McDonald Marketing Applications and Survey of Marketing Case Study Read the Chapter Case Study on McDonald’s (pages 256-58 in the text) and answer the thre

McDonald Marketing Applications and Survey of Marketing Case Study Read the Chapter Case Study on McDonald’s (pages 256-58 in the text) and answer the three questions at its end. If you have visited a McDonald’s in another country, feel free to discuss your experience there as it relates to the case. 256
Section Two UNDERSTANDING THE MARKETPLACE
2. McDonald’s operates restaurants around the globe. To
see how products vary, visit some of McDonald’s international websites (www.mcdonalds.ie, www.mcdonalds.
it, and www.mcdonalds.com.mx). Which product differ-
ences did you notice? Now, visit McDonald’s U.S. website (www.mcdonalds.com) to compare the similarities
and differences between the international and U.S.-based
websites.
Marketing Applications
1. What is globalization? Why is it important for marketers
to understand what globalization entails?
2. Moots is a high-end bicycle manufacturer located in
Steamboat Springs, Colorado. Assume the company is
considering entering the Brazilian, Chinese, and Indian
markets. When conducting its market assessment, what
economic factors should Moots consider to make its decision? Which market do you expect will be more lucrative for Moots? Why?
3. Now consider the political, economic, and legal systems of China, India, and Brazil. Explain why you
think one country might be more hospitable to Moots
than the others.
4. Colgate-Palmolive sells its products in many countries
throughout the world. How would you expect its marketing strategy to differ in various countries, compared with
that in the United States? Consider various areas across
the globe in formulating your answer.
5. How would Colgate-Palmolive vary its marketing strategies for product lines in low-income, emerging markets?
Discuss using each of the elements of the marketing mix.
6. What are some examples of companies that use a glocalization strategy?
7. Choose a firm that currently manufactures and sells its
products or services only in the United States. Choose
and defend a global entry strategy for the firm.
Quiz Yourself
1. What is the most common way to measure the current
size and market potential of a country?
a. Gross domestic product
b. Gross national income
c. Purchasing power parity
d. Trade deficit
e. Trade surplus
Which of the following global entry strategy progressions
would characterize that type of evolution?
a. Direct investment to strategic alliance
b. Strategic alliance to exporting
c. Exporting to strategic alliance
d. Joint venture to strategic alliance
e. Direct venture to joint venture
2. Many firms begin global expansion by moving from less
risky ventures initially to riskier ventures in later years.
(Answers to these two questions can be found in the Quiz
Yourself Answer Key section.)
Chapter Case Study
MCDONALD’S—A GLOBAL GIANT
From the Maharaja Mac in India to the Prosperity Burger prepared especially for Chinese
New Year celebrations, McDonald’s has built a global fast-food empire under its golden
arches. Only 33.5 percent of McDonald’s revenue now comes from sales in the United
States, and most of its international growth has come from the surging economies of Brazil,
Russia, China, and India.67 A pioneer in overseas franchising, McDonald’s has spared no
effort in its attempts to penetrate foreign markets. In China, it currently has more than
2,400 stores and is building partnerships with local companies that will help open 1,500
more over the next several years.68 In Brazil, it created Latin America’s first environmentally
certified fast-food restaurant. A vast market defined by stark cultural differences, India has
required a more modest approach that would allow McDonald’s to develop its real estate
and supply infrastructure, train the local workforce and management at its famed Hamburger
GLOBAL MARKETING CHAPTER EIGHT
257
University, and adjust the menu for vegetarian customers.69 There are currently 400 McDonald’s locations in
India; in 2016, it introduced its first Big Mac–branded
vegetarian burger, the Veg Maharaja Mac.70
But McDonald’s growth strategy relies on more than
just added locations. In crowded cities, with real estate
prices too high to build drive-through restaurants, the
company has hired droves of motorbike drivers to bring
Big Macs to customers. This nimble delivery approach is
now a mainstay in cities from Beijing to Kuwait City.
Mobile ordering and payments, for either curbside
pickup or table service, also will be available in 20,000
restaurants in the United States and abroad by 2018.71
Fast-food restaurants enjoy some segment-specific
benefits as they pursue such international expansion.
Unlike retail brands, such as Walmart or Carrefour, restaurants pose fewer perceived competitive threats. Local
eateries can exist side-by-side with a McDonald’s in a
way that a mom-and-pop grocer cannot survive if an international hypermarket moves in next door.72 But even
considering the massive growth in rapidly transitioning
economies, Europe still generates the bulk of foreign
sales for McDonald’s. In France, for example, “MacDo”
restaurants attract crowds that line up outside for a bite
of lunch. But lunch might mean something a little different in this case: French McDonald’s offer menus that
feature Camembert cheese on the burgers, Heineken, a
McBaguette, and macarons for dessert.73 At one time,
the secret to McDonald’s success was “lockstep”
consistency—namely, that a meal in Memphis tasted the
McDonald’s France has its own version of the “I’m lovin’ it” slogan.
same as it did in Moscow or Madrid. But the novelty of
©Bill Ryall/William Ryall
the American hamburger stand has worn off in the new
millennium, as has McDonald’s ability to export American culture as its staple commodity.
