Role of Marketing in OrganizationsEvidence Checklist Report

Table 1: Evidence ChecklistCriteria ReferenceTo achieve the criteria the evidence must show that the learner is able to:Task No.Evidence Pg. No.

P1Describe how marketing techniques are used to market products in two organizations.

12-7

M1Compare marketing techniques used in marketing products in two organizations.

28-13

D1Evaluate the effectiveness if the use of techniques in marketing products in one organizations.

313-19

P2Describe the limitations and constraints of marketing.

419-21

Introduction

I being an intern at Percept Gulf, the regions fastest growing advertising and marketing agency have to report directly to Mr. Prashant Sankhe, the Executive Creative Director of the company and the jury member for the AME Awards (Advertising and Marketing Effectiveness Awards). The purpose of these awards is to recognize organizations that have the worlds best advertising and marketing effectiveness. Here I have to identify A listed marketers that could be possible contenders for the awards, select and carry out research into two such organizations, addressing the following tasks, i.e. ; Describe how marketing techniques are used to market products in two organizations.

Compare marketing techniques used in marketing products in two organizations.

Evaluate the effectiveness of the use of techniques in marketing products in one organization.

Describe the limitations and constraints of marketing.

I will be targeting Tesco and McDonalds for this study. Lets have a look at a brief introduction of both the brands;Tesco is a British multinational grocery and general merchandise retailer headquartered in Cheshunt, Hertfordshire, United Kingdom [1]. This is the biggest private sector employer in the UK; the company has more than 360,000 employees worldwide. Tesco operates in 12 countries outside the UK, including China, Japan and Turkey. The company has recently opened stores in the United States. This international expansion is part of Tescos strategy to diversify and grow the business [2]. Tesco was founded in 1919 by Jack Cohen as a group of market stalls. The Tesco name first appeared in 1924, after Cohen purchased a shipment of tea from T. E. Stockwell and combined those initials with the first two letters of his surname, and the first Tesco store opened in 1929 in Burnt Oak, Barnet. His business expanded rapidly, and by 1939 he had over 100 Tesco stores across the country [1].McDonalds is the world's leading global food service retailer with over 36,000 locations serving approximately 70 million customers in over 100 countries each day. More than 80% of McDonalds restaurants worldwide are owned and operated by independent local business personnel [3]. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald. In 1948, they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth [4].Task 1: (P1) Describe how marketing techniques are used to market products in two organizations.

Marketing is the process in a business that its publicizing the value of a product or a service to the customers with the aspiration of selling the product or the service; it is a demanding business function in order to attract customers [5] [6].

As mentioned above, Tesco and McDonalds are the two chosen businesses where I will be looking at their objectives and marketing objectives; as well as at the marketing techniques used in order to succeed.

Tescos ObjectivesTescos objectives are [5]; To meet the needs of customers by constantly seeking, and acting on, their opinions regarding innovation, product quality, choice, store facilities and service. To work closely with suppliers to build long term business relationships based on strict quality and price criteria. To provide shareholders with progressive returns on their investment improving profitability through investment in efficient stores and distribution depots, in productivity improvements and in new technology.

McDonalds ObjectivesMcDonalds objectives are [5]; To be the customer's favorite place to eat. To provide its customers with food of a high standard, quick service and value for money.

However, every business is setting up marketing objectives to help the business be successful. Marketing objectives are different from the business objectives but theyre supporting the business overall objectives.

Tescos Marketing ObjectivesTescos marketing objectives are [5]; To grow the core UK business. To become a successful international retailer. To be as strong in non-food as in food. To develop retailing services notably Tesco Personal Finance, Telecoms and tesco.com.McDonalds Marketing ObjectivesMcDonalds Marketing objectives are [5]; Get a competitive advantage. Have a differentiation through strap line. Connect with the culture through the products offered.Marketing Techniques (Ansoff Matrix)Along with the marketing objectives, a business has specific marketing techniques that are called Ansoff matrix which are actually growth strategies. The Ansoff Matrix is the base to compare the relationship between General Strategic Direction and marketing strategies [5] [6].Marketing Techniques used in Tesco and McDonald's

a) Market PenetrationAim

The aim of Market Penetration is to increase a share in the current market with current products and secure dominance in a growing market, or change an existing market by driving out competition. The penetration includes an increase of existing goods to an already existing market. What happens is that the business is selling more of the same thing to the same people. The success is achieved through multiple ways; increased sales to customers will attract customers from rivals and it will gain market share. The strategy should be used when there is a growth in the market and the competitors share in the market are falling [5] [6].Tesco (example)

They could increase their grocery products.

