MKT304A Glocalization in Fast Food Chains Assignment Sample

• Subject Code : MKT304A
• University : Flinders University My Assignment Services is not sponsored or endorsed by this college or university.
• Subject Name : Management

Brand and Product Management

A-1) Gorham et al. (2016) have highlighted that for a decade or so, there has been scepticism in the minds of consumer’s regarding the agricultural industry and its practices. The consumers now want to know the various ways in which their foods are grown and processed as well as what its origin is and the content within it. The social media video campaign of McDonald’s- “Our Food, Your Questions”- started out in 2014 and streams videos which give all the information about their food, from the agricultural fields to the tables, to its consumers. With the help of this campaign and all the videos that McDonald’s has been broadcasting, the organization wants the world to know that they are very much aware of their social responsibilities and the safety and satisfaction of their consumers. The outlets of McDonald’s are spread all over the world.

These outlets are always spacious and kept neat and clean, especially the kitchens. Soothing music can always be heard playing in the outlets, the staff is cordial and always ready to assist. All of these factors create an atmosphere which can be cherished by friends and families who have stepped out of their homes to enjoy quick delicious meals and recreate. McDonald’s management has also ensured that hygiene and cleanliness maintenance processes are stepped up in its restaurant’s during the CoViD-19 pandemic. Sanitization of the entire outlet with its kitchen and the customers is regularly carried out and the customers are advised to follow all social distancing norms. It is something of wonder to be noted that McDonald’s only allows those in any part of the world to take up its franchisee who can buy the land to establish a McDonald’s outlet. A McDonald’s outlet anywhere in the world is not situated on a rented piece of land for which reason it is sometimes said that McDonald’s is not a supply chain collaboration or a fast foods chain of restaurants but it is a real estate giant.

A-2) McDonald’s follows a prepaid service mechanism. The customers have to place their orders on the billing counter and then be seated to wait for their order number to flash on the screen once it is ready to be served. McDonald’s policy is that of quick service. It does not take much time for the food to be served once the customer has placed her or his order. This means that everything from the placing of an order to its billing and serving is as speedy as it can be (Tristano, 2015). The kitchen staff and the front desk personnel are highly efficient and friendly at the same time. They greet their customers as the customers walk in or when they are at the counter to place their orders. The customers can select from a vast range of items present in the menu of the restaurants. They have barbeque items like beef, pork, ham, chicken, mutton, salmon, and cottage cheese among others.

They also have veg. burgers, potato patties burgers, egg burgers, sausage burgers, salads, pancakes, veg. McMuffin, puffs, cookies, chicken nuggets with dips, veg and non-veg salsa wraps, French fries, McFlurry Choco crunch, beverages like cola, peach tea and iced-tea, hot and cold coffee, and softy ice-creams in different flavours like mocha, caramel, vanilla and orange among others. Children especially enjoy these various delicacies at McDonald’s. According to Williams-Lee (2008), there was once a time when the top management turnover at McDonald’s was high. McDonald’s subsequently focussed on development of talent and leadership and now has a host of programs for leadership development. The company is now also developing talent and leadership in the lower rungs of the organization.

A-3) McDonald’s is a multinational fast food company. Panwar and Patra (2017) have highlighted that at this point in time, when such big ventures want to create a new market away from their local or domestic market, they have to choose from one of the two options of either following the same techniques as the ones they have been using in the domestic market or to change their marketing practices to fit it with those of the host nation’s companies. Vignali (2001) has observed that McDonald’s marketing approach is that of “mixed” type. Its policy is “Think global, act local.”, which is the marketing mix. The company has successfully been able to amalgamate the various elements of internationalisation and globalisation taking into account diverse fast food markets. The company’s smart and well thought out models have considerable impact on the world’s environment and are able to effectively cater to the local communities.

McDonald’s is economical for all. Whether they are pocket money earning children, working professionals or elderlies living off on their pension money, everyone can afford and enjoy occasional meals at McDonald’s. Pricing at McDonald’s is suited to meet consumers’ perception of value thus making it one of the most popular fast food joints (NDTV Food Desk, 2020). Steal-worthy deals are often offered by clubbing together the most popular dishes sold cheaply so that more people can eat together at low costs. This is why McDonald’s restaurants are filled with many people all round the year celebrating birthday parties, office parties, dates and get-togethers. The savings on such offers can be up to $1-$2 per meal depending on the region and country.

