Marketing Channels and Methods Term Paper

Pages: 7 (2664 words)  ·  Bibliography Sources: ≈ 15  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Marketing

SAMPLE EXCERPT . . .
"What is the right strategy to follow in a highly competitive market in which demand is relatively flat?" stated one executive recently. "The answer for us is to identify what our niche is in the market. For us, it is producing ... hamburgers." Healthy hamburgers! (Collins, 2002) Stressing return traffic for those hamburgers is an acknowledgement that McDonald's "fries and soda are where the fat [profit] margins really lie," for fast food companies -- but that does not have to mean fat consumers! (Munarriz, 2003)

Core Strategy

A value proposition is a clear statement of the tangible results a customer gets from using a company's products and services (Konrath, 2005). McDonald's has always offered its customers financial value, in the form of cheap, tasty food. But now the value will be given to the customer in a way that is better for the customer's physical as well as financial health.

Marketing Mix

Communications & Promotion

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An integrated marketing communications, or IMC approach, involves "coordinating the various promotional elements and other marketing activities that communicate with a firm's customers" (Belch & Belch 1999, p. 8). The image of an ordinary woman such as Morgan communicates the achievability of her weight loss goal without suffering the deprivation of the foods she desires, combined with value-saving coupons that attract McDonald's customers, based upon past needs and the fun incentives of 'nutritional' games, will be an ideal form of seemingly uncalculated, grass-roots promotion of an ordinary woman's personal achievement. The new campaign can become a positive, healthy promotion that the whole family can enjoy, that teaches something, promotes the product, and is image-enhancing for the company.

Pricing

Term Paper on Marketing Channels and Methods -- Assignment

McDonald's previous pricing strategy was that of a purely, famously value-based strategy (Marketing Teacher, 2005). The company's aim was to attract a high volume of customers. McDonald's maximized its revenue by encouraging customers to produce a large amount of inexpensive goods, such as starches and sugars, for a lower price than its competitors. This is called the "maximize quantity pricing strategy" (Net MBA, 2005). However, this purely value-driven philosophy for one-time customer visits has turned public opinion and even the food industry against McDonald's, because of its stress on volume. Once, people came to McDonalds for value from the brand, now the brand has lost its cache, even while the pricing remains low in relation to competitors. The new diet plan will feature products that are lower or on par with the prices charged by the competition, like Wendy's and Burger Kin. But it will not compete with these chains purely by selling a cheaper product; rather the focus of the company will shift from a stress on cheap quantities of food given to the customer on single visits to a stress on giving consumer value on return-visit basis.

From "target return" pricing, whereby a certain return profit on a single good is expected the company must stress a more subtle form of "value based" pricing with additional psychological elements of pricing. In the new promotion of the McDonald's diet, coupons are bestowed upon a customer's first visit in a way that gives them value for volume by offering them a discount on their next meal, switching from a cumulative quantity discount overall, where a consumer gains value from buying in immediate bulk, to a longer term quantity strategy (Net MBA, 2005)

Product Policy

The product's new policy enables the ordinary McDonald's consumer to gain the psychological value of being on a diet, combined with the satisfaction, convenience and economy eating fast food. Eat sensibly, and eat right, and McDonald's will give you the means, this new policy will stress. This new policy emphasis stresses continued McDonald's of regular consumers, but consumption over an extended period, thus stretching the customer's calorie needs over a larger period than a day -- a strategy of smaller portions employed by the first independent designer of the diet herself, Merab Morgan. Also, the creation of a game whereby individuals answer questions about McDonald's food's nutritional contents will create an added psychological incentive to return to the fast food establishment, so as to continue to play the game, make money. The company gains the long-term psychological advantage of showing that McDonald's is upfront with its product's ingredients and cares about the value its food can give to its customers, by decreasing bundle or bulk-based consumption on single visits, but making up for the lost volume of additionally purchased goods with higher rates of return traffic into its stores. The company shows through this new product policy that, contrary to the Spurlock film, it does care about its customers and is flexible to the needs of modern life, and that its products can be adapted into a nutrition-friendly lifestyle. (Bauman, 2005)

Channels of Distribution

One additional benefit for the company is that its network of distributing the goods need not change, rather the new campaign is promoted through a change of marketing, pricing, and allocating value from single to multiple trips. It is still hamburger-focused. (Munarriz, 2003) Thus, this is a strategy that can be deployed not just in America, but also in a wide variety of countries with different network channels of good distribution, except in developing and rural nations where frequent transportation to the chain may prove difficult.

Customer Relationship Management

Before, during the "Supersize Me," debacle, McDonald's decision to eliminate supersized menus was seen as calculated by many industry observers. By drawing upon a grass-roots campaign of Merab Morgan, McDonald's can enhance its image, combined with still offering the customer taste and value. (Bauman, 2005)

Works Cited

Bauman, Valerie. (11 Aug 2005) "People try to lose weight at McDonalds." AP Wire. Accessed on AOL on 22 Aug 2005 at http://aolsvc.news.aol.com/news/article.adp?id=20050811163009990002

Burger King. (2005) Official Website. Retrieved 11 Sept 2005 at http://www.haveityourway.com/

Collins, Luke. (2002) "Chips are down for Burger Giants" MCD: McDonald's Corporation News and Articles. Retrieved 27 Aug 2005 at http://www.licenseenews.com/news/news134.html

Daft, R.L. (1997). Management. Fort Worth, TX: Dryden Press.

Konrath, Jill. (2005) "How to Write a Strong Value Proposition." Sideroad. Retrieved 2 Sept 2005 at http://www.sideroad.com/Sales/value_proposition.html

Kotler, P., Armstrong, G., Brown, L, & Adam, S. (1998). Marketing. Englewood Cliffs, NJ: Prentice Hall.

Kotler, P., Chandler, P., Gibbs, R., & McColl, R. (1999). Marketing. Englewood Cliffs, NJ: Prentice Hall.

McDonald's (2005) Official Website. Retrieved 22 Aug 2005 at http://www.mcdonalds.com / McDonald's Official Website. (2005)

"McDonald's Stock Quote." (2005) The Rogue Investor http://www.rogueinvestor.com/dow_jones_30/mcdonalds_stock_information.html

Munarriz, Eric. "Burger Wars." (2003) The Motley Fool.com Retrieved 27 Aug 2005 at http://www.fool.com/news/commentary/2003/commentary030407ram.htm

Neal, C., Quester, P., & Hawkins, D. (1999). Consumer Behavior: Implications for Marketing Strategy. Boston, MA: Irwin/McGraw-Hill.

News Target. (Apr 2004) "McDonald's Stock Quote." Retrieved 11 Sept 2005 at http://www.newstarget.com/000960.html

Perreault, W.D., & McCarthy, E.J. (2000). Essentials of Marketing: A Global-Managerial Approach. New York: McGraw-Hill.

"Pricing" (2005) Marketing Teacher. Retrieved 8 Sept 2005 at http://www.marketingteacher.com/Lessons/lesson_pricing.htm

'Pricing Strategy." (2005) Net MBA. Retrieved 7 Sept 2005 at http://www.netmba.com/marketing/pricing/ [END OF PREVIEW] . . . READ MORE

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