Jaipuria Institute of Management,

Vineet Khand, Gomti Nagar

Lucknow – 226010

Academic Year 2021-22

Batch 2021-2023
Trimester 1
Programme (PGDM / PGDM-FS / PGDM
PGDM-RM)
Name of Course MARKETING MANAGEMENT
Section D
Name of Faculty Prof. Reeti Agarwal

Nature of Submission Assignment

(Assignment / Project Report)
Topic of Assignment / Project SEGMENTATION, TARGETING AND POSITIONING

Deadline for Submission 26 October 2021

Group/ Learning Team Number LTD10
Maximum Marks Allotted

Contribution of Group/LT members in the Assignment/Project

Sl. Name & Enrollment Contribution Signature

No. Number of Student

1 Bhavika Sahai INTRODUCTION

Enrollment number-
JL21PG217

2 Yashi Rastogi HISTORY

Enrollment number
JL21PG216

3 Sreyash Srivastava EXPANSION AND PRODUCTS

Enrollment number-
JL21PG219

4 Tripti Singh PESTLE ANALYSIS

Enrollment number-
JL21PG221
 5 Sunidhi Chaudhary SWOT ANALYSIS
Enrollment number-
JL21PG220

6 Tanya Singh SEGMENTATION, TARGETING AND

Enrollment number-
JL21PG214
POSITIONING ANALYSIS

7 Vineet Singh 4 P’S OF MARKETING

Enrollment number-
JL21PG218

Date of receiving at PMC: Signature of PMC Staff:

Penalty [Marks to be deducted (if any)]:
 INTRODUCTION

McDonald's is currently one of the largest fast-food corporations in the world. It is currently
operating in over 119 countries and has acquired over 31,000 restaurants around the world.
McDonald's brand objective is to be customers' favourite place and way to eat; they are
united by a worldwide plan known as the 'Plan to Win,' and they are dedicated to
continuously improving their operations and increasing their customers' experience.
McDonald's, as we all know, has been successful in achieving their goal over the years. Apart
from that, as a global corporation, McDonald's had a social obligation to give back to the
community; as a result, the 'Ronald McDonald House Charities' was founded to improve their
social image. Unfortunately, McDonalds does not have a 100% market share because there
are still a number of other competitors in the market, such as KFC and Burger King. Because
the business is hypercompetitive, McDonalds will require a smart marketing strategy to
defeat other competitors and maintain their position. McDonalds' effective marketing
strategy, as we all know, is founded on their unique and creative advertising as well as
excellent marketing research in order to maintain customer loyalty. Finally, the performance
of this project will be evaluated by three primary sessions: marketing research, marketing
mix, and competition strategies.
 HISTORY

In San Bernardino, California, brothers Maurice ("Mac") and Richard McDonald launched
the first McDonald's restaurant in 1940. It used to be a drive-in that served a wide range of
foods. However, in 1948, the brothers decided to rebuild the business, and a newly
envisioned McDonald's launched following a three-month makeover. The little restaurant was
created with the goal of producing large quantities of meals at a minimal cost. To do this, the
brothers created a simple, efficient structure called the Speedee Service System, which
comprised simply hamburgers, potato chips (later replaced by french fries), drinks, and pie.
Customers received their food promptly since hamburgers were made ahead of time,
wrapped, and warmed under heat lamps at a self-service station, which eliminated the need
for servers and waitresses. Because of these advances, the brothers were able to charge only
15 cents for a basic hamburger, which was less than half the price of rival restaurants.
McDonald's was such a hit that the brothers decided to start a franchise scheme.