A-4) The brand and product positioning of McDonald’s is excellent as is obvious from its humongous customer base and its spread in 118 countries of the world. However, the optimal positioning of competing firms in respect of their retail outlet localities in the fast food sector is at its best when they are situated far away from each other in large market areas, and close to each other in small market areas. The equilibrium between products and differentiation of products is dependant on the size of the market (Thomadsen, 2007). The part played by the competition of prices on the positioning of products is different when it comes to asymmetric competition and symmetric competition. The competition of prices is seen to have directly influenced symmetric firms in favour of differentiation, whereas asymmetric firms located themselves closer to their rivals even when the competition in prices makes the rival firm desirous of differentiation. The result is that the location of equilibrium with respect to asymmetric firms remain more or less the same and does not depend on whether prices are to adjust with these localities. In most places around the world, McDonald’s is situated in the cleaner and greener, more developed and posher, more lively and strategic parts of the cities. Even more so, it usually has more than just one branches in different parts of the city. In this way, McDonald’s makes it possible for itself to attract customers covering all parts of the city.

A-5) McDonald’s marketing strategy is a mixed type. It includes elements of globalization and internationalization. For this reason, it is called glocalization and McDonald’s, a glocal company. McDonald’s marketing strategy is based on the maxim- “Think global, act local.”. There are certain set standard procedures for establishing a new outlet anywhere in the world, however, this alone cannot be made possible by just replicating the previous experiences (Mathur, 2017). A thorough market research is absolutely necessary when planning on setting up a new outlet. Different regions and countries in the world have varying environments and types of potential customers, their behaviours and cultures. A good marketing research practice helps in identifying whether the company’s products would be appropriate for and suited to the new market they are aiming at. Roland Robertson- a sociologist- had coined the term ‘glocalization’ in the late 1990s referring to products and services in global markets being customized for the locals within a country or region in which they are to be sold. The concept, though not new in itself, is a method of positioning of products.

A fast food restaurant chain like McDonald’s has to research the market and find out which products are actually suitable for the local people. A lot of time, energy and resources are spent on this activity for understanding and developing suitable marketing strategies. For example, Australian people enjoy eating wraps a lot so McDonald’s has included a large variety of wraps in their menus in Australian outlets. The people in Greece are fond of pita, so McPita burgers are found in the menus of Greek outlets of McDonald’s. Similarly, the Taiwanese like rice and the Germans like hotdogs, so, McDonald’s makes McRice burgers in Taiwan and serves hotdog burgers and beer in Germany. Most Indians are vegetarians and even most of those who are nonvegetarians avoid eating beef and pork for which reason, McDonald’s has included many options of veg. burgers and chicken burgers in their menus in India. From these evidences it can be concluded that though the products of marketing are not consistent from region to region around the world, but the marketing strategies are, which take into account the different cultures, likes and dislikes of the local people of the region.

A-6) McDonald’s is the most ginormous chain of restaurants by revenue which serves more than 69 million people everyday from its approximately 39000 outlets spread over 100 countries. The revenues of the McDonald’s Corporation come from rents and royalties along with the fees paid by its franchisee partners and the sales happening in its restaurants operated directly by the company. McDonald’s is only second to Walmart among all the private companies in the world employing the largest number of people. As of 2018, McDonald’s had 1.7 million employees. The parent organization, mother organization or the umbrella for all the McDonald’s restaurants in the world is McDonald’s Corporation, which is situated in Chicago, Illinois. The key people in the corporation are Enrique Hernandez Jr. (Chairman) and Chris Kempczinski (President and CEO). McDonald’s has expanded and made its way into almost all the international markets, has become a symbol of globalization and has universally spread American culture of food.

