Introduction to Marketing Planning
Marketing is considered as a management process that is responsible for anticipating, identifying and satisfying needs of customers in a profitable manner. It involve a procedure by which the corporation should determine their targets want, undertake research into the context of future desires of clients and fulfil such needs by organizing available resources in an adequate way. Here, the assignment is focusing on marketing planning required to reposition a brand successfully in the target market and attain customers as well as local administration positive preferences towards it. In the present case of McDonalds, it is facing less footfalls due to increasing concern of people towards health and reducing habits of eating fast food products. To response such negative preferences, the company is required to plan its marketing activities for repositioning its brand as fast food with vegetables ingredients among the target audience.
1.1 Role of marketing planning
An important role is played by marketing in business, as planning to reach potential buyers support in ensuring that individuals are aware about their service or product and they have chances to covert such awareness into paying consumers. The process of marketing planning serves as a written guide for organization to follow in order to promote their offerings. Moreover, all of the business aspects are integrate by marketing planning, ranging from how services and products are priced to company’s financials (Baker, 2001). Consequently, the particular planning brings together the top management as well as departmental heads of finance. Also, the marketing organisation plays a role of forecasting, as it needs a company to project outcomes of sales from all efforts of marketing. An operations department of firm uses sales estimations to build a schedule of production. These forecasts are uses by finance department to create budgets whereas the human resource department for planning staffing needs looks to forecasts of sales.
An effective plan of marketing takes a close look at products and services of company and compares it with competitor’s offerings in the marketplace. The marketing department should review product of an organization in terms of customer interest, quality and buyers response among other attributes. Such elements appreciation supports a corporation to improve existing offerings and develop new ones as the business pursue its objectives. Furthermore, the overall marketing plan should adequately consider the pricing position of organization for its offerings. Based on this, marketer compare pricing strategies followed by other companies in same industry and then develop best prices for their products or services. This pricing plan serves two purposes, first it enable the firm to strategically price itself in the market and secondly it support the organization in reaching its financial objectives (THE ROLE OF MARKETING, 2015).
1.2 Potential barriers to marketing planning
The following six are main barriers that can be faced by marketer of McDonalds while planning marketing activities for its successful repositioning:
Environmental barriers – The prevailing legal, social, political, ethical, technological and economic regulations plus norms, together creating the external environment for company and can pose major barriers to planning marketing activities by planning limitations in the manner the business regulate trade conduct and interacts with environment (Haynes, 2015).
Cultural barriers – It impedes marketing planning at times employees and managers instil lack of trust in planning or on the prerequisite of change. A company while thriving on bureaucratic culture, can underestimate the planning need or lose initiative to leverage an unanticipated favourable condition. Failing to comprehend the target customers cultural sensitivities leads to faulty plans of marketing, specifically in case of global marketing (Keyes, 2009).
Behavioural barriers – The workforce behavioural traits can influence the plan of marketing in a great manner. For example, a conservative team of marketing can prefer adopted time testes methods of marketing and caution that may bring steady growth plus modest returns, while the team filled with risk takers can experiment with innovative or aggressive strategies of marketing to increase market share on fast pace.
Process and systems – At times lack of information or data and ineffective system can impede greatly the plans of marketing. For example, lack of market survey can force the McDonalds marketing team to rely on guesswork for identifying the best approach to marketing for target audience (McDonald and et.al., 2000).
Cognitive barriers – Less skills or knowledge resulting in ineffectiveness very often ranks as an initial reasons for unsuccessful plus faulty marketing plans. Marketers without proper skills may fail to understand the markets, products, competitors and customers properly and make distorted, ineffective or faulty plans. Lack of knowledge can prevent the marketing team from undertaking an appropriate survey to determine consumer preferences or new trends to introduce marketing campaigns.
Right resources – The main barrier to marketing plan is limited resources, such as people, money and time. Cash crunches force the team to concentrate on alternatives available at less cost that invariably gives less money value. Lack of manpower to conduct the marketing operation has direct bearing on its extent and pace of work (McDonald, 2009).
1.3 Recommendations for overcoming the barriers to marketing planning
The plan of marketing is “a rational series of actions leading to setting of marketing goals and plan to accomplish them.” the marketing planning complication means that at time company embarks on it, they must anticipate to meet a range of attitudinal, process and corporate difficulties. In order to understand the obstacles effectively that create impact on company’s marketing plan, the McDonalds marketer should recognize online advantages, which produce best techniques and results, which are easy to exercise. Inside the plan, a methodological system must be creates for encouraging objectives and link them (Meldrum and McDonald, 2007). Moreover, the environment should be scanned carefully and information’s must be accepted the channels by a laying system that only allow follow up of relevant information. In addition to this, the marketer of many organizations get so tired with their daily webinars, online analysis and emails and not able to spotlight on designing effective strategies of marketing. Hence, the marketer should manage their time by confining access to social networks and emails. It leaves more time for generating information and content creation
2.1 Macro-environmental factors affecting the marketing activities of McDonald
Identification of the marketing environment is very important aspect of marketing planning to achieve organizational objectives. Macro-environmental factors affect the organization in a way that firm do not have control over them and they must have to respond according to the changes in those societal forces. These factor put many threats for the organization at the same time also form various opportunities (Oliver, 2007). The PESTLE framework is used to analyse macro-environmental factors of McDonald for the purpose of developing effective marketing strategies.
