FINAL Marketing Analysis of McDonalds Thivesh Final

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Marketing Analysis of McDonalds Restaurants (New Zealand)
Ltd
Assignment 1, Module 1- Marketing
9/20/2011
Thivesh Veerasamy 24095
Marketing Analysis of McDonalds Restaurants (New

Zealand) Ltd
Sep. 20

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Table of Contents
Task 1.........................................................................................................................5
Sep. 20
Marketing Characteristics of McDonalds..................................................................7

Strengths............................................................................................................ 11
Weaknesses.......................................................................................................12
Opportunities..................................................................................................... 12
Threats............................................................................................................... 13
Task 2.......................................................................................................................15
PESTLE is an analysis of Macro-Environment factors which consist of Political,
Economic, Socio-Cultural, Technological and environmental factors. Below I have
gone in-depth to show what factors affect McDonalds..........................................15
Political............................................................................................................... 15
Economic............................................................................................................16
Socio-Cultural.....................................................................................................20
Technological..................................................................................................... 22
Environmental....................................................................................................22
Buyer Behavior......................................................................................................31
TASK 3......................................................................................................................33
a) 7Ps of the extended marketing mix in relation to McDonalds:........................33
c) Organisations vs. Consumers............................................................................37
d) International Marketing vs. Domestic Marketing...............................................37
Bibliography.............................................................................................................38

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Sep. 20
McDonalds History
It all began in the USA in 1954 with a milkshake machine salesman named Ray Kroc. Ray
received an order from the McDonald brothers hamburger outlet in California. He was
fascinated by their operation the menu was simple and inexpensive but the hamburgers were
good; the fries were made in-store; and the shakes were thicker than usual.
So Ray put a proposition to the McDonalds Brothers. Let me open new McDonalds stores and
Ill give you half of one per cent of the gross sales for the use of the name and the idea.
The McDonalds brothers accepted and Ray opened his first store in Des Plaines, Illinois. He
began to build the business by granting franchises to local entrepreneurs who were committed
to the McDonalds principles.
By 1960 Ray had opened 200 restaurants throughout the USA. In 1961 he bought the
McDonald brothers share of the business for $3 million and in 1965 the company went public
and became the McDonalds Corporation.
Today, McDonalds has more than 30,000 restaurants in more than 120 countries on six
continents. Every day, meals are served to more than 50 million people worldwide (Our Story)

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Sep. 20
Task 1
a)
Comparisons of Definitions
Chartered Institute of Marketing: the management process responsible for identifying,

anticipating and satisfying customer requirements profitably. (The Chartered Institute
of Marketing)
-
The company is based in the UK and is one of the leading international body for
marketing accreditation, professional development and training infrastructure. (The
Chartered Institute of Marketing)
From the definition the marketers use the management process, which is exactly what
they do as they work closely with other professionals to achieve the final result. As
stated in the definition Satisfying customer requirements this shows us that the
companies marketing is focused on their customers and what they do is for the
customers benefit. The last part of the definition talks about Profitably, there are many

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positives and negative with regards to this as if a customer had to see this, the customer
would think of the company as being greedy whereas for a company profit is the number
one goal and the aim of a marketer is to attract consumers so that the company can
make a profit.
Sep. 20
American Marketing Association Definition: Marketing is the activity, set of institutions

and processes for creating, communicating, delivering and exchanging offerings that
have value for customers, clients, partners and society at large. (About AMA)
-
The American Marketing Association (AMA) is the professional association for

individuals and organizations who are leading the practice, teaching, and development
of marketing worldwide. (About AMA) The company is based in Chicago, USA.
From the definition the marketers use the management process, which is exactly what
they do as they work closely with other professionals to achieve the final result. From the
statement above Marketing is the activity, set of institutions and processes which
simply means that marketing can be an activity as well and a process that is ongoing
and never stops. It doesnt mention anything about marketing but it does state what
marketers do and it says that marketers also follow certain principles in order to achieve
success. The last part creating, communicating, delivering and exchanging offerings
that have value for customers, clients, partners and society at large speaks for itself, it
simply says that its focused on customers wellbeing and not making money and profits.
They believe in being able to solve customers problems and let customers walk of with a
smile on their face. By them talking about exchanging offerings this shows that its not
only about business as the saying goes if I scratch your back you got to scratch mine,
that exactly how it works when it comes to marketing and satisfying customers.
Business Directory Marketing definition: The management process through

which goods and services move from concept to the customer. (Marketing Definition)
-
Just like the others they talk about the management process. This definition is simply
down to the point as it says its a process which goods and services move from concept
to customer which means that marketers are there to convey goods/ services to
customers through advertising etc. Marketing is based on thinking about the business
in terms of its customers needs and their satisfaction. (Marketing Definition)
I have prepared a small table just to show you a few differences between the three
different definitions:

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CIM
AMA
Business Directory
What do
marketers do?
The
management
process
Marketing is the
activity, set of
institutions and
processes
The management process
Who is it aimed
at/ about?
Customer
requirements
Customers,
clients, partners
and society at
large
to the customer
Why do they do
it?
Profitably
Creating,
communicating,
delivering and
exchanging
offerings that have
value for
customers
through which goods and

services move from concept
Sep. 20
Marketing Characteristics of McDonalds

-
Closeness to the customer: Through a profound understanding of exactly what the

customer needs (Marketing Oriented Business: How to develop marketing oriented
business?)
Productivity through people: Realising that the employees of the business are regarded
as an n asset as they are the most important as they can either make the business work
or cause it to decrease in value. (Marketing Oriented Business: How to develop
marketing oriented business?)
A bias for action: Providing for customers exactly what was advertised or intended,
therefore there is no false advertising, therefore in simple word what ever is told to the
customer need to actually materialise. (Marketing Oriented Business: How to develop
marketing oriented business?)
Value driven: Ensuring that whatever is sold is of a good quality or a good value for
money for the customers. (Marketing Oriented Business: How to develop marketing
oriented business?)
Simple form lean staff: Ensuring that it is easy for the customer to interact with the staff
or the company by either means of feedback forms or contact details of the managers
etc. (Marketing Oriented Business: How to develop marketing oriented business?)

