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Dear All,
The questions in the text book are too long. So, I decided to divide it into 4 sections;
(a, b, c and d)
Question 1
a) Identify the key elements in McDonald’s global marketing strategy.
b) How does McDonald’s approach the issue of standardization?
c) Does McDonald’s think global and act local?
d) Does it also think local and act global?
Answers (a)
2. According to Warren J. Keegan and Mark. C. Green in Global Marketing Second Edition,
global marketing strategy (GMS) has three additional dimensions that pertain to marketing
management. First, concentration of marketing activities is the extent to which activities
related to the marketing mix for example promotional campaigns or pricing decisions are
performed in one or a few country locations.
Second, coordination of marketing activities refers to the extent to which marketing
activities related to the marketing mix are planned and executed interdependently around
the globe. Finally, integration of competitive moves is extent to which a firm’s competitive
marketing tactics in different parts of the world are interdependent. The GMS should
enhance the firm’s performance on a worldwide basis.
Based on the case study, Ken Koziol, Vice President of worldwide restaurant innovation,
explained “McDonald’s was built on a strong foundation of a core menu that we took
around the world but we need to make sure are more locally relevant. Taste profiles and
desires are changing”.
The first element in McDonald’s global marketing strategy is globalization. According to
http://cenizamarcial.wordpress.com/2011/07/27/bm255-msdonalds/ globalization
involves developing marketing strategies as though the world is a single entity: marketing
standardized products in the same way everywhere. Globalized organizations employ
standardized products, promotional campaigns, prices and distribution channels for all
markets. Brand name, product characteristics, packaging and labelling are the easiest of the
marketing mix variables to standardize.
Britannica (2007) stated “Food is the oldest global carrier of culture”. Any changes in the
foods that we eat, in its preparation, the way it is served and consumed diminishes the
traditional beliefs of the people. One of the most influential changes came with introduction
of fast food restaurants like McDonald’s into foreign countries.
Second GMS is transformations have taken place which could be perceived as beneficial or
corrupting to that culture. According to William Gould (1996), before the introduction of
McDonald’s overseas “fast food was almost unknown. McDonald’s has been the first
company to try to export America’s love of fast food and changes in eating habits of other
nations”. The case study stated that “thanks to changing lifestyles around the globe, more
people are embracing the Western-style fast-food culture”.
Third GMS is local specialization. Radley Balko (2003), states that “In most communities, in
fact, the McDonald’s has conformed to the local culture not the other way around. The
McDonald’s corporation notes that most of its overseas franchises are locally owned, and
thus make efforts to buy from local communities. McDonald’s also alters its regional menus
to conform to local taste.” For example, the case study stated Hindu religion prohibits
eating beef, McDonald’s developed the Chicken Maharaja Mac specifically for India.
The final strategy is McDonald’s outlets can be set up practically in the world. In the case
study we find that there are a lot of McDonald’s restaurant open in a year. For example, in
China McDonald’s have more than 1,000 restaurants, in India McDonald’s operated 208
3. locations at the end of 2010 while in France with nearly 1,000 outlets represents McDonald’s
third-largest market in Europe.
Answers (b)
According to Warren J. Keegan and Mark. C. Green in Global Marketing Second Edition, one
of the GMS is global market participation is the extent to which a company has operations
in major world markets. Standardization versus adaptation is the extent to each marketing
mix element is standardized (i.e., executed the same way) or adapted (i.e, executed in
different ways) in various country markets.
So, in McDonald’s we found that the approach of standardization in first, McDonald’s
promotional tagline, “I’m lovin’ it”. According to Wikipedia, I’m lovin’ it is the
international branding campaign and it was used in 85 countries including Malaysia. The
company says this approach will revitalize the brand in the entire world, unify its messages
and integrate all its marketing moves.
Second is McDonald’s core product. McDonald’s served their core products such as burgers,
fries and soft drinks. These three products must be served consistently in the global product
offering. It also requires the standardized process and similar quality ingredients.
The case study stated that McDonald’s built its reputation by promising and delivering
three things to customers: inexpensive food with consistent taste regardless of location;
quick service; and a clean, familiar environment.
Third is quick service. The point of parity for all fast food restaurants is delivering fast
service. In McDonald’s it is not only delivering quick service but they must also consistently
fast, friendly and accurate service. For example, when a customer stepped in front of the
McDonald’s counter to purchase order, they must be greet by the cashier by saying “Good
afternoon Sir, welcome to McDonald’s, you want to having here or take away?”. This
pitching has been repeatedly used by McDonald’s cashier when they wanted to take an
order from their customer.
The fourth is restaurant design and layout. The point of parity for McDonald’s is taste good
while the point of different is fun environment targeting the market of kids, young adult
and family. When we enter McDonald’s outlet at IOI Mall Puchong it has different design
and layout from McDonald’s outlet at Ampang Point. At IOI Mall, the outlet has extended
area where differentiation product of McDonald’s such as McCafe is served’. McCafe’
targeted young people who like to hang out at the mall with their friends while enjoying
free wifi. However, McDonald’s at Ampang does not have McCafe’. The restaurant has
different size and type of chairs for seating. So, customer can choose where they prefer to sit.
In the case study, McDonald’s restaurant in France has redesigned it stores. It is because,
French people wanted to take a time when they are eating. Therefore, McDonald’s opening
fancy restaurant which people can sit and enjoying their meal.
Answer (c)
4. Global localization, it means that a successful global marketer must have the ability of
“Think global and act local”. Global marketing may include a combination of standard (for
example actual product itself) and nonstandard (for example distribution or packaging)
approaches. A global product may be the same product everywhere and yet different.
Global marketing requires marketers to think and act in a way that is both global and local
by responding to similarities and differences in world markets.
Yes, McDonald’s adapt think global because all over the world, McDonald’s remain as the
same company, using the same mission and vision and not to forget their logo and image,
golden arches. In the case study, it stated that golden arches are said to be the second most
recognized symbol in the world.
McDonald’s act locally because it gets use to the local culture by using their own product.
For example, people in France demanded McDonald’s to use French potatoes and French
cheese to their products so that it would appeal their local culture. McDonald’s also using
different name of the product so that it suit with the culture. For example in India,
McDonald’s are using the Indian name to its menu and served products such as
McAlooTikki, McCurry Pan and Pizza McPuff for vegetarian.
Answer (d)
Yes, McDonald’s also adapt think local and act global. Many companies are learning that it
is equally important to think local and act global. In practice, this means that companies are
discovering the value of leveraging innovations that occur far from headquarters and
transporting them back home. For example, the case study stated that McDonald’s in France
think local because they redesigned stores have hardwood floors and exposed brick walls.
Sign are in muted colours rather than the chain’s signature red and yellow, and the golden
arches are displayed more subtly. Overall, the restaurants don’t look like McDonald’s
elsewhere.
As McDonald’s locations in France undergo style makeover, some franchisees report sales
increases of 10 to 20 percent. It shows that the restaurant act global in order to increase their
sales revenue. Encouraged by these results, McDonald’s has embarked on an ambitious
program to refurbish several thousand outlets in various countries. Some American
franchisees began undertaking similar renovations.