The prominence of the organization has led to frequent debates in public life, related to obesity, corporate ethics and responsibility towards consumers. Most of the standalone outlets of McDonald’s provide both- service through the counter and drive-through service. McDrive locations are situated on highways where service through the counter and seating is unavailable. McCafes are styled like cafes and are highly popular in Australia. “Create Your Taste” (CYT) restaurants can be found in many countries like Australia, China, Hong Kong and New Zealand among others. In CYT restaurants, people get to choose by themselves which ingredients they want in their dish. Other types of locations include those which are connected to gas stations or convenience stores, the McExpress with limited seating, in shopping malls, inside Walmart stores and McStop locations found at truck shops. McDonald’s has tried to cater to every section of society in almost every location of the world. It can be concluded that its diverse styles and hierarchy are well though out.

A-7) McDonald’s marketing strategies and activities involve an all-round analysis of the external environmental factors in which the business has to grow (Vrontis & Pavlou, 2008). A thorough PESTEL analysis of these factors is painted in this section.

• Political factors: Operating in about 120 countries, McDonald’s political exposure is mountains. It complies with health and hygiene government regulations. Some governments pressure these fast food restaurants because these are seen as leading to obesity and cardiovascular diseases among a host of other problems in humans.
• Economic factors: McDonald’s has to decide from time to time whether it should grow its raw materials on its own, import them or procure them from local markets. Another important economic factor is for the management to decide the tax rates because if they are importing the raw materials, there would be tariffs levied on them.
• Socio-cultural factors: The performance of sales can be affected with people’s lifestyles being evolved. Now, more and more people are seeking to eat at a little higher price when they desire to eat out. Hamburgers and French fries today are not as fancy as they were earlier. People in different countries enjoy different dishes, for example, Americans like to eat hamburgers and Asians are fond of rice. Rice burgers and rice dinner have been promoted by McDonald’s in China.
• Technological factors: According to mcdonalds600.weebly.com (n.d.), using technology can help organizations enhance their productivity. It reduces wastage of time and resources. Using technology, the tasks of scheduling, ordering, sales and footfall forecasting and payments can be simplified. Simple and inexpensive digital marketing or provision of Wi-Fi at the outlets can both be done using technology. McDonald’s has been using technology to achieve all these goals.
• Environmental: McDonald’s once used polystyrene packaging for its sandwiches. Environmentalists all over the world condemned this. McDonald’s does not use polystyrene packaging anymore for any of its products and has switched to paper packaging which biodegrades in the environment very quickly.
• Legal: McDonald’s adheres to the labour laws, employment laws, corporate and tax laws of every country it operates in.

From looking at the aforementioned points, it can be concluded that McDonald’s indeed indulges in thorough market research and marketing activities and also that it plays fairly.

8) Do you believe the brand understands what it means to the consumers, e.g., “Who am I?”?

McDonald’s believes in the maxim- “Customer is God.”. It promotes loyalty towards its customers and cares about customer satisfaction. It does so because it has an image to protect and maintain at all costs. According to Andreani et al. (2012), customer loyalty and customer satisfaction build a strong association of customers to the brand. Also, when the customers are satisfied, they get naturally inclined towards the brand becoming its loyal customers, and so has been the case with McDonald’s. It respects its customer, innovates and works towards their delight and addresses their grievances in a timely and polite fashion. The success of McDonald’s is attributed to its “customer first” policy and its strategies to maintain its brand image. This had led customers to visit McDonald’s more and more and also recommend it to their friends. In this way, an optimistic relationship is built between the brand’s image and customer loyalty. It is no doubt that McDonald’s has the most sky-high brand equity score among all the fast food chains of restaurants in the world for it takes good amount of care of what its customers’ likes and dislikes are. McDonald’s promises its customers that it will provide them with high quality food at affordable prices.

A-9) McDonald’s Corporation is careful about how it builds its brand equity. It has made sure that its customers all over the world have proper knowledge about the brand and have everlasting memories to cherish of when they went out to eat at one of its outlets. Full-scale market researches are conducted time to time by the management level functionaries whenever new projects come in, there is need for some changes and innovations in the existing locations or when there is fluctuating growth in the business. All these activities lend positive support to the brand and its image. Also, when the business is performing fairly well, the marketing programs are reduced in intensity or halted for some time. This helps the organization in keeping a check on its expenditure. New products are constantly introduced and removed according to the popularity they gain amongst the customers, while some evergreen outselling the lesser popular products have been retained for decades now. At McDonald’s, the Corporation gives the brand the constant attention it needs.

