SAMPLE ANSWER 03

Anglia Ruskin University

BA (Hons) in Marketing
International Marketing
May 2013

ARU

Kindly note that these sample answers have been

developed in lieu of the assessment term mentioned in
the cover page and may not necessarily reflect the
structure that you are required to present in your final
answer. You are advised to use this only for reference
and not as a guideline for structure, content and
presentation.

INTRODUCTION:
The company we will be looking at is McDonalds based in the United Kingdom. McDonalds mission
and vision statement is that they want the company to be the best and swiftest fast food restaurant in
the world and create the best possible experience for the consumers worldwide and globally. For
McDonalds being the best basically means, providing and ensuring the outstanding and best quality of
not only goods and foods, but also customer care and services etc cleanliness hygiene factors that
concern customers and making an everlasting value and relationship with the consumers on the long
term and long run.
Therefore, ensuring that every customer that walks in McDonalds leaves with a full satisfied stomach
and smile on their faces. It was founded in the United States of America and has international
branches located all over the globe and provides fast food to customers and located in forms of
franchises as well. Furthermore we shall be looking at the marketing mix of McDonalds and how it
has developed its goods and services and established itself in the market. Basically marketing mix is
the elements and core factors of a companys marketing system which helps it to achieve and gain
marketing objectives. Mcdonalds (2012)
Lets look at the product that McDonalds provide to the customers in all its shops and branches.
McDonalds makes a great effort and focuses considerably on making and proving a menu for its
consumers a type of menu that they may want and varieties they may select from. Through market
research it is established exactly what is provided. However on the negative side, customers wants and
demands for McDonalds products change over time. In order to overcome these random and sudden
changes in taste of customers, McDonalds keeps introducing new seasonal products and food items
and phased out and replaced old ones comparatively and continues to do so overtime.
McDonalds makes sure when introducing new products in the market to customers, the new products
doesnt affect the sales of previous existing products and goods and choices for customers and which
might affect sales in a negative way for the existing products also known as trade off. McDonalds is
also aware that the items and products in the menu will vary in the eyes of customers and in the
market in terms of popularity. The ability to generate and maximise profits varies for McDonalds at
certain different points in the cycle of the organisation. Moreover, in India, McDonalds has a more
diversified approach comparison to other countries and branches. They focus more on the vegetarian
products as its suits the ethical approach and dont cause any problems for McDonalds and its sales.
As mostly the customers that purchase form McDonalds are vegetarian. The kids children meal is
also a great seller among other products and in demand pretty much everywhere. Royle (1998)
Moreover, McDonalds has separate cooking equipments and materials used in countries like India due
to religious reasons such as the vegetarians do not want to eat food that meat is cooked with the same
equipment from etc therefore, just for this country McDonalds has its different way of marketing its
products in the country. Also McDonalds cares for the peoples and societies values and respects the
religion pattern and important factors and sentiments towards religion equally culture as well.
Moreover, McDonalds takes dietary concern a serious matter and considers burger king to be the main
competitor as they provide healthier meals and food items for the childrens kids club etc. Hermy
(2010)
For product branding, McDonalds uses the golden arches even in countries internationally like in
Japan and India etc from the first opening store in the United States by ray croc in the late 1955 till to
this day present, McDonalds continues to utilize and use the golden arches as its main symbol to