McDonald's purchased appliances from Ray Kroc, a salesperson who was attracted by their
requirement for eight malt and shake mixers. He went to the restaurant in 1954 to check how
such a little establishment could sell so many milkshakes. Kroc became a franchise agent for
the brothers after seeing the potential in their restaurant concept. Kroc founded McDonald's
Systems, Inc., subsequently known as McDonald's Corporation, in Des Plaines, Illinois, in
April 1955, and opened the first McDonald's franchise east of the Mississippi River there as
well. Kroc bought out the McDonald brothers in 1961.
  EXPANSION AND PRODUCTS

The chain's local and international expansion continued. McDonald's first franchise outside of
the United States debuted in Richmond, British Columbia, Canada, in 1967. There were over
34,000 outlets operating in more than 115 countries and territories by the early twenty-first
century. In the 1990s, growth was so rapid that it was reported that a new McDonald's opened
every five hours somewhere on the planet. It quickly became the most popular family
restaurant, focusing on low-cost meals, entertainment, and flavours that appealed to both
children and adults.

McDonald's expanded its menu over time, adding Filet-O-Fish sandwiches in 1965, Quarter
Pounders in 1973, Egg McMuffins in 1975, Happy Meals in 1979, and Chicken McNuggets
in 1985. (1983). Furthermore, restaurants in other nations changed their menus to cater to
local tastes and habits.

McDonald's expanded their business beyond hamburgers in the late twentieth century,
purchasing Chipotle Mexican Grill (1998), Donatos Pizza (1999), and Boston Market (2000)
in the United States, and Aroma Cafe (1999) and a stake in Pret A Manger (2001) in the
United Kingdom. McDonald's, on the other hand, no longer owned or had an interest in any
of those enterprises by late 2008, focusing exclusively on its own brand.
 PESTLE ANALYSIS

 POLITICAL

McDonald's is the world's largest fast food chain. Because the government's primary priority
is public safety, fast food enterprises are always at risk of being targeted by the government.
So, if McDonald's does not follow health and safety regulations, it will be shut down by the
government. Furthermore, there is growing worry that their cuisine contains excessive levels
of sodium and sugar, which can lead to health problems such as diabetes and hypertension.
As a result, McDonald's is expanding its menu to include healthier options. Many countries
are more receptive to western culture and cuisine. Iran, which has a strained relationship with
the United States, has outlawed McDonald's. Bermuda has likewise banned McDonald's due
to its opposition to fast food.

 ECONOMIC
McDonald's has a presence in more than 120 countries. It needs to obtain supplies from all
over the world, and the cost of materials fluctuates due to currency exchange rates. As a
result, it must continually think on how to obtain materials at a minimal cost. People's
demand for fast food has declined as a result of the recent recession in many regions of the
world. McDonald's has a high employee turnover rate, which means that employees leave the
company frequently, and the company must constantly hire. Hiring and training new
employees wastes a lot of money and effort.

 SOCIAL
McDonald's is known for responding to the needs of its customers. Initially, it opened
restaurants all over the world by taking the 'American way of life' with them. Later on, it
began serving a variety of countries based on their specific needs. Because the majority of
Hindus in India are against beef, it substituted it with chicken, and because the majority of
Indians are vegetarians, it invented veggie burgers, McAloo tikki, and McVeggie to entice
them. The menu in Japan is completely different. Green tea ice cream, rice burgers, teriyaki
burgers, and shrimp burgers are among the items introduced, all of which cater to the tastes
and preferences of Japanese people.
  TECHNOLOGICAL

McDonald's is constantly developing new technology to improve customer service in order to

keep up with today's rapidly evolving technologies. It has recently installed self-order kiosks
throughout its restaurants, allowing guests to skip the line at the order desk. When people
choose their own things rather than ordering at the counter, they tend to order more.
McDonald's will purchase Dynamic Yield, a digital firm, in 2019 in order to better customise
meals. McDonald's restaurants' electronic menus now display different options depending on
weather, time of day, or regional preferences. People may order their favourite things and
add-ons using the app and have them delivered to their homes. McDonald's is continually
improving customer satisfaction through the use of such technologies.