McDonalds (example)They could increase frequency of purchase through an advertising campaign that would give consumers a reason to go there more often.b) Market Development

Aim

The aim of Market Development is to expand the market and customer base of the business. What is happening during market development is that the business is selling the same product to a newer customer base or entering new markets with the same base; its gaining new customers with the same product. This strategy is being achieved by including changes to many different aspects of the business, such as: Marketing Strategies, new distribution channels and a different pricing policy. Market development is best used when early markets are attempting to develop their market, then the business has the capacity and there are attractive channels to access a new market [5] [6].Tesco (example)

They expanded into the convenience store market.McDonalds (example)

They offer a free bag of fruits on Fridays, with every happy meal.c) Product DevelopmentAim

The aim of Product Development is to create new products for an already existing market. The risk of this strategy is that the customers might not like the product developed, and therefore because the strategy is quite costly, all the money would be spent for nothing. What makes product development easier, is a strong Research and Development program, also known as R&D. Without this, it is very risky and has a lower success rate. Businesses usually utilize product development when they have strong Resource and Development capabilities and the market is growing [5] [6].Tesco (example)

Two examples are Tesco expanding petrol sales and the development of financial services.McDonalds (example)

In France they created a new product named the McBaguette for a six-week market trial.d) Diversification

Aim

The aim of Diversification is to successfully sell new products to a new market, which means new products for new customers. Market diversification is the riskiest of the four strategies because its dealing with two unknown areas; a new market and new customers. There are two main types of market diversification; related and unrelated. Related stays within the bounds of the industry but beyond the present market. Unrelated is a growth in products and markets that are completely new. It is achieved by giving a new market to new customers [5] [6]. Tesco (example)

Tesco opted for own-label banking as a part of its diversification strategy [18].McDonalds (example)

McDonalds starting of McCafe in Japan is an excellent example of diversification [19].

e) Branding

Aim

The aim of branding is to convey brand message vividly, create customer loyalty, persuade the buyer for the product, and establish an emotional connectivity with the customers. Branding forms customer perceptions about the product. It should raise customer expectations about the product. The primary aim of branding is to create differentiation [12]. In other words we can say that theprocessinvolved in creating a unique name andimagefor aproductin theconsumers' mind, mainly throughadvertising campaignswith aconsistenttheme is called branding [13]. Tesco (example) The Tesco brand name came from the amalgamation of the first three letters of the stalls tea supplier T. E. Stockwell with the first two letters of the founders surname Cohen. Tesco products become recognizable by the blue strip of the logo [28].McDonalds (example)

At McDonalds the brand is represented by its familiar logo the Golden Arches [24].f) CRM (Customer Relationship Management) Aim

Customer relationship management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth. CRM systems are designed to compile information on customers across different channels -- or points of contactbetween the customer and the company -- which could include the company's website, telephone,livechat, direct mail, marketing materials and socialmedia. CRM systems can also give customer-facing staff detailed information on customers' personal information, purchasehistory, buying preferences and concerns [10].Tesco (example)

Tesco Clubcardis theloyalty cardof leading British supermarket chainTesco and is used as as a basic CRM tool.McDonalds (example)

McDonalds usesPowerCentre by Astute Solutions, and being a global chain with millions of customers, it needs to use an effective and reliable way of connecting with its customers and keep ahead of this very competitive market [29].Task 2:

(M1) Compare marketing techniques used in marketing products in two organizations.

Now I will compare Marketing Techniques used in marketing products in Tesco and McDonalds. I will outline the similarities and differences of the way the two organizations use marketing techniques.

