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International Marketing

Introduction

Globalization has made the globe considerably smaller. Globalisation involves

developing marketing strategies as though the world is a single entity, marketing standardized
products in the same way everywhere. Globalised organisations employ standarised products,
promotional campaigns, prices and distribution channels for all markets Brand name, product
characteristics, packaging and labeling are the easiest of the marketing mix variables to
standardize. Whereas internationalization involves customize marketing strategies for
different regions of the world according to cultural, regional and national differences to serve
specific target markets. In order to standardize the marketing mix, the strategy needs to group
countries by social, cultural, technological, political and economic similarities. When a
company enter in a new market or country, it generally analyse PESTLE (Political, Economic,
Social, Technology, Legal and Environmental factors)

This assignment involves an analysis of the marketing mix strategy utilized by a

multinational company; in this case, McDonald’s have been selected for the study purpose. 
McDonald’s is considered as the largest fast-food chain in the world and one of the most
powerful brands in the world.

McDonald’s

The modest beginnings of McDonald’s at Illinois in USA, turned out to be among the
main brand names in the international scene.  It has been synonymous to what is widely-
accepted the fast-food concept. The company operates over thirty one thousand stores all over
the world to date. It was one of the first to perfect the concept of fast service in the food
industry in its early days of operations in 1955. Given that the products of the company are
mainly western in character; its operations have also expanded to the Asian region. The first
Indian McDonald's outlet opened in Mumbai in 1996. In the rest of the globe, it operates
thousands of store franchises that functions autonomously.
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McDonald’s in India

McDonald’s is a global fast food operator which operates in India with a joint venture
partner. Two joint ventures, Connaught Plaza Restaurants Pvt. Ltd, which is responsible for
northern India, and Hard Castle Restaurant Pvt. Ltd, which oversees the western region,
manage the company in India.

Celebrating over 12 years of leadership in food service retailing in India, McDonald’s

now has a network of over 160 restaurants across the country, with its first restaurant launch
way back in 1996. Prior to its launch, the company invested four years to develop its unique
food chain, which has brought about a veritable revolution in food handling, immensely
benefiting the farmers at one end and enabling customers to get the highest quality food
products, absolutely fresh and at a great value.

McDonald's says it survived and expanded in India by developing innovative menus to

cater to the Indian taste bud, something it has not done anywhere else in the world.

Challenges in Entering Indian Markets

 Re-engineering the menu - McDonald’s has continually adapted to the customer’s

tastes, value systems, lifestyle, language and perception. Globally McDonald’s was
known for its hamburgers, beef and pork burgers. Most Indians are barred by religion
not to consume beef or pork. To survive, the company had to be responsive to the
Indian sensitivities. So McDonald’s came up with chicken, lamb and fish burgers to
suite the Indian palate.
 The vegetarian customer – India has a huge population of vegetarians. To cater to
this customer segment, the company came up with a completely new line of vegetarian
items like McVeggie burger and McAlooTikki.
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Product Positioning

“Mc Donald’s mein hai kuch baat” projects McDonald’s as a place for the whole
family to enjoy. When McDonald’s entered in India it was mainly perceived as targeting the
urban upper class people. Today it positions itself as an affordable place to eat without
compromising on the quality of food, service and hygiene. The outlet ambience and mild
background music highlight the comfort that McDonald’s promises in slogans like “You
deserve a Break Today” & “Feed your inner child”. This commitment of quality of food and
service in a clean, hygienic and relaxing atmosphere has ensured that McDonald’s maintains a
positive relationship with the customers.

McDonald’s Marketing Mix Strategies

McCarthy (1975) formulated the concept of the 4Ps - product, price, promotion, and
place marketing mix. For many years these have been used as the principal foundation on
which a marketing plan is based. Here we have analyzed 5Ps of McDonald’s India i.e.
product, price, promotion, place and people.

