McDonald’s global outlook profile and image and category/product selection

International marketing can be defined as the marketing activity which takes place across the national borders of home country. The major kinds of international marketing incorporate FDI, joint venture, franchising, licensing and export.This essay aims at analysing the global marketing activities which are undertaken by the chosen company McDonalds. This paper provide the global outlook of this company’s profile, number of key products, its competitive strategy, key international competitors and its presence in various nations. Moreover, this paper will analyse and provide an overview of its macro environment for the two selected international markets where this company operates by using PESTLE analysis. This paper will also analyse and describe the microenvironment of the two selected nations in which this company operates. The two nations which are selected for this study are the United Kingdom and China. In addition to that, this essay will describe the market entry strategy of this company in China and United Kingdom. The segmentation, targeting and positioning strategy of this company for each of the selected nation will be discussed in this paper. Furthermore, the marketing mix decision made by this company for each of the chosen nation will be critically evaluated in this paper.

McDonalds is the multinational fast food organisation which was inaugurated in the year 1940 in San Bernardino, United States (Tien et al. 2020). This organisation was founded by Maurice and Richard McDonalds and its international headquarters as of 2018 is situated in Chicago (Telang and Deshpande 2016). It is observed that this company has the 9^th biggest international brand valuation around the globe in the year 2020. It is among the biggest restaurant chain around the global in terms of revenue which approximately 60 million consumers on a daily basis (Howse et al. 2018). This company carries out its operations in 117 nations and operate approximately 32000 outlays around the globe. It is also considered as the 2^nd biggest private employer around the globe with around 1.5 million people (Mondurailingam, Jeyaseelan and Subramani 2015). It has been effective and successful because of its effective marketing mix. It has provided nutritional value when raising the awareness regarding the health. In addition to that, this company has also expanded its operations effectively into distinct markets via the utilisation of its creative and innovative strategies. This company has fabricated distinct strategies which suit the overall competitive market so as to overcome the obstacles to get the market shares and continue moving forward in a market. The major competitive advantage of this company over its major competitors incorporates value added services, quality, affordability, hygiene, innovation, and convenience. The major success of this firm has been its overall capacity to leverage its major strengths in order to overcome its weaknesses. The two major competitors of this company across the globe are KFC and burger king. KFC is observed to be successful and effective in the market due to its focus on the food quality along with significant restaurants which offers considerable excellence service to all its customers. Burger King is also found to be efficient and successful as it has been able to emphasis on the constant innovation, effective customer service, and product diversification.

Brief Overview on Marketing Environment of China and United Kingdom

Macro Environment:

As per political aspect of PESTL analysis, the Chinese economy is observed to be socialist economy which implies that government rule is prevalent and it owns every area and land and thus can take them back when it requires it. Furthermore, food safety problems in China influenced McDonald’s sales. Non-governmental and governmental prompts regarding health aspects also influenced the company. As per economic aspect, after the enhancement in wages was announced by the government in the year 2015, this company observed its overall profit at risk. Economic factor can be a threat in case China faces any downturn and vice-versa. As per social aspect, this nation has significantly grown in working class population and so people mitigate to the metropolises to get better job opportunities. This would have a favourable influence to this company. As per technology aspect, this company has aligned its procedures and enhanced its overall efficiency by adopting latest technologies which helped the company to operate effectively in continuous technological advancements. As per environment aspect, the copious utilisation of the Styrofoam containers and climate change are the major threat to this company which it needs to consider. As per legal aspect, there are many legal requirement levied on this company like health regulations, and animal welfare which this company must satisfy so as to avoid any legal issues.

As per political aspect, the government of United Kingdom has imposed very strict health related regulations which have significantly influenced the operations of the company (Nencheva 2021). As per economic aspect, the economic recession due to recent Covid-19 pandemic in the UK, enhancement in export and import taxes and higher turnover rate significantly affects the company’s overall activities. As per social aspect, health conscious consumers, healthy food and healthy brand image has being influencing the operation of the company (Gasimi 2015). As per technology, significant investment in technology could be risky for the company. As per environmental aspect, the use of plastic packaging can lead to environmental issues in the company. As per legal aspect, employees protest against the company for higher wages and effective working conditions and safety and health standards are the factors which affects its overall operations.

