ArticlePDF Available

McDonald’s: “think global, act local” – the marketing mix

Authors:

Abstract

Focuses on the marketing mix of McDonald’s. Highlights how the company combines internationalisation and globalisation elements according to various fast food markets. Using the effect of strategical and tactical models, the case illustrates the effect of McDonald’s on the global environment and how they adapt to local communities. Describes future franchise plans for McDonald’s.
McDonald's:
``think global,
act local''
97
British Food Journal,
Vol. 103 No. 2, 2001, pp. 97-111.
#MCB University Press, 0007-070X
McDonald's: ``think global, act
local'' ± the marketing mix
Claudio Vignali
Principal Lecturer, Manchester Metropolitan University,
Manchester, UK
Keywords Globalization, Marketing mix, Marketing management, Fast-food industry,
Marketing, Franchising
Abstract Focuses on the marketing mix of McDonald's. Highlights how the company combines
internationalisation and globalisation elements according to various fast food markets. Using the
effect of strategical and tactical models, the case illustrates the effect of McDonald's on the global
environment and how they adapt to local communities. Describes future franchise plans for
McDonald's.
Introduction
McDonald's background
Two brothers, Richard and Maurice McDonald founded McDonald's in 1937.
The brothers developed food processing and assembly line techniques at a tiny
drive-in restaurant east of Pasadena, California.
In 1954, Ray Kroc, a milk-shake mixer salesman, saw an opportunity in this
market and negotiated a franchise deal giving him exclusive rights to franchise
McDonald's in the USA. Mr Kroc offered a McDonald's franchise for $950 at a
time when other franchising companies sold restaurant and ice-cream
franchises for up to $50,000. Mr Kroc also took a service fee of 1.9 per cent of
sales for himself plus a royalty of 0.5 per cent of sales went to the McDonald
brothers. The McDonald's brothers sold out for $2.7 million in 1961.
McDonald's first international venture was in Canada, during 1967. Shortly
afterwards, George Cohon bought the licence for McDonald's in eastern
Canada, opening his first restaurant in 1968. Cohon went on to build a network
of 640 restaurants, making McDonald's in Canada more lucrative than any of
the other McDonald's outside the USA.
The key to the international success of McDonald's has been the use of
franchising. By franchising to local people, the delivery and interpretation of
what might be seen as US brand culture are automatically translated by the
local people in terms of both product and service.
McDonald's now has over 20,000 restaurants in over 100 countries, and
around 80 per cent are franchises.
Globalisation versus internationalisation
Globalisation involves developing marketing strategies as though the world is
a single entity, marketing standardised products in the same way everywhere.
Globalised organisations employ standardised products, promotional
campaigns, prices and distribution channels for all markets. Brand name,
The current issue and full text archive of this journal is available at
http://www.emerald-library.com/ft
BFJ
103,2
98
product characteristics, packaging and labelling are the easiest of the
marketing mix variables to standardise.
Globalisation of markets requires total commitment to international
marketing; it embodies the view that the world is a single market. For example,
Nike trainers, Levi's' jeans and Coca-Cola have all crossed global borders;
however, even there, some tailoring of the message is visible.
Internationalisation involves customising marketing strategies for different
regions of the world according to cultural, regional and national differences to
serve specific target markets. In order to standardise the marketing mix, the
strategy needs to group countries by social, cultural, technological, political
and economic similarities.
Ohmae (1989) states that ``large companies must become more global if they
hope to compete. They must change from companies that treat their foreign
operations as secondary, to companies that view the entire world as a single
borderless market''. Levitt (1983) suggests that, as markets become increasingly
similar and more global, the key to success lies in the ability to globalise.
Czinkota and Ronnenken (1995) believe that multinational companies should
have to find out how they must adjust an entire marketing strategy, including
how they sell and distribute, in order to fit in with new market demands.
``Altering and adjusting the marketing mix determinants are essential and vital
to suit local tastes, meet special needs and consumers' non-identical
requirements'' (Czinkota and Ronnenken, 1995).
However, Taylor (1991) supports the view that companies should use both
internationalisation and globalisation elements to create a competitive advantage:
... it is important to heed the maxim ``think global, act local''. The firm must ensure that its
structure fits in with its international environment, while at the same time, have the internal
flexibility required to implement its strategic goal (Taylor, 1991).
The debate between these two schools of thought is continuous and, as trade
barriers throughout the world diminish and we move towards a single
economy, more firms seem to be entering the international arena:
Growing internationalisation of tastes and buying patterns has made the development of
global and regional brands more feasible (Doyle, 1994).
As a result, organisations are experiencing a change in focus from developing
into a global company over time to being a ``born global''. Born globals operate
on a worldwide scale from birth rather than developing with the business.
The concept of ``think global, act local'' has become the business phrase of
the twentieth century and increasingly topical when looking at the debate
between internationalisation and globalisation. Crossing borders, both
physically and electronically, is becoming increasingly vital for even the
smallest businesses to remain competitive.
The marketing mix
McCarthy (1975) formulated the concept of the 4Ps ± product, price, promotion,
and place marketing mix. For many years these have been used as the principal
McDonald's:
``think global,
act local''
99
foundation on which a marketing plan is based. However, with particular
attention being paid to services marketing in recent years, theorists have
identified additional variables which could be added to the 4Ps. Fifield and
Gilligan (1996) recognised the following variables as an integral part of the
marketing mix ± process, physical, and people.
It is these 7Ps that we will use in analysing the marketing mix of
McDonald's:
(1) Product ± features, quality, quantity.
(2) Place ± location, number of outlets.
(3) Price ± strategy, determinants, levels.
(4) Promotion ± advertising, sales promotion, public relations.
(5) People ± quantity, quality, training, promotion.
(6) Process ± blueprinting, automation, control procedures.
(7) Physical ± cleanliness, deÂcor, ambience of the service.
