Marketing Capabilities Of McDonald’s: A Critical Analysis Of Standardisation And Adaptation In International Markets

Company Background

1. Critically analyse the extent that your chosen global brand’s marketing mix is standardised and/or adapted across international markets. Conclude by providing a 2-3 paragraph summary that discusses whether you consider this to be an appropriate strategy(s). Remember to support your answer. 

2. Discuss which Internationalisation Process Theory (IPT) ‘best’ describes the internationalisation process that your chosen global brand has undertaken. Again, remember to support your answer.

This report provides a deep insight into the marketing capabilities of McDonald’s and its business conducts, particularly in the United Kingdom. This brand is counted amidst the top global brands. This report aims at critically analyzing the extent that the marketing mix of McDonald’s is standardised across international markets. It also discusses the Internationalization Process Theory (IPT) with emphasis on the strategy of franchising system. The report provides detailed marketing capabilities, positions and information about McDonald’s. 

McDonald’s is considered to be a market leader in the sandwich shops that offers healthier food options to the traditional fast food centres. The annual sale of the brand exceeds around $6.2 billion and it has effective market presence in most of the countries. The firm possesses almost 28,000 units across the globe while the rapid development of the brand has successfully attracted several investments (Allah Pitchay, n.d.). This has also led to the extreme competitions with other competitors like KFC, Burger King, etc. Having participated actively in the most dynamic and competitive market, the firm is said to face extreme market challenges. And so, the key highlight is on the marketing mix to be developed by the firm to gain market growth and profitability. As per the future strategies of the organization, it has planned to open around 1700 new locations in the UK by 2015. The firm ensures that their operations perfectly match the requirements of the customers (Ciriković, 2014). This is made possible by McDonald’s by increasing the number of options. The firm is said to conduct elaborate market research upon the preferred locations. It aims at eliminating the problem issue of waiting with the orders, queues or hassles.

The firm has the key marketing objective of maintaining positive and potential market penetration at every quarter of the year. It acquires ample information regarding the market and in fact possesses a greater understanding of the needs of the customers (Dominici, 2009). The information proves to be highly beneficial and can be leveraged to increase understanding of those to be served by them, their needs and expectations, and the ways by which McDonald’s may improve its communication through marketing approaches (Goi, 2009). It utilizes effective strategy of market segmentation, targeting and positioning to capture the largest market share. 

Marketing Objectives

The McDonald’s chain tested international waters when it opened its first unit in the small exotic Middle Eastern island nation of Bahrain in December of 1984. In a relatively short time, the McDonald’s chain started to appear in such distant lands as Iceland, Poland, Nicaragua and China. With time it started developing itself into multiple nations, whereby the economic is quite stable and adequate market opportunities exist (Gore, 2006). It is evidenced that McDonald’s targets certain religious as well as cultural segments, at the same time keeping and maintaining the original values intact. The locations of the chain outlets may be varied but the core menus, food quality, and activities are consistent and same throughout. Travellers all across the globe may expect the similar high quality ingredients and food regardless to the national locations.

In the year 2003, the firm improved its nutritional content of Kids Pak meal by replacing the carbonated soft drink with juice box and also changing from high calorie cookie to fruit roll up fruit snack which is high in vitamin C. Kids Pak toys have also been designed to inspire several physical activities (Hassan, Reza and Farkhad, 2015). The web site serves as the source of information for parents who strive to manage diets of their children as well as exercise levels. The increase in the total sales of burgers has been the consequence of decline in the customer interest in fries as well as hamburgers, along with increase in the healthier options. It has been analyzed that the overall sales rate of burgers has grown to almost 15% annually. It also aims at capturing virgin international markets with its strong brand name. 

The concept of marketing mix includes four factors, namely product, price, place, and promotion.

The brand McDonald’s offers variety of food options like pasta, salads, soups, dinners and desserts. The menu is varied along with fresh quality food products. In the year 1996, the chain’s flagship sandwich, the classic BMT was first launched. With the gradual passing of years, more and more types and varieties of sandwiches were added with sustainable improvements (Lado, Martínezâ€ÂRos and Valenzuela, 2004). McDonald’s chain provides a line of latest crab-controlled wraps. Fresh toasted subs were added with time to its menu. The firm boasts of the fresh ingredients that are used for subs and sandwiches. In fact, the chain never hides anything from the customers. Every item is prepared on the spot and customers select their preferred toppings upon the subs. Most importantly, nothing is frozen or deep-fried in McDonald’s (Otubanjo, 2013).

Target Segmentation

This element of the marketing mix is considered to be a potent one because of the direct influence upon the customers, the firm and the entire economy. The firm is said to utilize upscale pricing a bit higher than the normal subs within the market. The brand offers differential strategy of pricing along with price value (Piercy, 2012). It creates value products with quality service.

