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McDonald's 'Plan to Win' strategy

Question:

International Marketing Mix Strategies of McDonald's in Pakistan.

  • The company intends to use apply the marketing mix strategies to increase its market share by 60 percent in the next 12 month.
  • To provide quality menus with exemplary services at reasonable prices

The mission of the company is to become a customer-favorite place to eat, drink, and have fun. The ‘plan to win’ strategy focuses on exceptional customer experience founded on the 4Ps that the company will use to improve its operations and customer experience in Pakistan

International Marketing Mix Strategies: McDonald's in Pakistan

McDonald’s remains the dominant player in the fast-food service retailer, especially the hamburger. The company serves over 35,000 restaurants worldwide with over 50 million clients daily (McDonald's, 2012). McDonald was restructured to pursue the ‘go international, act local’ culture thus defining its production principles. McDonald’s products like sirloin, fries, soft drinks, breakfast items, burgers, milk, chicken, and candy offer a significant feeling (McDonald’s India, 2012). The company operates on offering the best quality services to its customers thus encourage repeat customers. The company uses different strategies to meet the expectations of the clients.

Market share model and market analysis

McDonald is an indisputable marketplace leader in the Burger business. It has become a quick nourishing industry with a perceived productive and prominent brand image. In fact, the ‘McDonaldization’ is a term coined from its anticipated quick nourishment aspects (Bressan & Paola, 2014). As part of its advertising strategy, the company has distinguished the needs of clients and it strives to satisfy their requests. It further assesses its advertising techniques thus identify pitfalls regarding execution. The company boasts of over 30,000 eateries worldwide where it serves millions of customers.

The company used the ‘three-legged stool’ to define its operations. The three legs stand for the employees, suppliers, and proprietors (Zaiem & Zghidi, 2011). The connection or relationship between these stakeholders has made the company succeed because the connection defines the game plan. McDonald's has invested in sustainable and quality programs that deliver structures and supports its commerce model.

McDonald's in Pakistan

In Pakistani, the company’s operations are insignificant because it has failed to rule the market. The company needs to focus on expansion to control this potential market. Although many corporations have failed in this country, McDonald's have an opportunity to expand (Foxworth, 2013). The company should consider investing in the country, with focus on the urban communities including Karachi, Hyderabad, Islamabad, and Lahore. The company must consider introducing some of its pieces and build its establishment in the targeted communities.

Competitive Analysis

KFC is the leading player in the Pakistani market where it had introduced its chicken sandwich. The introduction of the McChicken expanded the KFC’s expenses because it believed its sandwich was mindful of customers.

McDonald's dominance in the global fast-food industry

Differentiation

McDonald enjoys a competitive advantage in the market. Since its inception, the company has never placed a stock without considering the tastes and preferences of customers (Alexander, 2012). The company has used most of its opportunities to learn the tastes of the society to avoid cultural conflict. It has considered the immense customer market by continuously contrasting the tastes. This implies that the company depends on the support of the basic slants. The company has passed its products within external territories through its connections that are aware of the mechanisms in the new market.

Cost leadership

The company has the potential to purchase supplies in mass thus benefit from economies of scale, McDonald’s leases properties and zone to comprehend its brand name (McDonald's, 2012). It has used its strengths to publicise its diverse chains thus understands the picture.

Political factors

The Pakistani government has recently increased its GST regarding the service industry. The changes in the regulations and rules can easily disrupt McDonald’s operations (Horovitz, 2014). For several years, the country has experienced the worst political instability thus affecting the import-export policies because the governments always use its ideologies to define its relationship with the external authorities. However, with strained relations with the West, McDonald has experienced troubles with the government, especially its raw materials imports. Nevertheless, the company is never expected to compromise the quality.

Economic factors

The recent economic downturn affected the company’s earnings. Sometimes, the organization can exaggerate its sales to befit the expectations of stakeholders. The company also faces problems with the exchange rates, interest rates, and currency. The continued increases in the production costs have affected McDonald’s performance (Horovitz, 2014). In Pakistan, the company is exposed to various variables influencing its operations. Similarly, most of the Pakistani customers are middle-class. Due to the financial downturn and cutbacks, these customers have retreated as they consider McDonald’s products as an extravagance.

Social factors

The customers in Pakistan are brand cognizant as they turn out to enjoy their times in the eateries (McDonald's, 2012). Unfortunately, some customers have become hostile to the American products. In effect, some customers and organization have boycotted the merchandise.