Product
One of the aims of McDonald's is to create a standardised set of items that taste
the same whether in Singapore, Spain or South Africa. McDonald's learned
that, although there are substantial cost savings through standardisation,
being able to adapt to an environment ensures success. Therefore the concept
of ``think global, act local'' has been clearly adopted by McDonald's.
Adaptation is required for many reasons including consumer tastes/
preferences and laws/customs. There are many situations where McDonald's
adapted the product because of religious laws and customs in a country. For
example, in Israel, after initial protests, Big Macs are served without cheese in
several outlets, thereby permitting the separation of meat and dairy products
required of kosher restaurants. McDonald's restaurants in India serve
Vegetable McNuggets and a mutton-based Maharaja Mac (Big Mac). Such
innovations are necessary in a country where Hindus do not eat beef, Muslims
do not eat pork, and Jains (among others) do not eat meat of any type. In
Malaysia and Singapore, McDonald's underwent rigorous inspections by
Muslim clerics to ensure ritual cleanliness; the chain was rewarded with a halal
(``clean'', ``acceptable'') certificate, indicating the total absence of pork products.
There are also many examples of how McDonald's adapted the original
menu to meet customer needs/wants in different countries. In tropical markets,
guava juice was added to the McDonald's menu. In Germany, beer is sold as
well as McCroissants. Chilled yogurt drinks are available in Turkey, espresso
and cold pasta in Italy. Teriyaki burgers are sold in Japan, vegetarian burgers
in The Netherlands. McSpaghetti has become increasingly popular in the
Philippines. McLaks (grilled salmon sandwich) are sold in Norway, McHuevo
(poached egg hamburger) in Uruguay. In Thailand, McDonald's introduced the
Samurai Pork Burger with sweet sauce. These are all examples of how
McDonald's has adapted its product offer in international environments.
BFJ
103,2
100
Irrespective of variations and recent additions, the structure of the
McDonald's menu remains essentially uniform the world over: main course
burger/sandwich, fries, and a drink ± overwhelmingly Coca-Cola. The keystone
of this winning combination is not, as most observers might assume, the Big
Mac or even the generic hamburger, it is the fries. The main course may vary
widely, but the signature innovation of McDonald's ± thin, elongated fries cut
from russet potatoes ± is ever-present and consumed world-wide by all
McDonald's customers, irrespective of their religious beliefs or political stance!
It is understandable, therefore, why McDonald's has made such a fetish of its
deep-fried potatoes and continues to work on improving the delivery of this
industry winner.
Quality
Quality Assurance teams are responsible for monitoring the quality of
McDonald's food products, both in the restaurants and at suppliers at all stages
of production. This involves a continuous round of visits, inspections and
audits, announced and unannounced, to all production facilities, distribution
centres and restaurants. Visits even extend to secondary suppliers such as
farms, to monitor crops growing in the field or to inspect seeds prior to
planting.
Every supplier manufactures to very tight specifications, which detail the
exact quantity and quality of raw ingredients and the dimensions of the
finished product. The specifications also stipulate extensive checking
procedures. In addition to studying all production run records which are sent to
McDonald's by suppliers, McDonald's regularly take samples of stock at
distribution centres to ensure that they conform to specifications.
The quality controls continue when the food arrives at restaurants. No
delivery is accepted until a series of quality and safety checks is completed. All
restaurant staff receive comprehensive training in food safety and hygiene and
food preparation procedures. This is a global practice and is one of the
distinguishing features of McDonald's as a fast-food restaurant.
Place
McDonald's currently has over 24,500 restaurants in 116 countries across the
world (see Table I).
McDonald's continues to focus on managing capital outlays more effectively
through prudent and strategic expansion. In 1998, the company added 1,668
restaurants system-wide (whether operated by the company, franchisee or joint
venture), compared with 2,110 in 1997 and 2,642 in 1996. In 1999, McDonald's
expected to add about 1,750 restaurants with a continued emphasis on
traditional restaurants primarily in locations outside the USA.
McDonald's realises the potential for growth in international markets and
plans to benefit from lessons that they learned in the USA. For example, they
used to add 300-400 restaurants a year, every year, in the USA regardless of
circumstances. It was a strategy that created a gap between them and the
McDonald's:
``think global,
act local''
101
competition. However, they realise looking back that they could have built even
more restaurants at a time when competition was not so great. This would have
meant that a lot of those ``other'' restaurants could have been McDonald's. They
have applied this lesson to their rapidly growing international business,
especially in markets where competition is not so strong. For example,
McDonald's added 415 restaurants in Japan, accounting for 25 per cent of
system-wide restaurant additions in 1998. Longer-term, markets like China,
Italy and Mexico are expected to represent a growing proportion of restaurant
additions. Although this strategy is an example of globalisation, it is still
clearly a ``glocal'' focus as McDonald's can now share ideas, best practices and
human resources across borders, thus further enhancing its competitive
advantage and strengthening its leadership position.
Price
McDonald's has realised that, despite the cost savings inherent in
standardisation, success can often be attributed to being able to adapt to a
specific environment. This is indeed the case with its implementation of its
pricing strategy, which is one of localisation rather than globalisation.
Table II illustrates the comparative Big Mac prices (flagship brand of
McDonald's) from around the world. It succeeds in highlighting the point that
McDonald's has had to come up with different pricing strategies for different
countries. More importantly, rather than just having a different pricing policy
for the Big Mac in these listed countries, McDonald's has had to select the right
price for the right market. The highest comparative price for the Big Mac is
that of our own country, the UK, but why is that the case? How does
McDonald's come to its pricing decision?
Pricing decisions
For each country, there is a rigorous pricing process that is used to determine
the price for that particular market. The process, as described by Vignali et al.