Microenvironment analysis

It is seen that this McDonalds is facing significant competition in the United Kingdom market. Many well-renowned companies in the UK namely Burger King, Pizza hut, dominos, KFC, Papa John Pizza and Starbucks proactively compete with this company for the market share. The other prominent competitors in this market are Costa Coffee, Pret a Manger and Caffe Nero. On the other hand, the major competitor of this company in Chinese market is KFC. In fact, KFC is ahead of this company in this market and is regarded as the market leader with more than 5000 outlays across China.

Marketing Entry strategy

Marketing Entry strategy:

McDonalds has considered franchising as the most effective manner to attain rapid expansion. Currently, 70 per cent of McDonald’s restaurants are observed to be franchises. Franchise is defined as the license or agreement for selling the products of the organisation exclusively in a specific area, or to conduct the business which carries the name of the company. The first franchised of this company started in the United Kingdom in 1986 which means that this company entered the United Kingdom market via franchising. As of now, this company has more than 1150 restaurants across the United Kingdom which employs over 49000 individuals and 34 per cent of them are operated by the franchisees. This company entered the Chinese market via different market entry strategy (Holtbrügge and Berning 2018). This company entered Chinese market via a joint venture with the local firm situated in Beijing in the year 1992 (Liu, Reichle and Li 2016). Through joint venture, the company entered the capital city of China and after that the company had approximately 600 restaurants in this nation but none of these outlets are carrying out its operations via direct franchising (Jeon et al. 2019). Later on, in the year 2004, this company inaugurated its first franchise restaurant in Tianjin (Alon and Kruesi 2019).

Segmentation, targeting and positioning

McDonalds utilises the demographic segmentation strategy in the United Kingdom market with age as a significant parameter. The major targeted segments of this company in this market are young urban family, youth and children. Currently, the youth prefer these places or outlays for their entertainment purpose. The urban family chooses these outlays on several occasions such as birthday party and so on. Likewise, if children are considered, they are mostly attracted towards delicious food and toys. To grab attention of the children, this company offers happy meal where a toy in provided with each happy meal. In many outlays, there are certain special facilities provided such as playing place where children can play certain games. This strategy enables the company to attract the young urban families who desire to spend some quality time. To target young people and teenager, facilities like free Wi-Fi is provided in every outlay. The company has positioned itself as a reasonable place for fulfilling their food needs without compromising on hygiene, food quality and service.

On the other hand, in Chinese market, the company uses the same demographic segmentation strategy where age is the key criteria (Ma, Pu and Wang 2021). This company generally targets young and single people, and newly married couples (George 2021). The young people who generally are professionals, employees and students are being targeted by this company (Liu 2016). This company utilises adaptive kind of positioning strategy in the Chinese market and so the company is constantly involved in periodical re-positioning of the good and services as per alterations in the segment (Liu, Reichle and Li 2016).

Segmentation, targeting and positioning

Product: As per McDonalds, the major thing which needs to be noted while providing menu items to the potential customers or consumer is that there should be significant amount of choices available to such potential customers in relation to where and how they are spending their hard earn money (Thabit and Raewf 2018). Thus, this company puts significant focus on building up the menu which the customer or consumer want. Thus, it understands that market research is significantly important in this respect. Nevertheless, the expectations and needs of the customer changes with time and thus determining the overall life cycle of the product and constantly observing the preferences of the customer is the major factor for this company. Thus, to fulfil such changing taste and preferences of the customer, this company has to launch new items and remove the existing ones over time. Although this company has many restaurants across the globe, it generally standardizes the menus as well as its operating process in its restaurants so as to ensure consistency throughout its operations. In both the chosen nations, this company has different offerings as per the taste and preference of each nation’s customer group.

