BE553 Principles of International Marketing Assignment Sample
Module code and Title: BE553 Principles of International Marketing Assignment Sample
Introduction
International marketing refers to the activities that are considered by the maximum of the brands and organisations in order to influence and attract consumers towards their products and services (Hao et al. 2019). Additionally, international marketing involves two or more countries with the unique marketing strategy that refers to the decisions taken for the global business environment. In this connection, the following assessment has been focused on considering McDonald’s as the company, which is an American multinational fast-food chain and operating all across the world with its astonishing menus and promotional tactics.
Therefore, the adaptation strategy of McDonald’s in the British market would be evaluated along with focusing on the strategies and their differences among them. Apart from this, a brief comparison would be done comparing the challenges that have been faced by McDonald’s in the adaptation strategies all across the world. Furthermore, at the end, few recommendations would be justified for McDonald’s to operate successfully while improving their international marketing with ease.
Main body
Adaptation strategy of McDonald’s in British market
Adaptation means copying with the culture of a country where the organisation is operating or intended to operate. In case an organisation is doing business in a country that is different from that of their culture, they have to adapt it in order to cope up with the local culture (Yang and Gabrielsson, 2018).
This can otherwise impact the organisation including their knowledge, product mix and marketing. It has been noted that McDonald’s has been considering transnational strategy in their global marketing, which is severely helping organisations to improve their current revenue with $22.93 billion that has increased from 2020 statistics, amounted to $18.86 billion (Companies Market Cap, 2022).
Referring to the outlining adaptation strategy of McDonald’s in the British market, 4Ps has been considered strategically to understand their approach towards McDonald’s pricing, product, placing and promotional tactics.
Price
Considering the pricing aspect, McDonald’s has a psychological pricing strategy that specially helps them to offer meal sets with products along with the discounted prices (Meyer, 2022). For example, customers are mostly inclined towards McDonald’s “happy meal” or “extra value meal” that refers to a psychological perspective of customers that are sensitive towards discounts and offers. This element of McDonald’s in their marketing mix is severely helping them to attract more customers and encouraging them to have their products.
Product
McDonald’s has a wide range of product mix that mainly comprises food and beverage products such as salads, hamburgers and sandwiches, desert and shakes, breakfast, McCafe, snacks and sides and many others. The company is primarily known because of its burgers, as it is the main generic product that makes them unique from the other fast-food chains while satisfying the market demands. For example, it has been noted that McDonald’s drive thru in the US is significantly increasing, as customer satisfaction rate 83%, with menu item availability 84% and speed of service 85% (Lock, 2022).
Place
Place is the most important element of a marketing mix, as it enumerates the venue or the location that can influence customers with a range of visibility to utilise the products and services. In this connection, it has been noted that McDonald’s has their own stores and restaurants from where they make most of the sales and revenue.
Apart from this, the restaurants also manage kiosks along with a great visibility in online mobile apps that are taken as an advantage to reach out to customers while letting them find the restaurant location, placing orders and paying as well (Meyer, 2022).
Promotion
In a business, it is essential to communicate with the consumers and promotional tactics are the most important way through which the business can market their products and services to reach out to targeted customers (Ju et al. 2018). It has been noted that McDonald’s has their approach of promotional aspects with most significant advertising sales, promotion, public relation and direct marketing.
Moreover, McDonald’s also offers discount coupons and product bundles to attract customers (Steenkamp, 2019). Apart from this, they also have an environmental support community in order to boost their corporate brand value while influencing a sense of sustainability and ethnicity (Meyer, 2022).
Whether these strategies are different to the ones used in other international markets
From the understanding of the above-mentioned 4Ps, it can be identified that McDonald’s is a brand, which refers to an understanding of the local culture and significantly values their ethnicity and their preferences. However, it has been noted that McDonald’s has faced few challenges in the European market, for example, the changing consumer preferences of the fast-food market, lawsuits, obesity and cool store design facilities and negative publicity.
However, this has not taken over McDonald’s shine in the market, as the organisation is still growing with their international market. The reason behind this is they understand the international market preferences, for example there are few items that are only found in the European McDonald’s such as Beer, Pastries, French fries sauce, Pork sandwich with horseradish sauce (Young, 2018). This is increasing their revenues in European nations such as in Germany they are having an increase in revenue from €3.47 billion to €3.83 billion (Koptyug, 2022).