(1999), is listed below:
(1) selecting the price objective;
(2) determining demand;
(3) estimating costs;
1998 1997 1996 1995 1994
USA
Europe
Asia/Pacific
Latin America
Other
12,472
4,421
5,055
1,405
1,447
12,380
3,886
4,456
1,091
1,319
12,094
3,283
3,633
837
1,175
11,368
2,595
2,735
665
1,017
10,238
2,195
2,168
505
880
System-wide restaurants 24,800 23,132 21,022 18,380 15,950
Source: McDonald's Corporation (1998, p. 26)
Table I.
McDonald's restaurants
by area 1994-1998
BFJ
103,2
102
(4) analysing competitors' costs, prices and offers;
(5) selecting a pricing method; and
(6) selecting a final price.
The process above sets out the basic framework that allows McDonald's to set
localised pricing.
McDonald's overall pricing objective is to increase market share. In each
country, they look at the demand for their product as a barometer for setting
price. In the USA, for example, a Big Mac with fries costs the equivalent of a
Chicago office worker's earnings during 14 minutes. However, elsewhere, a
meal like this is perceived as a luxury, as opposed to a normal product, and
would cost a lot more relative to earnings. In Nigeria, for example, a
corresponding meal would represent 11 hours 23 minutes of work for someone
living in Lagos. Thus, depending upon the perception of price by the consumer,
then will the price of the McDonald's product be determined.
This can further be explained by looking at Vignali's tactical model for
MIXMAPping (see Figure 1). By looking at the product MIXMAP, it is clear
that, although placed in the same box, the consumer in Lagos perceives the
McDonald's products as having more quality than the consumer in Chicago.
Therefore, in Lagos, the consumer will be willing to pay a higher price relative
to their earnings; hence, McDonald's prices its goods accordingly.
This pricing strategy does not always work successfully, though, as was the
case in the USA in 1997 when McDonald's was losing domestic market share.
To combat this, they had to lower prices in an attempt to increase revenues.
Country Price of Big Mac Cost in UK£
Australia
South Africa
USA
Korea
India
New Zealand
Turkey
Japan
Spain
Brazil
Ireland
Switzerland
Germany
Italy
Austria
Belgium
Denmark
UK
$2.65
R7.80
$1.89
2,600won
Rs80
$3.65
500,000TL
280yen
375psts
2.95reals
IERP1.85
SF4.02
DM4.90
L4,800
Sch34
BF105
DKK19.95
£1.81
0.87
0.92
1.13
1.13
1.19
1.20
1.25
1.27
1.44
1.52
1.52
1.58
1.58
1.59
1.61
1.66
1.80
1.81
Source: World Wide Web
Table II.
Comparative Big Mac
prices from around the
world
McDonald's:
``think global,
act local''
103
Similar efforts had also to be made in Japan for the same reason, proving once
more the importance of correct price setting.
The official stance on McDonald's pricing policy is highlighted in the
company's mission statement, where it states that the most fundamental
element of determining price was:
Being in touch with the pricing of our competitors allows us to price our products correctly,
balancing quality and value.
Therefore, it is possible to conclude that, by looking at other competitors in
each country, McDonald's can set the appropriate price for their products. In
New Delhi, India, McDonald's was looking at market penetration in October
1996, and set price through looking at Nirula's, a local food chain. They used
this local example as a guideline to what the Indian would perceive as an
acceptable price and hence what they should charge.
A comparative survey of prices was carried out in Hong Kong in June 1994
and demonstrated that McDonald's in price is equal to or cheaper than its
competitors in the fast food sector. The remarkable thing is, however, that not
only is McDonald's competitive in the fast food sector but its prices remain
competitive with those of other food purveyors. In Hong Kong, for example, an
average ``value meal'' is less than half the price of a simple noodles meal!
It is also important to look at the life cycle of a product/brand before setting
price, as then it is possible to select a pricing strategy from this (see Figure 2).
Figure 1.
Product MIXMAP
Figure 2.
The product life-cycle as
a determinant of price
BFJ
103,2
104
The product life-cycle (PLC) in Figure 2 is a further example of how the
McDonald's pricing strategy is one of glocalisation. The comparison is made
between the markets in the USA and Japan, who are at contrasting stages of the
PLC. If we use the example of the Big Mac, as illustrated in Table II, we can see
that in terms of the UK£, in the USA, the Big Mac is priced at £1.13 and in
Japan, it is priced at £1.27. This is explained because the US market is in the
decline stage of the PLC and so has to cut prices to re-establish lost revenue, as
was the case in 1997. On the other hand, the Japanese market is in its growth to
maturity phase and so can price the Big Mac higher with greater success in
terms of profitability.
Promotion
Promotion, or the marketing communications mix, was seen by Kotler (1994) as
consisting of five major tools:
(1) advertising;
(2) direct marketing;
(3) sales promotion;
(4) public relations and publicity; and
(5) personal selling.
Using these tools, McDonald's looks to localise its marketing communications
strategy as it needs to consider the enormous range of cultural and other
differences that it would be faced with in each country. It would be naõÈve to
ignore the various local markets and the factors which may affect the
performance of its product in them. It also needs to analyse consumers'
attitudes towards its product, usage patterns and ethnic, moral and religious
considerations in that environment. Although the idea is to promote
McDonald's as a global image, McDonald's focuses on the needs of the
communities they are entering. In a communications context, the maxim
``brand globally, advertise locally'' (Sandler and Shani, 1991) is the McDonald's
promotional strategy. To understand this more fully, further exploration of the
key elements of the promotional mix, appropriate to McDonald's, must be
examined.
Advertising
McDonald's has a wide range of advertising campaigns in various countries.
For example, in the UK, they use the England footballer Alan Shearer as a
figurehead to promote their hamburgers, whereas in France they use Fabien
Barthez, the French international goalkeeper. The point is that the image they
are trying to convey is the same; McDonald's just use different personalities in
different cultures to get their message across.