Comparison of Marketing Techniques used in Tesco and McDonald's

a) Market Penetration

Tesco

Tesco focuses on selling its products to existing markets and uses methods such as advertising the product in a manner that will attract their chosen markets audience. Tesco promoted its products by demonstrating the effects and free tutorials for its customers if needed [7].McDonalds

McDonalds focuses on selling its products in the same market and to the same customers by using methods such as BOGOF (Buy One Get One Free) or offering a free small item with a large meal. McDonalds also promotes its products by giving out discount flyers to its customers [7].Similarities

Both Tesco and McDonalds focus on selling their products to an existing market and both use promotion methods [7].Differences

McDonalds uses marketing penetration by giving out offers and discounts whereas Tesco cant afford to do that because it has a standard price for all its markets [7] therefore uses advertising to encourage the customers to buy the new products [7].b) Market Development

Tesco

Market Development was used to introduce the products to different market segments of people with different backgrounds, culture and varied in age. Tesco used market development to introduce its products to new markets by investing a lot of money to advertising and promoting the products [7].McDonalds

McDonalds has used Market Development by introducing its products to different markets and franchises in other countries as its initial market was USA. McDonalds has done this by highly promoting its products in new countries e.g. billboards and advertising. It made sure its market development technique was successful by offering them to different markets at low prices e.g. 2 McFlurrys at 99p and has increase prices when the demand for it increased [7].Similarities

Both organizations use market development to increase their sales by introducing their products into new markets of people of different backgrounds but similar interests and needs. Both use promotion methods when using the market development technique [7].

Differences

The difference between the way McDonalds used market development to market its products and the way Tesco used is that McDonalds introduced its products to a new market by targeting a wider market segment as its more affordable than the most of the big items presented by Tesco, i.e.; electronics etc. whereas Tesco targeted upper-class consumers. The other difference is that McDonalds had offers such as BOGOF (Buy One Get One Free) when introducing to new markets, however Tesco had a standard price for all its markets [7].c) Product Development

Tesco

Tesco produces new varieties of the products such as waterproof range of cosmetics, new models of electronics, new deals at groceries etc. and introduces them to the same markets [7].McDonalds

McDonalds constantly makes new types and flavors of its products, e.g. (McFlurry Smarties, Dairy Milk, cream Egg, etc. for the McFlurry) and introduce them to the existing customers [7].Similarities

Both companies used product development because they made a lot of profit through sales of the original product. Both organizations did not change the product but have added on extra features/ flavors [7].

Differences

It was much cheaper for McDonalds to develop its product as it only changed the flavors not the core product whereas Tesco produced the products with new features and effects [7].d) Diversification

Tesco

Tesco Bank is an important diversification put forward by Tesco.McDonalds

McDonalds has diversified in the form of McCafe in Japan, McAaloo Tikki (vegetarian item) in India etc.Similarities

Both are the examples of Related Diversification. i.e. the development is beyond present product market but still within the broad confines of the industry [20].Differences

None.e) Branding

Tesco

Along with the blue strip, Tesco's slogan Every little helps helps the brand recognizable.McDonaldsMarketing communication methods, such as advertising and promotions, are used to create the colors, designs and images which give the brand its recognizable face [24]. At McDonalds the brand is represented by its (1) familiar logo the Golden Arches, (2) familiar slogan im lovin it, (3) using the prefix Mc with most of their product names making them recognizable as McDonalds products [23]. (4) Ronald McDonald, a clown originally played by actor Willard Scott, who was famous for playing Bozo the Clown. This marked the beginning of McDonald's instilling brand loyalty in customers at a young age [25].

Similarities

Basic logos and slogans are being followed by both organizations.Differences

McDonalds has never compromised the branding rules they have set once. On the other hand Tesco ditches its own branding colors. The Guardian reported Tesco has ditched its blue-and-white striped Value label in favor of a new softer brand as a way of trying to relieve consumers of the embarrassment of buying the cheapest products on its shelves (27 Apr 2012) [27].f) CRM (Customer Relationship Management)

Tesco

Tesco Clubcardis theloyalty cardof leading British supermarket chainTesco and is used as a basic CRM tool.McDonalds

Besides usingPowerCentre by Astute Solutions, 500 - 600 McDonalds Restaurants across northern California and the US Midwest have launched an interesting integratedmobileCRM program.The core of the initiative is a clever App byMowingo that consumerscan downloadon their Smartphone.

Similarities

Both of them gather customers data.

Differences

McDonalds doesnt offer any special offers to any of its customers. On the other hand customers can collect rewards on Clubcards at Tesco.

