Mcdonalds Global Marketing Strategy, China And India [614912]

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SCHOOL OF MANAGEMENT MARKETING

MASTER STUDIES PROGRAM
STRATEGIC MARKETING

DISSERTATION PAPE R

Scientific Coordinator:
Associate Proffes or Preda Oana, PhD

Graduate:
Catanescu M. Maria Evelina

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Mc'DONALD'S GLOBAL MARKETING STRATEGY
STUDY CASE: CHINA AND INDIA

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CUPRINS
CHAPTER I. PRESENTATION OF THE ORGANIZATION ………………………….. …………… 7
1. Oraganization Overview ………………………….. ………………………….. ………………………….. …. 7
2. McDonald's Financial Overview ………………………….. ………………………….. …………………… 7
CHAPTER II. THE MARKETING ANALYSIS ………………………….. ………………………….. .. 13
2.1. CHINA'S MARKETING ENVIRONMENT ANALYSIS ………………………….. ……….. 13
ECONOMIC ENVIRONMENT ………………………….. ………………………….. ………………………….. … 13
2.1.2. CULTURAL ENVIRONMENT ………………………….. ………………………….. …………………… 16
DEMOGRAPHIC ENVIRONM ENT ………………………….. ………………………….. ……………………….. 17
TECHNOLOGICAL ENVIRON MENT ………………………….. ………………………….. ……………………. 18
POLITICAL ENVIRONMENT ………………………….. ………………………….. ………………………….. … 19
LEGAL ENVIRONMENT ………………………….. ………………………….. ………………………….. ……… 19
NATURAL ENVIRONMENT ………………………….. ………………………….. ………………………….. …. 19
2.2. INDIA'S MARKETING ENVIRONMENT ANALYSIS ………………………….. …………. 20
ECONOMIC ENVIRONMENT ………………………….. ………………………….. ………………………….. .. 20
CULTURAL ENVIRONMENT ………………………….. ………………………….. ………………………….. .. 21
DEMOGRAPHIC ENVIRONMENT ………………………….. ………………………….. ………………………. 21
TECHNOLOGICAL ENVIRONMENT ………………………….. ………………………….. …………………… 22
POLITICAL ENVIRONMENT ………………………….. ………………………….. ………………………….. … 23
LAW ENVIRONMENT ………………………….. ………………………….. ………………………….. ………… 23
NATURAL ENVIRONMENT ………………………….. ………………………….. ………………………….. …. 23
CHINA'S SWOT ANALYSIS ………………………….. ………………………….. ……………………….. 25
2.4. INDIA SWOT ANALYSIS ………………………….. ………………………….. …………………….. 26
CHAPTER III. MCDONALD'S ANALYSIS ON THE INDIA AND CHINA MARKET . 27
3.1. Fast food in the Chinese Market ………………………….. ………………………….. ………………. 27
3.1.2. The Main Characteristics of fast food in Chinese Market ………………………….. ………. 27
3.2. McDonald's China Marketing Mix ………………………….. ………………………….. ……………. 28

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Product and Position ………………………….. ………………………….. ………………………….. ……… 28
3.3. The 4Ps of McDonald's ………………………….. ………………………….. ………………………….. . 30
3.4. STRATEGY AND REPOSITIONING THE BRAND MCDONALD'S IN INDIA ….. 34
3.4.1. Fast Food Industry in India ………………………….. ………………………….. ……………….. 34
The 4ps of McDonald's India ………………………….. ………………………….. ……………………… 37
 Product : ………………………….. ………………………….. ………………………….. …………………… 37
 Place: ………………………….. ………………………….. ………………………….. …………………. 38
 Price ………………………….. ………………………….. ………………………….. ………………….. 38
 Promotion: ………………………….. ………………………….. ………………………….. ………….. 38
3.5. Competitors Analysis ………………………….. ………………………….. ………………………….. …. 39
KFC in China ………………………….. ………………………….. ………………………….. ………………. 39
Product and Position ………………………….. ………………………….. ………………………….. …….. 39
Promotion ………………………….. ………………………….. ………………………….. ……………………. 41
KFC in India ………………………….. ………………………….. ………………………….. ……………………. 42
COMPARISON: CHINA AND INDIA ………………………….. ………………………….. ………………. 46
ANEXE S

