Global marketing Strategies (McDonald’s)

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ALLAMA IQBAL OPEN UNIVERSITY
Course Marketing Management
Code (8511)
Semester Spring, 2015
Level MBA Marketing (3½ Years)
Tutor Sir Imran Inam
Name waQas ilYas
Roll # BA 582702
Assignment # 02
Topic =
Global marketing Strategies

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ACKNOWLEDGEMENT
All gratitude and thanks to almighty “ALLAH” the gracious, the
most merciful and beneficent who gave me courage to
undertake and complete this task. I am very much obliged to
my ever caring and loving parents whose prayers have enabled
to reach this stage.
I am grateful to almighty ALLAH who made me able to
complete the work presented in this report. It is due to HIS
unending mercy that this work moved towards success.
I am highly indebted to my course instructor for providing me
an opportunity to learn about the “which is vital ingredient” of
MBA program. I am very grateful to my teacher (Sir Imran Inam)
for providing me guideline for the completion of this report.
I feel great pride and pleasure on the accomplishment of this
report.

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ABSTRACT
This report is the Practical part of the most vital practice of our
MBA-Marketing program. The sole objective of my activity is to
familiarize with the practical manipulation of business
organization. This report has been written to know how big
organizations like McDonald’s manage their teams to achieve
their common goals.
In the first phase of the report there is the general introduction
about the company and then different terms have been
explained, then the mission, values, different services and
different strategies of the organization have been explained. In
the next part, SWOT analysis of the firm have been done by the
help of which it is identified that what are the strong areas of
the company and where it lacks so that it can improve, and
then in the end most important my experience while visiting in
the McDonald’s.

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DEDICATION
This report is dedicated to the greatest man in the
world that shows us the right path. Who is the
great patron of the mankind that is Holy Prophet
Hazrat Muhammad (PBUH).
I would also like to dedicate this small effort of
extract to my Parents and Teachers. They have
always been a shining star to look upon, to give
light and to show me the directions whenever I am
lost. May Allah give them more strength and long
life to guide me forever. Ameen!

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Table of Contents
Introduction of Topic 06
Practical Review of Company 16
Vision Statement 18
Mission Statement 18
Application of Topic 19
SWOT Analysis 20
Conclusion 21
Recommendations 21
References 21

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Introduction of Topic:
Global Marketing Strategies
A global marketingstrategy (GMS) is a strategy that encompasses
countries from several different regions in the world and aims at
coordinating a company’s marketingefforts in markets in these
countries.
A GMS does not necessarilycover all countries but it shouldapply across
several regions. A typical regional breakdown is as follows: Africa, Asia,
and the Pacific (includingAustralia) Europe andthe Middle East, Latin
America, and North America. A ‘‘regional’’ marketingstrategy is one that
coordinates the marketingeffort in one region. A GMS should not be
confusedwith a global production strategy. Outsourcingand foreign
manufacturingsubsidiaries,common features of a global production
strategy, can be used with or without a GMS for the finishedproducts.
GMSs can involve one or more of several activities. The coordination
involvedin implementing a GMS unavoidablyleads to a certain level of
uniformityof branding, of packaging, of promotional appeal, and so on
(Zou and Cavusgil, 2002). This also means that a GMS, in some ways,
goes counter to a true customer orientation (see MARKETING
PLANNING). The product and marketing mix are not adapted to local
preferences,as a customer orientation suggests. This is a potential
weakness of GMSs, and leaves opportunities open for local products and
brands.
As the notion of integratedmarketing communications (seeINTEGRATED
MARKETING COMMUNICATIONSTRATEGY) suggests, the ensuing
consistencycan have positive revenue benefits because of reinforcement
of a unique message, spillovers between countries, and so on. But the

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main drivingforce behind the adoption of a GMS is the scale and scope
of cost advantages from such uniform marketing strategies. These cost
advantages include elimination of unnecessaryduplication of effort,
savings on multilingualand same-size packaging, use of the same
promotional material, quantity discounts when buying media, and so on.
The pros and cons of a GMS are given in Below:
Components of a Global Marketing
Strategy
Identical brand names
• Uniformpackaging
• Standardizedproducts
• Similar advertisingmessages
• Coordinatedpricing
• Synchronizedproductintroductions
• Coordinatedsales campaigns
General pros and cons of global marketing strategies
Pros
• Revenue side: Reinforcedmessage, unique idea Spillover of brand
awareness Enhancedliking(mere exposure)
• Cost side: Reduces duplication, waste Uniform product design,
packaging, advertising Quantity discounts in media buy.
Cons
• Revenue side: Culturallyinsensitive, Anti global target, Vulnerable to
gray trade
• Cost side: Requires managerial time, Lowers morale in subsidiaries,
agencies.
THE ORGANIZATIONAL CONTEXT

