McDonald Market Analysis

4.0 McDonald Market Analysis

Companies today recognize that they cannot appeal to all buyers in the marketplace or at least not to all buyers in the same ways. Buyers are too numerous, too widely scattered, and too varied in their needs and buying practices. Moreover, the companies vary widely in their abilities to serve different segments of the markets. Instead, like McDonald, a company must identifying the parts of the markets that it can serve best and most profitably. It must design customer driven marketing strategies that build the right relationships with the right customers. As the one of franchise who runs a general store in Malaysia, for example in Perlis, they have to think what they can offered to consumers with not just one product so that they can accept it. Now, they will have a brand in mind when they walk through the door.

Thus, most companies have moved away from mass marketing and toward target marketing which is identifying market segments, selecting one or more of them, and developing products and marketing programs tailored each other, instead of scattering their marketing efforts. Usually, firms will focusing on the buyers who have a greater interest in the values they create best.

There are four major steps in designing a customer driven marketing strategy for McDonald. In the first two steps, the company selects the customers that it will serve. Market segmentation involves dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors, who might each require separate products or marketing mixes. McDonald will identifies different ways to segment the market and develops the profiles of the resulting market segments. Markets targeting consists of evaluating each market segment’s attractiveness and selecting one or more markets segments to enter. In the final two steps, the company decides on a value proposition which includes how it will create value for target customers. Differentiation involves differentiating the firms market offering to create superior customer value. While, positioning consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the targets consumers.

4.1 Market Segmentation

Buyers in any market different in their wants, resources, locations, buying attitudes, and buying practices. Through market segmentations, companies divide larges, heterogenous markets into smaller segments that can be reached more effectively with products and services that match their unique needs. There is no single way to segment a market. A marketer has to try different segmentation variables, and in combination, to find the best way to view the markets structure. Here we will look at the major geographic, demographic, psychographic, and behavioral variables.

4.1.1 Geographic Segmentation

Geographic segmentation are been categorized dividing the market into different geographical units such as nations, regions, states, countries, cities, or even neighborhoods.  A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants. McDonald localize their products, advertising, promotion, sales efforts to fit the needs of individual regions and cities. McDonald have developed several menus that basically being categorized according to the need of consumer in urban areas and rural areas.

4.1.2 Demographic Segmentation

Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. For example, in McDonald they offer some menus that fit with the family size and family life cycle by offering the bucket menu with the affordable price. In this ways, everyone can purchases the food regardless their level of income. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants, and usage rates often vary closely with demographic variables. In age and life cycle stage, McDonald has offering different product or using different marketing approaches for different age and life cycle group. For example McDonald target market for happy meal is children. McDonald’s aim is to sell to kids more hamburgers, fries and soda.

4.1.3 Psychographic Segmentation

Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic makeups. Here, we can conclude that how the products people buy reflects their lifestyles. As a result, marketers often segment their markets by consumers lifestyles and base their marketing strategies on lifestyles appeals. For example in McDonald, one of their targets market is teenagers because of the lifestyles of teenager that like to spend time with friend, they will find someplaces to hang with their friend, regarding this McDonald provide the spot for them as McCafe.

4.1.4 Behavioral Segmentation

Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses of, or response to a product. Many marketers believe that behavior variables are the best starting points for building markets segments. For example, McDonald will launch again their menus such as McFlurry Durian flavor because got many positives response toward the product.

4.2 Market Targeting

Market segmentation reveals the firm’s market segment opportunities. The firm must now evaluate the various segments and decide how many and which segments it can serve best. Now we look on how McDonald evaluate and select target segments. In evaluating different market segments, a firm must look at three factors which is, the first one is segment size and growth. McDonald must collect and analyze data on current segment sales, growth rates, and expected profitability for various segments. Secondly, segment structural attractiveness which is the company needs to examine major structural factors that affect long run segment attractiveness. For example, a segment is less attractive if it already contains many strong and aggressive competitors. Lastly, the company objectives and resources. Even if a segment has the right size and growth and is structurally attractive, the company must consider its own objectives and resources. Some attractive segments can be dismissed quickly because they do not mesh with the company’s long run objectives.

After evaluating different segment by McDonald, the company must now decide which and how many segments it will target. A targets market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Figure 1.0 shows that McDonald can target segments very broadly (undifferentiated marketing), very narrowly (micromarketing), or somewhere in between (differentiated or concentrated marketing).

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Figure 1.0 Types of target markets for company

4.2.1 Undifferentiated Marketing