Case Study Mktg8

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School

Niagara College *

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9503

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Marketing

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Feb 20, 2024

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docx

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Uploaded by ProfessorRatPerson1043

International Marketing Strategies – Activity 1 Group Mktg 8 Question 1: Identify the key elements in McDonald's global marketing strategy. Menu localizations: Although McDonald’s menu has some items that are available globally, some are only specific to a certain geography which makes consumers attracted to the brand. Great branding: McDonald’s maintains a strong, consistent brand image globally and has become one of the most iconic and famous fast-food chains in the world, and the name speaks for itself. Strategic locations: The locations chosen by McDonald’s are highly populated and experience high traffic, helping the brand attract more customers on streets, around the areas, and travelling by. Cultural adaptations: McDonald’s respects and adapts to local cultures, traditions, and languages to ensure people feel a sense of belonging. It also provides specific items on the menu that align with the religious beliefs of each location. Customer-centric approach: McDonald’s pays great attention to customer service, cleanliness and reliability while also striving to be eco-conscious as of lately.

Question 2: Despite a slowdown in global fast-food consumption, McDonald's continues to be a success story. What is the key to its success? Global Brand Recognition: McDonald's is one of the most recognized and valuable brands globally. The iconic golden arches and consistent branding create a strong and familiar identity, instilling trust and attracting customers across diverse cultures Adaptation to Local Tastes: McDonald's has successfully adapted its menu to cater to local tastes and preferences. While maintaining a core menu globally, the company introduces region-specific items to accommodate cultural and dietary differences, as seen in the case study with the introduction of the Chicken Maharaja Mac in India. Innovation in Menu and Marketing: McDonald's continually innovates its menu to meet changing consumer preferences and trends. The introduction of new items, promotional campaigns, and marketing strategies helps keep the brand relevant and appealing to a broad audience. Focus on Customer Experience: McDonald's prioritizes customer service, cleanliness, and reliable food as part of its "Plan to Win" initiative. This commitment to the basics enhances the overall customer experience and helps maintain customer loyalty. 5. Efficient Supply Chain Management: McDonald's has a well-established and efficient supply chain that ensures consistency in the quality of ingredients and products across its vast network of restaurants. Local sourcing of ingredients and partnerships with suppliers contribute to operational efficiencv.

Question 3: Does McDonald’s think globally and act locally? Does it think locally and act globally? Explain. One aspect in which McDonald's shows a global mindset is through its menu adaptation. The company recognizes that different cultures have varying culinary preferences and has made efforts to cater to local tastes. For instance, in India where a substantial portion of the population follows a vegetarian diet, McDonald's introduced a range of vegetarian options, including the famous McAloo Tikki burger. Moreover, in certain countries like Japan, McDonald's has collaborated with local brands to create unique menu items to appeal to the local palate, such as the Teriyaki McBurger. These adaptations demonstrate that McDonald's understands the importance of acting locally to attract customers and increase its market share. On one hand, McDonald's does exhibit efforts to think locally. For example, the company regularly introduces region-specific menu items to cater to the unique tastes and cultural preferences of different countries. In India, for instance, McDonald's replaced beef with chicken and veggie options, adhering to the country's cultural norms. Moreover, McDonald's sources its ingredients locally and often partner with local suppliers, supporting the local economy and ensuring freshness and quality of their products in various regions. However, McDonald's approach is not consistent across all aspects of its global operations. One notable area where the company falls short is in its sourcing practices. McDonald's heavily relies on global suppliers for its food ingredients, including beef and poultry. This means that in many countries, the company sources its products from abroad, rather than supporting local farmers and suppliers. This lack of emphasis on local sourcing contradicts the notion of acting locally, as McDonald's fails to invest in and contribute to the economies of the countries it operates in. By not fully integrating itself into the local supply chain, the company misses an opportunity to foster meaningful connections with local communities and contribute to their development.

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Question 4: What forced McDonald’s to make changes in its strategy in the US? Several factors prompted McDonald's to make strategic changes in its approach within the U.S. market. One significant factor was the evolving landscape of consumer preferences. The company faced challenges as changing tastes led customers to explore alternatives, with some opting for competitors like Wendy's and Burger King, attracted by value-oriented promotions and perceived freshness. Former CEO Don Thompson responded to these challenges by introducing the "Create Your Taste" menu innovation, allowing customers to customize their orders. This move aimed to provide a more personalized experience and cater to the demand for individualization in food choices. Additionally, the adoption of Apple Pay showcased a commitment to enhancing convenience for customers. Moreover, McDonald's faced criticism and pressure from public health activists regarding its contribution to obesity in the United States. Animal rights activists also protested the treatment of animals by McDonald's suppliers. These issues, coupled with concerns about pay inequality and the minimum wage, created a challenging environment for the company. To revitalize sales and address these issues, current CEO Steve Easterbrook took decisive action. He cut McDonald's prices on coffee and soft drinks, introduced the popular "all-day breakfast" option, and responded to competitors' claims of using fresh ingredients by replacing frozen beef patties with fresh ones in the Quarter Pounder sandwich. Easterbrook also initiated a significant remodeling initiative, investing over $1 billion to overhaul U.S. stores and create a more modern and inviting environment. In essence, the strategic changes in McDonald's U.S. operations were driven by a need to adapt to shifting consumer preferences, respond to health and ethical concerns, and enhance overall competitiveness in the dynamic fast-food industry.

Question 5: Explain the changes made in McDonald’s strategy. Price Reductions: McDonald's responded to the competitive pricing strategies of rivals by cutting prices, particularly on coffee and soft drinks. This move aimed to make McDonald's offerings more competitive in terms of value. Introduction of "All-Day Breakfast": To attract and retain customers, McDonald's launched "all- day breakfast." This move was likely in response to changing consumer preferences and the success of breakfast offerings throughout the day. Shift from Frozen to Fresh Ingredients: Addressing Wendy's claim of using "fresh, never frozen" ingredients, McDonald's decided to replace the frozen beef patties in its Quarter Pounder sandwich with fresh ones. This change was likely an attempt to enhance the perceived quality of their food. Store Overhaul: To enhance the overall customer experience, McDonald's committed to spending more than $1 billion on overhauling its stores. This initiative extended to the United States, as well as key international markets such as France and Germany. The overhaul likely involved renovations, modernization, and improvements to the physical infrastructure of McDonald's outlets. So, these were the changes in McDonald's strategy to address the challenges identified in the study and to regain the loyalty of customers who had switched to rival fast-food chains.

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