McDonalds Understanding policy development
Globalization2 creates the need for an international marketing strategy to create awareness of a product. The need for international marketing is motivated by the fact that there exist diversities across regions and people (Terpstra et al. The firms therefore have to take care of the elements of culture and market behavior. On the other hand domestic marketing involves marketing within the boundaries of a country where a product originates (Acharya, 2001). Specified domestic and international marketing results from the unique marketing mix required to suit a specific market. Some of the products added to the menu of foods include fruit salads and milk products. Some of the sources of the revenue include royalties, franchisees, and rent. Today McDonald's exists in more than 100 countries in the entire world.
The target customers served on a daily basis are close to 70 million. The domestic models of business include acquiring all the land in its own brand name(Dunning et al. Meat pies are added to the food menu in New Zealand. In Germany, the restaurant offers beer as one of the drinks. Prawns are also prepared and sold in Singapore and Japan. The diversifications in the foreign markets prompt the company to diversify the marketing strategy (Mak et al. , 2012 p. For instance, the joint venture established in Moscow within the former Soviet Union attracted a historical attendance of over 30000 people. A similar situation was witnessed when McDonald's opened its first food outlets in Beijing China. The success stories have often provided a ground for motivation especially when considering the move into newer markets.
Every success story made while entering into a region created an opportunity for further successes. For instance, the first entry into the Middle East was made in Tel Aviv Israel. Since within the US the firm can easily take care of training the franchisees on the production methods, maintaining the quality within the US is not as challenging as compared to the foreign markets. Marketing strategy within diversified cultures is also a challenge. For instance, the chain outlets have struggled to diversify the products in every region according to the food culture. Markets such as India have lesser tolerance for meat food products. The nature of unique markets such as the Indian market creates the need for diversification of the marketing strategy (Kulkarni & Lassar 2009 p.
The result turns out to be extra commitment in some markets more than others. As a result of the extra commitments made in some markets the firms’ expense may go up higher in some markets more than others (Wilson, 2006). Opportunities McDonald's enjoys social recognition marketing by its brand name. Exclusive diversified marketing has been one of the successes of the restaurant chain. The firm has often diversified the products to meet the market requirements for instance market McDonald’s Indian division is so much concerned about introducing their vegetarian food products to cater for the customers who do not take meat products. The use of technology in delivery and placing orders has also revolutionized the way of doing business in some regions.
For instance, online order placements and delivery is an opportunity that would greatly impact the way of doing business within the world. For instance, McDonald's recently began an online delivery business within Singapore. The online platform is an opportunity that McDonald’s entrepreneurs are yet to exploit wholly (Lee, 2011 p. Economic development in the regions of the world also provides an opportunity for growth of the firm. Since modern firms face the challenge of having to compete with foreign firms in their local markets. It is advisable the firms aspire for foreign markets to diversify their products. International marketing also provides an opportunity for evaluating the foreign target markets. For instance where McDonalds wants to evaluate the perception about a product it can opt for an online marketing to evaluate the customer’s perception of the product.
International marketing also provides an opportunity for carrying out a SWOT3 analysis of the foreign market (Czinkota & Ronkainen 2013). International franchisees also take part in product modification by discovering new products for their markets. Funding for the innovation of the product is carried out by the parent firm that assists in developing the product for the foreign markets. Licenses are only acquired from the franchisor after depositing the required minimum amount (Huszagh et al. Challenges of going international Some of the challenges associated with going international include standardizing the products to meet the demands of the market. Diversification challenges to meet the product cultural requirements may also be a challenge. For instance, most of the regional markets exploited had a strong relationship with the United States.
The first entry into the Middle East was made into Israel. Israel enjoyed a strong relationship with the United States at that particular moment. The forecasts were then used to exploit other markets within the Middle East. The force to go international came as a motivation of the mother countries influences within those regions (Pichler, 2012 p. The United States had a composition of diversified cultures that moved to stay within the United States. McDonald's, therefore, got an opportunity to test on the diversified cultures coped with the lifestyle within the United States. Most citizens from other nations had begun moving into the US and easily followed into the American culture and lifestyle. The results prompted the restaurant Chain McDonald's to try moving into the new markets.
The cultural difference also facilitated the development of the new products for diversified markets. The upgrade at McDonald’s food outlets such as the self-service system and introduction of a website to place the orders are regarded as some of the technological strengths enjoyed by McDonald's within its markets. Healthcare innovation technologies such as the emphasis on healthy foods also led to the modification of the menu to suit the requirements. The restaurant chain carries out an analysis of the food products it produces for its customers regarding the nutrition composition and health benefits (Adams, 2007 p. Possession of food technology productions, therefore, is regarded as one of the competitive edges enjoyed. Environmental Increased sensitization across most of the global markets creates the need for observation of several external dynamics.
Due to the increasing concerns of the sugar levels within the foods and the proportional rise in cases of diabetes and obesity states such as New York passed a law to limit the levels of sugar in the fast foods sold within their regions (Mello et al. , 2003 p. The firm was therefore forced to create a strategy for reduction. One of the biggest battles that McDonald's has had in the foreign operations includes the McLibel case where the company was accused of using child images in its advertisements and animal treatments. The accusations were based on the legal provisions of the country. Just as in the case of domestic marketing international marketing should evaluate the nature of the markets. Defining the nature of the markets facilitates the creation of the most appropriate products targeting the market.
McDonald's should also create flexibility in pricing to facilitate the incorporation of all characteristics of the market. McDonald’s international marketing strategy should also incorporate the idea of market discrimination in different regions to take care of the goals related to the generation of revenue. Since pricing within the countries is mainly set to apply across the different locations it is necessary to apply a geographic discrimination mechanism to incorporate several aspects of market demands. L. and Lusch, R. F. The complexity of context: A service ecosystems approach for international marketing. Journal of Marketing Research, 21(4), pp. R. and Ronkainen, I. A. International marketing. Cengage Learning. , Pak, Y. S. and Beldona, S. Foreign ownership strategies of UK and US international franchisors: An exploratory application of Dunning's envelope paradigm.
International Business Review, 16(5), pp. Global business today. Huszagh, S. M. , Huszagh, F. W. and Grünhagen, M. Cultural convergence in emerging markets: The case of McDonald's in China and India. Journal of Small Business Management, 54(2), pp. Kulkarni, S. and Lassar, W. The internationalization strategies of KFC and McDonald’s in China. North East University of Finance. Mak, A. H. , Lumbers, M. , Rimm, E. B. and Studdert, D. M. The McLawsuit: The fast-food industry and legal accountability for obesity. Pichler, F. Cosmopolitanism in a global perspective: An international comparison of open-minded orientations and identity in relation to globalization. International Sociology, 27(1), pp. Preble, J. F. Steiner, G. A. and Steiner, J. F. Business, government, and society (p. From San Bernardino to Shanghai: Domestic and Global Challenges at McDonald's Corporation(Doctoral dissertation, Vanderbilt University.
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