Free Essay: Marketing Mix of Starbucks and McDonalds

The industry dealing with fast food is quite competitive, and there are large companies that tend to dominate it. This way, it demands that small businesses need to be savvy in their development of strategies to drive consumer traffic. This discussion will look into the industry of fast food and focus particularly on Starbucks and Mcdonald's. These are two large companies dominating the market and they have different approaches for their marketing techniques. The two have a marketing mix that defines the strategies and the tactics that they will use to reach their target customers in terms of their products, place, price, and promotion.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Starbucks

The product positioning of the company is mainly through marketing where the company has positioned itself as a perfect and little expensive coffee shop that will offer the customers rich and delicious coffee (Greenspan, 2019). Starbucks has also remained ethical and actively participated in social responsibility because of their good reputation, leadership and innovation, governance and corporate responsibility. It has a culture of ethics that has helped in sticking to their mission and values.

Product

Starbucks makes use of its marketing mix for the development of the brand image and its popularity as well. It tends to change its marketing mix over time as a way of responding to the market challenges. In terms of the company's products, Starbucks innovates the mix to focus more on food and also beverages. Starbucks modifies the product lines so as to aim in the expansion of market reach and also grow the market share. Starbucks' products are such as coffee, tea, baked goods, smoothies, Frappuccino, and merchandise like instant coffee Place (Greenspan, 2019).

Place

The "place" component of the marketing mix for Starbucks is the determinant for the venues at which the target customers can reach the products. In most cases, Starbucks has its products in cafes or its designated coffeehouses. In other cases, there are channels where distributions are available for their products. These main venues include retailers and mobile apps in addition to the cafes (Greenspan, 2019).

Initially, the company had its products sold through its coffeehouses. They then developed applications to offer the products through their online stores. Recently, the company has ended the online operations and had a strategic change that reflected its shift to focus on the in-store experience.

Promotion

Promotion refers to the communication strategy of Starbucks to disseminate information concerning the products and encourage the customers to buy them. The major promotion strategies include interpersonal relations. The promotional mix is inclusive of word-of-mouth marketing, sales promotions, public relations and also advertising (Greenspan, 2019). In terms of their word of mouth, Starbucks has had a focus on the provision of best customer experience so as to encourage people to spread positivity about the business. The company uses television, print media and also the internet to advertise their products. The use of sales promotion is mainly in Starbuck Rewards.

Price

Starbucks uses a premium pricing strategy. This strategy as used in the marketing mix context is meant to take advantage of the tendency behavior of people to buy more expensive products (Greenspan, 2019). They do that on the basis of the perceived correlation between the high value of the product and the high price. The coffee products of the company are quite expensive compared to other competing products. This particular strategy helps Starbucks to maintain the high-end speciality image.

McDonald's Corporation

The company ensures corporate standards that are ideal for productivity. They ensure that these standards are implemented in the management of each of the franchise location (Meyer, 2018). McDonald's tends to apply a variation to the marketing mix so that it suits the conditions of either local or regional markets. Such an example is where their focus of the promotion strategies that involve the print media are in countries where such media is most popular and there are others where they prioritize the television.

Product positioning for McDonald's includes the use of segment insights or information about the behavior of consumers that they develop through market research. This way, they are able to achieve a competitive strategy that translates to strengthening their brand name. They thus position their products correctly for the target markets. McDonald's has also had its ethical promotion through collaboration with suppliers to reduce the impact on the environment by the supply chain (Harrington, Ottenbacher, & Fauser, 2017). The company is built on a foundation of personal and professional integrity. They earn the trust of people every day by serving safe food and their outstanding delivery.

Products

McDonald's is a food service business dealing majorly with food and beverages as well. The product element of the marketing mix covers the outputs of the organization that it provides to the target markets. The product line for McDonald's mainly includes sandwiches and hamburger, fish and chicken, snacks and sides, salads, beverages, desserts and also shakes (Meyer, 2018).

This particular segment of the marketing mix is the fundamental determinant of the organization's brand and image. McDonald's is mainly known for its burgers. In their recent operations, customers can purchase other products like breakfast meals and chicken. Their intensive growth strategies influence their product lines (Meyer, 2018). Their strategy is to diversify these lines so that they satisfy the market demand, and improve the revenue.

Place

The most prominent places where McDonald's places and distributes their products are the restaurants. They generate most of their sales revenue from the restaurants. There are other areas that the business utilizes for distribution, which are restaurants, kiosks, mobile apps and websites as well (Meyer, 2018). Some of the kiosks are temporary such as those used in sports competitions and other seasonal events.

Promotion

McDonald's disseminates new information meant to persuade customers to purchase their products. Among their promotional strategies includes the most significant which is advertising, public relations, sales promotions and also direct marketing (Meyer, 2018). The most notable promotion tactics for McDonald's are advertisements. They use TVs, print media, online media and also radios to advertise.

Price

The pricing strategy for McDonald's is a combination of bundle pricing and psychological pricing strategy. The bundle strategy is such that McDonald's offers its bundle products for discounted prices compared to purchasing the item separately (Meyer, 2018). Psychological pricing is where the company uses prices that appear more affordable like $__.99 instead of having it in the nearest dollar.

Comparison of the Marketing Mix Strategies

The marketing mix is different in terms of the products that the two corporations offer. Starbucks mainly deals with tea and coffee while McDonald's deals with hamburgers and Sandwiches. However, they are similar in that there are beverages that they offer. The main distribution center for McDonald's is a restaurant while that of Starbucks is coffeehouses and cafes.

The similarity in terms of the place is that they have online platforms where customers can place their orders. The promotion strategies for Starbucks include word-of-mouth while that of McDonald's is advertising. They have similar strategies in their sales promotions and public relations. The main pricing strategy for Starbucks is premium pricing while McDonald's is bundle pricing and psychological pricing.

References

Greenspan, R., (2019). Starbucks Corporation marketing mix (4Ps) analysis. Business management. Panmore Institute. Retrieved from http://panmore.com/starbucks-coffee-marketing-mix-4ps-analysis

Harrington, R. J., Ottenbacher, M. C., & Fauser, S. (2017). QSR brand value: Marketing mix dimensions among McDonald's, KFC, Burger King, Subway and Starbucks. International Journal of Contemporary Hospitality Management, 29(1), 551-570. Retrieved from http://modir3-3.ir/article-english/ISI/isi141-20179565381.pdf

Meyer, P., (2018). McDonald's marketing mix. (4Ps) analysis. Business management. Panmore Institute. Retrieved from http://panmore.com/mcdonalds-marketing-mix-4ps-analysis