Clubcard Fuel Save means customers can earn up to 20p off every liter of fuel. Customers can then spend the Fuel Save savings in any Tesco Petrol Filling Station. Savings are valid until the end of the following calendar month after being earnt. Unlike Tesco petrol vouchers the Fuel Save savings can be used at the PayatPump [30].Green Clubcard points are earned when customers re-use bags when shopping in store (one point per bag, exceptWalesand Northern Ireland), or opt out of receiving bagged products when shopping online (one point per ten items delivered). They can also be earned by recycling a limited number of products, currently mobile phones and ink cartridges, through Tesco-branded recycling services. Once earned, Green Clubcard points are equal in value to normal points, but are listed separately on receipts and Clubcard statements [30].Task 3:

(D1) Evaluate the effectiveness of the use of techniques in marketing products in one organization.

Marketing techniques is a useful tool used by McDonalds in order to promote their products and become more successful.

Evaluation of Marketing Techniques used in McDonald's

a) Market PenetrationUse

McDonalds uses Market Penetration to market its products to existing target markets. The purpose of this technique is to sell more of the existing products to the current market. McDonalds has used market penetration to encourage its customers to buy more and therefore to make the encouragement more powerful they started offering free hamburgers, cheeseburgers or McFlurry with the purchase of an extra value meal. McDonalds also offers saver menu meals which come at a cheaper price and are offered to all the customers [5] [8].Advantages

The advantage of this technique is that the customers will buy McDonalds products more regularly and in bigger quantities, which will increase sales and profit [8].Disadvantages

The disadvantage of this technique would be that such low prices may not generate a lot of profit as production costs will only decrease if demand increases which might take time. Also in order to promote all these offers, it might cost McDonalds even more money [8].b) Market Development

Use

McDonalds has used the market development strategy to introduce existing products to a new market. As an example Ill be using McDonalds entering India in 1996 [5] [8].Advantages

The advantage of this strategy is that McDonalds got to expand its business, successfully increase its profits and improve publicity [8].Disadvantages

They had to face challenges like cultural diversity but looking at the profits that can be avoided.

c) Product Development

Use

McDonalds is constantly using the product development technique to introduce new products to the existing customers. An example is McDonalds McFlurry ice-cream. McDonalds develops the products by adding on new flavors to the ice-cream; some of the new developed ice-creams are successful and theyre selling out quickly whereas others not so much. Therefore, in order for McDonalds to be successful in this technique, they should be carrying out surveys to find out what the customers would like to purchase from their fast-food [5] [8].Advantages

The advantage of this technique is that customers might actually be looking forwards for the new products offered by McDonalds [8], i.e. there must be wide chances of the acceptance of the new products by the customers.Disadvantages

The customers might not show any interest in the new products and therefore McDonalds will lose money on the production of the products that werent selling [8] BUT this can only be a possibility with very low chances and the consequences may be different as described above.d) Diversification

Use

McDonalds has diversified product range in India and all over the world. Due to diversified nature of products McDonalds is famous among masses. They offer McBreakfast, Lunch and Dinner, Coffee and many more diversified products. Now if McDonalds move to fully new business for example Hotel (McHotel) will be a concern. Diversification can be revealed from Indian market. 75 % menu has been Indianised. Halal food for Muslims has been introduced. McDonalds happy price menu in India, the 5ps and flexible operating platform all shows McDonalds to be a diversified organization [22].Advantages

The company operates in the fast-food segment of the food industry. Of the more than 30,000 McDonald's restaurants in over 100 countries, over 8,000 are operated by the company, more than 18,000 are operated by franchisees/licensees and over 4,000 are operated by affiliates. The revenues break down for 2005 and are consistent with its preceding historical operations. Therefore, justifies and confirms the companys longstanding dominant business diversification strategy [21].Disadvantages

They had to face challenges like cultural diversity but looking at the profits that can be avoided.e) Branding

Use

Through marketing (advertising and promotion), McDonalds establishes a prominent position in the minds of customers [24].

Advantages

When branding is done by proper marketing techniques (using appropriate advertising and promotion methods) then the results can be positive [26].Some examples include;

A clever use of food to advertise McDonalds Wi-Fry" [26]

Wide range of menu turned them Fish-Eyed [26]

Fresh greens depicting the freshness of salads [26]

Impressive example of environmental advertising [26]Disadvantages

On the other hand they should be careful while opting for images and colors for the ads so that they wont have negative effects on the brand [26]. e.g.

