MKT9124 McDonald's Global Marketing Strategy: Adaptation and Innovation in International Markets Case Study

MKT9124 McDonald's Global Marketing Strategy: Adaptation and Innovation in International Markets

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Introduction: McDonald's Global Marketing Strategy

The international marketing environment refers to the uncontrollable and controllable factors that impact the marketing decision-making of the company internationally. The term international marketing environment encompasses those elements that shape the programs, strategies, and policies of the international marketer (Kotabe, and Helsen, 2022). International market research represents a key part of becoming successful in export planning (Baumgartner, and Weijters, 2021). To critically review or assess the demand for the company's product and to analyze the forces related to a given export destination, international market research is a significant aspect. 

The aim of this report is to provide an understanding of marketing concepts applied in an international context. To effectively understand the marketing concept, McDonald’s Company is considered as a case company for the report. The report first highlights the brief introduction of the case company along with its international presence and marketing activities. The present Segmentation, targeting, and positioning (STP) of the company are discussed in this study. The different adaptations that are adopted by McDonald's indifferent consumer markets and countries are also undertaken in the report. The technological considerations of the brand to operate successfully in the global marketplace are highlighted in the study. The report also consists of recommendations about corporate social responsibility (CSR) for the case company to effectively operate its business in the international marketplace.

Brand and its current global/international presence and marketing activities

Mcdonald's Corporation is a public company headquartered in Chicago, US. It is an American-based multinational fast-food restaurant chain founded on the 15th of May, 1940. The company served its service of fast food worldwide in around 119 plus countries(McDonalds, 2022). Products that are provided by the company to its customers are French fries, soft drinks, soft serves, milkshakes, desserts, hotcakes, coffee, breakfast, salads, chicken, wraps, and breakfast. The case company seems to be the world’s largest restaurant chain by its revenue. According to the study, the case company is the world's second-largest private employer company currently having 1.7 million employees. The company varies its menu with different countries.

McDonald’s has covered over 38 thousand restaurants across 120 countries on the globe. In 1967, a case company opened the first international restaurants in Canada and Puerto Rico. The company daily serves around 70 million customers globally(Fox,et. al. 2020). McDonald’s has broadened the menu by involving fruits, smoothies, salads, and wraps. The company’s revenues globally consist of royalties, franchise fees, owned-restaurant revenue, and rent. The case company is an instance of a business that has grown incredibly aids from globalization. It is due to the dual international marketing planning of a company. The company adopted two different international strategies to make the business successful globally. 

The two international marketing strategies of McDonald's are:

Standardization strategy- The Corporation offers alike food products like McNuggets, Happy Meals, Filet-O-Fish, McFlurry, and McChicken (Samiee, and Chirapanda, 2019). This plan offers a business with a strong appearance. A standardization strategy is a money and time investor for the case company as it aids in constructing economies of scale. 

Adaptation strategy- With this strategy, the company adjusts to the requirements of its customers as essential to the cultures of particular countries. Adaptation strategy can be associated with localization (Griffith, 2021). This strategy helps the company to enable its fast food chain with a wider reach worldwide.  

Segmentation, Targeting and Positioning

The case company segments its items into different categories according to behavioral, demographic, placement, and psychographic factors. The dissection of a single market into minor market segments is called market segmentation. The US represents the largest geographic segment of the company by contributing over 36% of the company's revenue. McDonald’s groups its market goods according to its consumer’s consumption habits(Camilleri, 2018). The company segments its customers based on their gender, age, economic level, lifestyle, geography, or a variety of different factors among them. In the behavioral segment, the company attracts sports teams and local youth clubs for its convenient location and also for its low costs. The company focuses more on demographic segmentation, which includes a group of children, parents, and students. In psychographic segmentation, a company needs to make and encourage new products, and improved goods along with nominal cholesterol and fat, to stay ahead of the rivalry.

Vending to particular groups recognized by segmentation is referred to as targeting (Shi, et. al. 2020). Low- to middle-income families in both the urban and rural regions make up the mainstream of McDonald's consumers. They visit frequently at McDonald's restaurants, with an average of 44 visits every year. The procedure of choosing a marketing mix that is most matched to the target clients is devoted to "positioning." McDonald's uses adaptive product positioning, that necessitates the company to periodically redefine products or services in response to market trends. The 4Ps of the marketing mix is used to manipulate a company's positioning.

Adaptations have done in different consumer markets and countries to take into account different market conditions and cultural contexts

Since McDonald's is operating its business for many years, it has made its business much more flexible so that it can adapt to different environments easily. By taking an example of the case company's adaptability in the COVID-19 pandemic, the marketing conditions of the company can be easily understandable. When the Coronavirus pandemic occurs in the world, most businesses have come to an end (Bambra,et. al. 2020). Significantly, COVID-19 disrupted the operations of a case company, the fast food restaurant chain is illustrating on strengths of the global system to accomplish the crisis or position itself for long-term growth. An immediate challenge of coronavirus faced by the company was agility positioning the company to adapt or continue to serve its consumers where it is safe to do so. 