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Sep. 20
b) Marketing Concepts
In the evolution of marketing these are following four concepts of marketing.
1. Production Concept: Is when theres a limited number of products available for purchase
and monopolies were common. The belief of this concept that was held by business
was that if the demand existed for something, customers would buy it as long as it was
available and at a price they could afford. Also the manufactures did not need to put
things on the products in order for theirs to be distinguished from others because
generally there was no competition. New Zealand followed this production concept in
the early 50s and 60s. (NZMA, 2011)
2. Product Concept: The focus of this concept is on engineering and technical excellence
because the belief of customers will be for the product offering instead of against the
highest level of quality, the best performance and the most features. The advantage of
this concept is when there are a lot of similar products in the market and the
organization puts a lot of energy and resources into the excellence of the product. The
customer is not the main focus under this concept. (NZMA, 2011)
3. Selling Concept: This concept has a big emphasis because of the growing competition
and customer choice. However the promotion department still receives the highest
allocation of resources but now the promotion and the selling departments are
considered to necessary and vital. Persuasive selling and disrespect for what the
customer really or does not need are typical of this orientation. (NZMA, 2011)

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4. Marketing Concept: Competition has grown a great deal over the years but however
there has been a decline in natural and other resources. The consumers in todays
world are more informed of what products are available in the market place and of the
different rights they have for example the customer guarantee act. All the business has
felt the impact of these rights and changes to this concept. Therefore the essential part
of planning is the efficient use of resources and workers in McDonalds. The companies
such as McDonalds are able to stay more competitive and may even prosper and grow
if they have an emphasis on customer satisfaction. Also products and services are now
being able to be made to fit specific groups of customers each with identified needs and
therefore innovation becomes the main element in this approach. The changes in
society also have a big impact on further development of this concept. (NZMA, 2011)
McDonalds have many different marketing ideas one of the main ones are the happy
meal deals where children get a choice of many different options and they get a free toy
with the meal. This will attract many children as well as their families as there is a fun
environment in many of the McDonalds stores as there are play areas where children
can go on the jungle gym set up as well as participate in coloring competitions etc.
Sep. 20
c) Three benefits of McDonalds marketing approach
There are many benefits that McDonalds in New Zealand have; I will be discussing three
of them in the following three points:
-
McDonalds in NZ have used many Made in NZ products for example like the new
Angus beef burgers, these are supplied by the New Zealand cattle farmers and
McDonalds have been supporting them for over 30 years. By them doing this it will
attract more New Zealanders as the locals like to support their fellow business owners.
On the menu there are 2 options of Angus beef, theres the grand angus and mighty
angus beef (Angus Beef Story) They also use specials during peak times like the value
lunch deal where you can choose from a variety of different meals for only $5. By doing
this you will attract the lunch time rush of people which should increase the sales.
McDonalds focuses on attracting children at a young age as by doing this the children
will continue to buy from them in the years to come. They do this by introducing the
happy meal which includes a toy which is what attracts the children to buying it. There
are many choices available for kids like a choice between burgers, nuggets and wraps,
all these options are accompanied by a side and drink.

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McDonalds provides an option for people that are into there health options. They provide
a weight watchers menu which consist of a range of salads and seared chicken. This will
attract all the women n men that either gym or watch there diet.
Sep. 20
All these different options provide for the entire family from the kids to the mums that like
to watch there weight.
Three costs of marketing for McDonalds
McDonalds spends most of its money on advertising. From the annual report for 2010 I
found a few facts that will assist my argument about how much they spend on
advertising:
Advertising costs included in operating expenses of Company operated
Restaurants primarily consist of contributions to
Advertising cooperatives and were (in millions): 2010$687.0;
2009$650.8; 2008$703.4. Production costs for radio and
Television advertising are expensed when the commercials are
initially aired. These production costs, primarily in the U.S., as well
as other marketing-related expenses included in selling, general
& administrative expenses were (in millions): 2010$94.5;
2009$94.7; 2008$79.2. In addition, significant advertising
costs are incurred by franchisees through contributions to advertising
cooperatives in individual markets. (Corporation, 2010)
There are many different ways in which McDonalds do this like television, magazines,
billboards etc. All these ways of advertising cost McDonalds a lot cause in Auckland
everywhere you look you see the Golden Arches (what the McDonalds M is known
as). There is also word of mouth which is also a big advertisement for them.
McDonalds in New Zealand has a menu that has a big variety of choice, personally from
my experiences worldwide I think that its a high expense as when I was in India there
wasnt such a big variety. I think its a waste for NZ as the population isnt as big as
Indias population. New Zealand has the M Range which is focused on a more luxury
range which has a different bun and extras like onion etc. This large product range is
costly for New Zealand to keep up and things such as wastages etc. come into play.