Technological factors

Innovation and creativity have benefited McDonald in its operations worldwide. Most of the representatives use the technology to serve brisk management. Similarly, the workers also use the personal computers to maximize their productivity and monitor the administration framework (Ali, 2014). According to studies, the company has benefited from Google Apps and other office software sites. For instance, it has managed to meet the needs of customers online, especially those who place their orders through the internet. The company has also promoted the informal contacts. For instance, workers can use Google+ and Facebook to contact and mark their sources.

McDonald's market expansion in Pakistan

Key Success Factors

McDonald’s is an efficient player in the food sector because of the key success factors. Food quality is the leading quality control rule the company has used for decades. McDonald’s has used the stricter quality control to achieve the nourishment security in the market. It has kept the company stronger than its suppliers shipping the hamburgers (Aldi, 2014). Additionally, the company’s positive image and good reputation is another success factor. Fast-food Café has built positive image and brand thus assuring its customers quality food (Akgun, Keskin, & Ayar, 2014). It has remained a standout company in the modern world thus earning customer trust, confidence, and great picture. It has become the best spot for children and families thus affirming its exceptional value.

The company has operated ahead of its rivals because of its convenient locations. The company identifies its strategic locations thus make it approachable and easily accessible. The appealing spots have made it possible for customers to enjoy their fascinating experiences. For example, the Hyperstar Karachi franchise catches the attention of customers. McDonald’s Rawalpindi/Islamabad is strategically located to attract clients.

McDonald’s key issues include price sensitivity, terrible PR, and operation costs. As part of its price sensitivity, it has increasingly used high prices that can drive clients away. The company needs to focus on improving its pointless and wasteful operational territories to cut operating costs. McDonald’s has an outstanding brand image. For instance, it is believed that the company offers its customers good remunerations (Ali, 2014). However, the organization has suffered a grave dissent from its workforce who complains of low wages.

In business, marketing strategy defines the commitment of an organization to meet the expectations of customers (Ahmed, Ahmad, Parmar, & Khoso, 2014). It focuses on the action path that it has to execute to serve different individuals in the market. The company has established a marketing framework to market the products, McDonald's has incessantly controlled its marketing strategy by controlling limits thus minimize expenditures on the process (McDonald's, 2012). Upon establishing the marketing strategy, to company assigns different people distinct obligations to actualize the plan. The company uses its framework to set up inputs and quantify the targets.

McDonald has identified the elements that define the expectations and buying behavior of customers. McDonald’s offers hamburgers to its customers (McDonald's, 2012). However, it also offers them everything that can influence their purchasing choices. For instance, the picture element is essential in determining the feelings of customers upon buying it. The company has used advertising to establish a strong position and perception of customers.

McDonald's key success factors

The company has also benefited from its unique segmentation strategies that are based on various variables.

The company views Pakistani market as a metropolitan market. The topography of the national markets has made the organization to calm different portions, it is important for it to concentrate on the urban business regions (Yeu, Leong, & Tong, 2012). McDonald’s nourishes the metropolitan masses. This is achieved because of the natural dietary culture in the market and its continued efforts to use a standardized approach to attain sustainable market.

In Pakistan, the majority of the consumers are low-income earners and middle-class population. This implies that these targeted customers use their pay to meet their daily expenses. The metropolitan masses can afford the company’s offers and products. These products meet the expectation of the common laborers (McDonald’s UK, 2012). The company also considers age as an element. The family factor is also important in determining the strategy it uses to serve the market. Currently, the company will be concentrating on the family who pursues family suppers.

The company also considers the caretakers who intend to give their kids a lasting experience. Kids have to visit McDonald’s to have the fun of eating (McDonald's, 2012). The company offers sustenance tastes and quick associations that can influence their clamor for young people.

McDonald’s has organized different events and vacations to attract clients. Presently, the organization targets the customary clients with its promotional strategies. With the recent positioning in India, it has created an extraordinary event thus advancing its origin substances.

The company is an international organization that engages in serving different customers with diverse preferences and tastes. It has to use distinct strategies to meet the customers’ expectations. In fact, the company has embraced an adaptation strategy instead of standardizing its marketing strategies. In most cases, the organization combines its globalization and internationalization elements to serve the clients in the fast-food markets (Vignali, 2001). The company strives to adapt to the local communities in its global operational environment.