Figure 3: McDonald’s revenue in Germany (Source: Koptyug, 2022)
This refers to the fact that even though the organisation is facing challenges in their adaptation and understanding the culture, changing their menu according to the preferences are helping them in their market operation. However, the scenario of McDonald’s in India was completely different, as they encountered several difficulties in the early stage, as they had to cease and re-establish adaptation strategy while embarking towards the distant diverse culture of India (Sarkar, 2019).
India does not have a single culture rather it has a variety of cultures, and a large proportion of India are Hindu’s who does not consume beef. On the other hand, the Muslim people do not consume pork. Thus, this has entirely disrupted the menu of McDonald’s to operate in the Indian market. However, while understanding the entire market requirement, McDonald’s has changed their menu in India with introducing McAloo, Veg Pizza, MacPuff, Chicken Kebab Wrap, Iced Tea and many others that has lured the consumers towards the brand (McDonald’s India. 2022).
Hence, from the perspective and product offering of McDonald’s, it can be understood that the strategy of McDonald’s in different international markets is the same, as they target to understand the cultural preferences of consumers along with satisfying them while offering what they want. Referring to the example of the European market and Indian market, it can be stated that McDonald’s is trying very hard to adapt each and every market preference with an efficient understanding of requirements and adapting the entire culture of the nation to prosper with effectiveness.
Challenges of adaptation strategies used by McDonald’s in British market compared to other international market
The selection of suitable adaptation strategy is one of the most crucial aspects for organisations to expand its business in an international market. McDonald’s is known to be one of the leading brands associated with food services with over 36,000 restaurants and operating over 100 countries (McDonald’s, 2022). The organisation faces a lot of challenges both in the UK market as well as during its expansion to other markets. One of the major challenges that are faced by McDonald’s in the UK market is to comply with changing preference in the tastes of the consumers (Global Marketing Today, 2022).
The consumers of McDonald’s in the UK market prefer beef items, which make preparations like Bacon Double Cheeseburger and other related items highly preferred by the UK consumers (McDonald’s, 2022). In comparison to this, during the expansion of McDonald’s in the Indian market, it faced a lot of issues regarding the Indian culture, which is very different from the ones in the British market. Due to religious reasons, beef is not consumed by the Hindus of the Indian population and this served as a major source of barrier for its business (Cbs news, 2022).
Thus, focusing on Indian culture, McDonald’s eliminated beef and pork items from its Indian menu and made various innovations in the menu to fulfil the preferences of the Indian consumers (Cbs news, 2022). These innovations in the Indian menu included McAloo Tikki Burger, Butter Chicken Grilled Burger and others based on the preferences of the customers. In spite of its efforts to cope with the strict culture of India, McDonald’s still faced challenges regarding the type of meat it sold in the food products of India.
It faced severe backlash on Twitter from Indian customers for serving only Halal meat and certifying all its restaurants to be “Halal” (Economic Times, 2022). Moreover, 80% of the people in India are non-Muslims, which made the matter of halal meat a huge controversy over Twitter (Economic Times, 2022).
Increased threats from its competitors have served to be another major challenge for McDonald’s (Global Marketing Today, 2022). Wendy’s, Denny’s, Starbucks are some of the major competitors of McDonald’s based on their customer services, CEO rankings, services and products, pricing and others (Comparably, 2022).
Apart from that, In China, McDonald’s had to change its company name that was already registered (Sixthtone, 2022). The new name evoked the famous logo of the company and it was a source of mirth online as some of the netizens derided it. Thus, the brand image of the organisation faced a major drawback because the name was the identity for the brand reputation it had built over the years. Fast food brands like McDonald’s were often criticized by the people of China for breaking the homogeneity of traditional foods within the region (Sixthtone, 2022).
In order to cope with the preference of the Chinese population, McDonald’s made some innovations in the menu like the tangy Beijing-style chicken along with Sichuan style beef (Sixthtone, 2022). Apart from this, “uncool” and outdated store facilities and design is another challenge that is faced by the business enterprise in its Great Britain market (Global Marketing Today, 2022). Besides, negative publicity is another challenge that is faced by the organisation (Global Marketing Today, 2022).
