McDonald’s became a famous global name which had more than 33,000 restaurants in 119 countries (McDonald’s, 2012). How could it operate profitably in a competitive market? It was due to the flexibility in the changeable marketing environment (Lovelock, 2002). The marketing environment can be assumed as a flexible system. Just like the human body which may die if it fails to adjust to environmental modifications, so the business also may lose if it does not adapt to external and internal changes (Sowell, 2011).
Sargeant and Jay (2004) stated SWOT analysis contains specific indicators as to the key determinants of success in the company whereas most authors defined the marketing environment comprising microenvironment and macro-environment strongly affects the company’s survival. In this essay, the literature review concentrates on the influences of the marketing environmental factors on the company’s operations. The internal change is a part and parcel of the marketing environment (Palmer, 2000). The microenvironment comprises the actors which directly affect a firm’s operations (Jobber and Fahy, 2009).
Suppliers influence not merely the company’s operations but also the corporate image positively or negatively (Pride and Ferrel, 2010). Gavina delivered the best coffee in the world to McDonald’s, whereby McDonald’s became an obstacle for Starbucks in America (Time, 2008). Nevertheless, the importance of suppliers can be seen if things go wrong (Gillespie, 2011). McDonald’s restaurants were forced to close since suppliers could not meet demand on the twenty-fifth anniversary celebration in England (BBC, 1999). The importance of marketing intermediaries is to make a firm’s goods and services accessible to its buyers (Kotler, et al. 2006). Without marketing intermediaries, but being a distributor of Coca-Cola which provides McDonald’s much more just soft drinks since 1955 because of its power and reputation, McDonald’s itself understood and chose the best suppliers (Coca-cola, 2012). We do not live in an ideal world. An organisation must understand its customers and publics to anticipate what they will demand next (Jain, 1981). To satisfy children’s needs, McDonald’s celebrated birthday parties at Kids’ Zone and they were successful in this service (McDonald’s Malaysia, 2012).
No competitive marketing strategy is perfect for all companies, thus a company must identify an adaptable business strategy by considering competitors (Palmer, 2000). McDonald’s realised Vietnam was a risky market, because there were three big fast food companies (KFC, Lotteria and Jollibee) which had their own markets (Saigon Times, 2009). Moreover, McDonald’s got a foothold in the fast food marketing (refer to appendix 3). By using the PESTEL model, we can analyse many different forces in a company’s macro environment (Palmer, 2008).
Successes in a difficult external marketing environment significantly depend on how well you use potential of the market and avoid the pitfalls (Gillespie, 2011). The political forces are the less predictable factors that affect and limit a firm’s operations (Pride and Ferrel, 2010). McDonald’s made trial evaluations in the mid-1990s but in 1996 postponed their plans because of an anti-Western political backlash in Vietnam (Sunday Times, 2004). The economic situation determines some extent the success of organisations.
The economic forces (including economic growth and unemployment, interest and exchange rates, taxation changes and inflation) have a vital influence on the company (Jobber and Fahy, 2009). McDonald’s opened outlets in higher income countries, and then moved into lower-income countries later on (Grossman and Helpman, 1991). Changes in social forces (including demographic and culture) impact on consumers’ demand in society, especially where a company does business in different countries (Sowell, 2011). Pork is not widely used in Malaysia (comprising approximately 61. percent of Muslim adherents), so it was eliminated in McDonald’s menu (New Straits Times, 2011). Technological changes increase rapidly, thus the company must grasp at technological developments (Kotler, et al. , 2006). European McDonald’s restaurants replaced cashiers with touch screen computers. Owing to this method of ordering, customers could save time and easily pay with a credit card (Cnet, 2011). The environmental forces (including climate change and pollution) and the manufacture uncontrollably influence each other (Jobber and Fahy, 2009). Nowadays, companies “Going green” means protecting themselves.
McDonald’s opened a “green” restaurant in Chicago. They eliminated some electric lighting, made tables from recycled plastic etc and customers actually supported these changes (Daily Finance, 2009). Marketing decisions are strongly affected by legal forces, which regulate the rules by which a company must be conducted (Kotler and Armstrong, 2004). McDonald’s Malaysia officially announced “The allegations made about McDonald’s supporting Israelis are completely untrue”. Because McDonald’s were established under the law of Malaysia, these allegations would be illegal (McDonald’s Malaysia, 2012).
The influences of marketing environment’s factors provide a deep insight into the economy, the possible effects of economic change on business (Fletcher and Peters, 1997). These factors determine the success or failure of a company and the success of McDonald’s proved this. Consequently, to succeed in business, your company must be the fastest company which adapts to changes and exploits new opportunities as they appear in marketing environment.
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