This point can further be illustrated by Figure 3 which is Sandler and
Shani's (1991) classification of brand/advertising decisions. The McDonald's
advertising strategy would be positioned in strategy 2, as McDonald's
McDonald's:
``think global,
act local''
105
concentrate on standardising their brand name but localising their advertising
campaign. Examples of this are listed below.
In East Asia, McDonald's could not have had the success they have
experienced without their appeal to younger generations of consumer: children
and teenagers. The corporation makes a point of cultivating this market and
invests heavily in television advertising aimed specifically at children.
The advertising of McDonald's is different in China, as, by Autumn 1994,
they still had not placed an advert on Beijing television. According to the
general manager, it was pointless to advertise McDonald's on television
because Chinese commercials, unlike their counterparts in the West, appear
only during the interval between programmes. After watching one programme,
audiences tend to switch to another channel, which means that adverts have
little chance of being seen. Newspapers and popular magazines were therefore
seen as a better way to present McDonald's public image. In the Beijing region,
McDonald's relied on Burson-Marsteller, a transitional public relations
company, to deal with the Chinese news media.
This example of localisation can also be shown on one of Vignali's MIXMAPs
(see Figure 4). The matrix in Figure 4 highlights the fact that McDonald's does
not have just one universal advertising campaign. It recognises the fact that, as
mentioned above, the Chinese do not often watch TV adverts and the medium
through which they advertise to the Chinese consumer most is the press.
A further example of McDonald's acting more locally was when in Beijing,
China, the company's male mascot, Ronald, was paired with a female
Figure 3.
Classification of brand/
advertising decisions
Figure 4.
Promotion MIXMAP
BFJ
103,2
106
companion known as Aunt McDonald, whose job it was to entertain children.
Once more, this shows how McDonald's paid particular attention to the specific
market, knowing full well that this new female companion would only be
successful in certain international fast food markets and not work on a global
scale.
In contrast, in Hong Kong, McDonald's has made great efforts to present
itself as a champion of environmental awareness and public welfare, as they
see this as an important attribute to the local consumer. A leaflet comparing the
Hong Kong fast food industry saw McDonald's adverts as:
Promoting McDonald's as a local institution, with a clear stake in the overall health of the
community.
Public relations
A feature of the localisation of McDonald's in Beijing is that, in contrast to the
US practice of substituting technology for human workers, the Beijing
McDonald's relies heavily on personal interactions with customers. In everyday
operations, one or two public relations staff in each outlet are available to
answer customers' questions. Each restaurant assigns five to ten female
receptionists to take care of children and talk with parents. The whole courtesy
issue is such a big thing in the Far East and so McDonald's has to pay
particular attention to this. There would be no need for customer public
relations officers in the UK as the British have a completely different mentality
and would be more than happy to just eat their meal and leave the restaurant.
There are certain times, though, when McDonald's does adopt a global
strategy. In January 1997, McDonald's announced a global alliance with Walt
Disney which allowed them to share exclusive marketing rights for everything
from films to food, for the next ten years. This has led to McDonald's producing
toys in their ``happy meals'' for films such as A Bug's Life,Toy Story and the
latest Disney offering, Tarzan. In this instance, there is no need for McDonald's
to act local, as Walt Disney has a world-wide appeal that does not need altering
for different communities. Similarly, another global public relations exercise is
the Millennium Dreamers Global Children's recognition programme which is
being presented in conjunction with McDonald's, Walt Disney and UNESCO.
Young people from all over the world have the opportunity to express their
hopes, dreams and plans for the future.
Sports sponsorship
McDonald's sponsors a vast array of sports, on both a national and a global
scale.
Globally, McDonald's enhances its brand name with such associations as the
Olympic Games and the World Cup, the two biggest sporting events in the
global calendar. McDonald's paid an estimated £20 million for the right to use
the official logo of the international football event. The global nature of the
event allows advertisers to produce an international campaign and, with an
estimated 2 billion people watching the World Cup, the McDonald's message is
McDonald's:
``think global,
act local''
107
easily conveyed. The Olympic Games has also been a valuable advertising tool,
for, as Brad Ball (senior vice-president of McDonald's USA) puts it, ``The
Olympic Games has reinforced our reputation as a truly global brand''.
Nationally, McDonald's targets specific events with which it would like to be
associated. In the USA, McDonald's has strong links with the NBA (National
Basketball Association) and NASCAR racing, two hugely popular sports in the
USA.
McDonald's recognises that these sports are only popular in the USA and so
chooses just to sponsor these sports within the US boundaries and not on a
global scale.
Community relations
McDonald's concentrates on helping ``seek solutions for the problems facing
children and families today'' (Ken Barun, president and CEO of Ronald
McDonald House Charities). There are 160 local RMHCs in 27 countries all
aimed at the specific needs of improving the lifestyles of under-privileged
children. They attack this global problem by addressing the problems locally.
People
A blend of US human resource practices and host country norms.
A new McDonald's opens somewhere in the world every eight hours. Two
thirds of the 1,200 to 1,500 new restaurants which the company opens annually
are outside the USA. The firm has more than a million employees, and
estimates that the figure will double in the next few years.
Before entering a country for the first time the human resource department
has a list of questions that must be answered. These include:
.What are the labour laws?
.Would McDonald's be able to establish part-time and flexible work
schedules?
.Is there a maximum number of hours an employee can work?
McDonald's then adapts to each individual situation, therefore one could
describe the process as ``glocal''.
The company is strongly committed to staffing locally and promoting from
within. This means that McDonald's has managers who understand both the
corporate and the local cultures. The emphasis when recruiting is that the
applicants are customer-focused; the right attitude is seen as more important
than technical ability. The company believes that the best way to stand out
from the crowd is to satisfy all of the customers, all of the time. This is
emphasised in recruitment advertising and continues in preliminary screening;
this is standard the world over and another clear example of a globalisation
strategy.
