Print Email Download Reference This Send to Kindle Reddit This
submit to reddit

McDonalds is an example of the most successful business

The business was started in 1940s, with the two brothers who were Richard and Maurice McDonald. They owned a McDonald’s Bar-B-Que restaurant in San Bernadino, California, which came with drive-in, Auto-Mac, pay and drive service. By then, great success story began when the founder Ray Kroc bought the right to franchise the McDonald’s System and opened his first restaurant with the red and white tiled building along with Golden Arches design. He renamed it as McDonald’s Corporation and it goes international by 1967 McDonald’s vision is to be the world’s best quick service restaurants experience by providing outstanding quality, service, cleanliness, and value to attract and retain its customers with a smiling face.

According to Stuart Wall, 2009, a multinational enterprise is a company that has headquarters in its home country but has operations in other host countries. Dunning (1993) also defines the multinational enterprise as a firm that deals in foreign direct investment and controls value-adding activities in different countries

Since McDonalds is a multinational enterprise, it is franchised globally therefore its headquarters is actually entitled for the allocation of capital, efficient distribution of managerial skills, culture, technology, product design, line, brand name and it’s services across the globe.Therefore by controlling the quality of it’s products and maintaining the standards by using the recipes, the standard operations which include systems of inventory control, financial record-keeping ,marketing, trademarks, logos , equipment layout and display are all similar making it one of the biggest restaurant chain.

McDonald’s success as a multinational enterprise as they had several factors in consideration before they gained access in a country or region and these include culture, resources found, target, marketing situation, competitors, media and many more. Therefore there has to be need to use the international marketing mix, which are product, price, place, and promotion (4Ps) which will help the company to point out and identify the needs and preferences of its target market. The marketing strategy that has helped McDonald’s to overcome its competitors as the world’s largest fast-food retailer is that they want to go globally. By expanding globally, McDonald’s attempts to deliver same product throughout the world and adapting product to meet local wants. Certain standardization especially the global values are applied while some changes will be made due to different cultures and tastes of customers.

2.0 marketing mix

Marketing strategies are developed through research which will help the company to determining the right products or services, appropriate pricing, effective place and promotion for establishing the proper position in the market for achieving market shares. In this case, all the newly franchised outlet must have a standardized brand product values in concert with different cultural fare, owned and supplied by the society.

2.1 Product

This is a broad concept which involves the satisfaction of all consumer need in relation with the goods and service. It includes decisions about brand names, package designs, trademarks, patents, positioning and new development.

Looking at the best global brands study in 2006, McDonald’s was ranked number nine with its brand valuation highly at US$27.5 billion. In 1960, it was renamed as McDonald’s Corporation from Kroc’s company with the logo of letter of ‘m’. The company’s brand mission was to "be our customers' favourite place and way to eat". After which the re-branding campaign in 2003 which led to the launch of its international motto, “I’m Loving It” and the message from its music and sponsorship, giving a boost to its image and branding with a new attitude and direction.

The Corporation also introduced a new brand McCafe’ which offer premium coffee and cappuccinos at an affordable price. This helped it to go hand in hand with some of their competitors in order to capture the market share, since market shows that the popularity of drinking coffee is on rise

As a multinational enterprise, it aims to lay down the standard menu which had the same taste in all over the world. However, different places have different cultures. The corporation adapted the concept of thinking globally as long as they meet different people’s needs in different countries. They made innovations and offers locals menu beside standardized menu. For example, in India, 75% of the menu available is designed in a manner that they serves Vegetable McAloo Tikki Burger,chicken McCurry Pan and a mutton-based Maharaja Mac (Big Mac). It took the initiative to recognizes the laws in Hindu religion. Since 80% Indians don’t eat beef. In addition to the respective religions, foods are segregated into vegetarian and non vegetarian lines, cooks preparing vegetarian dishes wear distinctive green aprons. The French fries also not flavoured with beef tallow, even the mayonnaise and ice cream contain no eggs. In other places such as in Norway, they sell the McLaks, a sandwich made of grilled salmon and dill sauce.while customers in Chile can add avocado paste instead of ketchup to any burgers. Cheese empanadas are also sold in all McDonald's outlets in Chile under the same category as fries

2.2 Promotion

The objective of every firm’s promotional campaigns is often expressed as being both to increase the commitment of existing consumers to the product and to capture new consumers in every country. It also helps to build and maintain relationships by informing and persuading .It is the most direct link between a firm and its customers (Kurtz, 2009). The company must conduct a research before entering markets by analyzing consumers’ attitudes, usage patterns, ethnic, moral and religious. These can help to focuses on the needs of targeted communities before launching the promotions.