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INTRODUCTION
Marketing is the management process through which good and services move from concept to
customer. The marketing process comes along with the marketing strategy which is a strategy
of an organization that combines all of it's mark eting go als into one comprehensive plan. A
good marketing strategy should be drawn from market research and focus on the right product
mix in order to achieve the maximum profit potential and sustain the business. The marketing
strategy is the foundation o f a marketing plan.
A marketing plan is a plan that describes activities that involve in achieving specific
marketing objectives within a set timeframe. A market plan begins with the identification,
identification which is done through market reasearch, o f specific customer needs and how
the organization tends to fullfill them while generating an acceptable level of return. It
generally includes analysis of the current market situation (opportunities and trends) and
detailed action programs, budgets, sales forecasts, strategies and projected financial
statements.
In this paper we will talk about how Mc Donalds India and Mc Donalds China are different
yet alike when it comes to their global marketing strategy. The paper will contain four main
chapters, yet each chapter also containing a series of subchapters.
The first chapter, Presentation of the Organization will contain details about our both
organizations, McDonalds India and McDonalds China , their history, how it all began, but
also their financial anal ysis and their financial status in present.
Our second chapter, which is the Marketing Analysis, will have a marketing analysis done on
China but another analysis done on India. We will also do a SWOT Analysis on each country
to see their strengths, weakn esses, opportunities and threaths. In order to do the SWOT
analysis we will develop a marketing plan which will come along with a market reasearch.
The Marketing Strategy Analysis of the organizations, which will be the title of the third
chapter will do a marketing strategy analysis on both organizations from India and China.
Here, we will also talk about price, promotion and distribution in their organization on how
they are managing all those three things we mentioned below.
Our fourth and final chapte r, will be the chapter where we will talk about conclusions and
new propositions for the future in order to maybe bring something new to the organizations.

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This study examines the international marketing mix done by the McDonald’s in two different
importa nt markets, China and India.

The objective is to analyze and understand the similarities and differences of the international
marketing mix strategy implementation by the company. Using comparative analysis, this
study focused on 4P approach of marketing mix which is based on product, price, promotion
and place analysis.

McDonald’s marketing strategy in China and India were used for this study. The study found
that the McDonald’s has adopted different kind of its 4P in their international marketing mix
based on both, localization and globalization approaches.

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CHAPTER I. PRESENTATION OF THE ORGANIZATION
1. Organization overview
2. Finan cial status of the organization
3. McDonald's SWOT Analysis
1. Oraganization Overview
In 1940, two b rothers, Dick and Mc McDonald opened McDonald’s Barbeque restaurant in
SanBernardino California selling hamburgers. It was the first fast food restaurant that started
selling burgers.1
At first, it was a typical drive in restaurant which featured a large menu but also a car hope
service. In 8 years after the opening, the restaurant brought to the brothers a fortune that they
never expected. Even so, they realized that the hamburgers compromised 80% of their sales
and so they closed the doors of the fast f ood in order to reevaluate their business.
In 1954 Ray Kroc visited McDonald’s and he was surprised by the huge order for 8
multi -mixers from a restaurant in San Bernardino, California. There he found a small
but successful res taurant ran by brothers Dick and Mac McDonal d, and was stunned by
the effectiveness of their business.
Kroc showed his interest and vision in creating McDonald’s restaurants all over the U.S.
to the brothers.The brothers were reluc tant at first to begin a national franchise sys tem, but
because their business was starting to have copycats, they accepted Ray's Kroc offer,
therefore in 1955, he founded the McDonald's Corporation and 5 years later, he bought the
exclusive rights to McDo nald's name. By 1958, the fast food restaurant was already a chain of
restaurants and had already sold it's 100 million hamburger.
McDonald's is the no.1 and biggest global foodservice retailer with more than 32,000 local
restaurants serving more than 64 million cu stomers in 117 countries each day. More tha n
80% of McDonald's restaurants worldwide are owned and operated by independent local men
and women. It has a work force of 1.7million employees worldwide.2
2. McDonald's Financial Overview
The Company franchis es and operates McDonald’s restaurants.Of the 36,899 restaurants in
120 countries at year -end 2016, 31,230 were franchised and 5,669 were operated by the
Company.

