from their customer, they often make changes in their menu. In order to maintain healthy customer relation, company use different types of plans.

Commoditisation and Total Product and Solution Offering

Every business is benefited from having an internet presence. Using the internet in marketing is more of a matter of commitment. Mc Donald can make use of the internet marketing and it comprises digital media to inform about products and lure people to purchase products and services. The internet is a vehicle of promotions, advertising, and public relations efforts. The internet should be used in the overall marketing plan of the Mc Donald. The ways to use the internet for marketing can be:

• Affiliate marketing: It is a type of performance-based marketing in which the company can reward one or more associates for each customer brought by associate’s own marketing efforts. It is a great way to sell without employing even a single person.
• Pay per click: Pay per click is used to direct traffic to the websites. The ad is clicked when the advertisers pay. It is a great way to get prevent seen by the people because the company will pay only for those who click the link. The company can be sure that it is only paying for the people who are interested in the purchases of the company. The tools like Google Adwords permits to research relevant keyboards to ensure that the company makes available the terms people are searching.
• Search engine optimization (SEO): The SEO can be sued to make business highly competitive. The SEO experts are capable of getting business on the top of the search engines. Mc Donald can create content which is pertinent to the keywords and phrases that is used by the customers. The Company can even check Google Adwords to view how people use specific phrases to make sure it benefits them.
• Video marketing: video marketing is one of the growing areas of online marketing. It is popular among the people who prefer to watching than reading. It offers enormous flexibility to the business. YouTube is the other popular search engine after Google. Mc Donald can freely host videos of food. Facebook also promotes videos to be uploaded on the timeline. The increasing number of viewers increases the popularity along with the increasing number of followers. Using videos has an extraordinary role to play in promoting products of the company.
• Social media marketing: social media marketing has great advantages as it is free to use and can be used by the company in front of ideal customers who spend time on social media. There are also some levels of the paid advertising which are helpful in reaching to the potential customers. It has been considered that the businesses do well on social media because they are social. Links, photographs, videos, and blogs are helpful in building relationships along with credibility and expertise.
• Content marketing: The good content helps with the SEO. Mc Donald can have a blog section on the website which should be updated on the regular basis. The content of the website offers knowledge regarding offerings of the company. The ways should be a lookout to increase the chance of the content being shared and seen by more people.
• Online advertising: online advertising is a better way to reach an audience. Online marketing is a marketing strategy which involves the use of the internet to deliver market messages to potential customers. The most advantage of the online advertising is that it target users from the demographic data like age, gender, level of education, income and marital status. It also browses preferences and social behaviour. It underpins various social advertising platforms and products.

The cost structure of the Mc Donald is localized than the globalized. Mc Donald has different pricing and cost structure for the different countries. Singapore is required to undergo a strict process for determining the price of the market. This process comprises:

Choosing price objectives

Defining demand

Approximating costs

Evaluating competitors’ costs, prices and offers

 Picking pricing method

Selecting the final price

The pricing objective of the company is to enhance market share. It also considers the price of the competitors for allowing to price products appropriately.  It also balances quality along with the value. Mc Donald also decides the price as per the life cycle of the products.

                                                       

                                                                                              (Source: Market realist, 2013)

In the cost structure of the Mc Donald, majorly considers a purchase, wage, marketing, rent and utility, depreciation and others (Market realist, 2013). All these factors have a role in the pricing and cost structure of the Mc Donald. The raw material is being the largest component which is followed by the labor.

Mc Donald mainly makes use of the three generic pricing strategies like focus, differentiation and cost leadership. The company has been successful in employing cost leadership marketing strategy by making available fast food at low prices. The prices of the company have been kept low by:

Hiring and training inexpert employees instead of the trained chefs

Hiring only a few trained managers

The pricing strategy of the Mc Donald comprises price bundling along with the psychological pricing. The brand offers meals and other product bundles for a discount in the price bundling (Fast Food, 2018). On the other side, Mc Donald uses prices which appear to be suggestively more affordable instead of passing it off to the nearest dollar. The company often makes use of the price bundling in order to encourage customers to purchase more products.

Managing the Service Element

The company is itself imprecise about its pricing strategy. It understands the perceived value of the customers which is an important determinant in the price variation. It is also realized that using low price as a marketing tool can promise customers as a product of conceded quality. Besides, the competitors of the company can even count in the price war resulting profit margins reduced without enhancing sales.  The pricing and cost structure of the Mc Donald implements cost leadership marketing strategy successfully. Its main objective is to enhance market share. Arriving at a pricing decision is the outcome of evaluating demand, costs, product lifecycle, and competitor pricing. It even balances quality with the value.

