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4Ps Case Study Essay

4Ps (Price, Place, Promotion and Product) model is a useful tool for companies to plan and implement market strategies, after analyzing by 4Ps model, companies would have a better way to plan what or who is their target market, what is their obstacle and what they should do. Here is the simple graph of 4Ps model.

Case – McDonald’s

McDonald’s is world-famous. One of the key reasons is that it has great Market strategy. How can it have such a great plan? In this part we’ll discuss how environment affect its strategy.

The marketing mix is a term used to describe the four main marketing tools (4Ps):
1. Product
2. Price
3. Promotion
4. Place through which products are sold to customers.

Using detailed information about its customers, McDonald’s marketing department can determine:
1. What products are well received?
2. What prices consumers are willing to pay?
3. What TV programs, newspapers and advertising consumers read or view?
4. What restaurants are visited?

But how do McDonald’s get detail info about its customers? Therefore, it needs Market research, which is also needed to be done before using 4Ps model. Of course readers can skip this part to see the 4Ps part directly. (at page 5)

Market research and analyzing

Market research is the format which enables McDonald’s to identify this key information. Accurate research is essential in creating the right mix to win customer loyalty.

In all its markets McDonald’s faces competition from other businesses. Additionally, economic, legal and technological changes, social factors, the retail environment and many other elements affect McDonald’s success in the market. Market research identifies these factors and anticipates how they will affect people’s willingness to buy. As the economy and social attitudes change, so do buying patterns. McDonald’s needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future.

Market research considers everything that affects buying decisions. These buying decisions can often be affected by wider factors than just the product itself. Psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it. These additional psychological factors are significantly important to the customer. They can be even more important than the products’ physical benefits. Through marketing, McDonald’s establishes a prominent position in the minds of customers. This is known as branding.

There are a limited number of customers in the market. To build long-term business it is essential to retain people once they have become customers. Customers are not all the same. Market research identifies different types of customers.

After analyzing, McDonald’s can tailor communication to the needs of specific groups. It is their needs that determine the type of products and services offered, prices charged, promotions created and where restaurants are located. To meet the needs of the key market it is important to analyze the internal marketing strengths of the organization. Strengths and weaknesses must be identified (by using SWOT analyzing), so that a marketing strategy which is right for the business can be decided upon.

The analysis will include the:

1. Company’s products and how appropriate they are for the future
2. Quality of employees and how well trained they are to offer the best service to customers
3. Systems and how well they function in providing customer satisfaction e.g. marketing databases and restaurant systems
4. Financial resources available for marketing.

Then, McDonald’s has marketing objectives.

A marketing plan must be created to meet clear objectives. Objectives guide marketing actions and are used to measure how well a plan is working. These can be related to market share, sales, goal, reaching the target audience and creating awareness in the marketplace. The objectives communicate what marketers want to achieve.

Long-term objectives are broken down into shorter-term measurable targets, which McDonald’s uses as milestones along the way. Results can be analyzed regularly to see whether objectives are being met. This type of feedback allows the company to change plans. It gives flexibility. Once marketing objectives are set the next stage is to define how they will be achieved. The marketing strategy is the statement of how objectives will be delivered. It explains what marketing actions and resources will be used and how they will work together.

At this point the 4Ps is put together

The important thing to remember when offering menu items to customers is that they have a choice. They have a huge number of ways of spending their money and places to spend it. Therefore, McDonald’s places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers’ requirements change over time. What is fashionable and attractive today may be discarded tomorrow. Marketing continuously monitors customers’ preferences.

In order to meet these changes, McDonald’s has introduced new products and phased out old ones, and will continue to do so.


The customer’s perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item, it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity. A further consequence of price reduction is that competitors match prices resulting in no extra demand. This means the profit margin has been reduced without increasing sales.

Therefore, in Taiwan, for example, we have discount for lunch or dinner. Notice that McDonald’s doesn’t rise the product’s price, it use “discount” to retain the quality in customers’ mind.


The promotions aspect of the marketing mix covers all types of marketing communications. The methods include advertising. Advertising is conducted on TV, radio, cinema, online, poster sites and in the press (newspapers, magazines). What distinguishes advertising from other marketing communications is that media owners are paid before the advertiser can take space in the medium. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, telemarketing, exhibitions, seminars, loyalty schemes, door drops, demonstrations, etc.

McDonald’s knows about the people it is serving the more it is able to communicate messages which appeal to them. Messages should gain customers’ attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action, is usually sufficient. The right messages must be targeted at the right audience, using the right media. For example, in US, McDonald’s try to advertise to mothers with children. It took advertising space in cinemas during Disney films. The right media depends on who the viewers, readers or listeners are and how closely they resemble the target audience.


Place in the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer.

As we can see, Taiwan is full of McDonald’s because of franchising. Also, we have delivery service in some area.


McDonald’s uses Market mix in separated ways.

Once the marketing strategy is in place, various responsibilities are given to different individuals so that the plan can be implemented. Systems are put in place to obtain market feedback which measure success against short-term targets. McDonald’s ensure that this is done with tightly controlled, finite marketing budget.

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