1 McDonald's History, Wikipedia.
2 McDonald's History, Wikipedia

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When it comes to talk about their financial history, McDonald's strength comes from its
franchisees and suppliers, them being the key to the company's success. With the help of
these, the managers were able to identify, implement and scale ideas that meet the needs and
wishes of their customers. In addition, they developed a business plan – focused Plan to Win
("Plan") a plan that focuses on five pillars, which are: People, Products, Place, Price and
Promotion. In 2014 they remade the Plan framework, refocusing their plan s and actions on
what matters the most for their customers needs, some of th ose plans, presented below .3
 Adding more variety to the menu so the customers can have more of options when it
comes to the food and drinks.
 Modernizing the customer experience so interactions with the McDonald's Brand to be
more memorable.
 Taking meanigf ul actions to become an even more trusted brand.
Even though they had established the strategic growth priorities, 2014 was a disapointing year
for the company as unforseen events and weak operating performance pressured results in
each of their geograph ic segments.
They experienced challenges growing sales and guest counts in 2014, as comparable sales
decreased by 1.0%, reflecting negative guest traffic in all segments. While some of the
challenges they faced were anticipated, others were not, such as the impact of a supplier issue
in China, Japan and certain other markets and the volatile operating environment in Russia
and Ukraine. Results were also impacted by under – performance in key opportunity markets
that are significant contributors to consoli dated results, most notably the U.S.
Even though they were faced with a tricky situation in 2014 , last year, the Company
achieved the followings:
 Consolidated revenues decreased 3% (flat in constant currencies) due to the impact of
the refranchising, partly offset by positive comparable sales.
 Systemwide sales increased 3% (5% in constant currencies).
 Consolidated operating inc ome increased 8% (11% in constant currencies).
 Diluted earnings per share of $5.44 increased 13% (16% in constant currencies).
 Cash provided by operations was $6.1 bilion.
 Capital expenditures by $1.8 bilion were allocated mainly to invest in the restaurants
that were already on the market and, to a l esser extent, to new restaurant.

3 McDonald's: Behind the golden arches

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 The Company returned $14.2 bilion to shareholders through dividens and share
repurchases for the year, achieving the Company's targeted r eturn of $30 bilion for the
three year period ended 2016.4
Tabel 1.1: Shared revenues
2016 2015 2014 2016 2015 2016 2015
Company –
operated sales:
US $3,743 4,198 4,351 11% 4% 11% 4%
International
Lead Market 4,278 4,798 5,443 11 12 6 1
High Growth
Markets 5,378 5,442 6,071 1 10 4 6
TOTAL 13,399 14,438 15,865
Franchised
revenues:
US $4,510 4,361 4,300 3% 1% 3% 1%
International
Lead Market 2,945 2,817 3,101 5 9 8 6
High Growth
Markets 783 731 774 7 5 9 9
TOTAL 8,238 7,909 8,175
Total revenues:
US
$8,253

8,559 8,651 4% 1% 4% 1%
International
Lead Market 7,223 7,615 8,544 5 11 1 3
High Growth
Markets 6,161 6,173 6,845 0 10 4 6
TOTAL 21,637 22,347 24,040

4 http://www.stats.gov.cn/english/

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 US: In 201 6, the company related sales grew by 11% prior to the precedent year.
 International Lead Markets: In 2015, revenues decreased due to foreign currency
translation , whereas in 2016, it happened because of the of refranchising .
 High Growth Markets: In 2015 and 2016 , revenue growth was negatively impacted
by foreign currency translation.
The following t ables present comparable sales, comparable guest counts and
Systemwide sales increases/decreases.

2016 2015 2014
Sales Guest
Counts Sales Guest
Counts Sales Guest
Counts
US 1.7% 2.1% 0.5% 3.0% 2.1% 4.1%
International Lead
Market 3.4% 1.5% 3.4% 1.0% 0.8% 1.2%
High Growth
Markets 2.8% 0.8% 1.8% 2.2% 2.8% 2.9%
Foundational
Market & Co. 10.0% 1.9% 0.7% 3.7% 0.1% 4.8%
TOTAL 3.8% 0.3% 1.5% 2.3% 1.0% 3.6%
Tabel 1.2: Comparable sales and guest count increases/decreases

2016 2015 2016 2015
US 2% 1% 2% 1%
International
Lead Market 1 10 5 5
High Growth
Markets 3 7 6 8
Foundational
Market & Co. 8 13 11 3
TOTAL 3% 6% 5% 3%
Tabel 1.3: Systemwide sales (increases/decreases)
Franchised sales are not recorded as revenues by the Company, but with the revenues, the
Company calculates and records franchised revenues and are indicative of the financial health