represent the international fast food company worldwide. Moreover, any process in organisations like
McDonalds without proper training and would never be complete without strong and critical focus
and emphasis on standardisation. This process basically helps to maintain and manage and create long
term employee retention etc. Standardisation basically is the methods and process which is known as
a culture and creates and maintains uniformity and order in the ongoing important relevant operations
and takes cares of process in the company. The quality and customer satisfaction si equally important
in McDonalds as well as this standard process. Basically, McDonalds do not actually maintain and
attain the targeted level and desired level of standardisation of products and services causing them to
make them lower in the eyes f the consumers etc McDonalds utilizes and uses a lot of resources and
company materials and effort to achieve standardisation for the company. The goods such as the
burgers, fries and drinks are made sure that they look, smell and seem the same even internationally in
the branches overseas despite all the differences and problems and barriers arising in the international
boundaries etc.
Not only the end products that is standardized in McDonalds but also McDonalds has a franchise
model that operates and spots and allows and directs all regional and area franchises located so none
of them actually look or has a crucial main differences between the products of services. For all the
international franchise branches McDonalds puts them through intense and rigorous training and
development schemes and it is mandatory and very crucial to pass all these tests for the franchise to
be operated overseas. Therefore, to make sure it is a standard process being followed internationally,
McDonalds has courses and tests being offered for the people working for the company or
shareholders and franchisees and certified by the McDonalds University. McDonalds mangers and
staff are thought how to deal with situations arising and the customers day to day basis. The way the
outlet is to be planned and seen by the customers as well as the look and real feel of the original brand
and symbol etc all these are important factors that must be kept in mind when standardising by
McDonalds. In the end making sure all the customers have the same experience of taste and feel and
service regardless of the location of the branch or where they are located etc. Carlsson(2011)
McDonalds give people the sense of belonging and respect and value when providing and dealing
with them in general compared to other franchises and companies located around the country or
internationally. Basically most of the shops when McDonalds was founded in the labour market did
not have a value and respect such as after sales service for the customers. Therefore the customers
were not loyal or constant to purchase from them in the long run. But on the other hand, McDonalds
has a value for customers and this in return creates a good long term trust and relationship between
McDonalds and the company. The people and customers recognize this and they are very happy with
this process and treatment. Even the staff and managers are happy to work with the companys
positive views and aspects. They are more tightly bound and trustable with McDonalds. Calantone(
2010)
Secondly, compared to other companies and employers in the food industry, McDonalds the
management of McDonalds is extremely organised and trained specifically for tasks in hand and
dealing with the customers. They are specialized and trained through the human resource management
division. They place a very high and top value in terms of leadership and management McDonalds is
very careful for management of the people working for them and the workforce in general. Even
though through the strict and strong rules and regulations and system, running the management and
company they have a very flexible relation with the employees and staff members.
McDonalds follows and utilizes value pricing meaning it offers and sales it products at a cheaper rate
compared to that of other competitors such as kfc and burger king. It uses the bundling strategy which

is offering the combo packs in bulk to consumers to increase its overall sales with the combination of
competitive pricing. Therefore global pricing is one of the most challenging factors that McDonalds
face in the market and when facing its competitors. It also faces the challenge to fix its prices overseas
as the rules and regulations of the country such as the United Kingdom pricing policy might make or
break and effect McDonalds expansion methods and efforts in the end. For this reason McDonalds
uses value pricing strategy which offers the perfect right crucial amount of acceptable good service
and price and equality to the customers at the right value and prices which is considered fair to the
customers. The companys goals and costs importantly affect the pricing methods of McDonalds as
well. As well as the customers demand for certain goods and services. McDonalds have already fixed
goals that they would like to achieve which suits and are satisfactory and ensures a nice and
acceptable return on investment to manage and maintain the market share prices and values of the
company. They do this by meeting specific profit goals by assisting priority and cost management for
each goal. The pricing is affected mainly by the companys costs. Anon (2011)
So before actually ensuring and putting prices on new and existing products McDonalds firstly
calculates the costs of manufacturing the products, relevant costs like marketing and advertising and
distribution of the products are all calculated carefully by McDonalds. The pricing strategy
mentionable that is used by McDonalds to do so is the cost plus pricing which is the addition of the
international costs of materials and other important factors affecting price and then marking up to the
domestic and local manufacturing expenses and costs.
Also for the factor of consumers demand, McDonalds involves the buying power of the customers
where it is located. It is the key role and consideration that must be kept in mind by McDonalds
pricing decision making. For example in India, the consumers are hit and affected by the low income
per capita which causes a challenge and trouble for McDonalds to set fair prices as consumers are
price sensitive and aware more than in countries with people with a higher income rates and having
better buying power compared to Indias population. That is why McDonalds implied and put
different prices in India compared to off those prices in the United Kingdom so customers in both
places can enjoy the services and goods provided by McDonalds even though the pricing difference
etc.
The place for marketing of McDonalds is usually a strategic location located in places such as
shopping centres and places and locations that are easily accessible by the local public and young
population etc the fast food outlets are also found in densely populated urban areas compared to rural
areas and villages. Such as airports and busy streets etc. And it is usually located nearby and closely
to top other three competitors of McDonalds in the market such as kfc, burger king and subway. For
market entry strategies globally and domestically, McDonalds usually franchises. Basically
franchising is an ongoing business relationship where one side or party known as the franchisor gives
the rights and permission to the other side to distribute and provide goods and services to the
consumers using the original companies name, symbol and brand and goodwill etc.carlsson(1998)
This is usually exchanged in a treaty and for a certain fee provided to the original company by the
franchisor. This is done for providing common and usual customer experience and goods and services
even though it is thousands of miles and kilometres away from the original company. This allows
rapid and quick efficient market expansion for McDonalds. The process includes group purchasing
arrangements and methods an exclusive territory for each individual franchisee in the area as well as
group advertising programmes and methods to call and gain the customers interest. All these are done
through initial and long term continues support from the original franchisor. Such as providing