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Firms typicallycontemplate adopting a more coordinatedGMS, once
they have significant presence in several countries and regions. Since
local markets will never be exactly the same, a proposed global strategy
will generallynot be welcomed by the countrymanagers. The existing
local operations will have to be convincedto adopt the new global
strategy. Thus, a GMS is always top-down, not bottom-up, and it is easy
for anti-globalizationsentiments to stir even within a multinational
company. The typical solution to this problem is to allow country
managers to be involved in the formulation of the GMS, and to form
cross-national teams to participate in the implementation. It is also
common to designate one countrythe ‘‘lead’’ market for the strategy,
and use its current strategy as a starting point for the global strategy.
This lead country is typicallyone of the larger markets and one where
the firm has a strong market share. In multi brandfirms, it is also
common to limit a global strategy to one or two brands, allowingthe
local subsidiaries to keep control of some of their own brands.
GLOBAL SEGMENTATION AND POSITIONING
The firms most likelyto engage in GMSs are those present in global
markets. Global markets are those where customer needs, wants and
preferences are quite similar across the globe (see MARKET DEFINITION).
Typical product categories are technologyproducts, includingconsumer
electronics, cameras and computers, branded luxuryproducts, and also
apparel, personal care, and entertainment categories where, for certain
segments, globally standardizedproducts are desiredby all. By contrast,
in multi domestic markets such as food and drink, where preferences are
more culturallydetermined, global coordination is less common (see
CUSTOMER ANALYSIS).
Global Segmentation. The need to target similar segments in different
countries is an attempt to minimize the drawbacks of a coordinated
global strategy (see MARKET SEGMENTATIONAND
TARGETING). A typical cross-nationalsegment targeted with a
standardizedproductis the teenage and young adult segments, where
preferences are allegedlyvery similar even for food and drink categories.

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Coca Cola uses the same one-wordslogan ‘‘Always’’ aroundthe world.
Nike is positioned with a rebellious image in many countries, even
though the particular sports associatedwith Nike differ by country.
Technologybrands such as the iPod have usually even more coordinated
global strategies,with synchronizedrollouts of new models across
countries. Global marketers might use a two-stage approach to market
segmentation (see MARKET SEGMENTATIONAND TARGETING), first
groupingcountries into similar regions to increase the chances of finding
homogeneous subgroups within each region. Often the first step
amounts to selecting a trade bloc, such as the European Union. As
research has documented, many global strategies are, in fact, more
regional than global (Rugman, 2005). A GMS can also be successful if the
firm has managed to change local preferences. A new product enteringa
local market will usually change preferences to some degree, whether by
new features, promotion, or price. This is the basis for the extreme
standardizationproposed by Levitt in his seminal 1983 HBR (Harvard
Business Review) article, where he suggests that ‘‘everybody’’ likes the
same products. Examples of this abound. IKEA, the Swedish furniture
retailer, has changedthe market for furniture in many countries – it uses
a very standardizedand coordinatedmarketing strategy, focusing
around its simple and functional furniture, annual catalog, and
warehouse stores. Starbucks, the American coffee chain, also has re-
created and enlargeda mature market in several countries with its new
coffee choices,novel store layouts, and wider menu. In other cases,
changes in the environmenthave affectedpreferences so as to make
standardizationpossible. ‘‘Green’’ products are naturally targetingglobal
segments, as are the lighter beers, the bottled waters, and the shift to
wines.Such global segments naturally induce companies to adopt GMSs.
Global Positioning. The main issue in global positioning(see
POSITIONING ANALYSIS AND STRATEGIES) is whether the product
offering should be positionedthe same way everywhere or not.
Complicatingthe issue is the fact that even with complete uniformityof
the marketingmix, the arrived-atposition may still differ between
countries.A classic example are Levi’s jeans, whose rugged outdoors
image places it in mainstreamAmerican lifestyle segment, but becomes
a stylish icon in other countries. Also, as this example illustrates, even if a
brand wants to be seen as ‘‘global,’’ its position is typicallyaffected

