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111strategic Global Marketing Strategy 7bu027
111strategic Global Marketing Strategy 7bu027
111strategic Global Marketing Strategy 7bu027
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Title page:
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Table of Contents
1. Front Page ………………………………………………………………………….. 1
2. Title page ……………………………………………………………………….…… 2
3. Table of contents …………………………………………………………………….. 3
4. Introduction …………………………………………………………………………. 4
5. SCLEPT analysis of McDonald………………………..……………….…………… 5
6. Micro environment analysis of McDonald in India and China…………..….….…… 7
7. Market entry strategy in India and China ..………….…..…..…..………….………. 9
8. Marketing mix decision for India and China …...…………………………………. 14
9. Conclusion …………………………………………………….……………………. 17
10. References ……………………………………………..…………………………… 18
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1.0 Introduction
The McDonald's Corporation is a network of quick-service restaurants that is famous all over
the world. Richard and Maurice McDonald opened their first restaurant in 1940 in the
California region of the United States of America. Since that time, the company has expanded
internationally into over 121 countries, opening a total of around 40,000 outlets worldwide,
and the number is continually growing. McDonald's International employs more than 1.5
million people and provides its services to about 96 percent of the entire population of the
globe (McDonald's Annual report, 2019).
McDonald has maintained a strategy of "grow at all costs," which has been a huge boost in
the company's expansion aspirations and resulted in an aggressive expansion plan that has
been successful in both local and international markets since the company's beginning. (Love,
1995). According to Leonhard (1998), around sixty percent of McDonald's current earnings
originates from outlets located in other countries. There is a gap between McDonald's
worldwide sales and profitability due to the fact that the company dominates the market in
other countries to a significant extent. In 96% of the countries in which it does business,
McDonald's is the undisputed leader in the fast food sector. Furthermore, McDonald's market
share in other nations regularly reaches 50%. In the past, McDonald's rivals have not been as
effective in diminishing their market share in other countries as they have been in the United
States. However, this is starting to change as McDonald's continues to innovate and improve
their products and services. What plan has McDonald's used to fulfil its international
marketing goals? This essay's goal is to examine McDonald's strategy for accelerating its
international growth - using India and China as a case study. To better understand how
McDonald's entered into the Chinese and Indian fast food markets, this effort will analyse
their marketing approach.
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2.0 SCLEPT Analysis of the Indian and Chinese fast food market
The term "marketing environment" refers to the context in which a company conducts its
marketing (Lee and Carter, 2011). The marketing environment encompasses all aspects that
have an impact on the company's operations, manufacturing process, commerce, and
customer behaviour (Lee and Carter, 2011). Zeeman and Bogdan (2019) believe that the
formulation of a marketing plan needs to be very thorough. McDonald can use SCLEPT
analysis to figure out how certain external forces affect the competition in their industry and
how such forces can help them make an all-inclusive decision. (Valaskova, Bartosova,
Kubala, 2019).
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supply chain. operating hours and
. working hours for
women.
Economic
GDP/Capita GDP Per Capita -(IMF, 2023)
$23, 382 $9,073
Unemployment Unemployment
5.3% 7.7% of the total (BBC, 2022)
population
Cost of living is
rising.
Internet – 5G
Network
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According to the findings of the SCLEPT research, these two nations are distinct from one
another in a number of important respects. The eating of beef is illegal in India being a nation
that has a large Hindu population, and China, on its own, has animal welfare restrictions that
have a constantly negative influence on the supply chain. In addition, India has a large Hindu
population. India has a great range of ethnic groups as a consequence of migration, and each
of these individuals has their own preferences, some of which are impacted by their religion
while others lead active lives (Zeman & Bodgan, 2019). The use of technology exemplifies
how geographically near these nations are to one another. These distinctions have had an
effect on the marketing strategies that McDonald's has used in both nations in order to sell its
which involves standardising some aspects of their messaging and changing their marketing
approach to cater to the requirements of certain locations. "A geocentric company establishes
a worldwide strategy that adopts a plan based on a standardised identity and well-
communicated values, but then blends standardised and adaptive portions of the marketing
offer" in order to successfully satisfy the vast variety of customer expectations. (Doole,
This will be studied along the lines of analysing the conduct of consumers as well as the level
India
Conducting research about customers is essential to the success of any product. India is the
country that has the second-highest population of any nation on the planet. The population of
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India is more than one billion people. The majority of India's population now resides in the
country's urban areas. Even though people's typical incomes are very modest, they
the demands they have, their spending capacity, the reasons they shop, and the stores they
choose to frequent. MacDonald evaluates the client by concentrating on the client throughout
a wide variety of business subfields. As a result of the nation's rising economy, India's middle
class is increasing everyday, and consumers there are getting more acquainted with brands
China
Being associated with Western culture was a key element in McDonald's success in China.