There is a hamburger university in Illinois, USA. The main course is in
advanced operations; this is designed for managers, assistant managers and
BFJ
103,2
108
prospective franchisees. It provides training in 22 languages, although the
course teaches a standard practice to be used in restaurants worldwide, and
teaching is adapted to suit the needs of overseas students. There are additional
training centres in Munich, Tokyo, Sydney, London and mainland China. The
training centres teach managers such details as the temperature at which
hamburgers should be cooked and how to inspect restaurant facilities to ensure
that quality standards are met. Managers are also taught how to give
performance reviews, how to listen and what to do if a person becomes
defensive. Managers, in turn, pass the details on to their staff.
Within the restaurant structure in the UK there are three main levels of
recruitment at McDonald's ± hourly paid employees, junior business managers
and business management trainees.
The management development programme is for recruits who are at least 21
and who have some management experience. It offers a direct route into
management following an intensive and structured training programme.
Training in business management begins with an intensive training course
which teaches the basics of restaurant operation. This is followed by a series of
training courses designed to back up skills learned in the restaurant and to
develop management, communication and leadership skills. All managers
follow the management development programme.
The junior business management programme is open to A-Level school-
leavers and is combined with day release for study for a recognised business
qualification such as BTEC, HNC, HND or a degree. The two-year programme
is restaurant-based, and involves management skills and practical experience.
These two programmes are globally observed and adapted locally in terms
of qualifications.
In many countries, just building a restaurant and finding food that will meet
company standards require hiring an entire network of support services such
as engineers, construction workers and agricultural experts. This is to ensure
that the restaurant will meet McDonald's standards and is an example of how
McDonald's uses globalisation.
Process
There are 25,000 McDonald's restaurants in over 100 countries. The procedure
for making the food is identical everywhere. This epitomises globalisation;
McDonald's standards have to be met the world over. For example, one out of
two fries must measure 75mm, meat for Big Mac's weighs 45g and is 20 per
cent fat, and buns are 9.5-9.8cm in diameter and 6cm high.
Suppliers have to meet all the specifications and demands that McDonald's
sets them; if they cannot do this, McDonald's vertically integrates. For example,
in Russia, the beef available did not meet standards so it set up its own source
of supply for the restaurant.
The procedures for making the food in the restaurants are identical globally;
each restaurant has the same kitchen layout. Local adaptation is again
McDonald's:
``think global,
act local''
109
apparent as different international McDonald's have slightly different menus;
therefore new food preparation techniques are used.
The point of purchase at McDonald's is again standardised globally. Many
companies operating globally discover language translation problems and
therefore cannot use systems globally. McDonald's overcame this problem by
using pictographs; employees world-wide ring up sales on machines that
display symbols of Big Macs, french fries, or colas instead of words or
numerals. Software links price and total items.
One key to McDonald's success is the constant push to speed up production
without sacrificing consistency. Corporate goals include the filling of walk-in
orders within 90 seconds and a guarantee that customers will never have to
wait more than three-and-a-half minutes at drive-through windows. Company
representatives monitor performance by making surprise visits to McDonald's
outlets every quarter.
Physicals
To focus on consistent delivery of quality, service and cleanliness through excellence in our
restaurants.
This is the McDonald's message in every franchise throughout the world. The
customer knows that, whatever McDonald's they enter, the message of a family
environment will still be conveyed. It just depends on where you are in the
world as to how that message is broadcast.
This can be shown once again by using Vignali's tactical mapping process
(see Figure 5).
This promotional MIXMAP shows the global standards that McDonald's
tries to maintain in terms of cleanliness and service. The service aspect is the
variable that is adapted to local communities, like the example of China where
the interior walls in the local restaurants are covered with posters and slogans
emphasising family values.
A further example of McDonald's standardisation was when Philip T.
Walton, marketing executive of McDonald's USA, was taken on a tour of a
kitchen in a Beijing McDonald's. He said, ``I went on three such tours at
different locations, and all were identical''.
Figure 5.
Physical MIXMAP
BFJ
103,2
110
In 1994, McDonald's changed their advertising slogan to ``There's nothing quite
like a McDonald's''.
This saw McDonald's attempting an image change, as they adopted a more
personal approach to their customers, trying to talk ``to'' them rather than ``at''
them. This was again a bid by McDonald's to add to the whole ``McDonald's
experience'' and to add to their image as a global brand.
The traditional US value of ``service with a smile'' is embodied in the staff at
McDonald's restaurants throughout the world and is now characterised as an
expectation of the McDonald's consumer. It is these expectations that
McDonald's has to try to continue to meet to keep their competitive advantage
in the fast food sector.
Summary: globalisation or internationalisation?
After analysing the marketing mix of McDonald's, it is clear that the company
can be said to be ``glocal'', i.e. combining elements of globalisation and
internationalisation. McDonald's have achieved this through applying the
maxim, ``think global, act local'' (Ohmae, 1989), to all the elements of the
marketing mix.
McDonald's have been so successful in performing glocalisation that they
see the way forward as continuing to expand into these international markets
adopting this approach. This can best be explained in utilising the Boston
Consultancy Group matrix (see Figure 6).
McDonald's reach this conclusion by the fact that in the USA, their own
domestic market, they are a cash cow and have a lower market growth than in
the global market. Globally, they are positioned as a star brand and have the
ability to obtain a higher market growth and hence profitability.
References
Czinkota, M. and Ronnenken (1995), International Marketing, 2nd ed., Dryden Press, Chicago, IL.
Doyle, P. (1994), Marketing Management, Prentice-Hall, Hemel Hempstead.
Fifield, P. and Gilligan, C. (1996), Strategic Marketing Management, Butterworth-Heinemann,
Oxford.
Figure 6.
