Marketing Mix 4Ps | McDonald's Examples

Summary

The video script explains the Marketing Mix 4Ps—Product, Price, Place, and Promotion—as crucial for businesses to attract customers. McDonald's is used as a case study to demonstrate how these elements are adapted to meet consumer needs and preferences. The script covers McDonald's product diversification, competitive pricing strategies including a 'Saver Menu', extensive global presence, and multi-channel promotional activities. It emphasizes the importance of aligning the 4Ps for effective marketing.

Takeaways

• 🔑 The Marketing Mix 4Ps model includes Product, Price, Place, and Promotion, which are crucial for businesses to attract customers.
• 📈 Product involves tangible items like smartphones and services like beauty treatments, with McDonald's adapting to include healthier options.
• 💰 Price is pivotal and influenced by factors like supply, competition, and brand image, with McDonald's offering competitive pricing and a premium range.
• 📍 Place focuses on where customers can purchase, with McDonald's expanding from physical stores to online and mobile app orders.
• 📢 Promotion includes various activities to create interest, with McDonald's heavily investing in advertising and using promotions like Monopoly.
• 🌐 Adaptability is key as businesses must constantly adjust their marketing mix to environmental changes.
• 🏆 USP (Unique Selling Proposition) is essential for differentiation in a crowded market.
• 🍔 McDonald's has diversified its product portfolio to meet changing consumer tastes, including vegetarian and vegan options.
• 💼 Understanding customer willingness to pay is vital before setting product prices.
• 🌟 A strong brand image allows businesses like McDonald's to charge more due to customer trust and desirability.
• 📱 The introduction of 'My McDonald’s' app and 'McDelivery' service exemplifies the evolution of place in the digital age.
• 🎯 Integrated marketing strategies are necessary for the 4Ps to work effectively together.

Q & A

What is the Marketing Mix 4Ps?

The Marketing Mix 4Ps is an analytical model used by businesses to attract customers, consisting of four elements: Product, Price, Place, and Promotion.

Why is it important for businesses to adapt their marketing mix?

It's important for businesses to adapt their marketing mix to changes within their environment to remain effective in attracting customers.

What is the focus of the Product element in the Marketing Mix?

The Product element focuses on the tangible or intangible products or services that a business sells.

How does McDonald's differentiate its products?

McDonald's has diversified its product portfolio by introducing a range of products like McCafe, breakfast menu, salads, and vegetarian/vegan options to meet changing consumer tastes.

What factors influence the Price element of the marketing mix?

Factors influencing Price include the availability of the product, competition, and brand image.

How does McDonald's set its prices to attract customers?

McDonald's offers competitive pricing with a 'Saver Menu' and has introduced a signature range with higher prices to attract customers willing to pay more for premium products.

What does the Place element of the marketing mix entail?

Place focuses on the locations where customers can purchase products or services, including retail stores, online platforms, and direct manufacturer purchases.

How has McDonald's expanded its 'Place' strategy?

McDonald's has expanded its 'Place' strategy by introducing a mobile application for online ordering and a 'McDelivery' service through third-party delivery services.

What is the role of the Promotion element in the marketing mix?

Promotion involves activities to generate interest and awareness of products and services, aiming to increase sales.

What promotional activities does McDonald's use?

McDonald's uses a mix of advertising, sales promotions like the Monopoly game, and direct marketing through email and app notifications.

Why is it crucial for the 4Ps to complement each other?

For the marketing mix to be effective, each element of the 4Ps must complement the others to attract customers and increase spending.

How much did McDonald's spend on advertising in 2020?

McDonald's spent over $600 million on advertising in 2020.

Outlines

00:00

🍔 Understanding the Marketing Mix 4Ps

The Marketing Mix 4Ps is a business model consisting of Product, Price, Place, and Promotion. It's crucial for businesses to adapt these elements to attract customers. The video uses McDonald's as an example to demonstrate the application of the 4Ps. Product focuses on tangible items a business sells, and McDonald's has diversified its product portfolio to meet changing consumer demands. Price involves setting competitive prices and McDonald's offers affordable options like the 'Saver Menu' and a premium signature range. Place is about providing convenient purchasing options, and McDonald's has expanded to include mobile ordering and delivery services.

05:04

📱 McDonald's Innovations in Place and Promotion

McDonald's has innovated in the 'Place' aspect by offering not just in-store purchases but also through a mobile app and delivery services like 'McDelivery'. For 'Promotion', McDonald's uses a mix of advertising, sales promotions like the Monopoly campaign, and direct marketing via email and app notifications. The video emphasizes that the 4Ps should complement each other for effective marketing. The script concludes by encouraging viewers to like and subscribe for more business-related content.