One of the most best-selling as well as famous books namely Fast Food Nation along with a documentary that won award namely Super Size Me portrayed McDonald’s to be extremely detrimental to the health and well-being of the population in Great Britain (Global Marketing Today, 2022). Hence, these are certain challenges that are faced by McDonald’s in both British as well as in the international market.
Similarities and differences between the adaptation strategies by McDonald’s and its competitor in British market
McDonald’s is one of the most renowned brands that possess a lot of competitors in its UK market. According to the survey, conducted in the year 2022, regarding the restaurants present in the UK market, KFC, Costa Coffee, Pizza Express and Pizza Hut were among the top 5 food brands with an enhanced brand performance in the UK market (Statista, 2022). One of the competitors of McDonald’s in the UK market also includes Burger King who was observed to select similar adaptation strategies based on the preferences of the customers in the UK.
Burger King operating in the UK market has decided to launch Vegan nuggets from the month of January 2022 on a global scale both in its delivery as well as in its restaurants (Hospitality and Catering News, 2022). This launch is demonstrating positive progress in order to meet the target of 50% menu being meat free by McDonald’s within the year 2030 (Hospitality and Catering News, 2022).
According to the reports of the year 2021, the global revenue generated by Burger King is about 1.8 billion U.S. dollars from its global operations (Statista, 2022). Besides this, among all the brands present in the UK, Burger King is known to have nearly 95% brand awareness in the UK market, which shows its success based on adopting similar strategies as McDonald’s (Statista, 2022).
KFC serves as another major threat to McDonald’s in the UK market with the adoption of similar strategies to McDonald’s that is completely based on the taste and food preferences of customers in the UK. In order to meet the changing preferences of the UK consumers, KFC is also observed to make innovations in its UK menu, based on the choices of their potential customer base, for driving more consumers towards it (Forbes, 2022).
According to the reports obtained in the year 2022, KFC is observed to generate a brand awareness of about 97% in the UK market after the adoption of similar adaptation strategies as McDonald’s (Statista, 2022). In the UK market, most of the existing brands are observed to follow similar strategies with negligible differences in its business operations.
Thus, both Burger King and KFC are observed to follow similar strategies as McDonald’s and gain enhanced business performance in the UK market.
Conclusion and Recommendation
Based on the entire assessment it can be concluded that McDonald’s has an adaptation strategy that is significantly allowing the business to grow in the international market starting from the market of UK, US and India. The organisation is specifically focusing on the culture of each nation along with re-establishing their menus according to the nation.
However, it has been noted that the organisation has undoubtedly faced issues in their marketing and adaptation such as in terms of changing consumer taste preferences, threats of competitors, lawsuits, nutritional information, the concept of Halal meat in India, and others. This has significantly influenced their marketing in the international space. However, with their utmost focus on the marketing aspect with promotional tactics along with discount options McDonald’s is significantly moving upwards while increasing their revenue on a yearly basis.
Recommendations
Referring to the challenges that have been identified above, few recommendations has been structured referring to McDonald’s and their future better international market operations.
Hiring experienced legal advisors
It is recommended that McDonald’s should focus on hiring experienced legal advisors for the company, which will help them in preventing certain problems with flexible decision-making. Apart from this, with an experienced legal advisor, McDonald’s might be able to have an enhanced respect in the society with a chance of working with interesting people and governments in the future.
Customised training and development sessions for employees
Training and development in an organisation are a continuous process that should be considered by an organisation as the market demands and consumer preferences are changing (Karim et al. 2019). Thus, it suggested then McDonald’s should focus on customising their training and development according to the needs and required skills and capabilities so that the services in the stores and drive thru can get more standardised.
Incorporating healthy options in their menu
Currently after COVID-19, consumers are focusing on sourcing high standards of quality products and are reaching towards healthier options from brands (Liao et al. 2020). Therefore, it is suggested that McDonald’s should focus on sourcing organic ingredients in their products that can significantly influence consumers to opt for their products range.
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