 LEGAL

McDonald's is battling entrepreneur Vikram Bakshi for control of the Connaught plaza
restaurants in India. They have a joint venture that owns 185 McDonald's locations in the
north and east, but after Vikram Bakshi was fired as the firm's managing director in 2013,
Bakshi launched a lawsuit alleging McDonald's of mismanagement. This litigation is
assisting McDonald's competitors in growing in these areas while hurting McDonald's.
McDonald's was sued in Quebec for the toys that come with the happy meals. It was claimed
that it advertised the toys to entice children, despite the fact that advertising to minors under
the age of 13 is prohibited in Quebec.
  ENVIRONMENTAL

McDonald's has established a goal of having 100% of its packaging material come from
renewable or recycled sources by 2025, with recycling taking place in every location. Only
50% of packaging currently comes from sustainable sources, and only 10% of restaurants
recycle. Instead of sending orange juice in a ready-to-serve container, McDonald's now ships
frozen concentrate, which reduces orange juice packaging by 75%. To save energy,
McDonald's has pledged to install energy-efficient cooking equipment and LED lighting in
all of its restaurants.
 SWOT ANALYSIS

STRENGTHS

UNIVERSAL FRANCHISE: McDonald's is a multinational corporation with locations all

over the world. In 118 countries throughout the world, it is known for its fast food. As a
result, it has a significant global footprint. This makes it more recognisable to the general
public and aids in public awareness. As a result, it can put its global ideas into action on a
local level. This implies it can pursue its universal goals while also winning the hearts of its
customers.

It's also the most common for studies on fast-food restaurants and fast-serving eateries. It's
also the most well-known brand name for college essays. These facts say much about its fame
and appeal. All of this makes it simple for them to obtain new customers. It also works well
to intimidate their opponents.

FINANCIAL POSITION: McDonald's has a solid financial foundation. It has a total of fast
food outlets. It has been slowly but steadily increasing market share for the past 80 years. As
a star firm, it has won the public's trust. Its financial situation has put it in a position of sheer
advantage, causing its market value and brand name to skyrocket. It had a revenue of 21.98
billion dollars in 2019. As a result, the organisation benefits from this financially solid
position.
LARGE MARKET SHARE: In terms of size and global impact, McDonald's is the most
significant player. In 2006, as Wendy's and Burger King lost market share, McDonald's
continued to gain market share. McDonald's has a 19 percent market share, Yum! Brands has
a 9% market share, Wendy's has a 2% market share, and Burger King has a 2% market share.

CUSTOMER-CENTRIC INITIATIVE: McDonald's Win Plan provides a worldwide

framework for your organisation while allowing for local personalization. McDonald's has
improved the dining experience for customers around the world by adopting initiatives
around the five parts of your plan to win: people, products, location, price, and advertising.
As a result, revenues and customer visits have increased. This strategy, when combined with
financial prudence, has yielded positive outcomes for the company's stockholders.

INNOVATIVE TECHNOLOGY: McDonald's remains cutting-edge around the world; for

example, in Brazil, McDonald's is investigating the installation of Internet access terminals in
some outlets, which, in addition to allowing customers to order online, would result in a more
efficient process that would reduce the time between a customer's order and order pick-up,
would result in a more efficient process that would reduce the time between a customer's
order and order pick-up.

EARLY MOVER: McDonald's, which is credited with being the first to enter the fast-food
market, ushers in a new brand. Customers always think of McDonald's when they think of
fast food. McDonalds is, in fact, the number one choice for many customers in some large
countries, including the United States.

WEAKNESS: -

LEGAL ACTION: Throughout the process, McDonald's was involved in a number of

judicial processes and other legal cases. There are numerous examples involving the
trademark issue, for example. Many additional eateries and single-coffee-shop operations
were rebranded by McDonald's. Because the letters "Mc" are still present.

HEALTH PROBLEM: McDonald's uses beef oil and trans fat in their cuisine. Though it
isn't unlawful, it has a negative impact on customers' health because Trans—fat is the cause
of any reasonable cancer. As a result, a number of people who are concerned about their
health avoid eating at McDonald's restaurants. The company's revenue is reduced as a result.