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positively or negativelyby its country of origin. A fundamental factor
affectingtransferability of a position is the actual use of the product. A
food product such as apples might be consumed as a healthy snack in
the West (‘‘An apple a day keeps the doctor away’’ as the saying
goes).But in Japan, apples are a favorite item in the gift-giving season,
placinga premium on color, packaging, and price – hardlythe same
positioning. Even without such dramatic usage differences, differences in
economic development and cultural distance, in general, are main
factors influencingthe potential for an identical position? AFord carmay
be positionedas a functional value productin Europe, but might be a
status symbol in a poor country. First-time buyers in emergingmarkets
rarelyview products the same way as buyers in the more mature
markets, where preferences are well established. For example, the
successful Buicks offered to new customers in China offer quite different
benefits from those offered Buick customers in the United States, even
though the product is largelythe same. The strength of local
competition (see COMPETITIVE ANALYSIS) is also likely to vary across
countries,affectingthe positioning. Where domestic competitors are
strong, a foreign brand that is a mainstreambrand at home will typically
attempt to target a niche abroad. This applies to many European brands
includingHeineken, Illycaffe, and Volvo. In other cases, a company with a
niche position at home may target a more mainstreamposition in
another market – an example is Japanese Honda in the US auto market.
In global markets, where often the same global players compete in the
major foreign markets, positioningis more likely to remain constant
across the mature markets. Examples include automobiles, with the
global players occupyingvery similar positions in most markets. This is
less true for new product categories that are still in the growth stage in
many countries and the brands are not equally well known everywhere.
Cell phone makers Nokia, Samsung, and Sony-Ericssonoccupy quite
differentpositions in each market. The stage of the life cycle (see STAGES
OF THE PRODUCT LIFE CYCLE) is also likely to vary across countries,
affectinghow well a particular position can be transferred. In the early
stages, with preferences still in flux, a strategy based on the positioning
in a lead countrymay not be very effective in a new country. Thus, the
first automatic single-lens reflex camera was introduced by Canon as a
mainstreamproduct in Japan, but a specialtyproduct for more

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professional photographyoverseas. In emergingcountries with their
pent-up demand, however, even new consumers aspire for the best
products in the leadingmarkets. This is why some Western companies
(such as Electrolux, the home appliance manufacturer)will position
themselves at the top of the market even in a country like Russia. The
typical strategic assumption is that a globallyuniformpositioning
requires similarity of culture, of competition, and of life cycle stage.
However, even in countries where one or more of these requirements are
not met, a standardizedglobal positioningmay still work.
THE GLOBAL MARKETING MIX
Global products and services.Standardization of the product or service is
usuallya major feature of a global MARKETING MIX. ‘‘Product
Standardization’’means uniformityof product or service features, design,
and styling. There are several advantages to such standardization.
Advantages of Product Standardization.
 Cost reduction
 Improved quality
 Enhanced customer preference
Disadvantages of Product Standardization.
 Off-target
 Lack of uniqueness
Global Brands

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Keeping the same brandname everywhere has become the signature
feature of a global marketer, and ‘‘global branding’’ has become an
obsession among many multinationals.
Global brands have receivedincreasedattention from top management
in many multinationals because of the importance of brandequity as a
financialasset (see PERCEPTIONOF BRAND
EQUITY). Expandinginto new markets is an obvious way of building
further financialequity, which is usuallycalculatedby simply aggregating
projected revenues across country markets. Not surprisingly, most top
brands in terms of financial equityare global. But a strong brand not
only needs reach across countries, it also needs allegiance from local
customers. As global brands have stretched further to build financial
equity, local brands have been able to defend their turf by staying closer
to their customer and building affinity, or what may be called soft equity
(see
CUSTOMER EQUITY). Recognizingthis, many global companies not only
market their global brand in a country market but might also buy up a
successful local brandand retain its brandname – and customers. The
most clear-cutadvantages of global brands are the cost efficiencies from
scale and scope. The typical benefits to global brands are several. The
cost efficiencies tend to come from the ability to produce identical
products and packaging in long series, and also because global brands
can draw on uniformglobal promotions (more on this below). Demand
spillover is a result of the increasedexposure to the same brand in many
places,especiallyuseful when customers are global. The growth of
internationaltourismhas been a strong driver of global brands. The
status and esteem advantages have been shown by researchers,
especially prominentin less-developedcountries. While some research
has demonstrated a high quality perception for global brands, the more
firmly establishedfinding is that global brands tend to have a more
consistent qualitythan local brands.
The disadvantages of global brands become advantages for local brands.
Of course, none of these advantages come withouteffort and disciplined
application by the firms, whether global or local.
Benefits to Global Brands