A cheeseburger, fries, and Coke don’t register the same level of excitement when the café
next door and the bistro down the block are also serving burgers. More and more, the key to
McDonald’s future appears to be found in the DNA of the places it inhabits, like the sweet
potato soft serve now available in Hong Kong.74 And thus, the fast-food giant that has long
represented the globalization of taste suddenly has found itself in a very unlikely position: as
a defender of local cuisine.75
The kosher burger has been a hit in Israel, and Indian consumers seem to appreciate
the opening of McDonald’s first vegetarian restaurant. However, most new growth comes
from Russia, where the company has 609 locations and holds the largest market share in
terms of total sales. Even as fast-food competitors face potential market saturation in the
United States, Russian demand for quick burgers appears insatiable.76 Driving this Russian
appetite has been the growth of a newly affluent middle class with money to spend to dine
out. Infrastructure development in Russia also has been a boon to McDonald’s as cities
open malls with food courts, highways are constructed with drive-through locations, and
specialty suppliers of frozen food and packaging have appeared.
In the early years of Russian expansion, few private businesses existed to supply the ingredients McDonald’s needed to produce Big Macs and fries. The company solved the problem
by building an enormous food processing plant outside Moscow. But it also worked to cultivate relationships with local Russian vendors and contractors, to which it eventually could
outsource its supply chain. Today, a grower who began selling cucumbers to McDonald’s in
1990 has become the Pickle King of Russia, dominating the processed foods market.77
Even when faced with some politically sensitive challenges—such as suspicious inspections by Russian agencies that alleged code violations in several McDonald’s stores, seemingly
258
Section Two UNDERSTANDING THE MARKETPLACE
in response to the strained relations between the Russian and U.S. governments78—
McDonald’s has continued with its plans to
expand in the country. In 2016 it spread
into Siberian regions, opening 20 new restaurants, and plans further expansion in the
future.79 International enrollment in Hamburger University thus shows no signs of
slowing.
To achieve this international growth,
McDonald’s is relying not only on integrating local flavors but also on leveraging
technology to make meals totally customizable. In the United Kingdom, Australia,
and Canada, self-order touchscreen kiosks
have been popular with consumers. Adding customization means more menu
items, though, so service times have become a concern. But McDonald’s believes
McDonald’s is successful in Israel because of its kosher offerings.
it can deal with this issue because the
©David Silverman/Getty Images
self-service kiosks not only give customers
more control but also make it easier to order and receive meals. Once a customer has placed
a customized order, he or she can take a seat and wait for the food to be delivered to the table, enhancing the experience by offering more conventional restaurant service, with the
convenience of a fast-food outlet. Sales from these kiosks have accounted for one-quarter of
sales in the locations where they are available. Accordingly, McDonald’s has begun implementing them in the United States as well.80
Questions
1.
2.
3.
Which sociocultural factors have informed McDonald’s global expansion?
Describe some of the global marketing strategies that McDonald’s uses or might
consider using to spread throughout the world.
Explain McDonald’s global marketing strategy. Compare McDonald’s strategy in the
United States (www.mcdonalds.com/us/en/home.html) to McDonald’s strategy in
India (www.mcdonaldsindia.com).
Endnotes
1. Patrick Coffee, “Apple Shifts Global Marketing Strategy,
Restructures Its Relationship with TBWA/Media Arts Lab,”
Adweek, February 17, 2017.
2. Ibid.
3. Tim Culpan, “Chindia Needs One More Thing from Apple,”
Bloomberg Businessweek, September 13, 2017.
4. Shira Ovide, “Think You Won’t Pay $1,000? Apple’s Prices Are
Going Up Anyway,” Bloomberg Businessweek, September 12,
2017.
5. Reem Nasr, “Apple’s Success in China Can Teach US Firms a
Lot,” CNBC, January 29, 2015.
6. Harsh Chauhan, “Apple Makes a Smart Move to Expand in This
Huge Market,” The Motley Fool, April 1, 2017.
7. “Apple Is Focusing More on Emerging Markets,” Business
Insider, December 21, 2016.
8. Pierre-Richard Agenor, Does Globalization Hurt the Poor?
(Washington, DC: World Bank, 2002); “Globalization: Threat or
Opportunity?,” International Monetary Fund, www.imf.org.
9. www.census.gov.
10. https://stats.oecd.org/glossary/detail.asp?ID=1176.
11. http://siteresources.worldbank.org/DATASTATISTICS/
Resources/GNIPC.pdf; Arthur O’Sullivan, Steven Sheffrin, and
Steve Perez, Macroeconomics: Principles and Tools, 8th ed.
(Upper Saddle River, NJ: Prentice Hall, 2013).
12. The Economist, “The Big Mac Index,” July 13, 2017, www.economist.com/content/big-mac-index.
13. Phil Wahba, “How P&G Plans to Fix Its China Business,”
Fortune, February 18, 2016.
14. Data Mark, “P&G Grows More Than Rivals in Conditioners and
Hair Treatments in Brazil,” May 19, 2017, www.datamark.com.br/en/
news/2017/5/p-g-grows-more-than-rivals-in-conditioners-and-hairtreatments-in-brazil-229567/.
15. Sagar Malviya, “P&G Fails to Reverse India Tide; Sales Dive,”
The Economic Times, November 30, 2017, https://economictimes.indiatimes.com/industry/cons-products/fmcg/pg-failsto-reverse-india-tide-sales-dive/articleshow/61870702.cms;

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