IMBALANCED MEALS: Despite McDonald's efforts to update its menu with healthier
criteria, McDonald's meals remain unbalanced, with many items featuring chicken (both
grilled and fried), bacon, beef, ribs, or eggs. Salad of vegetables and fruits, with a limited
quantity of fruits and vegetables.

HIGH EMPLOYEE TURNOVER: Despite having many competent management and

experienced staff, McDonald's has a high turnover rate. Every year, several of his employees
get laid off from eateries. Furthermore, many others have left their employment, particularly
part-time workers, due to poor pay and heavy work pressure.
DISSATISFIED FRANCHISEES: Franchisees are becoming increasingly upset with the
costs imposed by McDonald's, and as the firm expands, so are the fees imposed on
franchisees for utilising the famed fast food name. People are upset, and many franchisees are
selling their companies as a result.

OPPORTUNITIES: -

The opportunities are external variables of a firm that they may profit from and gain from. A
McDonald's SWOT analysis will assist executives in considering them before making their
next big move.

DIGITAL MARKETING: Today's world is abuzz with news of digital marketing, which
has prompted many of the world's most well-known firms to expand their market share and
sales. McDonald's is also gaining a competitive edge by committing to being fully digital.
McDonald's is already utilising significant digital marketing platforms. Other digital
marketing channels include corporate websites, loyalty blogs, and marketing, in addition to
social media platforms. Digital marketing has the potential to make the brand more accessible
to a wider audience. Digital technology is used by McDonald's for staff engagement, supply
chain management, and franchise management.

FOCUS ON ASIAN MARKETS: The Asian market is brimming with commercial

potential. Fast food is in high demand among the present generation in nations such as China,
Singapore, Malaysia, and others in Asia. Many individuals prefer to eat quickly. As Asian
nations have prospered in recent years, boosting the spending power of middle-class
customers, McDonald's should devise various tactics to enhance its entry into Asian markets,
therefore growing the brand's client base and profits.

THREATS: -

Threats are the most important part of a swot analysis. A McDonald’s SWOT analysis will
point out the threats to this community that has been holding it back.

THE IMPACT OF THE PANDEMIC: This is a period of pandemics. McDonald's is a

household name in the consumer products industry. Even while the epidemic has had little
effect on sales, it does not diminish the gravity of the problem. This pandemic has had an
impact on the production, distribution, and purchase of McDonald's products. This has
resulted in significant modifications in McDonald's business practises.

MORE RELIANCE ON FRANCHISES: McDonald's business strategy is highly reliant on

its franchisees, which account for over 90% of the company's revenue. Although McDonald's
company has been solid thus far, franchise issues continue to arise on franchise units. There
would be more control as well. It becomes tough for the firm if the franchise does not
cooperate and its financial performance is poor. Without a franchise, it might be impossible
to carry out a large campaign or make a key strategic choice. As a result, the franchisee's total
job becomes crucial and important in order for the corporation to manage its franchisee
effectively.
 SEGMENTATION, TARGETING & POSITIONING
ANALYSIS OF MCDONALDS

Mc Donald's is a world-class fast food restaurant chain with a diverse range of cuisine
spanning from burgers to wraps, salads to desserts, shakes to coffees, and a commitment to
customer service.

Mc Donald's history stretches back to 1955, when it first opened its doors as a fast food
pioneer in the United States of America.

By the 1970s and 1980s, the organisation had established branches in various countries,
spreading the American way of life. Mc Donald's has a global consumer base of
approximately 69 million people.

McDonald's is the world's largest global foodservice retailer, with over 35,000 restaurants
serving over 70 million consumers every day in more than 100 countries.

McDonald's is famous for its wonderful hamburgers, but it also serves a variety of chicken
and beef sandwiches, French fries, and breakfast dishes. McDonald's adjusts its menu and
products according on the location in which it operates, in order to cater to the tastes and
demands of local customers.

For example, in India, McDonald's does not offer beef and instead promotes both non-
vegetarian (chicken) and vegetarian (vegetable) burgers. McDonald's is known for their beef
burgers in the United States.