The Boston Consultancy
Group matrix
McDonald's:
``think global,
act local''
111
Kotler, P. (1994), Marketing Management, Prentice-Hall, Englewood Cliffs, NJ.
Levitt, T. (1983), ``The globalisation of markets'', Harvard Business Review, pp. 92-102.
McCarthy, J. (1975), Basic Marketing: A Management Approach, Irwin, Homewood, IL, p. 98.
McDonald's Corporation (1998), The Annual 1998.
Ohmae, K. (1989), ``Managing in a borderless world'', Harvard Business Review, May/June,
pp. 152-61.
Sandler, D.M. and Shani, D. (1991), ``Brand globally but advertise locally? An empirical
investigation'', International Marketing Review, Vol. 9 No. 4, pp. 18-29.
Taylor, W. (1991), ``The logic of global business'', Harvard Business Review, March/April,
pp. 90-105.
Vignali, C. et al. (1999), various, British Food Journal, Vol. 101 No. 5/6.
Further reading
Cobb, R. (1996), ``Advertisers go to the wall'', Marketing, 15 April, p. 31.
Gibson, M. (1995), ``ICL seals McDonald's deal'', The European, 27 January, p. 17.
Goldsmith, R. (1999), ``The personalised marketplace: beyond the 4Ps'', Marketing Intelligence &
Planning, Vol. 17 No. 4.
Jackson, C. (1994), ``Ethnography of an urban Burger King franchise'', Journal of American
Culture, May/June.
Jolly, A. (1998), ``Growing appetite'', CBI News, March, pp. 20-1.
Kemp, G. (1995), ``Adwatch of the year'', Marketing, 14 December, p. 18.
Lee, J. (1995), ``Beefing up the burger battle'', Marketing, 22 June, p. 20.
Parker, B. (1998), Globalisation and Business Practice, Sage, London.
Reed, M. (1999), ``Wide open to the Web warriors'', Marketing, 4 February, pp. 19-20.
Royle, T. (1995), ``Corporate versus societal culture: a comparative study of McDonald's in
Europe'', International Journal of Contemporary Hospitality Management, Vol. 7 No. 2.
Solomon, C. (1997), ``Big Mac's McGlobal HR secrets'', Personnel Journal, Vol. 75 No. 4, pp. 46-54.
Tee, J. (1998), ``Sponsors discover World Cup is fair game for all'', Campaign, 12 June, p. 12.
Vignali, C., Vrontis, D. and Dana, L. (1999), An International Marketing Reader, Manchester
Metropolitan University, Manchester.
Watson, J. (1997), Golden Arches East: McDonald's in East Asia, Stanford University Press,
Stanford, CA.
Web sites
www.bizednet.bris.ac.uk:8080/compfact/mcdonalds/mcindex.htm
www.enviroweb.org/mcspotlight-na/media/press/index_mcds.html
www.mcdonalds.com
... The significance of adjusting marketing strategies to local tastes has been emphasized repeatedly (Bowman et al., 2003). The importance of having a variety of marketing methods for various types of customers has been highlighted since the first fast food restaurants started to expand globally in the middle of the 20 th century (Talpau & Boscor, 2011;Vignali, 2001;). The ways to sell and distribute products have also undergone periodical adjustments, depending on the country of distribution (Sutton-Brady et al., 2010). ...
Article
Full-text available
Every organization needs to consistently adjust operations and marketing strategies in order to perpetually satisfy consumers and reinforce dedication to the vision and mission of the company. The adjustments need to be made over time, according to situational influences as well as internal and external trends affecting consumer behavior. Without a proper marketing strategy, a company may go out of business due to internal and external organizational pressures. Nowadays, as the economies of countries worldwide show signs of crisis, fast food industry players need to adjust their marketing strategies in order to overcome the competition within new circumstances. This literature review demonstrates that in order to succeed in this competition, food chain companies need to combine multiple approaches and use omni-channel marketing campaigns. This article summarizes the research made over the last two decades and suggests topics in this area that can be further researched. The research documents, reviewed in chronological order, are peer-reviewed articles, conference papers, corporate websites and major media resources.
... The most studied mix, popularly referred to as the 4 P's, however has four elements which were extracted from the twelve elements. These four elements are the product, price, promotion and distribution (Vignali, 2001). The framework calls upon marketers to decide on the product and its price, distribution and promotion. ...
... Zaman ve mekân kavramları küreselleşme ile birlikte bulanıklaşmış ya da Bauman'ın (2017) (Ritzer, 2011: 23). Bu fast food zincirinin bu ilkeler etrafında dünyanın pek çok ülkesinde, ülkenin kültürel kodlarıyla kısmen uyumlulaştırılmış (Vignali, 2001) zincir mağazalar açması, Amerikan mutfağı ürünü olan hamburgerin dünyanın pek çok ülkesine fast food tarzı beslenme kültürünü de taşımış oldu. Yani küreselleşme ile tüketim nesneleri yalnızca tüketilen ve kaybolan nesneler olmaktan öte kültürlerin de taşıyıcı ve aktarıcısı oldular. ...