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of the franchisee base. The following table represents franchised sales and the related
increases/decreases. 5
Franchised
sales: 2016 2015 2014 2016 2015 2016 2015
US
$32,646

$31,639
$31,096 3% 2% 3% 2%
International
Lead Market 17,049 17,921 17,921 5 9 8 6
High Growth
Markets 4,858 4,525 4,678 7 3 10 10
Foundational
Markets & Co. 15,154 13,749 15,922 10 14 14 3
TOTAL $69,707 $66,226 69,617 5% 5% 7% 4%

Tabel: 1.4: Franchised sales

5 McDonald's 2016 Anual Repor t

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When it comes to consolidated selling, general and administrative expenses decreased 2% in
2016 and decreased 2% in 2015.
2016 2015 2014 2016 2015 2016 2015
U.S. $741 $766 $722 3% 1% 3% 1%
International
Lead Markets 464
534 621 13 14 10 1
High Growth
Markets 294 326 389 10 16 6 5
Foundational
Markets & Co. 885 808 706 10 15 10 20
TOTAL(Selling,
General &
Adm. Expenses $2,384 $2,434 $2,488 2% 2% 1% 4%
Less: Incentive
Based
Compensation 418 317 171 32% 85% 33% 95%
TOTAL:
Excluding
Incentive Based
Compensation $1,966 $2,117 $2,317 7% 9% 6% 2%
Tabel 1.5: Selling, general, administrative expenses.
Selling, general and administrative expenses as a percent of Systemwide sales was 2.8% in
2016, 2.9% in 2015 and 2.8% in 2014.

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CHAPTER II. THE MARKETING ANALYSIS

In this chapter we will talk about the economic environment, the demographic environment,
the cultur al environment the technological environment and also the juridic and natural
environment.
2.1. CHINA'S MARKETING ENVIRONMENT ANALYSIS
ECONOMIC ENVIRONMENT
China 's socialist market economy is the world's second largest economy by nominal GDP and
the world's largest economy by purchasing power parity according to the IMF, although
China's National Bureau of Statistic denies this claim. Until 2015 China was the world's
fastest -growing major economy , with growth rates averaging 10% over 30 years.
As of 2016, China is the second largest trading nation in the world and plays a prominent role
in international trade ,and has increasingly engaged in trade organizations and treaties in recent
years. China became a member of the World Trade Organization in 2001. China also has free
trade agreements with several nations, including Aust ralia, South Korea , ASEAN , New
Zealand , Switzerland and Pakistan . 6
China's share of world trade (at current USD in millions)

6 China's Environment, Wikipedia

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On a per capita income basis, China ranked 72nd by nominal GDP and 84th by GDP (PPP) in
2015, according to the International Monetary Fund (IMF). The provinces in the coastal
regions of China tend to be more industrialized , while regions in the hinterland are le ss
developed . As China's economic importance has grown, so has attention to the structure and
health of the economy.7
By the end of 2015, China became the world's first ever nation to have a GDP (PPP) above
the $20 -trillion mark, doubling its overall output in the fastest time possible (6 years). As
China's economy grows, so does China's Renminbi , which undergoes the process neede d for
its internationalization . China initiated the founding of the Asian Infrastructure Investment
Bank in 2015.
Economic growth is projected to increase this year but also in 2018, thanks to the impact of
earlier fiscal and monetary stimulus. In a context of low inflation, monetary policy has to
focus on financial risks, which have grown and should be kept an eye on them . 8

Growth has picked up somewhat, with machinery and high -tech industry production in the
lead. Investment in the servi ce sector continues to be buoyant, but still considerable excess
capacity in the industrial sector will continue to weigh on overall investment. Housing
investment has accelerated sharply, notwithstanding a series of home purchase restrictions
and tighter conditions for mortgages. Surging house prices in the largest cities continue to fuel
residential investment and prices are holding up even in small cities where there is excess

7 wttc.org/China
8 China's Economy, Wikipedia.

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capacity. Supported by rising real incomes, consumption has remained robust, w ith buoyant
housing -related purchases, e -commerce sales and overseas tourism.