Because of this, the brand's Chinese menu when it first entered the Chinese market was
At McDonald's restaurants in China, you may get a wide variety of Chinese specialties such
youtiao (Chinese deep-fried dough) and cakes with taro filling (a type of sweet potato).
Along with being used to make tea, green tea also gives sweets and hamburger buns a vivid
green hue.
The initial letter of the hamburger's Chinese name itself is noteworthy since it may be read as
Chinese video games were used as inspiration for the meal packaging used by McDonald's to
advertise in that country. The McDonald's menu options in China must also adapt to the
availability of ingredients in the regional market. Because real cheese is expensive in China,
Chinese hamburgers use rubber-like cheese substitutes instead. Chinese customers cannot
notice the difference since they do not consume cheese very often; nevertheless, foreigners
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3.2 Industry Competition analysis:
India
McDonald's has long dominated the fast food industry in India. In India, KFC is one of
McDonald's main rivals for fast service hamburgers. Domino's, Pizza Hut, Subway, Jumbo
King and other fast food outlets are competitors of McDonald's in India. Due to the shrinking
market share of these competitors in India, McDonald's is now dealing with new difficulties.
Jumbo King competes in the fast food industry by using a simple strategy of quickly
delivering hamburgers to customers who are strapped for time. In order to compete with its
competition, McDonald targets its consumers using three separate segmentations based on
their needs, preferences, and tastes. Due to the uniqueness and variety of the products it
offered, McDonald's in India had a dominant position in the nation and had an advantage
China
The greatest rival to McDonald's in China is KFC, another major American fast food chain.
KFC performs very well in China, where 8,441 locations were active as of March 31, 2022.
This amount is far more than the 3,977 KFC locations in the US. Along with American fried
chicken, Starbucks, a premium coffee brand from the United States, is expanding quickly
here. Starbucks has 5,360 locations in China compared to McDonald's 4,395 in 2021.
Good news does exist for McDonald's in China, however. McDonald's unit count is
increasing more quickly than those of KFC and Starbucks, despite having lost the top spot in
today's figures. From 3,787 in March 2020 to 4,395 in March 2021, the number of
McDonald's locations climbed by 16%, while KFC and Starbucks increased by 14%.
Occasionally, McDonald's introduces novel goods just for the Chinese market. The
corporation posts promotional films on social media, particularly around significant cultural
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occasions like Chinese New Year. These videos use aspects of Chinese heritage to evoke
Given that McDonald's businesses across the globe today contribute a significant portion to
the total income of the corporation, it is essential to investigate how the chain first broke into
international markets. McDonald's entered the global market via the establishment of
franchises, joint ventures, and company-owned stores.
When McDonald's had the option to choose from, franchising was not only preferred, but it
also had a significant effect on the company's expansion. According to information on the
corporate website, franchisees currently own 73% of McDonald's restaurants worldwide. It
is necessary to analyse the concept of franchising to comprehend how essential it was to
McDonald's rapid expansion into China and India. McDonald's restaurants have expanded
internationally much more rapidly than other retail industries, and this is solely due to
franchising. However, McDonald's was acquainted with the concept of franchising.
McDonald's development in the United States began very early in the company's inception
(Love, 1995) by utilising franchising, a relatively innovative business strategy at the time.
The fast food industry, and McDonald's in particular, was responsible for transforming
franchising into a business model that would revolutionise the global retail industry. A
franchise agreement is based on two parties' desire to earn while minimizing risk. Without
using its own money, the franchiser aspires to grow an already successful company. Without
going it alone and betting everything on a novel concept, the franchisee wishes to manage a
firm. One offers a name in the industry, a strategy, knowledge, and access to resources. One
contributes the money while carrying out the duty (Schlosser, 1998). McDonald's, in this
instance, seeks to have a worldwide footprint without running the very high risk of traveling
to other nations and upsetting local eating traditions. McDonald's understood that in order to
access international markets successfully, an American fast food company would require the
assistance of local collaborators. This is precisely what franchising allowed McDonald's to
accomplish.
