Comparing the analytical techniques
There are many analytical techniques which can be used on products on services in marketing. The three techniques I have chosen are the SWOT analysis, the product life cycle and the PESTLE analysis. In this essay, I will compare the analytical techniques used by McDonalds and see how they relate their marketing decisions on their chosen products and services. The SWOT analysis This allows McDonalds to look internally and externally to see what is good for them and what is potentially bad for them.
They can evaluate this my looking and predicting any opportunities that may arise to them and be able to pre-judge and threats that they may be involved in, in terms of their competitors. The Strengths (S) and Weakness (W) look internally of an organisation and the Opportunities (O) and Threats (T) refer to the external factors of an organisation. Strengths relate to anything that is positive about an organisation or a factor in which they hold that holds a competitive edge over their rivals. One of McDonalds main strengths may be that their brand name is so strong that it is recognisable my many people across the world.
The products that McDonalds sell can easily be identifies by consumers that the food has come from their rather than other fast food restaurants. Weakness relate to anything in which the organisation possesses that is likely to hinder them on a whole or a negative factor in which they encounter. In relation to McDonalds, this can be used by referring that McDonalds do not sell enough healthy food and only sell a limited amount of it. This can hinder profits as a healthy easting customer would rather eat healthy food rather than the ‘fatty’ products in which McDonalds sell to the public.
Opportunities are an external factor in which the organisation may use to ensure that they achieve the opportunities that are referred to them. In relation to McDonalds, they spotted a niche in the market by offering healthy products such as the McSalads. This was an opportunity as their rivals such as Burger King did not offer such products from a fast food restaurant. A threat is considered as anything that may falter an organisation or in which is a bad influence in which hinders the performance of a business.
In relation to McDonalds, a threat could be that Burger King have introduced a new products in which attracts their audience. This is considered as a threat as if McDonalds keep on offering the same products every time, consumers will get bored of the products and will want to try something new elsewhere, this leading to McDonalds losing customers. Another threat is something that McDonalds cannot advertise their products directly to children, as obesity concerns and complaints have restricted McDonalds to do so. Product lifecycle The product life cycle represents the life cycle around a selected product.
This consists of 5 stages that is based around the selected product. There are as follows: > Development: this is the first stage in which the product is analysed and produced in vast numbers. The product is not bought in to the market yet and is usually developed after the research has been gathered. > Introduction: is the first stage in which the product is brought into the market. At this stage a lot of advertisements should take place to promote the product so that consumers are aware of the product. Sales are low at this point as consumer awareness is low as product is new and can be time consuming.
Growth: is the second stage in which the demand of the product is on a rise. As consumers are aware of the product, they will want to try it out so therefore, the organisation will benefit in profits. > Maturity: is the third stage in which the product is at its peak demand. Therefore, the product is expected to raise no further than from stage 1 to 2 and will look to stay relatively close to the product peak line. > Decline: this is the fifth and final stage in which the product tends to slow down in terms of sales and the demand for the product goes down.
The product is on its low verges and will suffer profits. A product life cycle can be used in terms of McDonalds as it suggest the way a product they may introduce new to the market or re-promote an existing product and see how it will react in the market. From this life-cycle, McDonalds are able to predict their product sales and see how long the product will last until profits tend to decline. It also provides any organisation to decide on whether they should invest capital into their products or to introduce a niche product to the market as McDonalds are successful at doing so.
PESTLE analysis A PESTLE analysis looks at the external factors that influence an organisation on the outside. PESTLE stands for Political, Economical, Social, Technological, Legal and Environmental. These are 6 external factors that influence an organisation. McDonalds can use a PESTLE analysis by: Political- McDonalds is referred to this as they have to ensure that employees are paid the national minimum wage minimum and that employees are at least 16 or above. Economical- as it is the period of a recession, consumers are saving more and spending less than usual.
The demand for products will be relatively low and therefore, McDonalds have to make sure that they are not affected as much. Social- as obesity concerns are raging across the globe, not many people are into eating fast food. They would look for healthy options and something that would keep people fit and healthy. McDonalds were affected until they were forced to introduce healthier products. Technological- McDonalds have to keep up-to date with their technology to make sure that their customers experience will be a comfortable one.