Stronger foreign demand has boosted exports and industrial production. . Consumer price
inflation, in contrast, remains subdued. 9

9 https://www.wttc.org/research/economic -research/economic -impact -analysis/country -reports/

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2.1.2. CULTURAL ENVIRONMENT
Ethnic & Language Groups
The concept of being Chinese is not based on race. Rather, it is a cultural concept. To speak
and behave like a Chinese – in short, to accept the Chinese system of cultural values means to
be Chinese. They refer to themselves as Han or sons of Han (as in Han Dynasty, a period of
great historical significance). Throughout history, small ethnic groups that came into contact
with the Han Chinese have adopted Chinese culture and have been absorbed into the
mainstream. This process continues, though there are legal guarantees designed to protect the
rights and culture of minority nationalities.
Traditionally, the definition of a min ority nationality in China is a group of people who speak
a common language, occupy a common area and share a common sense of social values.
Although the minority nationalities represent a comparatively small portion of the total
population (aproximately 6 .7 percent of China's population), they have an importance in
Chinese society beyond their numbers because of the strategic territories they occupy. Most
minority nationalities live along China's sparsely populated frontiers and have cultural
relationships with minority groups in neighboring countries, such as Kazakhstan, North Korea
and Russia.
Cultural Values
Chinese culture is highly complex but scholar across the world agree that despite the diversity
of Chinese communities many shared characteristics persist. These derive largely form the
pervasive influence of Confucian philosophy of the Chinese culture and they are at the very
core of Chinese identity.
The most important values of Chinese culture include the: importance of family, hierarchical
structure of social life, cultivation of morality and self -restraint, and the emphasis on hard
work and achievement. The Chinese culture and society can be defi ned as "collectivist". In
many ways the family unit takes precendence over its individual members. C hildren must
learn not to answer back to their parents or other elders. It is assumed that the family as a
whole will thrive and prosper if harmony prevails at home. In other words – the basic rules of
obedience, moderation and self -restrain amongst family members should be observed.
Expectations related to family life account for many of the difficulties faced by Chinese

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imigrants. The second generation finds it hard to cope with the demands of their parents. They
want to fulfill their own potential – like opting out of the catering business. And, stripped of
their traditional position, deprived of respect, abandoned and isolated, the first generation
feels unable to shape their children's way of life. Guilt on the children's part and shame on the
parents' may result.10
DEMOGRAPHIC ENVIRONM ENT
China is classified as an upper middle -income country by the World Bank, and its rapid
growth over the decades has pulled hundreds of millions of its citizens out of poverty. About
10% of the population in the country l ives on $1 USD a day, compared to 64% just 35 years
ago.
The current population of China is 1,388,365,533 as of Monday, July 10, 2017, based on the
latest United Nations estimates. Although 56 different ethnic groups are officially recognized
in China, 91. 51% of Chinese are Han Chinese. Only one other group – Zhuang – has a larger
than 1% share of the population. Other ethnic groups are growing at a higher rate than Han
Chinese, but because of the massive dominance of Han Chinese, this is not expected to
dramatically alter China’s ethnic composition.
China is officially an atheist state, and doesn’t survey its people on their religion. Because of
this, no accurate figures regarding religious demographics are available. China's constitution
guarantees freedom of religion, although any religious organization without official approval
faces state persecution. A survey taken in China showed that 85% of Chinese residents have
some religious beliefs, while just 15% consider themselves to be atheists.
About 3% of th e population is Islamic, with a Christian population estimated to be about 5%.
According to some sources, Christianity could represent as much as 20% of China's
population by 2025. Buddhism is practiced by 10 to 18% of Chinese residents, while over
30% pra ctice local folk religions.11

10 Business Environment in China: Political,Cultural, Economic Factors.
11 Business Environment in China: Political,Cultural, Economic Factors.

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China's Population Growth

According to current projections, China's population will finally peak in 2028 with a
shrinking labor force and an over – 65 population of 240 million. Only Japan has aged faster
than China.
Chin a has another very serious demographic problem due to sex -selective abortion and its
one-only child policy, resulting in a ratio of 120 boys for every 100 girls. It's estimated that
the percentage of men in their late 30's who have never married will quin tuple by 2030, and
this large number of unmarried young men will have a detrimental impact on population
growth.
By 2028, China is estimated to have 1.4 billion residents each, yet after 2025, it is expected to
decline.12
TECHNOLOGICAL ENVIRON MENT
Currentl y, about 70% of China's electricity is generated by burning coal. China already uses
more coal than the U.S., the European Union and Japan combined. In 2013, about 4.38 billion
tons of coal were mined in China and there is still an estimated 4.5 trillion t ons of remaining
coal reserves. With the coal plants now in China, the process is very innefficient and harmful
to the environment. It is estimated that every week to ten days another coal power plant opens