The company understands that customers would be satisfied when it offers a menu that befits their expectations. McDonald's provides customers choices because many customers spend their money differently on various needs (Price, 2002). By offering them choices, the company is catering to their needs. According to the company, focusing on the menus ordered is critical because McDonald has always strived to create a menu demanded by customers. This is an adaptation strategy instead of creating a standardized menu. With the rapidly changing technology, the organization has acknowledged the factors which customers consider (Khoso, Ahmed, & Ahmed, 2014). Therefore, McDonald has invested heavily in its R&D to monitor the market preferences. To the company, introducing new products is propriety and eliminating the previous ones is necessary for its survival.

Marketing strategy of McDonald's

The company focuses on the beverage and food products. It intends to offer various gifts to attract customers, especially the kids. The strategy is an innovative move to offer products. This company values the Pakistani’s religion, cultural background, personal disposable income, and buying habits (McDonald’s India, 2012). It has adopted the marketing and product mix to meet the needs of the local customers. For instance, in India, the burgers contain fish or chicken instead of using the beef because it is sacred. In Mexico, this product is served with chili sauce. However, the company has standardized its burger, except in other markets.

The marketing mix element involves communicating with customers and provides the strategies to communicate with them. McDonald has differentiated the minds of customers using their services (Aldi, 2014). The company also uses different campaigns to promote its products. It promotes the idea and products this prepare the best orders to clients. For example, it offers opportunities for customers seeking to enjoy a quick lunch. In most cases, it has communicated such services using different strategies.

Advertising

McDonald communicates its advertisement messages through different mediums, such as Radio, print media, TV, and online. In the United States, the company has invested in the TV Ads. In Pakistan, McDonald's uses national channels and social media to advertise its products (Ali, 2014). The company promotes its videos on YouTube and Facebook. For instance, its processes transform the ordinary potato into the Mac-Fries.

Sales Promotions

McDonald's has proposed to increase its sales promotion in this new market. The fast-food industry in Pakistan is booming despite being stiff competition (Akgun, Keskin, & Ayar, 2014). The local restaurants also offer similar products cheaply. McDonald needs to use exciting deals better than the local restaurants.

Public relations

The company is yet to use the public relations policy in Pakistan. However, McDonald is a house of philanthropies and a defender of ecological activities (Khoso, Ahmed, & Ahmed, 2014). It uses the best green project to bolster its corporate brand. The green environmental activity will help the firm to increase its social and corporate image.

Direct selling

McDonald’s engages in direct selling in many countries. However, in Pakistan, the direct selling is unpopular. For instance, it can sell the product to corporate client businesses, community parties, events, and local government (Akgun, Keskin, & Ayar, 2014). McDonald has invested in advertising and it will use the strategy to promote its marketing mix thus succeed in Pakistan. The company needs to initiate rigorous advertising of its products on the Pakistan television channels. It will also benefit from the sales promotion.

McDonald's unique segmentation strategies

Pricing

In the international market, pricing remains a complex task. It is a value proposition is the customer’s minds. Given the current economic situation, many customers draw the mental picture of the value of any product. The psychological meaning of pricing would involve the move by a customer to perceive the value of product beyond or below its market value (Bressan & Paola, 2014). Nonetheless, it is critical to consider other factors like competition, fixed and variable costs, and the targeted market. McDonald's seems to create the value in customers’ mind thus satisfy their expectations. In Pakistan, McDonald's uses the psychological pricing and price bundling (Horovitz, 2014). It uses both strategies to offer different discounts and deals, especially when it comes to price bundling. In psychological pricing, the company looks affordable by rounding its prices off like charging Rs. 299, or Rs. 99.

McDonald's also intends to use the integrated pricing strategy to become successful. The company uses the best formula to set affordable prices thus targets the relevant market. It finds it easy to create the differentiation perception the customer’s mind (Aldi, 2014). For instance, customers will try to maintain the lowest prices for its products in Pakistan compared to its rivals like KFC. However, KFC controls the larger market share than McDonald's in Pakistan. The company will also be offering innovative products including Macc-Allo-Tiki-Burger to benefit the Indian customers in Pakistan. Like in India, in the Pakistani market, many customers are poor thus making it possible to design menus that befit their living standards.