"If I had a brick for every time I've said the words Quality, Service, Cleanliness, and Value, I
think I'd probably be able to span the Atlantic Ocean with them," says Ray Kroc, the
company's creator.

How did McDonald's manage to have so many locations throughout the world?

The organization's franchise marketing approach has assisted it in spreading its wings over
the world, allowing its members and owners to share risks, penetrate, and exploit new
business possibilities around the world.

MC Donald's, on the other hand, employs a market segmentation, targeting, and positioning
approach.

What is segmentation, targeting, and positioning, and why is it crucial to businesses?

Organizations use segmentation, targeting, and positioning as strategic market models to split
the commodities, products, or services supplied in order to target a specific audience and
place the brand image in the audience's thoughts against their competitors in the market.
SEGMENTATION: - Market segmentation is the division of large marketplaces into
groups with comparable requirements and desires. The goal of segmentation is to obtain a
better understanding of the consumer, create a competitive edge, and be able to better service
the customer's requirements and wishes.

McDonald's divides a large market into tiny consumer groups using several forms of
segmentation.

 GEOGRAPHIC SEGMENTATION:
Geographic segmentation splits markets based on their location. McDonald's divides their
business into geographical regions, such as:
-America
-Europe
-Asia/Pacific, the Middle East, and Africa are three of the world's most populous regions.
McDonald's adjusts their menu and food offerings to fit regional tastes and demands based on
geographic segmentation (e.g., Canada, Latin America).
-In India, McAloo Tikki and McVeggie are available.
-In the United States, the Bacon Smokehouse Burger and Quarter Pounder (beef) Burger are
offered.
-In Arabian nations, McArabia Chicken and Beef Burgers are offered.

 DEMOGRAPHIC SEGMENTATION:
Demographic segmentation is based on consumer-demographic data like age, income, family
size, socioeconomic position, and so on.McDonald's divides the market into the following
demographics:

1. Children: To entice this younger demographic, McDonald's provides a variety of

freebies, toys, and happy meals.
2. Young Adults (Age Group 18-29): Without a doubt, this category is the most important
source of revenue for any company, much alone McDonald's. Although this market sector
has a smaller disposable income than the norm, their purchasing behaviours are
significantly more extravagant than those of the other market categories.
3. Adults: The third section is the adults' segment, which McDonald's targeted by tweaking
its menu and making its offerings less calorie-dense and healthier.

TARGETING:-

Following segmentation, the organisation must choose a targeting approach. Companies must
decide which market segments they wish to focus on and include them in their long-term
business plan. The marketer must make many critical decisions:

 What standards should be used to assess markets?

 How many markets should you go into (one, two, or three)?
 What are the most valuable market segments?
Three important elements to consider while considering a possible market segment are listed
below.

1. Size and expansion of segments

2. Attractiveness of segment structure
3. The company's goals and resources

POSITIONING: -
Positioning refers to the choosing of the best marketing mix for the target client category.
Positioning is accomplished by the manipulation of the four Ps of the marketing mix, and the
positioning matrix reveals that certain combinations make more sense than others (Iacobacci
2014). McDonald's employs adaptive product positioning, and as a result, the corporation
engages in frequent re-positioning of products and services in response to changes in the
segment (Dudovskiy 2016). A exact statement from McDonald's franchise strategy paper is
as follows:

“McDonald’s has made itself to be the family friendly low cost restaurant in
the fast food business. We have a narrow scope for a customer base and a low
cost strategy” (McDonalds 2016).”

Positioning is the act of forming a picture in the minds of customers that allows them to
recognise the differences between your product and that of competitors. McDonald's has
positioned itself as a family restaurant in India. Then they began promoting themselves in
relation to children by incorporating innovative toy advertising with their products, such as
"Happy Meal." They took great measures at first to prevent it from becoming a hangout spot
for teenagers and adults (20 to 24 years of age). Now that children and adults are so
accustomed to fast food, McDonald's should target them as well, attempting to present
McDonald's as a destination for everyone.
 4 P’S OF MARKETING
 PRODUCT

DIVERSIFICATION: McDonald's is recognised for its burgers, but it also has a diverse
menu of other things. McDonald's offers to a wide range of tastes and preferences, from
salads for the health-conscious to ice cream for dessert.