12 http://worldpopulat ionreview.com/countries/china -population/
Population 2013 2014 2015 2016

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somewhere in China that has enough capacity to serve all of the houses in Dallas and San
Diego. The combination of the tremendous reserves of coal in China, the dirty, inefficient
power plants currently in use , and the increase in number of these power plants is a recipe for
disaster. China will use i ts coal reserves because of the ever -increasing demand for energy
associated with Chinese economic development. Finding a cleaner way to convert Chinese
coal into electricity is imperative if China hopes to develop in a reasonably environmentally
friendly manner. 13
POLITICAL ENVIRONMENT
2017 is a big year for the Communist Party of China.
Next autumn, the party will host the 19th National Congress, which will likely determine the
top leadership and set up the country's political future.
Given the ellection of t he United States president, Donald Trump, China could face an
uncertain politcal environment.
LEGAL ENVIRONMENT
For the Chinese authorities, the major challenges currently arise from the effects of
development on the environment, from the flows that exist in the transformation of working
and living conditions and from risks due to legal insecurity and to shortcomings in
government and business governance. Despite the accomplishments of legal reform , there are
a tons other that have to be improved, such as the sectors of corruptions, corporate fraud,
insider trading and criminal scale violations of intellectual property . Given the fact that
corruption is a big issue, nepotism is being favored, and this is also an issue that needs to be
adressed to.
NATURAL ENVIRONMENT
Global warming is, we believe, the biggest issue that China comfronts with when it comes to
its natural environment. I t not only puts pressure on the environment but also it is a very
serious challenge to human development. The adaptability of global change is no longer a
distant scientific problem, but an urgent social, political and economic issue. China, as a
member of the global village, as well as a large developing country with a vast population, but

13 https://www.cia.gov/library/publications/the -world -factbook/geos/print_ch.html

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limited natural resources and relati vely poor ecosystems, faces even grater difficulties and
challenges in mitigating and coping with climate change.
China has a poor natural environment, and climate change has exacerbated the situation. As a
result, the essential geographical vu lnerability of certain disadvantaged groups means they are
facing even greater challenges. The greater challenges are the fragile ecosystems that the rural
areas from central and west China are facing.
The pove rty of the villages ,the isolation from the bigger cities and lack of infrastructure
make s them very vulnerable to natural disasters such as tsunamis and earthquakes . 14
2.2. INDIA'S MARKETING ENVIRONMENT ANALYSIS
ECONOMIC ENVIRONMENT
India experienced strong inclusive growth between 2003 and 2011, with average growth
above 8% and the incidence of poverty cut in half. Th ese gains came from past structural
reforms, strong capital inflows = and expansionary fiscal and monetary .These growth engines
stopped and faltered in 20 12, the cause of it being high inflation ,large current and fiscal
deficits which left little room for monetary and fiscal stimulus to revive growth
In 2014, the economy has shown signs of a turnaround and imbalances have reduced . Fiscal
consolidation at the central government level has showed a decline in both inflation and the
current account deficit. Confidence has been boosted by on -going improvements to the
monetary policy framework . The large decrease in the rupee has also helped revi ve exports.
Industrial production has recovered and business sentiment has rised , caused by a decline in
political uncertainty. Reducing macroeconomic variations further , is key to sustain the
consumer and the investor 's confidence but also to keep from happening, external

14 http://worldpopulationreview.com/countries/china -population

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vulne rabilities .

CULTURAL ENVIRONMENT
India is the home of a number of influential religions, it provides an i nteresting context in
which to evaluate the relationship between religious culture and economic behav iors. The
main religions of India includ e Hinduism, Buddhism, Sikhism, Islam, Christianity, and
Jainism. Compared to the other main religi ons of India, Hinduism provides little
encourag ement to change one’s situation in terms of material wellbeing. According to
Hinduism, th e purpose of life is to attain liberation and freedom from re -birth and the chain of
cause and effect, which means living to understand reality and not for the pursuit of material
things. 15
In connection to religion, indian people are very faithful to their traditions and cultures, that is
why it is important to mention the fact that, that's why, all the McDonald's restaurants that
exist in India, do not serve beef meat, no products with beef and that is also why they
included a vegetarian menu in the variety of products.
DEMOGRAPHIC ENVIRONMENT
Demography implies the structure and dynamics of population in a society or in a country. In
India's case, considering demograp hic compositions, the country has more than 1.2 billion

15 https://en.wikipedia.org/wiki/Hinduism

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population out of which 50% is below 25 years of age. This positions India as one of the
economies having growing youth population and has demographic dividend. The trend of
urbanisation is also incre asing in the country. These indicators are nothing but the factors
which provide opportunities for business. Because of its young population, India is bestowed
with the advantages of this demographic transition, making India m ore open to receive
opportun ities for more business.