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-
There are many pressures from society that play a big part. No matter how much
advertising McDonalds use if a parent doesnt allow a child to come due to the publicity
of children becoming obese. (McDonalds, healthy eating, and the Happy Meal of the
future, 2006) Therefore if parents are not open minded then no matter what McDonalds
do they still wouldnt bring there families to the fast food restaurant. Below are just a few
articles that I attached with regards to McDonalds negative publication due t wrong
advertising.
Sep. 20
The McDonalds French fry lawsuit has become one of the biggest stories in the vegetarian
movement, yet very little about it has appeared in vegetarian publications. The class action suit
originated after it was discovered that the fast-food chain had not told vegetarians that its french
fries and hash browns had beef in them, contrary to the impression some had after a company
press release of July 23, 1990, which stated that McDonalds fries were cooked in 100 percent
vegetable oil. But alas, many unfortunate vegetarians did consume McDonalds french fries or
hash browns after July 23, 1990, and in doing so unwittingly consumed minuscule amounts of
beef.
A lawsuit was filed against the company and a $10 million settlement was agreed upon, with $6
million going to vegetarian groups. But then disputes erupted, not only with McDonalds, but
within the vegetarian community as well, over which groups should get the moneyprobably
the most serious and most public division in the history of the modern vegetarian movement.
(McDonalds Lawsuit - Whats the story?)
d)
SWOT Analysis of McDonalds
Strengths
McDonald's has been a thriving business since 1955 and 20 of the top 50
corporate staff employees started as a restaurant level employee. In addition, 67,000
McDonalds restaurant managers and assistant managers were promoted from
restaurant staff. Fortune Magazine 2005 listed McDonald's as the "Best Place to Work
for Minorities." McDonalds invests more than $1 billion annually in training its staff,
and every year more than 250,000 employees graduate from McDonald's training
facility, Hamburger University. (SWOT analysis of McDonals, 2009)
The business is ranked number one in Fortune Magazine's 2008 list of most
admired food service companies. (SWOT analysis of McDonals, 2009)

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One of the world's most recognizable logos (the Golden Arches) and spokes
character (Ronald McDonald the clown). According to the Packard Children's
Hospital's Center for Healthy Weight children age 3 to 5 were given food in the
McDonalds packaging and then given the same food without the packaging, and they
preferred the food in the McDonald's packaging every single time. (SWOT analysis of
McDonals, 2009)
Sep. 20
They are a global company operating more than 23,500 restaurants in 109
countries. By being spread out in different regions, this gives them the ability to
weather economic fluctuations which are localized by country. They can also operate
effectively in an economic downturn due to the social need to seek out comfort foods.
(SWOT analysis of McDonals, 2009)
McDonald's takes food safety very seriously. More than 2000 inspections checks
are performed at every stage of the food process. McDonalds are required to run
through 72 safety protocols every day to ensure the food is maintained in a clean
contaminate free environment. (SWOT analysis of McDonals, 2009)
Weaknesses
High employee turnover in their restaurants leads to more money being spent on training
(SWOT analysis of McDonals, 2009)
McDonald's have problems with fluctuations in operating and net profits which ultimately
impact investor relations. Operating profit was $3,984 million (2005) $4,433 million
(2006) and $3,879 million (2007). Net profits were $2,602 million (2005), $3,544 million
(2006) and $2,395 million (2007). (SWOT analysis of McDonals, 2009)
They have yet to capitalize on the trend towards organic foods. (SWOT analysis of
McDonals, 2009)
Opportunities
In today's health conscious societies the introduction of a healthy hamburger is a great

opportunity. They would be the first QSR (Quick Service Restaurant) to have FDA
approval on marketing a low fat low calorie hamburger with low calorie combo
alternatives. Currently McDonald's and its competition health choice items do not include
hamburgers. (SWOT analysis of McDonals, 2009)
They have industrial, Formica restaurant settings; they could provide more upscale
restaurant settings, like the one they have in New York City on Broadway, to appeal to a
more upscale target market. (SWOT analysis of McDonals, 2009)

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In 2008 the business directed efforts at the breakfast, chicken, beverage and
convenience categories. For example, hot specialist coffees not only secure sales, but
also mean that restaurants get increasing numbers of customer visits. In 2009
McDonald's saw the full benefits of a venture into beverages. (SWOT analysis of
McDonals, 2009)
Provide optional allergen free food items, such as gluten free and peanut free (SWOT
analysis of McDonals, 2009)
Sep. 20
Threats
They have been sued multiple times for having "unhealthy" food, allegedly with addictive
additives, contributing to the obesity epidemic in America. In 2004, Michael Spulock
filmed the documentary Super Size Me, where he went on an all McDonalds diet for 30
days and wound up getting cirrhosis of the liver. This documentary was a direct attack
on the QSR industry as a whole and blamed them for America's obesity epidemic. Due
in part to the documentary, McDonalds no longer pushes the super size option at the
dive thru window. (SWOT analysis of McDonals, 2009)
They are a benchmark for creating "cradle to grave" marketing. They entice children as
young as one year old into their restaurants with special meals, toys, playgrounds and
popular movie character tie-ins. Children grow up eating and enjoying McDonalds and
then continue into adulthood. They have been criticized by many parent advocate
groups for their marketing practices towards children which are seen as marginally
ethical. (SWOT analysis of McDonals, 2009)
Any contamination of the food supply, especially e-coli. (SWOT analysis of McDonals,
2009)
Major competitors, like Burger King, Starbucks, Taco Bell, Wendy's, KFC and any midrange sit-down restaurants. (SWOT analysis of McDonals, 2009)