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 Scale and scope economies
 Demand spill over
 Global customers
 High esteem, status
 Consistent quality
Advantages for Local Brands
 Local brand affinity
 Motivated local employees
 Prodomestic (and Anti-globalization) sentiment
Global Pricing and Distribution
In GMSs, pricing, and distribution are more closely connectedthan at
home. The reason is not that the costs involvedin distribution
(transportation but also insurance andcustom duties) necessarilyraise
the final price to the customer. Such straight ‘‘price escalation’’ does not
usuallyoccur except in one-time transactions. Manymultinationals have
strong home market ‘‘cash cows,’’ and when faced with more intense
competition in foreign markets they reduce prices by loweringtransfer
prices to their subsidiaries. Some firms also use foreign markets as an
easy way out of overcapacity, applyingmarginal cost pricingprocedures
(although these can run afoul of dumping laws). And the improved
efficiencyof global transportation, thanks to global express carriers and
consolidatedshipment procedures, means that geographic distance is no
longer the trade barrier it once was. Transportation costs are typicallya
small proportion of the total price paid (see MARKETING CHANNEL
STRATEGY). The strong connection between pricingand distribution
rests more directlyon another phenomenon. The ease of transportation,
coupled with differinglocal prices and currency fluctuations, are what
provide the margin that allows for arbitrage opportunities for customers
to buy branded products cheaper abroad. This is an instance of so-called
‘‘Gray Trade’’ – the importation of brandedproducts through other than
authorizedchannels (see MULTICHANNEL MARKETING). It is the rise of

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gray trade that force multinationals to decide pricingand distribution
strategies jointly – and even multinationals thatwouldotherwise not
contemplate a global strategy, have to find a way to align prices to avoid
such trade.
Selected Drivers of ‘‘Gray Trade.’’
 Transportation is global and efficient
 Trade barriers are low
 Products and brands are standardized
 Communication is global
Why Global Coordination of Prices is Difficult
 Currency exchange rates fluctuate
 Local distributors are independent
 Import prices to subsidiaries have to consider tariffs, taxes.
 Local competition varies across countries
Global Marketing Communications
Next to global brands, the most visible aspect of a GMS is perhaps
global advertising.
Global advertising can be defined as media advertisingthat is more or
less uniformacross many countries, often, but not necessarily, in media
vehicles with global reach. Although global appeals had been used
previouslyin promotions. With increasing globalization andthe stress on
global brands, the momentum behindglobal advertisinghas been
sustaineddespite anti-globalizationand Prolocalization sentiments
aroundthe globe. One contributingfactor has been the rise of the
Internet and the availabilityof many commercials on sites such as
YouTube, where even local advertisementcampaigns potentiallyhave

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global reach. There are several forces behindthe need for integrated
global communications (see INTEGRATEDMARKETING
COMMUNICATIONSTRATEGY). One can distinguish between supply-side
drivers and demand-side drivers. On the supply side, the emergence of
consolidated global advertisementagencies has played a significantrole
in generatingmore global advertising. Although in many ways, the
agency globalization has been a response to the globalization of the
clientfirms – global managers find it useful to deal with the same agency
in differentparts of the world – once established, the global agencywill
naturallywantto leverage its global capabilities. The global agencycan
also claimsuperior production values with a global campaign, since
more resources can be used for one television commercial that is going
to be shown around the world.
Major Drivers of Global Advertising
Supply Side
• Global ad agencies
• Global media
Demand Side
• Global customers
• Preference convergence
Advantages of Integrated Global Communications
 Consistency of brand communications
 Media spill over
 Cost savings
 Improved production
 Leveraging a great idea
The Disadvantages of Integrated Global Communications
 Images and symbols might not be locally acceptable

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 Appropriate media might not be available
 Product usage is not the same
 Local creativity can be stifled
Practical study
McDonald’s
The McDonald's Corporation is the world's largest chain of hamburger
fast food restaurants, servingaround68 million customers daily in 119
countries across 35,000 outlets. Headquarteredin the United States, the
company began in 1940 as a barbecue restaurant operated by Richard
and Maurice McDonald. In 1948, they reorganizedtheir business as a
hamburger stand using production line principles. Businessman RayKroc
joinedthe company as a franchise agent in 1955. He subsequently