equipment and specified rules and regulations that are strict and must be performed like a ritual when
selling to the customers. Mcdonalds(2011)
For promotions, McDonalds is widely known for and is engaged in short term incentive methods such
as customer promotions among limited meals in certain values and promotional methods and games
etc. This is done to promote and sell existing, old and new items and food stuffs to the consumers.
Good examples would be the promotions of happy meals toys, the monopoly stickers provided with
each purchase and contests etc also advertisement campaigns are also provided and shown through
media, newspapers and magazines to promote a great McDonalds experience and active lifestyles
shown by McDonalds to promote its sales and goods.
McDonalds has selected the best methods in the market to promote its goodwill and brand reputation
worldwide. They have penetrated tough markets such as in south East Asia India, Japan and even in
the South American countries. It is a great deal and achievement for McDonalds on the long run and
they have overcome the marketing barriers in most countries overseas and are in good terms with the
customers and the government policies over the decades since it was founded in the united states.
Through the SWOT ANALYSIS, which shows the strengths and weaknesses achieved and avoided
and overcome by McDonalds, and the opportunities it has taken to increase its market share and
overcome the critical market threats from top world ranked competitors like kfc and burger king it is
crystal clear and visible that McDonalds has made the right strategic decisions since the beginning
and due to the technological advancements recently in the 21st century McDonalds is one of the fast
food brands on top of the market no doubt. Bartlett (1989)
2.
McDonalds uses a non equity based method of internationalisation. This is basically and commonly
known as franchising method. Basically as we have discussed before, the method of franchising is
most popular when companies want to set up and open branches in other countries out of their reach
and in different challenging markets that the original company is totally unaware of. So the process
involves the franchisee overseas to purchase and use the business name and brand and undertake
activities including the trademark compared to any patented technology and materials. There are two
generation and methods of franchising. The first method is that the franchiser gives and grants
considerable amount of autonomy and permission to the franchisee overseas and the second method
includes, a little amount or not at all any autonomy to the franchisee.
Now let us look at the advantages and disadvantages of the franchiser, in this case McDonalds. The
advantage is that overseas and international expansion is much more affordable and cost cut and less
expensive and local adaptations can be made by the franchisee locally as they are more familiar with
the local traditions and cultural ethical and legal values and factors involved. Disadvantages may
include that the possible and risk of conflict and misunderstanding resulting in danger for not
following the rules and regulations of the franchiser as well as agreements mentioned and given. The
franchisee might decide to become solo with vital information and become a direct competitor for
McDonalds in the future this is a great risk. Buzzell (1968)
The advantages for the franchisee may be that when they buy themselves into an existing and well
repudiated brand and company with positive good will like McDonalds they not have to go through
all the troubles and hardships of setting up a business from scratch. As they will be receiving
instructions and support as well as marketing tools and guidelines training and starting up help from
the franchisor. The disadvantage is that there is a huge amount of restrictions of what they can do and

cant do. As McDonalds have a very strict rules and regulations regarding the quality, goods and
services customer care as well as pricing and training and development programmes etc. Robert
(1968)
3.
The country of origin effect in the marketing world is basically known as a psychological effect that
the consumers are affected by when customers are unfamiliar and not familiar and dont know much
about a certain product or service from a different foreign country or region. Because the product and
quality is unknown it has a halo effect mentioned by marketing specialists on the consumers when
they try to evaluate about the product or service. The country of origin for McDonalds is the United
States of America. Because united states have a positive and good country image internationally and
most of the people in the globe know about the states, this will allow McDonalds to market and
introduce new products easily around the world quickly in a short period of time and gain customer
trust and good will swiftly than other companies like McDonalds but if they are from not so
developed and developing countries which they will have difficulty in gaining recognition and trust
from consumers worldwide. Carlsson (2003)
Products made in developing countries like India and Brazil for example, they are marketable when
offered at lower prices compared to global and local competitors and marketers in the region. But in
this terms, McDonalds do not have any problem at all as it comes from a developed country and
automatically when people hears American food or products they are interested without any doubt
because they are familiar with the product of services provided by u.s.a. this is a great advantage for
McDonalds and they may continue to utilize this strategy for their advantage and profit making
quickly in international branches through franchises etc.anon (2012)

BIBLIOGRAPHY:
anon. (2012). mcdonalds. Available: http://www.mcdonalds.co.uk/ukhome.html. Last accessed 28th
april 2013.
tony royle. (1998). working for mcdonalds. Available:
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Last accessed 19april 2013.
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Bartlett, C. A. and S. Ghoshal (1989). Managing across borders: The transnational solution.
Cambridge, MA: HarvardBusiness School Press.
Carlsson, B. (2003). Globalization, entrepreneurship, and public policy: A systems view. Industry and
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Buzzell, Robert (1968). Can You Standardize Multinational Marketing? Harvard Business Review 46
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