TECHNOLOGICAL ENVIRONMENT
After Independence, India had basic problems like poverty , unemployment and development
of India . Ever since then, the Indian Govt. has taken many fo rward steps to expand the
technological development.
1. Establishment of technological and research institute
Indian government has opened 500 technological institutes for providing education to Indian
students. It has also established 1080 research institut es, like space research centre, medical
research centre and agricultural research centre ha ve developed India technically.
2. Positive Technical policy
India has strong and positive technical policy for technological develop ment. This policy
opens door to import technology from foreign countries for increasing agricultural and
industrial developments.
3. High Growth Rate of Information Technology in India

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In India, the IT sector is developing with 35% growth rate, India is second country after
China who is using internet at large scale for e -commerce , e-education and e -accounting .
4. Incentive for promoting Technology in India
• Indian Govt. has given 100% income tax exemption for expenses incurred in research of
technology in I ndia.
• State financial corporation is uplifting domestic technology by supporting finance to
domestic Industries.
POLITICAL ENVIRONMENT
The Indian constitution g ives significant administrative and legislative power to state
governments. States sustains 57% of total expenditures, and h ave administrative control over
police, provision of public goods, labor markets, land rights, mone y lending, state
public services, and retail taxes Surveys indicate that among all levels of government, the
majority of Indian citizens hold state gover nments responsi ble for provision of public
goods and public safety.
Even though the technological sector is evolving the roads or electricity infrastructure was
and still is a major or severe obs tacle to growth, and many firms have resorted to private
provision of these goods .
LAW ENVIRONMENT
India's environmental laws are a result of international conventions, commitments and judicial
pronouncements, reminds Dutta. Any changes in it will have to adhere to those global laws.
NATURAL ENVIRONMENT
There are many environmental issues in India. Air pollution, water pollution, garbage, and
pollution of the na tural environment are all challenges for India. The situation was worse in
the past, but at t he present time , India has made one of the fastest progress in the world, in
working at its environmental issues and impro ving its environmental quality. Still, I ndia has a
long way to go to be as developed as the its neighbours . Pollution remains a major challenge
for India.
Major environmental issues are forest and agricultural degradation of land, resource
consumption (such as water, mineral, forest, sand, and rocks), environmental degradation,

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public health, loss of biodiversity, loss of resilience in ecosystems, livelihood security for the
poor.
Air pollution, poor management of waste, growing water scarcity, falling groundwater tables,
water pollution, preservation and quality of forests, biodiversity loss, and land/soil
degradation are some of the major environmenta l issues India faces today.16
India's population growth adds pressure to environmental issues an d its resources. In recent
years, a r apid urbanization has taken place, but this has caused a buildup of heavy metals in
the soil of the city of Ghaziabad, and these metals are being ingested through contaminated
vegetables. These h eavy metals are hazardous to people's health and are known as being
carcinogens .17

16 https://www.cia.gov/library/publications/the -world -factbook/geos/print_in.html
17 http://worldpopulationreview.com/countries/china -population

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CHINA'S SWOT ANALYSIS
In order to understand how McDonald's business works on the market in China, below we
have a SWOT analysis of the country.
STRENGHTS WEAKNESSES
 China is continuing to open up
various sectors of its economy to
foreign investme nt.

 With its vast supply of cheap labor,
the countru remains the top
destination for foreign direct
investment in the developing world.

 China's expanding economy is
gradually giving it greater clout in
the international affairs, which will
allow to build politically important
ties. o Foreign companies continue to
complain about the poor protection
of intellectual property in China.

o Chinese corporate governance is
weak and non -transparent bu
western standards, which is a
considerable risk for foreign
compa nies in choosing the right
local partner.

o As with any other one -party state,
China's political system is unstable
and unable to respond to wider
changes taking place in society.
OPPORTUNITIES THREATS
 China's ongoing urbanization and
infrastructure drive will provide
major opportunities for foreign
investment in landlocked provincies
as well as the transfer of skills.

 The Chinese goverment is giving
more protection a nd
encouragement to the private
sector .