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Sep. 20
(McDonalds SWOT)

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Task 2
Sep. 20
PESTLE is an analysis of Macro-Environment factors which consist of

Political, Economic, Socio-Cultural, Technological and
environmental factors. Below I have gone in-depth to show what
factors affect McDonalds.
Political
McDonalds worldwide is influenced by many political factors, each state has its own policies
which is decided by the government of that state. For example theres certain parts in United
States that have laws for pertaining to the health implications of eating fast foods. It has
been said that harmful elements like cholesterol and effects of obesity are caused from
eating fast foods like McDonalds. For example there is an impending legal dispute in the
McDonalds franchise in India where certain infringement of rights and violation of religious
laws pertaining to the contents of the food. (PESTLE analysis, 2009)

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These are the important legislations when a business like McDonalds comes to New Zealand.
The Commerce Commission Act 1986 is an Independent Crown entity that enforces 2 principal
legislations:
- Commerce Act 1986: Promotes competition in markets within NZ
- Fair Trading Act 1986: Protects consumers from misleading and unfair trading practices.
These legislations are important to McDonalds as they employ local people from New Zealand
to work for them. These legislations are:
- Human Right ACT 1993
- Health & Safety in Employment Act 1992
- The Equal Act 1972
- Employment Relations Act 2000
Taxation Policy
These will affect McDonalds a lot because they need to know how much tax they must charge
on their products and also the correct tax for their employees. These legislations are:
- Income Tax Act 2004
- Goods & Services Tax Act 1985
Sep. 20
Economic
Companies in the fast food industry have their individual concerns involving economic
factors. Due to the changing inflation and the changing exchange rate, McDonalds has the
tendency to experience hardship. These fluctuation affect every country in the world there it
would also affect McDonalds as they have many chain stores worldwide. Customers are
also faced with a problem of going over their individual budgets on whether or not they
should spend more on fast food chains. Therefore, the chains have to put up with many
issues of the effects of the economic environment. In regarding the operations of the
company, food chains like McDonalds tend to import much of their raw materials into a
specific territory if there is a dearth of supply. (PESTLE analysis, 2009)
Business Cycle: Its the predictable long-term pattern of alternating periods of economic
growth which is recovery and decline which is recession is characterized by changing
employment, industrial productivity, and interest rates. In NZ the economy runs approximately in
7 year cycles and the stages are:
- Recession
- Trough
- Expansion
- Peak
- Contraction

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Sep. 20
(Definition of Business Cycle)

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McDonalds is not supported by an improving economic outlook. Given the fact that our
economic projections and simulation are correct, MCD is expected to remain at current price
levels until the end of this year. The best outcome implies only modest positive return, while
the worst-case scenario holds a risk of significant loss. Such a poor return profile does not
seem very attractive, particularly in the presence of better investment options. (Mcdonald's:
Left Behind The business Cycle, 2011)
Sep. 20
From the above graph we find that McDonald's was an exceptional investment prior to and
during the great recession of 2008. (Carnevale, 2011) We can see that the dividend
increased from $.55 per share to an estimated $2.49 per share for calendar year 2011.

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Sep. 20
Income is very significant to McDonalds because they must know what the market related salary
is for their employees in order for them to pay them the correct amount. The stats from New
Zealand are as follows:
- The average annual salary in New Zealand is $45000
- If you have a university qualification you are likely to earn 30% more than those who are
nor qualified
- If you also have a bachelors degree or higher you are likely to at least double the
amount than a person who left school and has no qualifications.
The unemployment stats will affect McDonalds the most in the economic section of the
environment. Below are the figures from the department of labour and Statistics of NZ:
- Unemployment Rate is 7.3% which is the highest in the last 10 years
- 168000 are unemployed in New Zealand
- The most affected sectors of the retailers are the retail, manufacturing ,construction and
the car industry
- However the health and education sectors is where the employment has risen

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-
Sep. 20
Also the unemployment rate is the one of the lowest in the world. They are rated 61 in
the world. (Unemployment Rate)
In the youth the unemployment rate has reached 18.4% and in the ethnic group the
following
Pakeha (White people of NZ) 4,6%
Maori 15,4%
Pacific Islanders 14%
Socio-Cultural
McDonalds has a vast variety of consumers worldwide that they aim to attract, they focus on
attracting children, families, students as well as business people. In each country, McDonalds
uses local favourites to draw in there customers like at the moment in Auckland we get frozen
L&P and Pavlov as well as Angus beef patties. In order to attract students during the lunch time
they give away free Wi-Fi with any meal purchased. In the Uk McDonalds have given them
options for dining. (PESTLE analysis, 2009)

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Sep. 20
These are important facts that McDonalds needs to know in order for them to be profitable.
Demographics of NZ
This information is based on the census taken in 2006
Age Structure
- 0-14 Years 20.7%
- 15-64 Years 66.5%
- 65 Years and over 12.8%
Life Expectancy
- Total Population is 80.36 years
- Males are 78.43 years
- Females are 82.39 years
(Age Structure In NZ)

