Segemntation And Target Market For Mcdonalds

2263 words - 10 pages

Introduction
It is never an easy task to establish a company as a globally recognized brand without proper positioning and segmentation of the market. Market segmentation is to divide the broad market into a smaller group according to different criterions and the target market is the group of customers a company wants to serve. “Market segmentation does matter as it helps to craft messages for a definite audience” (Diamandies & Kotler, 2015). For this paper, I have selected McDonalds for discussion. As a company McDonalds has a great reputation as Pfeffer (2006) suggested, “even if the world ends, McDonald’s would still be open”. This paper provides an adequate discussion regarding the ...view middle of the document...

McDonalds target market and selection
A target market is the set of people or buyer who share common interest or common characteristics that the company wants to serve. It is important to identify the target market, as not all products might appropriate for all. According to Hekne (1996), “selecting proper target market according to product is important and for example, selecting target market for cigarettes should not be applied for children”. McDonalds has targeted the young families but mostly it has a prime focus on the small children because if they can attract small children, families will follow its interest. The company concentrates on metros at the very beginning. After that, they open up branches widely. They want to set up outlets around the cities where they can ensure the quality of products.
McDonalds mainly follows concentrated marketing strategy. In this strategy, the company goes after a larger share of one niche or a few segments. They focus on specific niche or segment so that they can serve that portion of the market well. Drea & Hanna (2000) argued that, “niche marketing allows the organization to provide superior value with a particular dimension and it is greatly valued by the segment of customers”. The company has divided their move to selecting target market into four phases. Those phases are given below:
Phase I – This phase focuses on the people who fall into relatively higher income category. Those people are exposed to western food and culture. Therefore, they are always desperately seeking variety in their foods and searching for newer item continuously. As they have enough money, they are willing to spend on different food like international cuisine and fast food.
Phase II – The next phase is to make a move to a relatively smaller town. It will get a positive spillover effect from the beginning phase. The company can also target the foreigners who might be a visitor in that country. They are very likely to show interest in McDonalds.
Phase III – The next move the company can make is to the crowd pulled places like malls, highways, multiplexes etc. These can be great source of revenue as thousands of people visit these places regularly.
Phase IV – In this phase, the company can introduce new product line for the middle-income class group. These foods will be cheaper than the first phase but will not lack quality. It will be a great source of income for maintaining same quality.
Market Segmentation of McDonalds
For developing a well-planned marketing strategy, one of the prime focuses is to understand the target customers. Unless we know whom to serve, we cannot afford to get a maximum amount of profit from the company the company must understand its customers in order to communicate to the consumer market. The more effective the communication is, the more you get the best out of it. Thiel (2014) suggested that, “the first person to dominate the important market segment with potential, will also be the...

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