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purchasedthe chain from the McDonald brothers and oversaw its
worldwide growth.
A McDonald's restaurantis operated by a franchisee, an affiliate, or the
actual corporation itself. The McDonald's Corporation revenues come
from the rent, royalties,and fees paid by the franchisees, as well as sales
in company-operatedrestaurants. In 2012, the company had annual
revenues of $27.5 billion and profits of $5.5 billion. Accordingto a 2012
BBC report, McDonald's is the world's second largestprivate employer
behind Wal-Martwith 1.9 million employees, 1.5 million of whom work
for franchises. McDonald's primarilysells hamburgers, cheeseburgers,
chicken, French fries, breakfast items, soft drinks, milkshakes, and
desserts. In response to changingconsumer tastes, the company has
expandedits menu to include salads, fish, wraps, smoothies, fruit, and
seasoned fries.
Headquarters
McDonald's Plaza, located in Oak Brook, Illinois is the headquarters of
McDonald's
The McDonald's headquarters complex, McDonald's Plaza, is located in
Oak Brook, Illinois. It sits on the site of the former headquarters and
stablingarea of Paul Butler, the founder of Oak Brook. McDonald's
moved into the Oak Brook facilityfrom an office within the Chicago Loop
in 1971.
Board of directors
As of November 2014, the Board of directors had the following
members:
 Andrew J. McKenna, Chairman
 Susan E. Arnold, OperatingExecutive, Global Consumer & Retail
Group of The Carlyle Group
 Robert A. Eckert, OperatingPartner of Friedman Fleischer & Lowe
 Enrique Hernandez, Jr., Presidentand CEO of Inter-Con Security

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 Jeanne P. Jackson, President, Product and Merchandisingfor Nike,
Inc.
 RichardH. Lenny, Operating Partner of Friedman Fleischer & Lowe
 Walter E. Massey, Presidentof the School of the Art Institute of
Chicago
 Cary D. McMillan, CEOof True Partners ConsultingLLC
 Sheila A. Penrose, Non-executive Chairman of Jones Lang LaSalle
 John W. Rogers, Jr, Chairman andCEO of Ariel Investments
 Roger W. Stone, Chairman andCEO of KapStone Paper and
Packaging
 Donald Thompson, Presidentand CEO
 Miles D. White, Chairman andCEOof Abbott Laboratories
On March 1, 2015, after being chief brand officer of McDonald's and its
former head in the UK and northern Europe, Steve Easterbrook became
CEO, succeedingDon Thompson, who stepped down on January28,
2015.
Vision of the Foundation
McDonald's Brand vision is "To be the best quick service restaurant
experience". Beingthe best means providingoutstandingquality, service,
cleanliness, and value, so that we make every customer in every
restaurantsmile.
Mission of the Foundation
“McDonald's brand mission is to be our customers' favorite place and
way to eat and drink. Our worldwide operations are alignedarounda

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global strategy calledthe Plan to Win, which center on an exceptional
customer experience – People, Products, Place, Price and Promotion. We
are committed to continuously improvingour operations and enhancing
our customers' experience.”
Review of theoretical and practical
situation with respect to topic
Why is McDonalds Successful in many countries around the
world?
We can point out followingpoints for McDonald’s Marketing
Strategy around the world.
◦ Quality, Service, Cleanliness & Value (QSC&V).
◦ Innovative way of presentingitself among people.
◦ Welcomingall category’s people.
◦ Regional taste and menu.
◦ Various kinds of ventures in market.
◦ Increasingdemandof fast food over the world.
◦ Increase foreign capital inflows
Example of Global Marking Strategy
Whereas in Asia, the trend is different. The people in Asia want
food as per their taste, which McDonalds served them. They
preparedtheir menus, which includedregional taste of people. For

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Example, In India McDonald does not serve beef as Hindu culture
does not accept it. Whereas it serves chicken in India.
SWOT Analysis
Strength
 Home DeliveryServices
 Children Targeting
 Heavy Advertising
 Largest Customer Community
Weaknesses
 Local Competition Varies across countries
 Negative Publicity
 New Innovations

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Threats
 Lawsuits against McDonald’s
 Trend towards Healthy Eating
 Local fast food RestaurantChains
Opportunities
 IncreasingDemandfor fast food
 Availabilityof Mass Media for Advertising is important.
 Enhance the Global Transfer of Communications
Conclusion
GMSs have become increasinglyimportantwith the
internationalization of business and globalization of markets. Even
though they are characterizedby centralizedcoordinationand
streamliningto achieve scale and scope economies, localization,
and adaptation are becoming increasinglyimportantas emerging
markets rapidly manifestculturallyandethnicallydifferentiated
consumer demand. Global success depends cruciallyon striking
the right balance between uniformityand local adaptation. This
balance, as we have seen, involves both top-down leadershipand
sensitivity to local markets – a true managerial challenge.
Recommendations

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 A comprehensive communicationpolicyand strategy shouldbe
designed.
 Company must exchange ideas regardingcommunication with
consumers.
 Internal communication policyand strategy must be modified
accordingto the changes in business.
References:
 www.mcdonals.com.pk
 www.facebook.com/McDonaldsPK
 www.twitter.com/McDonalds
 Personal observations
 Wikipedia
 Relevant text book of AIOU
 Discussion by McDonald’s Branch Manager
 Teacher discussion