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New Zealand consists of the following ethnic groups:
- NZ Pakeha 72%
- Maori 13%
- Asians 8.1%
- Pacific Islanders 6%
- Other 0.9%
Sep. 20
Technological
Technology is something that changes everyday with regard to McDonalds there are many
new technologies such as the inventory system and the management of the value chain of
the company allows for easy payments for their suppliers and other vendors which the
individual stores in respective markets deal with. (PESTLE analysis, 2009) Mcdonalds have
also got a new ordering system which has a specific ordering time and if the meal isnt done
within the times its given free, for example if the food is prepared already its 35 sec and if
the meal is unprepared its 4 min.
Environmental
McDonalds have had a lot of environmental issues regarding there packaging of burgers
and styrofoam cups for the drinks as there were harmful to the environment. From articles,
McDonalds have decided to turn its spent cooking oil into biodiesel fuel to power its vans in
the UK. (Barriaux, 2007) They also decided to use non-hydrogenated cooking oil in there
stores. The menus have changed to varying degrees over the past few years, with the
introduction of sustainably grown coffee, organic milk and toasted deli sandwiches.
(Barriaux, 2007) They no longer uses polystyrene packaging, except for drinks such as
milkshakes and coffees, and now uses only cardboard which is made from 70% recycled
cardboard and brown paper bags.

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Sep. 20
As you can see from the above picture McDonalds is on a mission to prove that they are eco
-friendly. They now offer healthier options like salads and other low calorie foods. In the
German Newspaper Die Welt, I even read about the first McDonalds branch that offers no
burgers. It makes use of the concept of a salad bar and is located in the business quarter of
Paris, La Dfense. Customers can order
salads that cost about 7 Euro. They can
choose between five classic recipes or
combine their own mixture. (NerdyLaura,
2011)
McDonalds also focuses on it Drinks, as
they now offer sustainably grown coffee
and organic milk which now puts a
pressure on other companies like
Starbucks.

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a)
The micro environment is the internal part of the business. Its also the factors or elements in
an organization's immediate area of operations that affect its performance and decision
making freedom. (Micro Enviroment Definition) These factors include the following:
-
Stakeholders
Competitors
Customers
General public
Banks/financial institutions
Sep. 20
Shareholders
McDonalds has 1,348,000 shareholders of record and beneficial owners of the Companys
common stock as of January 31, 2011. All shareowners are also entitled to attend the Annual
General Meeting (AGM), at which they have the opportunity to ask questions, discuss the
company's performance and vote on certain issues. (2010 Annual Report- McDonalds, 2010)

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Consumers
McDonalds consumers can contact the company by various means and also deals with
consumer enquiries on a daily basis via in store feedback forms to website and phone calls. It
performs market research to track the changing consumer trends. Many parts of the business
also use surveys and market research panels to find out what consumers think of their products.
Sep. 20
Customers
McDonalds has ongoing discussions with its customers. Wholesalers and retailers provide the
vital link to consumers and it is they who make the McDonalds brand widely available.
Employees
McDonalds has a tradition of encouraging direct, two-way involvement and communication with
employees. Managers hold regular individual and team meetings to inform colleagues about the
business and hear their views. The company also does surveys to check how its employees feel
about working at McDonalds. Internal newsletters, a group website and many local websites
help employees keep up to date with what is going on and allows to see what events are taking
place in McDonalds.
General Public
The company regards itself as a citizen in the countries in which it operates and enters into
regular dialogue with organisations such as national governments and international bodies. For
example, the World Health Organisation (WHO) to discuss issues that effect the company.
These issues can be anything from agricultural policy to education and skills.
Competitors
McDonalds has many different competitors such as Burger King, Wendys, Oportos, etc.
McDonalds at the moment is currently running a few special like the McValue meals which run
at $5 for the meal whereas Wendys has a similar meal but give an extra ice-cream sundae with
the meal. There are many other specials that other fast foods are running that will affect the
customers of McDonalds choices

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b)
Segmentation
1. Geographic factors:
Geographical segmentation divides markets into different geographical areas (Market
segmentation) McDonalds is eaten all over the world and in every continent you will surely find a
McDonalds outlet. When it comes to the city or metro size it varied from under 5000, 2000050000, 50000 +. When its come to climate its in the Northern and Southern. You mainly find it
in city centres but to my surprise I have even seen it in rural areas as well.
Sep. 20
2. Demographic factors:
Demographics originate from the word demography which means a study of population. The
population can be divided into age, gender, income, and family lifecycle amongst other
variables. (Market segmentation) McDonalds caters for all ages, genders and family sizes.
People of all income can purchase it from kids at school to Ceo of companies that earn in the
millions it provides for all its customers. When it comes to religion it varies from country to
country like for example in india they dont serve beef as its part of their relgion not to eat beef
and in mexio they add extra chilli sauce to the burgers therfore as every country has different
setups of McDonalds. It caters for all races and every nationality.
3. Psychographic factors:
In psychographic segmentation, buyers are grouped according to variables such as Social
Class, Lifestyle, or Personality. (Psychographic Segmentation) For McDonalds it caters
for all types of classes, they do this by having different meal option ones for the people on a
tight budget and the more expensive meals for people who like to purchase expensive
meals like the M range.
4. Behavioral factors:
Is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and
benefits sought. (Market Segmentation) McDonalds is available for all types of occasions but I
would say its more for on the go or kids birthday parties. It has many customers that are very
loyal to the company and only purchase meals from them. With regards to peoples attitude
towards the product it turns out to be very positive and customers seem to be very positive
about the products they receive.
Geographic
Happy Meals
Kiwi Pavlova
World Region Or Country , Happy meals are a

Pavlova is only significant
Country
Regions ,
worldwide
that is
toRestaurants
New Zealand McDonalds
Marketing
Analysis
ofthing
McDonalds
(New
found inZealand)
every country. Ltd
The it cost $3.90 and is only
only difference would be
sold during the spring and
the choice of the food
summer months.
included in the happy meal
and the toys that are
included with the meal.
Sep. 20
These factors are not so

relevant to McDonalds

Age, Gender, Family Size,

Family Life Cycle,
Occupation, Education,
Religion, Race,
Generation, Nationality


Income
This factor is relevant to

McDonalds in order for
them to be a successful
company. A person who
earns less money will find it
hard to spend money on a
happy meal for their child
as they have to pay for
other expenses.