A. Products Success

One of the aims of McDonald's is to create a standardised set of items that taste the
same whether in Singapore, Spain or South Africa. McDonald's learned that, although there
are substantial costs savings through standardisation, being able to adapt to an environment
ensures success. Therefore the concept of ``think global, act local'' has been clearly adopted
by McDonald's. Adaptation is required for many reasons including consumer
tastes/preferences and laws/customs. There are many situations where McDonald's adapted
the product because of religious laws and customs in a country. McDonalds studied the
behaviour of the Indian customer and provided a totally different menu as compared to its
International offering. It dropped ham, beef and mutton burgers from the menu. India is the
only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in
India are 100% vegetarian. McDonalds continuously innovates its products according to the
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changing preferences and tastes of its customers. The recent example is the introduction of the
Chicken Maharaja Mac.

B. Place

The place mainly consists of the distribution channels. It is important for the
availability of the products to the customer at the right place, at the right time and in the right
quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonald’s outlet. In India,
the number of restaurants is more than 160 and also increasing year by year to make the
availability of its product to every customer easily.

C. Pricing Strategy

McDonald's has realized that, despite the cost savings inherent in standardization,
success can often be attributed to being able to adapt to a specific environment. This is indeed
the case with its implementation of its pricing strategy, which is one of localisation rather than
globalisation.

McDonald’s came up with a very catchy punch line “Aap ke zamane mein, baap ke
zamane ke daam”. This was to attract the middle and lower class consumers and the effect can
clearly be seen in the consumer base McDonald’s has now.

McDonalds has certain value pricing and bundling strategies such as happy meal,
combo meal, family meal etc to increase overall sales volumes.

D. Promotion Strategy

The various promotion channels being used by McDonald’s to effectively

communicate the product information are given above. A clear understanding of the customer
value helps decide whether the cost of promotion is worth spending.

There are three main objectives of advertising for McDonald’s are to make people
aware of an item, feel positive about it and remember it. The right message has to be
communicated to the right audience through the right media. McDonald’s does its promotion
through television, hoardings and bus shelters. They use print ads and the television
programmes are also an important marketing medium for promotion.
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Some of the most famous marketing campaigns of McDonald’s are:

 “You Deserve a break today, so get up and get away- To McDonald’s”

 “Aap ke zamane mein, baap ke zamane ke daam”.
 “Food, Folks, and Fun”
 “I’m loving it”.

E. People

McDonald’s understands the value of both its employees and its customers. It
understands the fact that a happy employee can serve well and result in a happy customer.
McDonald continuously does Internal Marketing. This is important as it must precede external
marketing. This includes hiring, training and motivating able employees. This way they serve
customers well and the final result is a happy customer.

The punch line “I’m loving it” is an attempt to show that the employees are loving
their work at McDonalds and will love to serve the customers.
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PESTLE Analysis of McDonald’s in India

Pestle (Political, Economic, Social, Technology, Legal and Environmental factors) is

an analysis of the external macro environment in which a business operates. A brief analysis
of PESTLE for McDonald’s is discussed below:

A. Political Factors

The international operations of McDonald’s are highly influenced by the individual

state policies enforced by government. For instance, the company is controlled by the
individual policies and regulations of operations. Specific markets focus on different areas of
concern such as health, worker protection, and environment. All these elements are seen in the
government control of the licensing of the restaurants in the respective states. For instance,
there is an impending legal dispute in the McDonald’s franchise in India where certain
infringement of rights and violation of religious laws pertaining to the contents of the food.
The existence of meat in their menus in India is apparently offensive to the Hindu religion in
the said market. There are also other studies that points to the infringement of McDonald’s
Stores with reference to the existing employment laws in the target market. Like any business
venture, these McDonald’s stores have to contend with the issues of employment procedures
as well as their tax obligations so as to succeed in the foreign market.

 B. Economic Factors

Before penetrating the market, the company must carry out a well conducted market
research, especially in the movements in the economic environment. The frequency of the
shifts in the inflation rate as well as the fluctuations in the exchange rate affects the operations
of the company. Therefore, in India, McDonald's is committed to sourcing almost all of its
products from within the country. For this purpose, it has developed local Indian businesses,
which can supply them the highest quality products required for their Indian operations.
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C. Socio-Cultural Factors

The international strategies of McDonald’s seem to function on several fields to

guarantee lucrative returns for the organisation.  To illustrate, the organisation improves on
establishing a positive mind-set from their core consumers. McDonald’s has launched a
sensible valued set of food that tenders a reliable level of quality for the respective market
where it operates.