Keywords

💡Marketing Mix 4Ps

The Marketing Mix 4Ps is a foundational concept in marketing that refers to the four key elements a company must control to market a product effectively: Product, Price, Place, and Promotion. In the video, McDonald's is used as a case study to demonstrate how these elements are applied in practice. The 4Ps model is central to the video's theme of understanding how businesses attract customers.

💡Product

Product refers to the goods or services offered by a business. In the context of the video, McDonald's has evolved its product line to include healthier options like salads and vegan meals, in addition to its traditional fast food offerings. This diversification helps the company meet changing consumer demands and preferences.

💡Price

Price is the amount of money charged for a product or service. The video explains how McDonald's sets competitive prices and uses strategies like the 'Saver Menu' to attract price-sensitive customers. It also discusses the introduction of a premium, higher-priced menu to cater to different market segments.

💡Place

Place in the marketing mix refers to the distribution channels and locations where consumers can access a company's products. McDonald's has expanded its 'place' strategy by adding online ordering through its app and delivery services like 'McDelivery', making it convenient for customers to purchase their products.

💡Promotion

Promotion covers the various activities a company uses to communicate the value of its products to consumers and persuade them to buy. McDonald's uses a mix of traditional advertising, sales promotions like the Monopoly game, and direct marketing through email and app notifications to promote its brand and products.

💡USP (Unique Selling Proposition)

USP is a marketing concept that emphasizes the unique features or benefits of a product that distinguish it from competitors. The video mentions that businesses should seek to differentiate their products to stand out, which is McDonald's approach by offering a wide range of products to cater to various consumer tastes.

💡McCafe

McCafe is a product line within McDonald's that focuses on coffee and other beverages. It is mentioned in the video as an example of how McDonald's diversified its product portfolio to attract a wider audience, including those seeking a coffee shop experience.

💡McDelivery

McDelivery is McDonald's service for delivering food directly to customers' homes or offices. The video highlights this as part of McDonald's adaptation to modern consumer preferences for convenience and the growth of online food delivery services.

💡Consumer Behavior

Consumer behavior refers to how individuals make decisions about buying goods and services. The video discusses how factors like price, product availability, and competition influence consumer behavior, which McDonald's considers when setting its pricing strategy.

💡Brand Image

Brand image is the perception that consumers have about a brand. The video explains that a strong brand image, like McDonald's, can command higher prices because consumers perceive the brand as desirable and trustworthy.

💡Market Research

Market research is the process of gathering information about consumers' wants and needs. The video emphasizes the importance of conducting market research to understand the target market, which McDonald's uses to guide its product development and marketing strategies.

Highlights

The Marketing Mix 4Ps is an analytical model used by businesses to attract customers.

The 4Ps consist of Product, Price, Place, and Promotion.

Businesses must adapt their marketing mix to environmental changes.

Product element focuses on tangible items and services.

Market research is crucial for product development.

Differentiation is key to standing out from the competition.

McDonald's has diversified its product portfolio to meet changing consumer tastes.

Price impacts buyer behavior and is influenced by supply, competition, and brand image.

McDonald's offers competitive pricing with a 'Saver Menu'.

Place involves where customers can purchase products or services.

McDonald's has over 39,000 restaurants worldwide for easy access.

McDonald's introduced online ordering and delivery services.

Promotion includes activities to generate interest and awareness.

McDonald's spends over $600 million annually on advertising.

Sales promotions like Monopoly increase short-term sales.

Direct marketing through email and app notifications is used to target customers.

The 4Ps should complement each other for effective marketing.

Transcripts

The Marketing Mix 4Ps is an analytical model used by businesses to attract customers.

It is made up of four elements which are referred to as Ps, simply because they all start with

the letter P. These are Product, Price, Place, and Promotion.

It’s important to be aware that the most effective businesses constantly adapt their

marketing mix to the changes which happen within their environment.

In this video, we will look at each P individually and apply the Marketing Mix to McDonalds to

see how they effectively use the 4Ps to attract customers.

The first P is product.

The product element of the marketing mix is focused on the products or services that a

business sells.

Products are classified as tangible items as they come in a physical form and can be

touched by the consumer.

For example, smart phones, clothing, and trainers are all classed as tangible products.

Whereas services are classed as intangible as they cannot be touched by the consumer.

Examples of services include, beauty treatments, car valeting, and pet sitting.

When developing a product to sell to the public, it’s crucially important that the business

conducts market research to identify the wants and needs of the consumers within its target

market.

Following this, where possible a business should seek to differentiate its products

and services to stand out from the competition and increase the chances of the customers

shopping with them.

This is where the USP comes into play as the business aims to make the product or service

different to what is already available elsewhere in the market.