Chapter
Full-text available
A Sociological Analysis in The Context of Consumption-Religion Interaction: Halal Cosmetics Participants' reasons for choosing halal certified products were examined with their sociological dimensions on the basis of the relationship between consumption society and religion, and it was concluded that consumption culture has a greater effect on transforming religious culture, even though there is a mutual interaction between consumption culture and religious culture. Piyasada satılan farklı kategorilerdeki ürünlerin, içerik ve üretim koşullarına göre “helal sertifikası” ile belgelendirme işlemi dünyadaki başka Müslüman ülkelerde olduğu gibi Türkiye’de de başlamıştır. Türkiye’de 2009 yılından itibaren iki şirket tarafından yapılan bu sertifikalandırma işlemi sadece gıda ürünleri ile sınırlı kalmamış, halı yıkamadan kozmetiğe kadar şirketler bu onayı almaya ve dini hassasiyetleri olan bireyleri hedefleyerek pazara çıkmaya başlamışlardır. Bu çerçevede, bu araştırmanın konusunu oluşturan helal sertifikalı kozmetik ürünler de, bu konuda duyarlılık gösteren bireylere yönelik olarak piyasaya sunulmaktadır. Bu araştırmada, bu sertifikaya sahip bir kozmetik şirketinin satış elemanları ve ürünlerin kullanıcılarıyla niteliksel analiz metodu çerçevesinde yarı yapılandırılmış sorularla derinlemesine görüşmeler yapılmıştır. Bu görüşmelerde katılımcıların, helal ve haram kavramı algıları, helal sertifikalı ürünleri satın alma nedenleri ve bütün bu tutumlarının dini inançları ile ilişkisinin boyutları sorgulanmış ve veriler MAXQDA analiz programından yararlanılarak kodlanmış ve betimsel analiz yöntemine tabi tutulmuştur. Katılımcıların helal sertifikalı ürünleri tercih gerekçeleri, tüketim toplumu ve din ilişkisi zemininde sosyolojik boyutlarıyla irdelenmiş ve bu zeminde tüketim kültürü ve dini kültür arasında karşılıklı bir etkileşim olsa da tüketim kültürünün dini kültürü dönüştürme etkisinin daha fazla olduğu sonucuna varılmıştır.
... The above analysis shows the direct and positive effects of marketing mix, health consciousness, and service quality on buyer decisions (Gronroos, 1978). These effects, in turn, have been demonstrated in previous studies for various industries such as retail, fast food, coffee and so on (Vignali, 2001, Hwang & Cranage, 2010, Qin & Prybutok, 2008. In this study, the authors also attempt to point out the mediating roles of health consciousness and service quality in the direct relationship of marketing mix and consumer decision-making. ...
Article
Full-text available
The study investigates how marketing mix factors are mediated by health consciousness and service quality in creating fresh fruit buying decisions of customers in Vietnam. This study employs samples of customers in Vietnam via the survey questionnaire. The authors have used a total of 256 responses that acquired the valid criteria. The compound of data analysis comprises reliability test, validity test, exploratory factor analysis, group analysis and multiple regression analysis to structure the hypothesized model. Respectively, the structural equation model (SEM) is applied to conduct the multiple multivariate equations. By the assumption of causal-effect relationship between independent variables such as marketing mixed factors, and mediator as health consciousness and service quality, which potentially impact on purchase decision; the SEM method is deployed. The results reveal that consumers have paid no attention to the marketing mix factors, but they care much about service quality and health consciousness. Thus, health consciousness and service quality are effective mediators. These findings are new and contribute to the consumer behavior and retail marketing literature. The findings of this study can provide assistance to managers in the given field to understand more easily the consumer behavior about fresh fruits, then improve their own performance.
... In a business context, the text was born in the context of advertising and branding strategies of Sony Corporation and other Japanese multinational companies in the 1980s and 1990s [8]. McDonald's also uses the "think globally, act locally" strategy to customize products according to local tastes: if McDonald's products are Hamburger, for Indonesia, they also sell fried chicken and rice [9]. ...
Conference Paper
Full-text available
Indonesia is lagging in the global arena of the advancement of civilization. In various discussions and debates, appear the text "thinking globally, act locally." This paper analyzes the text using the Critical Discourse Analysis method. The analysis shows that, like the previous texts, the text is present in a polemic, containing a magnetic pull the orientation of advanced civilization or local stagnation. Indonesian texts differ in meaning from the historical context of the production of the text itself in the multinational business expansion, environmental issues, and multicultural education. The text is not in the development policy document. Therefore, the text is nothing more than a slogan, does not affect the movement and achievement of progress, so that backwardness remains factual. In the Indonesian context, the right motto is "think locally but act nationally or globally" that reflected the diversity and the necessity to be equal in a globalized world.
... A different strand of studies linked to international marketing, and international business literature suggest that DC-SIP could arise due to a mix of strategies which firms use to place products in different markets. The 'marketing mix' strategies pursued by international firms across national borders could include either adaptation and localisation of products ('go international'), or standardisation of products ('go global') (Schmid and Kotulla, 2011;Jeong et al., 2018;Ohmae, 1989;Taylor, 1991;Levitt, 1983;Vignali, 2001;Vrontis et al., 2009;Son et al., 2018). ...
Book
Full-text available
Differences in composition of seemingly identical, branded food products (DC-SIP) occur when a good is marketed in one country as being identical (labelling, and appearance on packaging) to goods marketed in other countries, while that good has significantly different composition. The DC-SIP issue was brought to policymakers’ attention in 2017 by tests conducted in several Eastern EU Member States, which showed that some brand owners sell products across the EU Single Market, which are of different composition, despite having the same or similar packaging. The European Parliament and the European Council stressed the importance of tackling the issue of dual quality products, and requested that the European Commission investigate these practices, and find a solution at the European level. As a response to this request, the European Commission’s Joint Research Centre (JRC), in collaboration with experts from Member States’ competent authorities and stakeholders in the food chain, developed and applied a harmonised methodology in 2018/2019, with the objective of bringing further evidence on whether the composition of various branded food products differed across Member States. In April 2018, the European Commission tabled a proposal for the amendment of the Unfair Commercial Practices Directive 2005/29/EC, aimed at introducing more specific rules on the DC-SIP issue. The European Parliament and the Council adopted these amendments on 27 November 2019. At the request of the European Parliament, the JRC carried out an economic analysis of DC-SIP in collaboration with DG GROW, to develop a better understanding of the drivers, and of the impact of this phenomenon. This report summarises the main finding of this pilot project. The specific objectives of this project were to: (1) Explain the rationale for brand owners to offer different versions of identically or similarly branded food products in different markets; (2) Analyse the impact of DC-SIP on consumers’ choices and welfare and (3) Identify the main determinants of the occurrence of DC-SIP across Member States.