Political factors: This dimension include government bureaucracy, stability of government and policies for foreign market that influence various aspects of McDonald. The government departments for trade develop many regulations and policies that would determine how McDonald produce their offerings and how would they promote it. For example, in Germany comparative terms cannot be used while promoting products so McDonald must avoid “best” or “better” while advertising their products. Moreover, political background varies across countries, so global operations of the firm becomes complicated. For example, in some countries, local manufacturers are well protected by their government so launching its product via franchisee will face stiff resistance, therefore McDonald need to be ready to explore other opportunities like a joint venture
Economic factors: Consumer spending pattern and purchasing power are influenced by economic trends. For example during recession time, consumer spending potential decreases and thus price factor will become more crucial. McDonald should develop their pricing strategy as lower prices accordingly. Moreover, McDonald’s should also need to develop cost effective promotion tools in developing countries, to keep the final price as low as within the reach of majority of customers.
Technological factors: Technological developments allows opportunity to utilize various promotional tools like websites and television, for online and home shopping thus changing the pattern of product selling to consumers. Moreover, global operations of McDonald would heavily rely of effectively utilizing technology to keep their all franchisee at high quality standard (Root III, 2015).
Social factors: Social demographic factors like population density, age group, gender profile determines organizational strategies and marketing planning. The changing social trend allows children and youngster to have more freedom in determining the choice of food and place to eat, thus McDonald’s advertising strategy should target those people effectively. Cultural factors also have a large impact on planning the marketing strategy. For example, in Malaysia and Singapore McDonald changed the food preparation methods by slaughtering the beef as per Muslim law.t
Environmental factors: It is important to consider environmental factors for McDonald in deciding the food ingredients, for example temperature and humidity conditions for all location would not be the same so type and quality of products would be changed. Further, environmental friendly policies like using less plastic in packaging is also important factor to consider (Tallontire, Rentsendorj and Blowfield, 2001).
2.2 The potential opportunities arising from the macro-environmental analysis
Porter (1980) provided five factor framework that impact competitive opportunities for organizations.
Competitors within the same industry: The established presence of McDonald than its competitors like KFC provide good opportunity to the firm due to lower competition. Conversely, competition due to local players in some countries will provide opportunities for the firm to launch its competitive offerings.
Entry of new competitors: Established economy of scale for McDonald ensure high resistance for new entrants. They have wide distribution channels and authoritative access to raw materials, so investment cost would be very high for a new player.
Substitute products: McDonald’s burger offers high level of accessibility through multiple outlets and other substitute fast food products like pizza, fried chicken will found very hard to compete them.
Buyers bargaining power: McDonald has high control on its products type, place and price, so this threat is relatively very low.
Suppliers bargaining power: The size at which McDonald operates, suppliers find it very economical and are very interested to sustain their business with the organization. McDonald also provide various facilities to their supplier like training etc. to have high influence on them (Wong, 2010).
Constant environmental forces affects the firm’s position as stable and provide opportunity for the firm to expand its economy of scale as well as to sustain its competitive position in the market.
2.3 SMART marketing objectives based on the opportunities identified
Marketing objectives are essential for the firm to promote their products and services among potential customers. The key objective of McDonald is to reach their target of doing better than their rivals (Whalen and Boush, 2014). The SMART approach for setting marketing objectives help to ensure they are specific, measurable, achievable realistic and time bound. The marketing objectives of McDonald are:
- To prepare and serve quality fast food products in a fun and friendly environment with quick service;
- To provide its customer value for money;
- To maximize sales revenue and profits, thereby providing good return to investors and shareholders of the company;
- For franchisee, initial objective would be to make enough money in order to cover the costs of setting the franchisee within the first year;
- To retain its no 1 position in the fast food industry in terms of revenue and market share;
- To grow and expand their target market in global horizon;
To be a socially responsible company
- by letting local business-persons and people to manage and operate their franchisee outlet,
- by supporting charity events and other community activities,
- by offering fair career progression to their staff members,
- by investing more on training and development of their workers
3.1 Marketing strategies to support the achievement of stated objectives
For effective global operations, McDonald should implement cost effective strategies by bearing in mind following points:
- Should have significant investment in research and development;
- Implement substantial promotions;
- High level of efficiency in production and operational processes through continuous learning, training and innovation;
- Effective management of its franchisees;
- Efficient use of the distribution network;
- Employ low cost labour (Borgerson and Schroeder, 2002).