In mid-March of the beginning of the coronavirus, McDonald's experienced a significant decline in the results of its varied market. According to the study, as of April 8, around 75% of McDonald's restaurants were operated by some sort of service (Galanakis, 2020). The company has taken key steps to preserve its financial flexibility by containing a share repurchase program or rising the cash position by increasing $6.5 billion in the debt market during the first quarter. At the time of the peak of the corona, the company's worldwide restaurants were closed but at that time the company also found new ways to reach out to its customers. The company served its customers with online booking of their favorite food through its website. The company provides home delivery of food when the customer orders any food from the company's website. A case company also offers its products on different food delivery websites like Uber Eats, FoodPanda, Doordash, and many more. 

Other than the COVID-19 pandemic, McDonald's faces product issues in different countries. For example, in India most of the customers are vegetarian and the company is famous for providing non-vegetarian products (Rizou, et. al. 2020). The company identifies problems in offering non-veg products in India, and because of its taste, the consumer avoids the company's products, as the Indian public's preferred taste is spicy fast food products. After this crisis, the company started providing two different displayed menus in its restaurants in India. One menu contains all vegetarian products and the second menu contains non-vegetarian products. The case company also added some local taste products to its menu such as McAloo tikki burger, pizza McPuff, etc. 

The technological considerations for the brand of choice to operate successfully in the global marketplace

The case company adopts different technologies on time to successfully operate in the global marketplace. McDonald’s rapidly increasing its tech abilities to increase its consumer experience or uplift revenues. In 2019 march, a case company acquired an online personalization start-up dynamic yield for higher than £232.8 million along to generate a customizable drive-through experience that can be tweaked to fit the traffic, weather, or popular products of the day (Cetinic, and She, 2022). The case company's new tech empire is a tech lab which is considered a hub of the company. It is previously increasing the team by appointing engineers, data scientists, or other tech specialists to confirm that the company doubled down on its tech innovations over continued research and development (R&D).   

McDonald's invested in that technology which automatically alters person's drive-thru menu portals, on different factors like the weather, for instance, the new tech automatically suggests McFlurry ice cream on hot days and shows consumers those items that were already seen as a popular product of the company's particular restaurant.   

The company adapts differently the marketing mix from an international perspective. The company's marketing mix strategy assesses the competitive and brand's position in the international marketplace along with the company's achievement of its overall objectives as a business. The company performs different strategies on the 4Ps of the marketing mix which are product, price, place, and promotion. 

Product strategy- McDonald's product mix is mainly made up of food and beverage resources since the company is a Restaurant Service Company (Sudari, et. al. 2019). Case Company varies and changes its menu products according to the customer's preferable taste, location, and country's culture.

Price strategy- Mostly the case company pricing is dependent on the psychological pricing methods in the marketing mix. The pricing strategy of a company is developed in a manner in which all types of customers can afford its products. As the company mainly targets middle and lower-middle-class customers, the pricing strategy is developed according to the company's target. 

Place strategy- The Company has its restaurant locations in commercial malls and city centers, to make the customers easily access its restaurants and their favorite dishes. Along with this, the company provides free internet available to its customers at many locations, by this company making appealing and handier to business persons, teens, or even freelancers who are searching for a place to do work.   

Promotion strategy- The case company is already promoting wisely its products and services in all those countries in which the company is operating. The company is using advertisement most significantly with sales promotions, direct marketing, or media relations. 

Recommendations in relation to corporate social responsibility for the brand in the international marketplace

A case company's corporate social responsibility (CSR) is rated as good on the scale of good initiatives of providing food to the public (Velte, 2022). McDonald's cites various CSR initiatives such as climate action, the global roundtable for sustainable beef (GRSB), the packaging and recycling program, and the United Nations sustainable development goals (SDGs). 

It is recommended to the company it should adopt the below three corporate social responsibilities (CSR) policies to improve its work efficiency in the consumer market.

1) Economic Accountabilities: McDonald’s should especially relate to an economic feature that is an original drive of constructing the corporate. CSR should observe with a goal of maximizing earnings per share (EPS), keeping a gainful situation constantly, and preserving the strong rivalry position or functioning efficiency.

2) Legal Accountabilities: Case Company should perform constantly with general laws, local regulations, and policies that are the social contract among society or firms, and be the law-abiding company citizen. A successful business can be recognized as a good contentment of legal responsibilities.

3) Philanthropic Duties: As a crucial part of society, the company relies on society or uses resources from it. In this case, a company should create involvement in society to respond to the resources they use (Woodruff, 2018). It is significant that the corporation can inspire workers to contribute to charitable actions, put effort into making better superiority of life or support the public as well as private educational organizations.

Conclusion 

Based on the above report, it is concluded that the case company which is McDonald's has effective marketing strategies that vary at every geographical level. The company already provides its products and services in different countries of the world. Since it faces several problems while operating in different countries. McDonald's significantly adopts suitable strategies of marketing mix's 4Ps. The company also effectively segmented, targeted, and positioned its place in different markets based on its locations. At last, the company successfully survived even in bad times like COVID-19, by adopting new technologies in its operations. 

References

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