Chapter
Full-text available
GİRİŞ Dünya, küreselleşme ekseninde gelişip dönüşürken yaşamın birçok alanı da yenilenmekte ve ortaya çıkan yenilik ve değişim atmosferi tüm toplumsal süreçleri etkilemektedir. Dijitalleşme ile birlikte geleneksel medyada da deği-şimler yaşanmaya başlanmış, geleneksel medyanın ağırlığı kaybolmuş ve yerini dijital medyaya bırakmıştır. Geleneksel medyada var olan iletişim ortamı, 2000'lerin ilk yıllarına kadar önemini korusa da son yıllarda özellikle bilgi ileti-şim teknolojilerinde yaşanan ilerlemeler sonucunda dijital medyanın giderek etkisini artırdığı söylenebilir. Günümüzde internet teknolojilerinde karşımıza çıkan yenilikler ve gelişmeler ile birlikte hız kazanan dijitalleşme süreci; ileti-şim, pazarlama ve reklamcılık sektörüne hâkim olmaya başlamıştır. Dijital medya, dünya çapında ulaştığı kitleler ile karşılıklı etkileşim kuran düşük mali-yetli ancak yüksek kapasiteli iletişim platformu olma niteliğini korumaktadır. Bununla birlikte dijital medya ortamları, geleneksel medyaya göre daha kişisel-leşmiş mesaj ve deneyim sunmaktadır. Dijital medyanın temeli anındalık ve etkileşime dayanmaktadır. Dijital medyanın bu iki temel dayanağı, hedef kitle-ler ile gerçek zamanlı iletişim kurularak anında geribildirim alınmasını sağla-maktadır. Dijital medya uzmanları, dijital medya kanalları ile müşterilerle düşük maliyete dayalı anında ve etkili iletişim kurabilmekte, eş zamanlı geribildirim sürecini aktifleştirebilmekte ve karşılıklı bilgi alışverişi ile uzun soluklu etkile-şim yaratabilmektedir. Dijital medyanın doğasından kaynaklanan bu özellikler, reklamcılık sektörünü de yakından etkilemiş ve dijital reklamcılığın popüler-leşmesini sağlamıştır. * Dr. Öğr. Üyesi, Ege Üniversitesi İletişim Fakültesi, selin.bitirim.okmeydan@ege.edu.tr https://orcid.org/0000-0002-7996-2178
Chapter
Although Burger King and McDonald’s are widely recognized as direct competitors, there may be enough differences in customer profiles between the two chains to recommend or justify divergent location strategies. In this regard, the authors use ordinary least-squares (OLS) regression to test whether site and trade-area criteria can explain individual store sales and if such criteria are consistent for both chains. This research shows that there are situations where locational factors may have directionally different effects on store sales of the two chains. While Burger King generally experienced higher sales in denser urban areas with higher proportions of minorities, McDonald’s experienced higher sales in suburban areas adjacent to freeways.
Article
Full-text available
Theories of marketing management and strategy need to evolve and change to keep pace with changes in the marketplace and in marketing practice. As the next century draws closer, it is apparent that some marketing managers are basing their relationships with customers on policies and procedures called either “individualisation”, “mass-customisation”, or as we prefer, “personalisation”. The core of this practice involves tailoring goods and services to the individual needs and wants of specific consumers, just the opposite of one-size-fits-all. We propose that personalisation is so important to marketing strategy that it should become one of the featured elements of the marketing mix, alongside product, price, promotion, place, personnel, physical assets, and procedures, to form a new marketing mix, the 8Ps.
Book
Book Description Officially endorsed by the CIM Approved by the CIM Chief Examiner Written by the former CIM Diploma Senior Examiners User-friendly, interactive design Designed specifically for the 2000 CIM syllabus Strategic Marketing Management: Planning and Control 2000-2001 is specifically developed and written for students studying for the Planning and Control module of the CIM Diploma. This book, as with the others in the series, has been completely revised to match the 2000 syllabus for the CIM qualifications. Synopsis This volume is specifically developed and written for students taking the Planning and Control module of the CIM Diploma. This book, as with the others in the series, has been revised to match the 2000 syllabus for the CIM qualifications. It is designed to help you pass the professional examination, and give you practical marketing knowledge for further use in your career. It includes examination papers, a glossary of key terms, and an interactive text with questions, activities, and highlighted key points.
Article
In the heated debate about marketing globalization, the issue of brand standardization has received much less attention compared with advertising standardization. When both issues have been addressed, empirically or conceptually, they have not been considered simultaneously. The current study develops and empirically tests a framework to simultaneously consider brand and advertising standardization strategies. A survey was conducted among brand managers in firms operating in Canada, with data collected on a brand level. The results revealed an independence of brand and advertising standardization practices. It was also found that brand standardization was practiced to a much higher degree than advertising standardization, with the most used combined strategy involving brand name standardization and non-standardization of advertising. Effects of product type and brand age were also investigated. The findings clearly indicate that companies tend to “brand globally, advertise locally”.
Examines the human resource policy of one US multinational company (MNC) (the McDonald's Corporation) operating in the hospitality industry in Germany and the UK. Focuses on the makeup of the workforce, levels of unionization and worker participation. These issues are analysed in the context of the debate about the convergence or divergence of behaviour in organizations and the increasing globalization of economic activity. Suggest that although the company has been unable to avoid union involvement at industry level in Germany (as it has in the UK) unionization and industrial democracy are still seen as highly undesirable in both countries. Concludes that, while there are aspects of societal culture which cannot be totally evaded or overridden, the meaning and value of societal culture are continually and consistently being undermined by the pressure for convergence as represented in this case by one MNC's corporate culture.