Place

The marketing mix focuses on the distribution of products and services. Distribution of products allows the companies to reach out to the clients. According to studies, scholar (Alexander, 2012), have defined distribution based on the physical presence of the products. It depends on the management process. Importantly, the distribution processes remain engaging to offer customers to the targeted customers. McDonald's has identified the best location where customers can access the product. In Pakistan, it has created physical and virtual locations to sell the products including restaurants, websites and apps, kiosks, and McDonald mobile apps. Importantly, the Pakistani restaurants will generate more sales than the other sales points. The Kiosks also offer some selected products.

The company anticipates affirming its position and maintaining the reputation by focusing on the overall performance of the company.

The company should create an appropriate marketing plan by working on higher hierarchy thus off-guideline to its relevant departments.

Challenges faced by McDonald's in Pakistan

The company anticipates achieving its objectives of focusing on the overall financial positions including sales, profit, market share, and budget. The company will manage to achieve its objective upon analyzing the divisions and departments within the plan. It will have to invest in marketing channels, communication, and research.

If the company fails to match its goals and values, it must consider the second option. The company will have to establish additional prioritize in its pipeline by reviewing the new product, services, and location.

Conclusion

McDonald stands a high chance of improving its revenues by expanding into the Pakistani market. The fast-food industry is a viable sector in the Pakistani market. Despite stiff competition in the market, the marketing mix provides an opportunity for McDonald to achieve its goals. Nonetheless, the company should consider the integrated marketing communication strategy to overcome the impact of the local restaurants and KFC. Based on this marketing plan, the company has an opportunity to enlarge its market position by offering the new products that meet the expectations of its clients

References

Ahmed, R., Ahmad, N., Parmar, V., & Khoso, I. (2014). Role of Packaging and Labeling on Pakistani Consumers Purchase Decision. European Scientific Journal, 10(16), 464-473.

Akgun, A. E., Keskin, H., & Ayar, H. (2014). Standardization and adaptation of international marketing mix activities: A case study. Precedia- Social and Behavioral Sciences, 150, 609-618.

Aldi, T. (2014, June 4). Business case studies. Retrieved October 5, 2017, from https://businesscasestudies.co.ke/mcdonalds-restaurants/the-market-process/the-marketing-miz-and-market-research.html1#axzz46BicwLU6

Alexander, A. (2012, March 12). Which is the world’s biggest employer? Retrieved October 12, 2017, from https://www.bbc.com/news/magazine-17429786

Ali, A. (2014, February 11). Fast food consumption in Pakistan. Retrieved October 6, 2017, from brandsynario: https://www.brandsynario.com/fast-food-consumption-in-pakistan/

Bressan, F., & Paola, S. (2014). Get off to a good start. International relationship marketing in emerging markets. Precedia- Social and Behavioral Sciences, 150, 1230-1239.

Foxworth, J. (2013, June 5). Segmenting and Targeting Markets. Retrieved October 6, 2017, from https://bababababamcdonalds.blogspot.com/2013/05/chapter-8-segmenting-and-targeting_6.html

Horovitz, B. (2014, May 18). McDonald's testing seasoned fries. Retrieved October 6, 2017, from USA Today: https://www.usatoday.com/story/money/business/2014/05/08/mcdonalds-french-fries-fast-food-restaurants/8857099/

Khoso, I., Ahmed, R., & Ahmed, J. (2014). Pricing Strategies in Pharmaceutical Marketing. The Pharma Innovation Journal, 3(7), 13-17.

McDonald’s India. (2012). McDonald India. Retrieved October 5, 2017, from mcdonaldindia.com: https://www.mcdonaldindia.com/

McDonald’s UK. (2012). Marketing at McDonald's. Retrieved October 6, 2017, from https://www.mcdonalds.co.uk

McDonalds. (2012). About McDonald's. Retrieved October 5, 2017, from Official Global Corporate Website: https://www.aboutmcdonalds.com/

Price, L. H. (2002, May 12). Fast-Food Restaurant Industry Analysis. Retrieved October 5, 2017, from megaslides.com: https://megaslides.com/viewer_next/build/pdf.worker.js

Vignali, C. (2001). "McDonald’s: “think global, act locally” – the marketing mix". British Food Journal, 103(2), 97-111.

Yeu, C. S., Leong, K. C., & Tong, L. C. (2012). A comparative study on international marketing mix in China and India: The case of McDonald’s. Precedia- Social and Behavioral Sciences, 1-6.

Zaiem, I., & Zghidi, A. (2011). Product adaptation strategy and export performance: The impacts of the internal firm characteristics and business segment. Contemporary Management Research, 7(4), 291-311.

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