McDonald's may decide to present itself as a local small-town company rather than an
American international conglomerate in order to capitalise on the franchising opportunity.
They produced the world's quickest-growing fast food business, which they ran themselves.
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Those individuals who are willing to comply with the requirements and pay the franchise fees
will have access to a vast selection of vendors, cutting-edge technology, and a track record of
outstanding achievements.
McDonald's entered the Chinese market via franchising. According to Franchise (2012), the
prevalence of franchising in China began to rise in the late 1980s. It went through a phase of
chaotic growth. Numerous franchisors engaged in unethical business practises and even
mislead franchisees as a result of the negative legal climate. Franchisees sometimes fail to
make payments to their franchisors or infringe on their intellectual property rights. The 1997
enactment of the Ministry of Internal Trade's Regulation on Commercial Franchise Business
was China's first franchise law. This Act specifies criteria for intellectual property protection,
copyrights, and trademarks, among other things (Franchise, 2012).
Mainland's first McDonald's Three years after the first KFC restaurant opened in Beijing in
1987, In October 1990, China made its international debut in Shenzhen, Guangdong province
(Wikipedia, 2012; Franchise, 2012). The biggest McDonald's in the world, with over 700
seats, opened in Beijing in 1992. (Wikipedia, 2012). Shanghai McDonald's reportedly broke
the previous record by constructing 200 new locations in China in 2011, propelling
McDonald's to the third-largest market on the planet. In China, McDonald's will increase its
spending. According to predictions, total investment in China would increase by 50% in 2012
compared to 2011. The funds will mostly be used to build new restaurants, spruce up the
outsides of already-operational companies, and speed up services. McDonalds China intended
to establish an additional 225–250 restaurants in 2012 (McDonalds China, 2012).
According to Euro monitor and RNCOS, McDonald's is one of the most prominent
enterprises entering India. The food franchise industry in India is expanding at a phenomenal
rate of 25–30% per year and is unaffected by the global economic downturn (Fransmart,
2012). According to Fransmart, even at the above course, there is a widening chasm between
India, the country's largest consumer market, and the shortage of outstanding food franchise
options. Numerous overseas multinational brands have numerous options to launch
enterprises in India as a result of this expansion. The annual Franchising World Top 100
study found that this growth rate would remain stable for the foreseeable future. Currently,
over 1000 franchised brands operate in India. The study also noted that franchising was
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among the best ways to reach the Indian consumer market with businesses and brands
(Franchise Business, 2012). The majority of businesses have chosen this route to enter the
sizable Indian consumer market since the franchising sector in India has been developing
positively as well. Deputy Commercial Counselor Dale Tasharski of the American Embassy
in New Delhi estimates that 71% of Indians are under the age of 35. The educated, modern,
and social Indian middle class is expanding rapidly. They have supplanted India's top earners
in terms of income, and they prefer fast food franchises owned by the United States. The
widening disparity between the supply and demand for food franchises offers expansion-
minded US food franchises and well-capitalized Indian business proprietors a unique
opportunity for profit (Fransmart, 2012). McDonald's first foray into the Indian market
occurred in 1996, when it opened a location in New Delhi. (Wikipedia, 2012).
4.3 Segmentation
Market segmentation is the strategy whereby a company divides a market into subcategories
that are likely to exhibit similar responses to marketing inputs. (Doole, Lowe, and Kenyon,
2019)
Targeting
Selling to specific groups identified via segmentation is known as targeting. Marketers need
to be able to strike a balance between creating a company culture and understanding segment
size and expected profitability. While segmentation is the process of dividing a population
into categories based on specific characteristics, targeting is the practise of selling products to
specific groups that have been identified as a result of segmentation. Choosing the marketing
combination that will appeal to the target audience the most is a crucial aspect of positioning.
Therefore, children, adolescents, and young urban families are the target market in both
nations.
China targeting
Demographic 6-70;
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Males and females;
India Targeting
While Mcdonalds use the same adaptive targeting in all their markets, the major influence on
the targeting model in India is the vegetarian nature of the consumers, which means that a lot
of consumers tend to reduce meat intake from a particular age (Pew research survey, 2021)
Demographic 8-45;
Positioning
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Positioning has to do with the rating or perspectives of consumers about the company’s
product. To achieve this, a brand must be creative and give consumers striking ideas that will
not leave them easily (Tudor, and Negricea, 2012)
China
McDonald's employs adaptive product positioning by often changing their offers in response
to market trends in China. This requires focus and being abreast of happenings in the country
to enable it adapt accordingly. This strategy is aimed at positioning the brand ahead of its
major competitors and particularly to present itself as being sympathetic of the people’s
economic situation, especially where it appears that the peoples’ spending power dwindles.