The brand is under represented in both cases... one will take some time to get it [26]f) CRM (Customer Relationship Management)

Use

As mentioned earlier PowerCentre has enabled them to collect data about the views of their customers, whether or not theyre satisfied as well things that cause dissatisfaction. The data is available in real time and allows McDonalds to share the information with people across the organization quickly for the most relevant results [29].

The PowerCentresoftwareprovides McDonalds with up to date databases for which can measure satisfaction results across the brand as a whole, by region or even down to individual restaurants. This makes it easy to identify problems and get them resolved quickly [29]. McDonalds have benefitted from the aftercare and support from Astute Solutions which make themmorethan a software provider. Helping businesses to monitor the reactions of their customers, Astute Solutions provide continued advice and offer recommendations, giving a much more personal service than simply as a software vendor [29].AdvantagesCRM software like PowerCentre is suitable for big corporations like McDonalds and it can provide great solutions to help connect with customers and get to understand there likes and needs better [29].

Disadvantages

There isnt any apparent disadvantage besides taking into account the data protection issue (covered in Task 4, under the legislations section).Task 4:

(P2) Describe the limitations and constraints of marketing.

Considering McDonalds, being an American organization it had to face many limitations and constraints when it came to introduce it in Asian countries, especially Arabian countries and India with totally diverse culture and people.

Some limitations that might have hindered McDonalds during this task; Keeping account of Halal-Haram in Muslim countries as if violated, can be sued in consumer court.

Keeping account of Vegetarian Community in India.

Facing promotion and advertising challenges in new environment. Maintaining reasonable price of the products so that the target audience can purchase the new launches. e.g. In India, most of the population is middle-class cannot afford too costly fast food.Legislations that safeguard consumer rights;

a) Sale of Goods Act

Products must match their description. i.e. they have to make sure that the customer is getting what he is promised in terms of quantity and quality [15].

Products must be of satisfactory quality [15]. Products must be fit for purpose [15].b) Consumer Credit Act

The Consumer Credit Act regulates credit card purchases but also gives protection when the customer enters into a loan or hire agreement [17].c) Unfair Practices

Payments of commissions or rebates to some customersRebates, commissions, or other specialservicesthat are secretly offered to some customers but not others are unlawful when those payments lessen competition [16].

Price discrimination between different cities or communitiesThey have to make sure that the Prices for the same Products are same all over the franchises, i.e. none of the customer is getting overcharged [16].

Selling a product or service below the sellers costSometimes the products are to be sold below their cost in order to drive competitors out of business. By temporarily losingmoney, a long term market share increase can be gained [16].

Selling "Loss Leaders""Loss leaders" are products that are sold below their cost. These products can be used to increase sales of other products or services [16].

d) Data Protection Act

When we talk about surveys and markets research to improve services and products, it involves customers personal details etc. which have to be protected at any cost. McDonalds Privacy and Personal Data Protection Policy deals with this [9].

McDonalds Privacy and Personal Data Protection PolicyThis Privacy and Personal Data Protection Policy is issued taking into account thePersonal Data Protection Act 2010(the Act) that was introduced to regulate the processing of Personal Data in commercial transactions. The Act requires us to inform the customers of their rights in respect of their Personal Data that is being processed or that is to be collected and further processed and the purposes for the data processing. The Act also requires obtaining the customers consent to the processing of the Personal Data. In view of the Act, McDonalds is committed to ensuring that your Personal Data is protected [14]. Each of McDonalds and the Introducing Party warrants that it has complied, and shall continue to comply, with the requirements of the Data Protection Act 1998 and all other data protection legislation in any jurisdiction relevant to the exercise of any rights or the performance of any obligations pursuant to these Terms and Conditions [14].

Any personal data that the Introducing Party provides to McDonalds for the purpose of applying for a Site Finders Fee will be used only for the purposes of assessing, processing and recording the Site Finders Fee and may, for this purpose, be shared with McDonalds Affiliates [14].

Conclusion

According to above description, comparison and evaluation McDonalds can be termed as the best among the two organizations based on its better usage of marketing techniques/growth strategies (Ansoff Matrix) as compared to Tesco. So according to my study McDonalds can be a strong contender for AME Awards.Bibliography

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