McDonalds have allowed wi-fi connections when customers shop at their restaurants so that customers can sit down and relax. Legal- McDonalds have to follow the rules of non-smoking in public places. As this law was introduced, public places were ensured that people would not smoke in public places. If McDonalds fail to do so, they can come under scrutiny and fined for their failure to follow such regulations. Environmental- McDonalds will be concerned that vast amount of trees have to be cut down in order for products to be made such as cup holders.
Environmentalists will be concerned as they believe that green land scenery is destroyed when trees are cut down for such uses by organisations. The differences between these 3 analytical techniques are that the SWOT analysis refers to the internal and external factors that influence McDonalds. From this McDonalds can see what to invest into and what how these factors are influential in the running of McDonalds on a whole. The strengths and weakness are focused internally of an organisation and the opportunities and threats are focused upon the external influences of the organisation.
The SWOT analysis supports this technique for McDonalds can look and see what their main strengths are and able to invest more concentration into their weaknesses, to ensure that they are limited to a minimum. They can also focus on overcoming their threats from local rivals and make sure they take on opportunities that may arise in the future. The product life-cycle only refers to the internal influences of McDonalds and how certain products are likely to do in their market.
From this technique, McDonalds are able to see how the product will be introduced and the likely period in which the product will most likely sell in and when the demand for it will be high. This technique can be used on many products in which McDonalds sell top the public. An example of this can be the McSalad. Once McDonalds have gathered all their research and introduced their product, they are making sure the public are aware of the product and it has good pubic awareness. McDonalds can estimate and see which periods in which the demand will be sky high and see when the time period will be slow.
As this is a new product (niche) in the market, the demand is still at a peak in terms of demand or still growing as it is a very popular product in which McDonalds sell. The PESTLE analysis focuses on only the external factors of McDonalds. This means that McDonalds are able to refer to threats and opportunities such as introducing a new product and looking at what local competitors are looking to do in the future. This technique can inform McDonalds in able to market their decisions in a proper manner.
From this analytical technique, McDonalds are able to see what laws and regulations they have to follow and see what other factors influence them on a whole. I will now compare the relative effectiveness of these 3 techniques in see how they support McDonalds in to develop themselves in the market. A SWOT analysis is effective into support McDonalds because they can examine their strengths, weakness, opportunities and threats. From these factors, McDonalds are able to see what their weaknesses are able to invest capital to ensure their weaknesses are at a limit.
If McDonalds have low threats and weaknesses, this could lead to McDonalds to have higher profits and gain more customers. If McDonalds are able to do this, their weaknesses will now longer be an influence and can become strength. Another effective use of a SWOT analysis is that the factors review both the internal and external factors of the organisation as a whole. It takes into consideration all the factors that are within the organisation and the factors that influence them on the outside.
McDonalds can carry such a technique on a regular basis to see whether the factors have improved and see whether they need to concentrate on a particular influence. However, a disadvantage of using a SWOT analysis is that it does not concentrate on a specific product, this leading to a basic overview of how the product will run. The depth overview will be concerning the organisation rather than products and see what influences McDonalds rather than the products they sell. The PESTLE analysis is effective as it allows McDonalds to look externally and see what influential factors influence them on the outside of the McDonalds.
McDonalds can use this to relate the factors around them by referring to what can be done to avoid these external factors. A disadvantage is that if a new law is introduced by the government to increase the national minimum wage, organisations such as McDonalds will have to follow the new rules in which the government set. Failing to-do so could lead to organisations being publicly fined. The product life-cycle is effective because it allows McDonalds to analyse specific products and to see how the demand for products will either rise or go down in specific periods.
McDonalds can also examine factors in which will help them boost profits and be able to introduce new products to the market and see how well that product will do in the future. The disadvantage of using this technique is that it only concentrates on specific products and only what will happen to the product after a period of time. However, it can show clear indications to McDonalds to invest into departments in which will help boost their profits by analysing their products using this type of analytical technique.