A-10) In the case of McDonald’s, strong evidences have always been witnessed regarding the brand monitoring its brand equity sources. According to Gill and Dawra (2010), brand equity develops when consumers give more preference to a certain brand over others. Marketers try to cut down on marketing expenses and at the same time increasing the sales. They do so in the pursuit of enhancing marketing efficiency and are in constant search of factors which could help them achieve this. A big and strong brand like McDonald’s helps its managers to reap the benefits of higher margins, enjoy the loyalties of their customers, make the business less vulnerable to attacks by competitive forces, attract better communicative responses from the customers and achieve more cooperation from their trading partners and other intermediaries. The management at McDonald’s quantifies their brand equity so that they can keep a track of the strengths of their brand. Thorough brand audits are done regularly and under way brand-tracking researches are frequently used. They carefully observe the branding and marketing of the products and services which they are offering to the customers and also how it appeals to the customers themselves. When the true picture of what the customers perceive and believe about the brand is revealed to the managers, can they only help the conflict between the views of the consumers and the corporate. At McDonald’s, these practices are already very well streamlined in the organizational machinery.

References for Glocalization in Fast Food Chains

Andreani, F., Taniaji, T. L., & Puspitasari, R. N. M. (2012). The impact of brand image, customer loyalty with customer satisfaction as a mediator in Mcdonald’s. Jurnal Manajemen dan Kewirausahaan, 14(1), 63-70. Retrieved from: https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.916.6705&rep=rep1&type=pdf

Gill, M. S., & Dawra, J. (2010). Evaluating Aaker's sources of brand equity and the mediating role of brand image. Journal of Targeting, Measurement and Analysis for Marketing, 18(3-4), 189-198. DOI: https://doi.org/10.1057/jt.2010.11

Gorham, L. M., Gibson, C., & Irlbeck, E. (2016). Making a case for McDonald's: a qualitative case study examining the McDonald's" Our Food, Your Questions" campaign. Journal of Applied Communications, 100(4), 17-33. Retrieved from: https://go.gale.com/ps/anonymous?id=GALE%7CA486284384&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=10510834&p=AONE&sw=w

Mathur, S. (2017). Glocalization in fast food chains glocalization in fast food chains: A case study of McDonald's. In Strategic Marketing Management and Tactics in the Service Industry (pp. 330-347). DOI: 10.4018/978-1-5225-2475-5.ch013

mcdonalds600.weebly.com (n.d.). PESTEL analysis of McDonald’s. Retrieved from: https://mcdonalds600.weebly.com/pestel-analysis.html

NDTV Food Desk (2020). McDonalds (McD) menu, McDonalds menu with price list. Retrieved from: https://food.ndtv.com/restaurants/mcdonalds-mcd-prices-and-menu-1790160

Thomadsen, R. (2007). Product positioning and competition: The role of location in the fast food industry. Marketing Science, 26(6), 792-804. DOI: https://doi.org/10.1287/mksc.1070.0296

Tristano, D. (2015). Drive-thru or drive on by? What McDonald’s must do to stay relevant. Retrieved from: https://www.chicagobusiness.com/article/20150202/OPINION/150209971/what-mcdonald-s-must-do-to-stay-relevant

Vignali, C. (2001). McDonald’s:“think global, act local”–the marketing mix. British food journal, 3(2), 97-111. DOI: https://doi.org/10.1108/00070700110383154

Vrontis, D., & Pavlou, P. (2008). The external environment and its effect on strategic marketing planning: a case study for McDonald's. Journal for International Business and Entrepreneurship Development, 3(3-4), 289-307. DOI: https://doi.org/10.1504/JIBED.2008.019163

Williams‐Lee, A. (2008). Accelerated leadership development tops the talent management menu at McDonald's. Global Business and Organizational Excellence, 27(4), 15-31. DOI: https://doi.org/10.1002/joe.20210

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