(2020 McDonald Annual Report)
Standardization and adaption strategies are typically at the center of the discussion when
considering global marketing strategy. While Szymanski et al. (1993) defined standardization
as a consistent and uniform method to allocating resources across the variables of the
marketing mix across markets throughout the country, Viswanathan and Dickson (2007)
defined it as a comprehensive promotional effort. A standardization strategy, according to
Jeannet and Hennessey (1998), is the formulation of a consistent plan for a product, service,
or company throughout the whole global market, which comprises of numerous marketplaces
spanning countries or states. According to proponents of the standardised global marketing
strategy, as the world grows increasingly similar, buyers in all global markets have the same
preferences and expectations. (Levitt, 1983, 1984).
Given the distinct characteristics of some markets, a global brand should actively try to
modify its strategy in the light of the reality that even markets and goods that seem to be
comparable internationally can have slight variations from one area to the next that might
impact their adoption by potential customers worldwide. (Kotler, 1986).
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McDonald's worldwide success, according to Vignali (2001), has been due to the use of
franchising, as it allows residents to swiftly adopt the US brand culture in terms of goods and
services. The marketing mix—product, price, promotion, and place—must be developed with
these crucial customers in mind, according to McDonald's (McDonald's UK, 2012). The
consistency of McDonald's goods and services defines their marketing approach. In contrast,
McDonald's must respect regional traditions and religious constraints in places like India.
(Goyal and Singh, 2007).
The main factors will be considered along the line of Products, pricing, promotion and place.
● Product
McDonald's UK (2012) asserts that it is crucial to remember that potential consumers have a
choice of spending options when showing menu items to them. Therefore, McDonald's
meticulously considers the design of a menu that consumers want. Under these conditions,
market research is essential. In contrast, client expectations may change over time.
Understanding the product life cycle and keeping track of customer preferences are crucial to
the success of a business (McDonald's UK, 2012). To keep up with changing consumer
tastes, McDonald's must gradually phase out obsolete goods while introducing new ones.
● Pricing
There are workable alternatives to multiple pricing systems. McDonald's UK (2012) asserts
that a key factor in pricing is the consumer's impression of value. Customers form their own
opinions regarding the worth of a product. As a marketing strategy, employing reduced prices
carries the risk that consumers will associate them with inferior quality. We must have in-
depth understanding of the brand's reputation in order to set prices. Otherwise, we run the
danger of lowering our profit margin while keeping up our sales.
● Promotion
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● Place
McDonald's global strategy includes franchise development. Every McDonald's store has
unique and consistent operating aspects. Despite their different cultures and social norms,
McDonald's China and McDonald's India employ the 4Ps marketing blend in remarkably
similar methods. Due to the franchisor's influence on company operations choices, many of
the original principles are still in use in various regions of China and India. Burgers (available
in a variety of flavours), french fries, soft beverages, and desserts are McDonald's menu
staples. In China and India, all McDonald's locations continue to serve the current menu. In
McDonald's self-service system, customers place their orders at the counter, pay, and then
transport their food to a table or to go. China and India have McDonald's restaurants with the
same exterior and interior design as the rest of the world. In contrast, the table below
illustrates significant differences between McDonald's Glocalization strategies in China and
India.
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Marketing mix China India
McDonald's has quickly become one of the most prosperous enterprises in the world. The
incorporation of globalisation into the business strategy has enabled it to accomplish and
maintain a high level of growth. It is also going to keep looking at its many growth potential
throughout the course of the next years, beginning with the establishment of the business in
the United States and continuing through its subsequent growth into other nations such as
England, Australia, and most notably India and China. McDonald's has perfected the practise
of localization, also known as adaption, in order to serve its customers in China and India
with an exceptional level of service. It is crucial to underline that McDonald's has evolved
into a luxury brand, particularly among members of the middle class, who are now more self-
confident in the knowledge that they, too, can afford to eat at high-quality locations. As the
company continues to modify its operations in response to shifting conditions throughout the
world, especially in the United States, it is imperative that it investigate ways to connect with
the working poor.
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