Traditionally, McDonald’s offered fast food which was perceived by the public as predominately

unhealthy but tasty, with the core products within its portfolio including burgers, chips,

and milkshakes.

However, over the years McDonald’s has diversified its product portfolio and adapted to changing

consumer tastes.

For example, McDonald’s has introduced a wide range of diverse products such as it’s

McCafe range, a breakfast menu, salads, aswell as vegetarian and vegan meal options.

This has helped McDonald’s to attract a wider audience and meet the wants and needs

of more consumers, which in turn has helped them to increase sales.

We now move onto the second P which is Price.

Price is focused on the selling price set by the business for its products and services.

It’s a very important element of the marketing mix and one that truly impacts buyer behaviour.

Before setting a selling price, it’s important that the business understands how much the

customers within their target market are willing and able to pay.

but there are several factors which influence this.

These include: The availability of the product or service,

for example, if a product is in short supply, this typically drives up the price a business

can charge.

Competition in the market also impacts price, for example, if a business has many competitors

who offer similar products or services, it is likely that it will need to reduce its

prices to compete and attract customers within the crowded marketplace.

In addition, the brand image is a very influential factor as most customers have a preconceived

opinion about the business and its products which influences its worth to them.

A business with a very strong brand image is typically able to charge more for their

products and services as customers find the brand desirable and trustworthy.

Once a business has considered these factors and knows how much the customers within their

target market are willing and able to pay for its products and services, it’s then

able to utilise a range of pricing strategies to influence buyer behaviour.

The price of McDonald’s products could be considered as being very competitive with

many people visiting McDonald’s stores not only because of factors such as convenience

and speed but because the products are also very affordable.

They even offer customers a ‘Saver Menu’ which features fan favourites such as the

famous cheeseburger, Fries, and McFlurry’s for just 99p.

However, in recent years, McDonald’s have introduced a signature range which is focused

on what they deem to be a more premium upmarket product with a higher selling price, with

the aim of attracting customers who are willing to pay more for a better-quality product that

still comes with the convenience and familiarity of McDonalds.

The third P of the marketing mix is Place.

Place is focused on the location where customers can purchase the products or services which

the business offers.

Common examples of place include: Retail stores which customers can physically

visit.

Online such as a website or a mobile application which customers can access via the internet.

Or purchases made directly from the manufacturer.

In today’s business world, it’s very important to provide customers with the opportunity

to purchase products and services in a variety of places which are convenient to them such

as having both physical retail stores and a website.

As of 2020, McDonald’s had over 39,000 restaurants around the world, meaning customers are never

too far away from a McDonald’s or seeing those famous arches in the distance.

Traditionally, McDonald’s could only be purchased instore at their restaurants or

by utilising their drive through.

This has all changed in recent years as McDonald’s have introduced a variety of new ways for

customers to purchase their products which include:

A mobile application known as ‘My McDonald’s’ which allows customers to order online

and a delivery service which is known as ‘McDelivery’ that allows customers to have food delivered

directly to them through third party delivery services such as Uber Eats and Just Eat.

The fourth and final P is Promotion.

Promotion is focused on the activities undertaken by a business to generate interest and make

customers aware of the products and services which they sell.

Businesses often use a wide variety of promotional activities with the aim of ultimately increasing

sales.

Common methods of promotion include discounts and special offers, social media activity,

influencers, sponsorship, and advertising across a range of multimedia such as TV, radio,

billboards, online video, and website banners.

McDonald’s uses a mixture of promotional activities to bring attention to the brand

and increase sales.

Advertising is one of their most effective promotional techniques and something McDonald’s

takes very seriously, having spent over $600 million in 2020 alone to carry out campaigns

across TV, Newspaper, Radio and billboards just to name a few.

McDonald’s also use sales promotion as a short-term incentive which is designed to

encourage people to buy more of their fast-food products.

For example, the Monopoly promotion where customers receive stickers with their meal

which gives them the chance of winning free food, discounts at certain retailers or even

cash prizes for a limited time which has successfully increased sales at McDonald’s as people

buy more often and buy larger meals to increase their chances of winning.

McDonald’s also utilise direct marketing through email and app notifications by targeting

their customers with special offers and seasonal menus items designed to encourage them to

make an order online or instore.

Now that we’ve looked at each of the 4Ps with some examples of how McDonald’s utilises

them, it’s important to be aware that the 4Ps shouldn’t be used in isolation and for

the marketing mix to be truly effective in attracting customers and increasing spending,

it’s crucial that each element of the marketing mix complements the others.

Hopefully, that’s provided you with a better understanding of this analytical marketing

model and how it is used in business.

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