It addresses a wider market demand by diversifying its menu options and attracting more
clients. This also reduces the risk of being overly reliant on a single market segment.

LOCALIZATION: McDonald's excels at one part of its business: localization. They know
that cultural differences in different locations lead to differing culinary preferences because
they have so many outlets all around the world.

For example, there are more chicken, fish, and vegetarian options in India, where a bigger
number of people do not eat beef or meat in general.
  PRICE

BUNDLE PRICING: When offering combo meals that are less expensive than ordering a
burger or drink a la carte, McDonald's aggressively uses bundle pricing. Customers are more
inclined to buy more things at this reduced pricing in order to get the most bang for their
buck. Family dinners, in addition to combo meals, are another approach to entice customers
to spend more.

PSYCHOLOGICAL PRICING: Many of the menu items are also intentionally priced, with
pricing like $.95 or $.99 rather than $.00 being used. Customers will consider things to be
more affordable as a result, prompting them to purchase more.

 PLACE
ACCESSIBILITY: McDonald's has a large number of locations near city centers and
commercial malls, making it very accessible.

While McDonald's is best known for its restaurants, the company also offers other services
such as dessert kiosks, McCafe, and even McDelivery in select regions. Some McDonald's
locations are also open 24 hours a day, seven days a week, to serve customers.

FACILITIES: Free internet is available at many McDonald's locations, making it more

handy and appealing to teenagers, businessmen, and even freelancers searching for a place to
work.
On the premises of some locales, there may even be a playground. This provides a fun space
for kids to play after they've eaten, which is appealing to both kids and families.

 PROMOTION
ADVERTISING: McDonald's spends more than a billion dollars on advertising each year,
and they do so in a variety of ways, including newspaper and magazine ads, radio and
television commercials, social media posts, and more.

McDonald's is very good at a few aspects of advertising, including:

 Symbols & slogan

McDonald's has become identified with the golden arches and the Ronald McDonald clown.
"I'm lovin' it," says McDonald's in a short and straightforward slogan. This slogan, which is
backed by a catchy tune, appears regularly in both digital and print advertisements.
These eye-catching icons, as well as the catchy tagline, make the McDonald's brand easy to
recall, firmly establishing it over the world.

 Co-Branding
McDonald's is also recognised for collaborating with other businesses to promote their
products. One prominent partnership is the McDonald's Monopoly Game, which they
developed with Hasbro.
When purchasing a meal, it also sells memorabilia such as Transformer figurines, Hot Wheel
cars, NBA and Olympic related products, and so on. Customers are more likely to return to
the restaurant if they have collected the full set.

 Corporate Social Responsibility

McDonald's also uses CSR to promote a positive image. The Ronald McDonald House, for
example, is a non-profit organisation dedicated to improving children's health and well-being.
McDonald's also tries to reduce its environmental impact by reducing plastic waste and
buying from suppliers who don't deforest. This boosts the company's sustainability brand
value and attracts customers who want to support socially conscious businesses.

 PEOPLE
CUSTOMER SATISFACTION: McDonald's knows how important it is to keep consumers
pleased and satisfied. Customers are urged to be polite, and employees are encouraged to
serve them with a smile. Due to its very efficient operations, there are frequently minimal
wait periods, as befitting its 'fast-food' moniker.

Self-service kiosks and digital menu boards are examples of how technology may be used to
deliver a more seamless client experience while also lowering labour costs.

CHILDREN and FAMILIES: McDonald's also has a lot of marketing initiatives aimed at
kids and families. McDonald's advertises itself as a fun location for a family to visit, from
Happy Meal toys to advertising with smiling children and parents.