COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES

Week No: (7)

Trimester:3rd AY 2021/2022
HWAC 2

COURSE CODE BSIB531 COURSE TITLE GBP

SECTION TIME DAYS THD ROOM
STUDENT NAME ID NO.
TEACHER’S NAME DATE

TOPIC GLOBAL MARKET

ACTIVITY TITLE METHODS OF ENTERING GLOBAL MARKET

ACTIVITY Individual activity.

DIRECTION & Guidelines:
REQUIREMENT/  Try to answer the question based on critical thinking given from the case
S study in the class.
 Submission via Moodle only.
Question: Analyze the following statement:

1. Go over several methods a business might engage in foreign trade. Give

some examples of businesses that have utilized these strategies to
penetrate international markets. (10 marks)

ACTIVITY
OUTPUT
What Are Market Penetration Strategies?

Market penetration is the successful selling of a product or service in a specific

market. It is measured by the sales volume of an existing good or service
compared to the total target market for that product or service. Market
penetration is one of the business growth strategies from the Ansoff Matrix. H.
Igor Ansoff first devised and published the Ansoff Matrix in the Harvard
Business Review in 1957, within an article titled “Strategies for Diversification”.
The product-market grid is used to help assess and determine the steps the
company must take to grow, and the risks associated with each strategy

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1

Dr. Nidhi Menon Dr. Jayendira Shankar Dr. Vinodh Natarajan

Faculty Member Programme Head Associate Dean College Dean
Date : Date: Date : Date :
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
Week No: (7)
Trimester:3rd AY 2021/2022
HWAC 2

COURSE CODE BSIB531 COURSE TITLE GBP

SECTION TIME DAYS THD ROOM
STUDENT NAME ID NO.
TEACHER’S NAME DATE

In the market penetration strategy, the company tries to grow using its existing
offerings (products and services) in existing markets. It tries to increase its
market share in the current market scenario, increasing market share within
existing market segments. This can be done by selling more products or services
to existing customers or by finding new customers within existing markets. The
company strives for increased sales for its present products in its current
markets through increased promotion and distribution.

This can be accomplished by:

1. Price decrease
2. Increase in promotion and distribution support

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2

Dr. Nidhi Menon Dr. Jayendira Shankar Dr. Vinodh Natarajan

Faculty Member Programme Head Associate Dean College Dean
Date : Date: Date : Date :
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
Week No: (7)
Trimester:3rd AY 2021/2022
HWAC 2

COURSE CODE BSIB531 COURSE TITLE GBP

SECTION TIME DAYS THD ROOM
STUDENT NAME ID NO.
TEACHER’S NAME DATE

3. Acquisition of a rival in the same market

4. Modest product refinements

Of the four product-growth strategies in the Ansoff Matrix, market penetration is

the least risky.

Market Penetration Example: McDonald’s

McDonald’s Corporation, the American fast-food company founded in 1940, is

the world’s largest restaurant chain. As of 2018, McDonald’s serves over 69
million customers daily in over 100 countries across 37,855 outlets. It started as
a restaurant operated by Richard and Maurice McDonald in San Bernardino,
California, the United States, which was rechristened into a hamburger stand,
and later turned the company into a franchise. The Golden Arches logo was
introduced in 1953 at a location in Phoenix, Arizona. In 1955, Ray Kroc, a
businessman, joined the company as a franchise agent and purchased the chain
from the McDonald brothers. McDonald’s Corporation revenues come from the
rent, royalties, and fees paid by the franchisees and sales in company-operated
restaurants. According to two reports published in 2018, McDonald’s is the
world’s second-largest private employer with 1.7 million employees (behind
Walmart with 2.3 million employees). As of 2020, McDonald’s has the ninth-
highest global brand valuation.

Best known for its hamburgers, cheeseburgers, and French fries, they also offer
chicken products, breakfast items, soft drinks, milkshakes, wraps, and desserts.
In response to changing consumer tastes and a negative backlash because of
the unhealthiness of their food, the company has added to its menu salads, fish,
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3

Dr. Nidhi Menon Dr. Jayendira Shankar Dr. Vinodh Natarajan

Faculty Member Programme Head Associate Dean College Dean
Date : Date: Date : Date :
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
Week No: (7)
Trimester:3rd AY 2021/2022
HWAC 2

COURSE CODE BSIB531 COURSE TITLE GBP

SECTION TIME DAYS THD ROOM
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TEACHER’S NAME DATE

smoothies, and fruit.

McDonald’s has stayed on as the world’s largest restaurant chain by revenue,

mainly due to its aggressive market penetration strategies. Here is how
McDonald’s have been keeping the lion share of the market:

smart pricing

McDonald's is famous all over the world for its affordable meals, and it's always
cheaper than its competitors. They also price most of their products using a
smart pricing strategy - prices end in .99, which makes it seem affordable.
McDonald's also uses bundled prices where it is cheaper to pay for combo meals
(food plus drinks) together rather than individually for each item.

Intense marketing and advertising

McDonald's is known for its mass marketing and advertising. You can't watch a
TV show without watching its ad several times while the program is running!
Television played a major role in the company's advertising strategy. In addition
to the usual media (television, radio, newspapers), the company uses billboards
and banners. It also sponsors many sporting events ranging from the Little
League to the FIFA World Cup and the Olympic Games. So far, McDonald's has
used 23 different logos in US ads and some other logos for specific countries
and regions. In addition, McDonald's is not shy about convincing celebrities to

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4

Dr. Nidhi Menon Dr. Jayendira Shankar Dr. Vinodh Natarajan

Faculty Member Programme Head Associate Dean College Dean
Date : Date: Date : Date :
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
Week No: (7)
Trimester:3rd AY 2021/2022
HWAC 2

COURSE CODE BSIB531 COURSE TITLE GBP

SECTION TIME DAYS THD ROOM
STUDENT NAME ID NO.
TEACHER’S NAME DATE

endorse it. Celebrities include sports celebrity Michael Jordan and rapper Travis
Scott. In countries and territories outside the United States, you'll find that it is
endorsed by your favorite local celebrities and personalities. One of its longest-
running and most popular sponsorships is the NASCAR races, dating back to the
NASCAR Cup Series in 1977.

Increase distribution through express service, pickups and deliveries

It certainly lives up to its name as fast food as it is known worldwide for its
quick service. McDonald's has also set up a delivery service for ease of
purchase. The company also offers home delivery through a third party food
delivery service like UberEATS, etc.

Innovative product bundles plus local offers

Who hasn't heard of McDo's Happy Meal? The Happy Meal is an excellent
demonstration of how McDonald's has applied modest product improvement to
penetrate the market and capture a more significant market share. The contents
of the Happy Meal are staples like burgers and French fries but combined with
toys and desserts for kids, they become irresistible for kids and parents alike.
McDonald's also "translates" its menus to meet the food needs and tastes of
each country. In some McDonald's restaurants in Asia, soup is served while beer
is sold in German McDonald's stores.

FACULTY
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5

Dr. Nidhi Menon Dr. Jayendira Shankar Dr. Vinodh Natarajan

Faculty Member Programme Head Associate Dean College Dean
Date : Date: Date : Date :
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
Week No: (7)
Trimester:3rd AY 2021/2022
HWAC 2

COURSE CODE BSIB531 COURSE TITLE GBP

SECTION TIME DAYS THD ROOM
STUDENT NAME ID NO.
TEACHER’S NAME DATE

FEEDBACK

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6

Dr. Nidhi Menon Dr. Jayendira Shankar Dr. Vinodh Natarajan

Faculty Member Programme Head Associate Dean College Dean
Date : Date: Date : Date :