McDonald can have differentiation in its offering by producing higher quality products than its competitors and position its brand image accordingly. Moreover, McDonald’s competitive position in the market as well as market attractiveness are on strong side of the Mckinsey matrix, therefore company should have long term strategies to concentrate their efforts on continuing and improving their strengths elements. McDonald have dual advantages of first mover as well as huge market share, so their long term strategy should also include to capitalize on these advantage and to drive the market as per their preferences
The analysis of macro-environment suggest that on one hand McDonald should have strategy of reducing cost by considering standardized approach on the other hand they should also adapt to changing customer preferences. So a balance between the two will be required to grow and sustain in the long run. It is recommended to standardise their operations at international level where possible but local flexibility will also be crucial as per the demand of local market.
3.2 Marketing mix element of company
The following elements of McDonalds marketing mix can support it in achieving the defined strategies:
Product – The Company should attempt to provide a standardized service globally. Franchise can be best option for getting autonomy to adapt the offerings while maintaining high standardization through control of quality (Vrontis and Thrassou, 2006).
Price – McDonalds can reposition itself as low cost offering outlet of drink and food. An inexpensive menu can be adapted on global level while sustaining their core objective of assuring quality (Jacob and Ulaga, 2008).
Place – The organization can spread evenly its outlets all through the cities by making them accessible. Drive through and drive in options can make further the company’s products convenient to target clients.
Promotion – McDonalds can make TV ads for increasing its new food stuffs to people as well as press advertising for providing more details regarding business repositioning. Also, it can be supported by in-store promotions for encouraging customers to try the stuffs (Karakaya, 2002).
4.1 Ethical issues that influence marketing planning
Ethical marketing is a philosophy rather than a marketing strategy, which informs all efforts of marketing. It seeks to stimulate fairness, responsibility and honesty in all ads. Ethics is particularly difficult subject, as every entity has subjective judgments regarding what is “wrong” and “right”. Due to this reason, ethical marketing is not a fast and hard rules list but a common guidelines set for supporting organizations to evaluate new tactics of marketing.
Some trade are establish because the owner strongly feel about an issues as well as would like to deal with it through their undertakings. Whereas other businesses follow ethics in their marketing activities, as they feel it is what actually consumers anticipate from them. Some customers make purchase of services or products because they feel they are ethical or a particular company is responsible for them (Ulaga and Chacour, 2001). To response such demands of customers, business corporations have raised their concentration on implementing ethical practices in marketing. Moreover, ethical marketing requires strategies of marketing, which are ethical as well as reflect market and customers’ expectations. It is not simple to define the word ethical or determine which ethical decisions can adequately satisfy the expectations of market. A person’s view of morality and ethics is influenced by range of things including their background, culture, experience, peers, upbringing/family, country, religion and community
Remaining competitive and balancing ethics could be difficult. When ethical marketing consist of considering welfare and needs of employees, customers and suppliers then it can add to total costs of business. For instance, fair trade products offers manufacturers with minimum rate. If increase in business costs lessens profit margins, then it passed onto buyers by increasing their price. But if companies can employ ethical marketing that reflect market expectations, it can make them more appealing to consumers and hence develop a competitive advantage (Milne, 2000).
4.2 Consumer ethics and the effect it has on marketing planning
Organizations realize the significance of performing in more ethical manner as well as broadcasting this transformation to their consumers. One of the simplest method of obtaining this is by their effective practices of marketing. If an organization puts effort to advertise more ethically, it positively reflects on each business area. There are different disadvantages and advantages of ethical marketing (Murphy, Laczniak and Wood, 2007). Unethical ads often just as real as it is immoral. Moreover, since unethical behaviour is necessarily not in contradiction of the law, there are several firms who use unethical ads for attaining competitive position. For example, many individuals purchase diet pills although they are rarely has any effective results. It is due to the reason that some diet pills organizations use manipulative and exaggerated claims to trick clients into making purchase of such items. When the same firm committed to use ethical ads they would possibly lose their business. But may be their business model sneaky, it is not unlawful. For firms seeking to enhance their brand image and create long term relations with consumers, such type of unethical behaviour can rapidly result in failure (Payne and Pressley, 2013). Consumers do not expect to be manipulated by their liked brands. Hence, organizations can utilize ethical marketing as a manner to build a sense of trust amongst their clients. When company want to have positive influence on customer then should honestly advertise its offerings, which will make customers feel that they are investing in products quality and provide money value (Skyrme, 1989).
The above report is concluding that marketing plays a vital role in create awareness for company’s products or services along with its features to target customers as well as encourage them to make purchases. However, there are some barriers and macro environment factors affects the overall strength of any marketing strategies that should be properly deal by the marketer. Moreover, the five force model of Porter signifies the opportunities for organization that can be achieve through effective marketing planning. In order to implement adequate strategies of marketing and attain valuable outcomes, SMART objectives has been developed for the McDonalds repositioning in the global market. Finally, to gain positive preference of buyers and achieve competitive position among rivals, the company should pursue ethical business and give proper consideration to consumer ethics in its business as well as marketing activities.
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