McDonalds in order for
them to be a successful
company. A person who
earns less money will find it
hard to spend money on a
Pavlova as they have to
pay for other expenses.




Density & Climate, City or

Metro Size
Demographic
Psychographic
Social class, Lifestyle,
Personality
Behavioral
Occasions
Benefits, User Status, User
Rates, Loyalty Status,
Readiness Stage, Attitude
toward product

McDonalds products in
order for them to be
successful. McDonalds
needs to be of high quality
therefore this aspect is very
important, if the quality of
there products is of high
quality then the customers
would be satisfied wand
keep coming back. Attitude
is very important as if a
customer leave in a happy
way then they will keep
coming back and

McDonalds products in
order for them to be
successful. McDonalds
needs to be of high quality
therefore this aspect is very
important, if the quality of
there products is of high
quality then the customers
would be satisfied wand
keep coming back. Attitude
is very important as if a
customer leave in a happy 4
way then they will keep
coming back and

Zealand) Ltd
Sep. 20
c)
3 Marketing Strategies that influence McDonalds
Marketing Mix
Target Market
Health
Marketing Mix: This consists of the product, price, place and promotion. With regards to
McDonalds the menu that they introduce has to be a appealing to the customers as they
want to attract the customers into supporting them. The price of a good is always important
as it determines whose going to buy it and how often. At McDonalds in New Zealand they
cater for both the wealthier as well as the poorer communities. For the wealthier people they
have a special range of burgers which is classified as the M Range which is a different
more expensive bun and extra add ons whereas they offer the cheaper burger for those that
are less fortunate. When it comes to the promotional aspect McDonalds uses many different
forms of advertising such as TV ads, bus decals, billboards, and sponsorships. By doing this
they are getting there brand across so that they can attract more consumers. Place is
another factor of the marketing mix as McDonalds have many stores worldwide, in this case
they are evenly spread out so that one store doesnt clash with another. (Bhasin, 2010)
Target Market: The target market of a company is the market or customers that the
company wishes to attract or focus on. With regards to McDonalds there are many for
example they focus on student, families, children, and on-the-go business people. I have
contrasted a small table outlying some of the above groupings of their target market.
Parent with children
Visits to give their child a treat

Zealand) Ltd
Student
Cheap for students as they get many

discounts as well as the option to use WIFI
internet
Children
Fun place for children to eat therefore the

child loves to go there
Business person
Prefers going there as they receive fast

service as well and the food being great and
convenient to take anywhere with there busy
work schedule as well as the use of WIFI
internet
Sep. 20
Health: There are many positive and negative factors with regards to the health factor:
Positive:
There are healthier options like the choice of different burgers, wraps and salads.
Some of the meals are weight watchers approved which is recommended for the people
looking for healthier options.
With the burgers they come in chicken or fish and the chicken is seared chicken which is
the healthier option. They also offer a garden salad with the chicken as well which I think
is a positive aspect with regards to health. (Weight Watchers)
The campaign, called McDonald's Real Life Choices, shows consumers how to order
their McDonald's menu items and stay on track, whether they're watching calories, fat or
carbohydrates. McDonald's restaurants will showcase posters and brochures featuring
information on McDonald's Real Life Choices. (Is McDonald's Actually Getting Healthy?,
2004)
Negative:
McDonalds has had many negative articles against them that say that there food
is bad for ones health.
Fast food is usually fried or contains a part that is. Or the food is cooked in oil or
grease or some other way that adds so much of the bad fats that are out there to
it. (Health Risks Of McDonalds Food) What they saying is that there are so
many fats etc in the fries and patties that it might be a risk to ones health. The fat

Zealand) Ltd
that we intake goes into our bodies and doesnt digest very well, so we pretty
much just storing the fats all over especially in our arteries.
Sep. 20