McDonald's has developed a menu especially for India with vegetarian selections to
suit Indian tastes and culture. In line with its respect for local culture, India is the first country
in the world where McDonald’s does not offer any beef or pork items. McDonald's has also
re-engineered its operations to address the special requirements of vegetarians. Special care is
taken to ensure that the vegetable products are prepared separately, using dedicated equipment
and utensils. This separation of vegetarian and non-vegetarian food products is maintained
throughout the various stages of procurement, cooking and serving. So much so that the
mayonnaise and the soft serve are also 100% vegetarian. Also in India, only vegetable oil is
used as a cooking medium.

D. Technological Factors

For a fast food restaurant, technology does not give a very high impact on the
company and it is not a significant macro environment variables. However McDonalds should
be looking to competitors innovation and improve itself in term of integrating technology in
managing its operation. For example in inventory system, supply chain management system
to manage its supply, easy payment and ordering systems for its customers and wireless
internet technology. Implementation of technology makes the management more effective and
cost saving in the long term. This will also make customer happy if cost savings results in
price reduction or promotional campaign discount which will benefits them from time to time.
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E. Legal Factors

There has been the recurrent bellowing in opposition to the fast food industry.  This
has similarly made McDonald’s apply a more careful consideration on their corporate social
responsibilities.  On the whole, this addressed the need of the company to form its corporate
reputation to a more positive one and a more socially responsible company. Seen on the
website of the company, it seems that they have acquired strides to take in hand the key social
censures that they have been berating them in the past decades.  The company has provided
their customers the relevant data that they need with reference to the nutritional substances of
their products.  This is to attend to the arguments of obesity charged against the products of
the company.  In the same way, the consumers provided freedom in choosing whether or not
they want to purchase their meals.

F. Environmental Factors

The social responsibilities of McDonald’s on the state are influential to the operations
of the company. McDonald's believes in giving back to the community it serves. Wherever
McDonald's goes, it becomes a part of the community it operates in and contributes towards
the development of the locality. For example, McDonald's has introduced the concept of
‘Litter Patrols’ – McDonald's employees go around the market every day, picking up garbage
left behind not only by customers from McDonald's restaurants but also by other visitors in
the area. The result is a cleaner neighbourhood.
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Conclusion

McDonald’s is one of most successful companies in the world today. With its rapid
embracement of globalization, the firm has been able to expand and retain numerable growth;
as well as continuing to explore with its growth potential in the coming years. From the
beginning of the company’s development in the United States, to its spread in England,
Australia and more recently India and China, the firm has been able to provide a variety of
hamburgers and other foods to its consumers. From the Big Mac, to the Maharaja, the
company’s successive strategies, specifically with heavy research and development have
allowed it to fulfill the tastes of locals in every country it operates. The strategies developed
by its experts, thus allows for the company to increase in revenues, quality, and bring about
consumer satisfaction.
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Bibliography and References

Books
1. “Marketing Management” 12th Edition, by Kotler, Keller, Koshy and jha
2. “International Marketing” 12th Edition, by Phillip R. Cateora and John L. Graham

Internet sources

1. http://www.scribd.com/doc/11520753/Marketing-Strategies-of-McDonalds
2. www.ftc.gov
3. www.trifter.com/.../mcdonalds-strange-menu-around-the-world.35517
4. www.wharton.universia.net
5. www.jrcanda.com/internatl.html -
6. https://classshares.student.usp.ac.fj/.../McDonald’s%20“think%20global,%20act
%20local”%20–%20the%20marketing%20mix.pdf
7. marketingteacher.com/Lessons/lesson_pricing.htm
8. http://www.bukisa.com/articles/22314_mcdonalds-and-global-marketing
9. www.ngfl-cymru.org.uk/vtc/bus_studs/members/.../PEST.pdf
10. www.mcdonaldsindia.com/
11. mcdonaldsindia.net/ -
12. http://www.indiamarks.com/guide/What-You-Can-and-Can-t-Get-at-McDonalds-
India-/1739/
13. http://www.marketingmag.com.au/news/view/mcdonald-s-marketing-success-in-india-
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