In the United Kingdom, this company has different product line. The company adopted a new strategy named “Plan to win” strategy in its United Kingdom market so as to enhance sales (Critchlow et al. 2020). It observed that British people have a different taste and perception regarding food. They are more health-conscious compared to its host nation and thus most of them avoid unhealthy food. Therefore, as the part of this strategy, this company offered value and variety, tastier food and enhanced services to the customers. In order to cater to its health-conscious consumer group in the United Kingdom, this company introduced certain healthier food options like salads and offered nutritional information and data regarding its products or items on the food packages. Moreover, it frequently modified its overall menu so as to incorporate latest items. To attract its targeted British customer group, this company attempted to localise certain items on menu. It added certain versions of the local food on the menu. The company offered certain food items like Vegetable Deluxe burger to the health conscious British customers. This company also offered 3 forms of donuts since these were well-renowned among these British customers.

On the other hand, in China, McDonalds offers the item as the preference of its Chinese customer group (Nasirun et al. 2019). The company observed that Chinese prefer chicken to beef due to certain reasons. Thus, this company adopted the culture and preferences of the targeted customer group in this market and changed its recipes accordingly that means it opted for localisation. Till date, this company offers 17 kinds of burgers and 4 kinds of rice in its menu with certain beverages and dessert as per the preference of the customers. Likewise, the company also incorporated various Chinese dishes like youtiao and so on. It also offered soya milk in breakfast and green tea is not utilised for making tea but also utilised in hamburger buns and sweet which add vivid colour to it. It also offered less spicy, less fried and less salty food as per their taste. This indicates that the product offering in both the nations are quite different from one another.

Price: The perception of the customer regarding value is a crucial determinant of price charged (Išorait? 2016). Price is generally what a customer pay for a particular good or service. It is observed to be the most crucial factor of the marketing. The price of a product would influence the organisational goal and marketing decision and attainment in the sales volume would affect price reversal. Thus, it is quite challenging for the manager to decide the price which is most effective particularly in downturn. The correct choice of the pricing strategy would help this food chain in obtaining effective and competitive position in all the markets where it operates. It is found that the pricing strategy of this company is localised instead of globalised. The pricing strategy of this company is distinct for different nations. Each nation goes through strict procedure so as to determine price for specific market. In the United Kingdom market, this company’s primary strategy is to provide the quality food rapidly to the customers at a good and viable value. The overall pricing structure for this company over the years has effectively supported its primary message. The organisation strives to different itself from its competitors by providing the variety of items in its menu which is appealing to various kinds of people from the ones who just need great hamburgers to the ones who want healthy and quick meal. Thus, this company utilises the cost leadership pricing strategy in the United Kingdom (Crawford, Humphries and Geddy 2015). It is generally a pricing strategy in which company gains competitive advantage in market by having very low operating expense. As an outcome, the company offers its products at competitive and affordable prices. The pricing strategy of this company in the UK market also incorporates psychological pricing blend with price bundling. In this market, this component of marketing mix demonstrates the significance of the price bundling so as to motivate the customers to purchase more items from this company. On the other hand, in China, this company mainly utilised the price skimming strategy as its pricing strategy for this market (Kraak et al. 2017). Price skimming strategy is generally a procedure of selling the good or service for higher price initially, and then slowing reduces its price so as to access the new market segments. Thus, the overall price setup is generally high in comparison to the normal restaurants for fast food. Moreover, this company does not have any price segmentation.  The company slightly modify its overall prices during this challenging time period.