Zealand) Ltd
Buyer Behavior
Cultural
Emotional Buyer
Culture Is the most basic
The emotional buyer will buy
Personal Factors
cause of a persons wants
it because they really want to
Age & Life Cycle Stages is
Doesnt matter what age you
and behaviours. Some
eat McDonalds and they
that people the goods and
are you can still buy
factors are language, food
want to satisfy their needs.
services they buy over their
McDonalds.
and etc
lifetimes
Occupation are peoples
Doesnt matter what age you
occupation affects the goods are you can still buy
Subculture contains smaller
When it comes to race it
and services bought
McDonalds.
subcultures, or groups of
matters as for example
people
withSituation
shared value
Muslims
only eat halal
food
Economic
A
This is difference
for both
systems
based on common
only
and in
India
Hindus
persons economic
situation
because
with
recession
life
experiences
and
dont
eat
beef
therefore
it
will affect product choice
people dont want to spend
situations for e.g. in NZ
cant
be sold ifthere.
but however
people are
Pakeha and Maori
felling for McDonalds they
Social Class are societys
Social class will only matter if
will still buy it.
relatively
permanent
and
going
the more
Lifestyle is a persons pattern you
There
is nofordifference
ordered
divisions
whose
expensive
choice
from
the
of living as
expressed
in his
because I think
that
lifestyles
members
share such
similar
M
range
butifalla the
other
or her activities
as
do not
effect
person
is
values,
interests
and
meals
are
affordable
for
all
work, and hobbies.
buying McDonalds
behaviours. E.g. of some
social classes.
social
classes
upper-upper
Personality & Self-Concept:
This is different because if
class,
lower-upper
class
Each persons
distinct
you dont like McDonalds for
Social
personality influences his or
a particular reason than you
Reference Groups. A group
These are both the same
her buying behaviour.
wont buy it because you
is made up of 2 or more
because it doesnt effect if
dont like it.
people
who interact
you buy McDonalds with a
Psychological
Factorto
accomplish
and
group
bysame
yourself.
Motivation: Aindividual
person has
This isor
the
because if
mutual
goals.
The
reference
many needs at any given
the person wants McDonalds
groups
time then act as a point of to satisfy their need they will
reference for us to judge our buy it until they are satisfied
behaviour based on how we
identify with that group.
Family it is the most
Whether you come in a
important reference group
family or individually you still
because we are born in to it
going to purchase
therefore we are influenced
McDonalds therefore it wont
by our parents, brothers and make a difference.
sisters.
Roles & Status: A person
I think is the same for both
can belong to many groups
because when it comes to
like family, clubs, and
buying McDonalds it doesnt
organizations. The persons
matter what roles and status
position
in each
group can 24095
you have in your home.
Thivesh
Veerasamy
be defined in terms of both
role and status.
Companies
For a company they buy
shares, franchises etc as an
Obviously you would be old
investment.
enough to make a decision to
purchase shares or
franchises for the company.
You would have to be high
up on the chain in order to
Doesnt affect companies.
make decisions for the
company.
However companies cant
just buy shares or franchises
the company has to be
financially stable to purchase
such things.
Companies would have to
have
money to
Thereaislotnoofdifference
purchase
as lifestyles
they
because I shares
think that
arent
cheap
especially
do notvery
effect
if a company
is
with
regards
to
McDonalds.
buying McDonalds shares
etc
It depends on the person
making the decision for the
company.
Two or more people would
represent the company so it
wouldnt make such a big
difference.
Its got to do with the person
thats buying the shares for
the company.
Wont affect the company.
I think is the same for both

because when it comes to
buying McDonalds it doesnt
matter what roles and status
you have in your company
4
Sep. 20

Zealand) Ltd
Sep. 20

Zealand) Ltd
TASK 3
Sep. 20
a) 7Ps of the extended marketing mix in relation to McDonalds:

The product marketing mix consists of 4 Ps namely Product, Pricing, Promotions and
Placement, but there 3 more extended service marketings Ps called People, Process
and Physical evidence.
Product:
When McDonalds decided on the products that are going to be on the menu they had to
take into consideration what customers would buy for example the McChicken, they had
to decide on what chicken to use in the burger whether to have mayonnaise or just
tomato sauce and what bun to use, as customer want quality and they not going to pay
for an item that doesnt taste good or look appealing. Therefore when they had to do the
menu that had to place considerable emphasis on what customers are going to want.
This is where the market research comes into play. However customers requirement do
change over time, for example what is fashionable and attractive today may be
discarded tomorrow. With regards to all that McDonalds tend to change it menu by
either adding on new stuff and getting rid of the items that dont do so well. You will find
that some of the products still remain hits like the Big Mac or Cheeseburger for
examples whereas other died down like the deluxe cheeseburger which took of well but
died right down. They also provide a more expensive range called the M range which
consists of the Grand Angus which is filled with a thick and tender Angus beef patty,
red onion rings, cheese, tomato, gourmet salad mix, and served on a soft sourdough
bun. It's mouth-wateringly juicy. (M Selections) Theres also other ones ilke the Mighty
Angus, Grand Chicken crispy and there are many more which also include wraps

Zealand) Ltd
Sep. 20
Pricing:
Pricing is a major factor when it comes to customers as they the ones that pay for the goods,
therefore McDonalds has to analyze its customers pockets and then decide on what the prices
will be for each product. For example at the moment they have the Mc Values meals for $5 and
this is only runs in New Zealand. It includes a burger, fries and coke and a bonus ice-cream.
There are many problems with using the low price marketing tool as customers will think that
due to the low price the quality of the product is poor therefore not purchasing it. Another factor
of price reduction is that competitors match the lower prices resulting in no extra demand
therefore the profit margin is reduced without the sales increasing.
Promotion:
As we all know promotions is the biggest aspect of marketing due to the different type and ways
of promoting a product. Advertising is the main way of a company promoting its products and
they do so by using TV, radio, in cinema, online, using poster sites and in the press for example
in newspapers and magazines. The thing that distinguishes advertising from other marketing
communications is the media owners are paid before the advertiser can start using the space.
The skill in marketing is to develop a campaign that uses several different techniques to provide
the most effective results. For example TV advertising makes people much more aware of
McDonalds item whereas press provides more detail. McDonalds uses in-store promotion to get
people to try their products and to encourage people to keep coming back for more. The aim of
most marketing audiences is assist the customers to take some type of action for example buy
the product, visit a restaurant, recommend the choice to a friend or increase purchases of the
menu item. The more McDonalds know about the customers the more they are able to provide
for what they want. With regard to their advert McDonalds focuses on placing adverts to capture
the right target market for example I have done up a table to show where they would put an
advert and for what target market they aimed at:
Business women
Cosmopolitan, or womens magazines
Students
Around the universities, teen magazines and
defiantly TV adverts
Children
The best would be Disney Channel,
Nickelodeon etc
Business men
Mens magazines like GQ etc