This element of market mix is concerned with operations required to shift products or services from seller to the consumers. The brand aims at opening more of 1700 chain outlets within the UK. The firm aims at using major business locations to draw the maximum number of customers. Mostly the non-traditional locations have been chosen by McDonald’s to bring about developments in its business growth (Sorokin, 2012). The places that are chosen by McDonald’s are amusement parks, airports, colleges, universities, hospitals, recreational areas, convention centres, convenience stores, secondary schools, travel centres, supermarkets, amusement parks, etc. The firm ensures that their operations perfectly match the requirements of the customers. This is made possible by McDonald’s by increasing the number of options. The firm is said to conduct elaborate market research upon the preferred locations (Su et al., 2014). It aims at eliminating the problem issue of waiting with the orders, queues or hassles.

This element usually covers four aspects – advertising, public relations, personal selling and sales promotions. The firms targets customers of age group 18-49 years; for maximizing the buying power it focuses on the age group of younger customers who belong to the group 18-34 years. The advertising objective of the chain is enhancing the presence of brand amidst customers (Taylor, Zou and Osland, 2000). The advertising is mostly done through national TV at the time of sports, prime time on major broadcast and cable networks. More advertising is done through local markets on radio, television and prints. The chain outlets promote messages in store along with point of purchase material such as menu translates, posters, etc.

McDonald’s chain provides a line of latest crab-controlled wraps. Fresh toasted subs were added with time to its menu (Topajka Shaw, 2001). The firm boasts of the fresh ingredients that are used for subs and sandwiches. In fact, the chain never hides anything from the customers. McDonald’s understands the need to be highly aware of the competition within the target emerging market, as it generates all opportunities as well as threats which determine the attractiveness of target markets. McDonald’s is known to implement the franchising system in an extensive manner. 

Marketing Mix: 4 Ps

McDonald’s has successfully achieved the international success and has been still in the process. According to the higher management of McDonald’s, it is a belief that customers crave for something that tastes really good, has got value for their money and also healthier at the same time. The process of internationalization for McDonald’s had begun with the identification of potential markets across the globe (Vertinsky and Zhou, 2000). The firm has always aimed at expanding itself in the countries that were not really aware of such products or services. In the initial reading of top markets, the firm did not include Russia. However, presently Russia is up for several stores and it has been announced by McDonald’s to get more 1000 stores by the end of 2015. The firm has been focusing at the economics within the market, and it perceives that Russia is much bigger market than that being anticipated (Zhang, Zhang and Jia, 2010). The internationalization took place by focusing on the market of the United Arab Emirates as the fastest growing nation.

The development from suppliers to consumer market makes the competition worse. Specializations as well as innovations need upgraded marketing forms where the system of franchise is successful with marketing services and that of training or service-related products. McDonald’s is known to implement the franchising system in an extensive manner. On account of the benefits of franchising for manufacturers in terms of traditional market forms, the overall share of such system with the food sector would be raised (Su et al., 2014). McDonald’s chains are qualified in specific manner to use franchising as an international strategy.

In the internationalization efforts of McDonald’s, identifying as well as selecting the most effective foreign markets is a crucial factor for success. It follows the policy of selecting only those national markets that have the greatest projection of success by using the limited resources efficiently. While entering into foreign markets, the firm faced several constraints from external business environment within the targeted market. This influenced the entry strategies. As the markets are attributed by complexities, the firm well understands the need to analyze the business environments while trying out new emergent markets.

While setting up business ventures in emergent markets, it is important to well understand the external business atmosphere which is critical element. The overall attractiveness of the target market segment with respect to profitability prospects happens to be a key parameter to decide on whether to enter market or not. Subway understands the need to be highly aware of the competition within the target emerging market, as it generates all opportunities as well as threats which determine the attractiveness of target markets. McDonald’s is known to implement the franchising system in an extensive manner. On account of the benefits of franchising for manufacturers in terms of traditional market forms, the overall share of such system with the food sector would be raised. McDonald’s chains are qualified in specific manner to use franchising as an international strategy.

Evaluation of the external corporate environment as well as attractiveness of market segment within market segment, and also appreciating the link amidst the resources as well as capabilities of the firm with the target customer requirements is demonstrated as the critical task for any multinational company. This is considered to be important for conducting further economic development. Such factors are essential for any firm to be successful within the emergent market. 

Conclusion:

Thus it may be concluded from the study that the firm has undertaken effective policies and operational strategies to occupy the lead position within the competitive market environment. The increase in the total sales of sandwich has been the consequence of decline in the customer interest in fries as well as hamburgers, along with increase in the healthier options. It has been analyzed that the overall sales rate of burgers has grown to almost 15% annually. It also aims at capturing virgin international markets with its strong brand name. 

References

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