McDonald's has maintained an extensive advertising campaign for decades. As in the worldwide image, McDonald’s invited several celebrities to represent the brand such as the famous tennis player Venus Williams as an icon in their campaign ‘I’m loving it’. In addition to the usual media, the company makes significant use of billboards, brochures, and sponsors sporting events like Beijing 2008 Olympic Games and even the English premier league. Where the advertisement portrays warm and a real slice of everyday life

In a situation where the organisation is targeting a particular market, the company has to use advertisement which suits the particular region for instance in China, McDonald's only uses newspapers and magazines to promote its image but not on television advertisement. This is because they understand that people tend to avoid the commercials because at that time they will be watching programmes then later on the advertisement is featured between episodes (Vignali, 2001).

Ronald McDonald used this to be a point of differentiation in each market. He seldom appears in television advertisement but he promotes McDonald's locally such as holding wine in France and McDonald's Filet-o-Fish in Australia. In Thailand, Ronald McDonald greets people in the traditional Thai way greeting gesture of the hands.

In addition, sales promotion is present differently in diverse countries. In Japan, a high-technology country, McDonald’s e-mail offers directly to more than 10 million customers, it found that it is more efficient than traditional coupons at there. Over 150,000 customers pay for their McDonald’s by mobile phones. In India, one of McDonald’s most popular attractions was the instant scratch and-win prizes on a daily and weekly basis, “Lucky Itch”. The daily drawn prizes include televisions, cell phones, camcorders, VCRs, music systems, microwave, and even scooters. The weekly prizes promise a family vacation to various places outside India. McDonald’s turn out this promotion because Indians believe in fate-driven success or failure is a way of life from the powerful concept of Karma in Hinduism and reward for good

2.3 Pricing

In every organization, pricing plays a very important role in the international marketing mix; this is because it is governed by competition, production costs, and company objectives (Kotler, P. & Armstrong, G., 1994). This is one of the most important elements of the marketing mix, as it is the only mix which generates a turnover for the company. Pricing could not possibly be standardized across the globe without considering locally factors like fixed and variable costs, competition, company objectives, proposed positioning strategies, target group and willingness to pay.

The table below shows how the price of a BigMac varries differently in different countries.

Country price

1. China - USD 1.41

2. Hong Kong - USD 1.54

3. Malaysia - USD 1.57

4. Venezuela - USD 1.58

5. Egypt - USD 1.60

In pricing strategies, McDonald’s is using the bundle pricing worldwide. Which means they are offering two or more complementary products and selling them for a single price (Armstrong, pg655)? For example, happy meal, combo meal and family meal are selling in a cheaper and more valuable price to encourage more sales.

In 2001, McDonald’s in India widely cut the prices on the menu. Vegetable nuggets were cut from Rs 29 to Rs 19, and the soft service ice cream cone from Rs 15 to Rs 7 .In 1997. McDonald’s offered its enormously popular shudh shakahari (pure vegetarian) and VegeSurprise (a veggie burger) for Rs 17. With this price, McDonald’s was able to sell the veggie burger 40% more than what it expected within a month between September and October of 2001. In March 2004, McDonald’s launched Happy Price menu under which it sells four of its burger products at Rs20 each. This has led to a 25% increase in customers. This action was done as McDonald’s India was in a position to get the lion’s share of rich and upper-middle class population as their GDP income level is lower. There was a wide prevailed perception that McDonald’s is expensive. Finally, the price has been more affordable with the new offering value meals in a range of moderate prices. McDonald’s has employed this value-ladder strategy to ensure affordability and to attract the majority of customers

2.4 place

This is the major challenge that a firm can have difficulties while laying down its international marketing strategy mix, It involves the management processes in bringing products to the end consumer. McDonald’s carefully focuses on location of its outlets and they have to make sure that every branch is in the best location. McDonald’s take the advantage from its rivals by having excellent franchises locations. You find out that they are always located in visible areas that are easy to locate and the surrounding is always very interesting to be visited. These locations are the main source of attraction for both consumers and for the services that the company provides. For example the outlets which were opened at the Park Towers in Karachi attracted so many shoppers who kept on visiting the place more frequently.

3.0 Suggestions on the company’s future changes

In order for McDonald’s to be recognized as a multinational company, it means the growth started from its home country before expanding to different markets in other host countries with responsibilities for its overall planning and control of the international activities

In the new product branding in future, McDonald's Germany's vice-president Holger Beeck announced that the famous golden arches will change from its traditional red, background to emblazoned on a green due to respect the environment. This “green McDonald’s” was planned at German restaurants only. It was being made for the reason of alerting us that our environmental are getting worst. According to Financial times, Beeck told that the change will be made on all new and refitted restaurants (sbs.com.au), such as in Dún Laoghaire and Swords, Co Dublin, the company is already displaying the gold-on-green logo, with more stores to follow (www.irishtimes.com) .

Create an equity strategic alliance with its suppliers, sub-assemblers and distributors in order to implement the best deals in the global markets.