Zealand) Ltd
Sep. 20
Placement:
This refers to where the stores are located. Place is another factor of the marketing mix as
McDonalds have many stores worldwide, in this case they are evenly spread out so that one
store doesnt clash with another. (Bhasin, 2010) In Auckland city alone there are about 3 stores
but they dont clas with each other as they are in different parts of the city.
People:
People can either make or break a company in this Im talking about the staff. Recruiting the
right staff and training them appropriately is essential for the companys success as they are the
face of the company. Consumers make their judgement on a company within the first 10 sec of
talking to a staff member therefore the staff have to be customer friendly and always smiling an
dwell trained. Staff should have the appropriate interpersonal skills, aptititude, and service
knowledge to provide the service that consumers are paying for. Many British organizations aim
to apply for the Investors in People accreditation, which tells consumers that staff are taken care
off by the company and they are trained to certain standards. (Service Marketing Mix /
Extended Marketing Mix ) From my past experiences at McDonalds there have been some

Zealand) Ltd
positive and negative experiences where staff have been very rude but theres been
experiences where they have been good to me.
Process:
Sep. 20
Refers to the systems used to assist the organization in delivering the service. (Service
Marketing Mix / Extended Marketing Mix ) With McDonalds there systems are evry advance
they run a special at the moment whereif your meal is prepared and takes longer that 30sec to
come to you during drive-thru you are given free vouchers. This is a current promotion in NZ
only. There system in the store are very advanced therefore the delivery time can be achieved.
Physical Evidence
Where is the service being delivered? Physical Evidence is the element of the service mix
which allows the consumer again to make judgments on the organisation. (Service Marketing
Mix / Extended Marketing Mix ) When a customer walks into a restasurant like McDonalds they
expect the restaurant to be a clean and friendly enviroment. If the restaurant isnt clean then
consumers will make perceptions based on their sight and then will probly never come back.
b) The two products are Happy meals and Pavlova:
Product
Price
Promotion
Placement
Happy Meals
Happy meals are focused for
kids as they give a toy with
the comb as a promotion to
attract kids to buy it
All McDonalds outlets
Pavlova
$3.90
A big advertisement of the
product has been put up on
TV, adverts and in stores.
All McDonalds outlets

Zealand) Ltd
Sep. 20
c) Organisations vs. Consumers

McDonalds focuses on marketing their products in different ways to different consumers and
companies. Consumers can purchase food such as burgers etc and drinks both hot and cold,
but as for organisations its a another whole ball game altogether as McDonalds would probably
sell them share or even a franchise but they do also buy food for catering events etc.
McDonalds offer companies more than they would offer consumers for example if Auckland
University had to approach them to purchase a mini store at the university McDonalds would
sell them one whereas for a consumer McDonalds would only market food items for them.
Organisations are also sold shares in McDonalds like State Street Corp in the US.
d) International Marketing vs. Domestic Marketing

When it comes to marketing in general both international and domestic are the same.
Domestic Marketing
The marketing strategies that are employed to attract and influence customers within the
political boundaries of a country are known as Domestic marketing. (Difference Between
Domestic marketing and International marketing) When a business only caters for local markets,
even though it competes against foreign companies functioning within the country, it is known
as domestic marketing. The companies focus is only to provide for local markets and not
overseas.
International Marketing
When there are no boundaries for a company and it targets customers overseas or in another
country, it is said to be engaged in international marketing. (Difference Between Domestic
marketing and International marketing)

Zealand) Ltd
Difference between domestic marketing and international marketing
As explained earlier, both domestic as well as international marketing refer to the same
marketing principles. However, there are evident dissimilarities between the two.
The scope of domestic marketing is limited and will eventually dry up. On the other end,
international marketing has endless opportunities and scope. (Difference Between
Domestic marketing and International marketing)
As is obvious, the benefits in domestic marketing are less than in international marketing.
Furthermore, there is an added incentive of foreign currency that is important from the point
of view of the home country as well. (Difference Between Domestic marketing and
International marketing)
Domestic marketing is limited in the use of technology whereas international marketing
allows use and sharing of latest technologies. (Difference Between Domestic marketing and
International marketing)
Domestic marketing has nothing to do with political relations whereas international
marketing leads to improvement in political relations between countries and also increased
level of cooperation as a result. (Difference Between Domestic marketing and International
marketing)
In domestic marketing there are no barriers but in international marketing there are many
barriers such as cross cultural differences, language, currency, traditions and
customs.(Difference Between Domestic marketing and International marketing)
Sep. 20
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Zealand) Ltd
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Chartered Institute of Marketing: the management process responsible for identifying,

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American Marketing Association Definition: Marketing is the activity, set of institutions

The American Marketing Association (AMA) is the professional association for

Business Directory Marketing definition: The management process through

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through which goods and

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Closeness to the customer: Through a profound understanding of exactly what the

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In today's health conscious societies the introduction of a healthy hamburger is a great

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(Definition of Business Cycle)

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