Place: Place is where the products of a firm will be actually offered for sale. It incorporates geographical location that offered services or products of the firm and various kinds of firm’s distribution channels (Fan, Lau and Zhao 2015). In the United Kingdom market, the place or the location of McDonalds which usually serves as the foundation of company’s success. The outlets are placed strategically close to the targeted customer group so as to sustain the effectiveness. In essence, this company adapts the viable customer-centric strategy when it is about the overall distance from its targeted consumer group.  It is found that this company is currently available in most of the cities in the United Kingdom (Harrington, Ottenbacher and Fauser 2017). This was possible only because of the contract which this company signed with Ubereats in the year 2017. In addition to that, most of the outlets of this company remains open 24/7. This demonstrates the intensive distribution channel of this company which implies that the items of this company are available for sale via every possible channel of distribution. As discussed earlier, this company has mainly two targeted customer group in Chinese market. One customer group incorporates the employees or staffs who spend their entire day while working in computers. Such individuals busy at work and thus have no time for cooking food. The fast food offered by this company enables them to eat the food in a very short time period.  The other customer group incorporates the individuals who does not like preparing food such as the young individuals. While targeting on this customer groups, this McDonald Company has its special outlets place strategy. This company started its outlets in the cities where well-established transport network and huge population density are present so as to reach to the consumers who have such busy lifestyle.  In order to satisfy the needs of consumer group who desire to try something new and are not willing to prepare food by themselves, the outlets are located close to commercial areas, universities, and schools where these consumer prefer to visit and study at. This company always search for the most effective locations in the marketplace so as to provide its customers with convenience. This company generally develop quality outlets in the neighbourhoods, colleges, tollways, malls and airports. Formerly, the company has certain strict rules with regards to selecting an outlay location that is over 50000 resident within five kilometre radius.

Promotion: Promotion is the activity which fabricated to enhance the overall sales of the company’s good and services. The sales promotion is regarded as the martial or activity which act as the inducement so as to motivate the consumers or customers to purchase the goods. Organisations generally desire to enhance its sales via temporary reductions in price, advertising campaign and different kinds of the promotion techniques.  The more effectively a company promote its good and service, more it would build up brand loyalty from its customers. In the British market, this company has utilised certain promotional strategies so as to maintain its effectiveness and visibility among its targeted customer group (Solaiman, Osman and Halim 2015).  This company is mainly utilising advertising and public relations practices as its promotional strategy in this market. The recently developed advertisements of this company is based on certain company’s social responsibility statements. The company developed such advertisements to create awareness about nutrition, local community projects, activities and health. This company rationalised its overall websites and advertisements to incorporate dietary and nutritional information. The marketing campaign of this company are assisted by its promotional activities like public relation projects and press release which is administered by operations team in UK (Ceil 2017). The company is involved in certain sponsorship programs which are one of the public relation projects for enhancing awareness about the current offerings of this company. In the China market, this company has utilised different forms of promotional strategy which also incorporates meal packaging stimulated by the video games of China (Steenkamp 2017). This company utilises various practices like digital marketing, sales promotion, and advertising to promote its extensive range of products among its targeted group. The company advertises its products via social media, websites, and televisions. The company issues all its offerings, offers and so on continuously in the websites, televisions and social media. Digital and social media marketing is observed to be growing immensely with enhancing usage of these social media platforms and televisions by a huge population. Thus, promotions via these networks enables the company to get hold of its targeted customer group effectively. This company distributes coupons in the public places so as to attract new customers.  The menu options of this company also adapted the available ingredients in the Chinese local market so that it could be appealing to the targeted customer base.  The company creates different function activities and uses the available network facilities in order to attract the participation of the younger customer.

Conclusion:

From the above discussion, it can be concluded that the chosen company McDonalds has significant visibility and brand reputation around the globe. It was also known that it has effectively applied the international marketing principles for all its products in 2 distinct nations. However, as per PESTEL analysis, it was observed that the company was facing certain issues in both the nation and so certain recommendation have been made to address those issues. In china, it is recommended that the company must minimise the usage of Styrofoam containers and replace it with sustainable alternatives so as to deal with environment threat. The company must take initiatives to deal with climate change. In UK, the company must take steps to deal with higher turnover rate and also utilise more localised raw materials so as to minimise its tariff burden. The company must introduce more options of healthy food so as to build a healthy brand image among its targeted consumers. Moreover, in UK the company must upgrade its working conditions and implement effective HR strategies so as to deal with employee dissatisfaction at workplace. It should also replace the plastic packaging with a sustainable packaging option so as to deal with environmental issues. The company should also extend its targeted customers in China and incorporate adult consumer group so as to gain a competitive edge in that market. 

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