Make its product localize when entering into new markets (Nigeria, Argentina, Malaysia, etc) thereby making its products cheaper and more accessible to local consumers.

Expand their opportunities by creating close relationships with other firms whom are ready and willing to give information, thus making them greater than the American big three in terms of capitalization and than Nissan and Honda in Japan, which creates way for investors to invest in a very attractive company Toyota.

Become a learning organization through relentless reflections and continuous improvements.

Have a pure global dominance in order to compete on a global scale (in foreign markets) economy.

In the new product branding in future, McDonald's Germany's vice-president Holger Beeck announced that the famous golden arches will change from its traditional red, background to emblazoned on a green due to respect the environment. This “green McDonald’s” was planned at German restaurants only. It was being made for the reason of alerting us that our environmental are getting worst. According to Financial times, Beeck told that the change will be made on all new and refitted restaurants (sbs.com.au), such as in Dún Laoghaire and Swords, Co Dublin, the company is already displaying the gold-on-green logo, with more stores to follow (www.irishtimes.com) .

In stead of changing the brand of Golden Arches background to green, McDonald’s can also catch the public attention by environment awareness by using other practical “green” method, such as decorating more natural plants in both inside and outside of the restaurant, use environment friendly or recycled packaging and tissue or set recycle bins and so on. This would provide better branding image of McDonald’s and attract the environment lovers to visit McDonald’s more frequently as it not only on changing the brand’s colour but really do something to safe the environment..

In the product varieties, McDonald’s could come out with more innovations range as to complete with its competitors. For example, Malaysia is a multinational countries, although it is having a higher percentage in Muslim, it does have numbers of vegetarian from Hindus, Budhist and other religious. Nowadays, the populations of vegetarians in Malaysia are increasing. These people do wish to hang around and enjoy the culture and services which brought by McDonald’s but unfortunately they can’t as they don’t have the chance to taste the food. As additionally, recently global people are concern about health and diet issue, its competitors is offering low fat sandwiches while McDonalds still doesn’t have any diet meal. Thus, McDonald’s should continue implement vegetarian food as there is a huge market within the vegetarian and the health conscious people.

A creative and successful promotion could help McDonald’s to boost up the sales in short time period. As history in 1 Jan 2000, Singapore, McDonald’s began a 40 day wedding Design of a loveable Japanese feline icon-Hello Kitty. The promotion is remembered for sparking a queuing frenzy by thousands of people and igniting a public debate about the suitability of such soft toy promotions and the unruly response of Singaporeans that ensued (infopedia.nl.sg). By as early as it began, the well-intentioned promotion veered out of control with mayhem ruling the day each time the toys were released. Thousands of people turned up to buy the toys with the Extra Value Meals, with crowds forming as early as sunrise, and in some instances, the night before. By using this good reference, McDonalds should launch similar promotion in the other country. Without doubt, other famous doll could be used in the promotion. A doll who name “Barbie” is a very good choice for McDonald’s! She is the best-selling doll in the world which created by Germans (syl.com). Perhaps the most famous name in doll-makings history, Barbie has delighted children since 1959, and has become a magnet for doll collectors. Over the years, Barbie has appeared as a doctor, UNICEF volunteer, athlete, and businesswoman, and has enjoyed universal appeal as a collector's item (encyclopedia.com). She also has a partner who named Ken. This “Barbie” dolls would definitely pushing a history high panic buy in McDonald’s. After all, McDonald’s could continue this promotion strategy by launching the clothes and accessories of Barbie and Ken to boost up the sale of McDonald’s in a period of time.

McDonald’s are strongly suggested to be distributed and placing its restaurants into college, university and office blocks. Recently, student usually like to eat fast food like McDonald’s due to rushing of time, or sometimes hanging around with friends during break time or after class. Thus, it is a good chance to open a small size McDonalds which offers the best seller menu in college or university which populated by students and lecturers.

In Pakistan, McDonald’s customers usually belong to the upper-middle class. These people prefer having a meal with customer service and a tinge of sophistication that the outlets provide. These customers perceive McDonald’s as a status symbol. It comprised students and new-working class. Thus, in countries which same to this, McDonalds should start diversifying in low priced products like milkshakes and smoothies and introduces more variety in the valuable range. For most people out there, McDonald’s is more of an experience rather than just an eating out occasion and McDonald’s has to focus on making the experience more and more fulfilling in terms of both value and price. Besides, McDonald’s can also introduce greater range of low priced snacks to cater the recession driven public for those who feel McDonald’s is more of a status symbol.

Print Email Download Reference This Send to Kindle Reddit This

Share This Essay

To share this essay on Reddit, Facebook, Twitter, or Google+ just click on the buttons below:

Request Removal

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:

Request the removal of this essay.


More from UK Essays

Doing your resits? We can help!