The branding is a marketing practice which unveils in creating name, logo and the overall design. It helps to differentiate product and services from the competitors. It creates consumer preference for the offerings of the company. It is helpful in generating revenues and market share. It even expands the company’s estimated worth. Mc Donald is ranked sixth as the top brand. It is one of the most visited restaurants and is successful in branding success globally. The comprehensive market research and segmentation are the main reason for the success of the Mc Donald in the restaurant business (Kowitt, 2012). It is imitated in the offerings of the company like drinks, burgers, and fries as it varies as per the eating habits of the people centered on the demographics. The company caters to the people of different cultures and consider their differences. The franchises are even given on the authority to prepare menus as per the food habits and interest of the local people. Other than the different menus, ambiance, experiences and color palettes are alike around the globe. If it is talked about the color palettes then the company chooses red and yellow which is known to encourage hunger in human beings. It comprises a clever branding. The branding takes time along with the patience. It demands entire attention and firm commitment. The company promotes branding by keeping memorable and exciting advertisements. The slogan of the company ‘I’m loving it’ become prize game and marketing technique. Mc Donald always makes sure that it stays consistent with the promotions (Samsudin, et al. 2011). It is to be believed that the branding strategy of the company is based on the uniformity and a person will always be in a situation to order the most iconic menu items like Big Mac. The brand has created its image by the greater choice, better value, and faster delivery.

Experiential Marketing, Experience Management and Customer Relation

Mc Donald is the world’s leading restaurant company. Using a scale for good by the company can be sustainable for the customers, producers, and the environment. It is the vision of the company to source food and packaging sustainably. The company addresses 3 Es of sustainability like ethics, environmental responsibility, and economic viability. The company makes sure that the food and packaging originate from sustainably managed land. It is called sustainable land management commitment (Prakash and Singh, 2011). Mc Donald extended its commitment to address all the three Es. The company is even assuring to reduce greenhouse gas emissions from its restaurants and offices. There are two environmental goals which company want to achieve by 2025. It wants to have 100% of its customer packaging come from the renewable and recycling sources and have the option of recycling in all of its restaurants. At present, 50% of the guest packaging comes from sustainable sources whereas just 10% of the restaurants are recycling. Such moves are being made by the company in response to the customer’s demand. The company desires to reduce wastage and have a positive impact on the community.

The TBL (Triple Bottom Line) is a grouping of economic affluence, environmental stewardship, and social responsibility. Mc Donald tries to enact and maintain a degree of corporate responsibility. It denotes to being a good citizen in the global community along with maintaining profit. There are some issues which have begun to become conspicuous in regard to the corporate responsibility. The company tries to be responsible for the promotion of sustainable farming methods. The company has even joined Unilever and Nestle in promising to shift to completely sustainable sourced palm oil. Because it is a source of greenhouse gases and also leads to a great deal of the negative outcomes. The environmental impact can be reduced by recycling wastes (RATHI, 2013). The economic impact can be reduced by being more sustainable and making profits. At last social impact can be reduced by including more salads and nutrition in the meals. The consumption of the whole wheat bread should be promoted.

The top stakeholders of the Mc Donald are its employees and customers. the stakeholder group of the company mainly comprises the following parties:

• Employees: The employees of the Mc Donald are the top stakeholders. The interest of these stakeholders comprises career development and fair compensation. The interests of the employees are also addressed by the training and development programs (Shakhshir, 2014). For instance, Hamburger University facilitates training for the personnel of the Mc Donald. The company also has global mobility policy in order to support leadership development.
• Customers: The interest of the customers comprises affordable and healthy food choices. The CSR initiatives of the company make sure affordability of the products through regulation and supply chain rationalization.
• Investors: The Company strives to fulfill the demands of the investors. The interest of the investors comprises profitability along with the growing revenues. Such concerns are addressed by the stable business operations (Coursaris, van Osch and Balogh, 2016). The launching of new products has a role in addressing such issues. The CSR of the company satisfies the interest of the investors.
• Communities: The community is addressed through community development and environmental programs. The company has sustainability and support programs for the community. The sourcing policy prioritizes sustainable production (Chan, 2012). The company has even a number of CSR programs for supporting community.

Conclusion

From the above based report, it can be concluded that marketing has become very much essential in the modern day marketing. Marketing mix such as 7p’s and 4C’s are properly managed in McDonald’s Singapore. They have been following commoditisation and total product & solution offering in an effective manner. Experiential marketing, experience management and customer relation is also to be managed within the organisation in an appropriate manner. Internet marketing is highly used within the organisation especially social media marketing is highly used by McDonalds. Cost structure of company is more localised than globalised. They have adopted the pricing strategy that is more on the lower side. Branding is used within the organisation so as to improve the image of the firm in front of their customers. Sustainability is their main focus and hence they have used triple bottom line structure. In this the role of the stakeholders becomes very much essential.

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