marketing process Flashcards
‘situational analysis – SWOT’ - case study
McDonalds Strengths: - Goodwill/global brand - Large market share - Technology Weaknesses: - Lack of central control over daily operations - perception of unhealthiness Threats: - Competitors like Hungry Jacks or Oporto - Negative publicity Opportunities: - Utilise digital media advertising - Expansion into developing countries
‘situational analysis – product life cycle’ - case study
McDonald’s French Fries are a good example of a product’s life cycle
- Introduction: french fries replaced packaged potato chips in the 1940s
- Growth: they became more popular between 1940-1990 as McDonalds expanded globally
- Maturity: in 1990, there was a campaign against the oil used in the fries as it contained beef tallow, which was unhealthy. McDonalds changed their recipe to not include beef tallow and this caused resistance from customers as they liked previous taste better
McDonald’s french fries haven’t reached decline phase yet as they keep changing the recipes and adding new variety worldwide - “loaded fries, twisted fries, cheesy fries”
market research - case study
McDonalds uses market research to gather information on the needs of their customers. This was traditionally done through surveys and questionnaires, however, recently, the introduction of various apps has allowed the business to get real-time data about what items are selling, at what time, where and to who. In some countries around the world, the business encouraged customer feedback via an online satisfaction form. This feedback from customers highlights areas of weakness of the business that may be causing decline in sales.
identifying target markets - case study
The overall target market of McDonalds includes everyone. However, specific characteristics of the business differentiates the customers as some are aimed at a specific group. For example, different products are sold in different countries and this segments customers using geographic and cultural factors. Or the vegetarian/vegan options for a specific target market
developing marketing strategies - case study
In March 2017, McDonald’s revealed a new global growth plan. This included:
- enhancing digital capabilities and the use of technology to elevate the customer experience
- redefining customer convenience through delivery
- elevating the customer experience to provide a more convenient, personalised and enjoyable visit
‘situational analysis – SWOT’ - description
Gives a clear indication of the business’ position compared with its competitors and analyses market conditions that it is operating in
Marketing plan should be modified to reflect the information in a situational analysis
A SWOT analysis:
- Strength (internal) - good reputation, motivated workforce, unique product, etc
- Weakness (internal) - poor image, old technology, outdated products, inefficient operations process etc.
- Opportunities (external) - the possibility for entering a new market, favourable economic conditions, little competition
- Threats (external) - new government law which might be passed or the actions of competitors
‘situational analysis – product life cycle’ - description
The product life cycle is a graphical interpretation that shows the four stages a product goes through. Depending on the stage, the business will adopt different marketing strategies.
Introduction Stage
Sales grow slowly and there are negative profits due to the heavy promotion
- Product: business establishes their brand and reliability
- Price: tends to be lower than competitor pricing in order to gain market foothold
- Promotion: used to communicate and educate potential buyers
- Place/Distribution: tends to be selective, allowing consumers to gradually form an acceptance of the product
Growth Stage
Heavy promotion prior has allowed for customer acceptance, leading to an increase of sales, market share, and products
- Product: quality is maintained and improvements and support services can be made
- Price: can be slightly increased or maintained due to increase demand and market share
- Promotion: business can promote its product to a wider audience
- Place/Distribution: distribution channels are increased due to increased popularity
Maturity Stage
Sales levels off and the market becomes saturated
- Product: the business will attempt to differentiate product features and packaging from their competitors
- Price: may need to be adjusted downwards to maintain market share
- Promotion: occasional promotion is needed to retain customers
- Place/Distribution: distribution incentives may be implemented
Decline Stage
Sales are falling and the business needs to consider product deletion
- Product: business can attempt to implement some improvements, or sell the product to another business
- Price: heavily discounted to sell remaining stock
- Promotion: this is discontinued
- Place/Distribution: distribution channels are heavily reduced and only offered to the local segment of the market
market research - description
Market research is the process of systematically collecting, recording and analysing information that is needed in decision making, to minimise the risk of failure of the market through the analysis of the needs and wants of consumers.
Steps in the market research process
- Determining information needs - working out what information is needed to make the decision
- Collecting the data from primary and secondary sources
- Data analysis and interpretation
establishing market objectives - description
Marketing objectives are realistic and measurable goals that a business wants to achieve through a marketing plan (maccas uses customer-centric strategy)
3 common marketing objectives include:
Increasing Market Share
- Market share: refers to the business’ share of the total industry sales for a particular product
- Increasing market share is important because small market gains can translate into large profits
Expanding the Product Mix
- The product mix refers the total range of products offered by the business
- Increasing the product mix of a business will increase the profits of a business in the long term however, a business needs to understand the customer’s needs before developing a range as the same product mix does not remain effective for long
Maximising Customer Service
- Maximising customer service → improved customer satisfaction → positive reaction from customers about product → possible repeat purchases → increased sales → increased profits
identifying target markets - description
Having a target market can maximise profitability as it better satisfies the need and wants of that segment
Businesses can choose from 3 approaches when finding a target market:
- Mass marketing: targeting a large range of customers and a single set of marketing strategies used for the whole market
- Market segmentation - dividing the total market into groups of people where each group shares characteristics. Uses a marketing plan satisfying the wants and needs of a relatively uniform group.
- Niche Marketing - Marketing the business products to a narrowly selected target market segment.
Benefits of identifying target markets
- Uses of marketing resources more efficiently
- Promotional material more relevant to customers’ needs and preference
- Better understanding of the consumer buying behaviour
developing marketing strategies - description
For a business to achieve its objectives, they need to develop marketing strategies which are called the marketing mix and consist of 4 types of market strategies, product, price, promotion and place/distribution
- Product: the business needs to determine branding, packaging and product quality. A combination of these features helps satisfy the needs and wants of the consumer and to attract customers and improve customer retention
- Price: the amount of money a customer is willing to offer in exchange for a product. The business aims to select the correct price to keep competitive while maintaining a steady profit of margin.
- Promotion: to inform, persuade and remind customers about its products. Businesses need to develop promotion strategies where the potential benefit exceeds the costs as it can be very expensive.
- Place/distribution: deals with how the business will get its product to the customer. The business also needs to consider distribution issues concerning transport, warehousing and inventory.