 China is actively expanding its
political and economical ties with
major emerging markets such as
Africa and Middle East.  China's government will block
attemps of the foreign firms to take
over assets of national importance.

 China is experiencing rising labor
costs, promoting some investors to
turn to cheaper destinations such as
Vietnam.

 Growing corruption, widening
inequalities, increasing rural
poverty and environmental
degradation have lead to an
increase in social unrest in recent
years.

China's economic modernization presents great opportunities to U.S. businesses. If China
strenghts their economic – performance and enhance their long – term economic security, U.S.
companies must move quickly to capita lize on the world's fastest growing market. Despite the
risks, problems and challenges, there can certainly be rewards for U.S. companies that are
planning to operate in China.

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2.4. INDIA SWOT ANALYSIS
Just like we did below with China, we also have a SWO T analysis of India.
STRENGTHS WEAKNESSES
 Availability of skilled manpower.

 Extensive Higher Education.

 Diversified nature of the economy
system. o Inequality in prevailing socio
economic conditions.

o Poor infastructural facilities.

o Rural urban divide , leading to
inequality of high standards.
OPPORTUNITIES THREATS
 Huge domestic market.

 Huge natural gas deposits found in
India.

 Huge agricultural resources,
fishing, plantation crops, livestock.  Global economy
recession/slowdown.

 High fiscal deficit.

 Volatility in crude oil prices across
the world.
Even though India faces a lot of weaknesses and threaths, specialists say that its economy will
be the third largest by 2025, right after USA and China.

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CHAPTER III. MCDONALD'S ANALYSIS ON THE INDIA AND
CHINA MARKET
In this chapter three of the paper we will talk about each company of the countries, the
marketing mix and their strategies on the Chinese and Indian Market. It will also be presented
some examples of the menus from each McDonald's and we will see the differences but also
the similarities of this company when it comes to these two countries.
3.1. Fast food in the Chinese Market
"Fast food" is the translation of "kuai can" that literally means "fast and convenient food" or
"quick meal." As we mentioned before, the fast food industry entered the chinese market quite
late and the first fast food US chain which entered the market was Kentucky Fried Chicken
(KFC.) During the past 12 years, within the chinese fast food industry, exists the concom itant
and competitive pattern of traditional and modern, Chinese style and Western style, high
grade and low grade, has come into existence. Nowdays, in urban China, dining out is
increasingly populat with consumers. It has become a big business for wester n restaurant
chains and local entrepreneurs, Fast food restaurants are flourishing business opportunity and
have rapidly become a normal part of urban life.
At the present time, with the rapidly develo ping and expanding, as a popula r life -service
industr y, fast -food has started to occupy market share in food and beverage market. The
consumer market and supply market of the fast -food industry has basically taken shape, and
fast-food has become an indispensable demand of tourist, student the middle class an d
businessman, it looks like a popular industry.
3.1.2. The Main Characteristics of fast food in Chinese Market
China is a big country and the differences between different regions are very obvious. The
main performance of differences are culture and the level of economic development, both
which impact the catering industry. It's easy to find that development levels of catering
industry are very different throughout the eastern, central aareas and western provinces of
China. The eastern part has the highes t retail sales of catering industry, and the central part
has the fastest growth rate. 18

18 Comparative Marketing Mix between China and India: McDonald's.

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Chinese fast food gives emphasis to the usage of grains, beans and vegetables. The style of
cooking uses techniques which prefer deep frying to boiling. Compared to we stern fast -food,
chinese fast -food appears more nutritional. Most of Chinese cooks tend to prefer food which
is low in terms of calories. Also, when it comes to dinning, at the table it is not acceptable to
not have chopsticks.
At last, symbolization is ho w people imagine or regard something, which reflects the ways
people are thinking, for example, the colour. To explain this, it's easy to realize the meaning
of red; it is almost opposite between Eastern and Western countries. Red decoration in
festival, s uch as red lanterns, red Chinese nodes and red bangers. By contrast, red stands for
blood and revolutions in the Western countries.
3.2. McDonald's China Marketing Mix
Product and Position
The first McDonald's restaurant was located in the bustling east g ate in Shenzhen in China on
October 8th, 1990. And in April 1992, McDonald's opened a restaurant on Beijing's
Wangfujing Street, which became the world's largest McDonald's restaurant. The menu of
McDonald's core product in China is described as follows :
Hamburger Chicken Side Choice
Big Mac,
Filet-O-Fish,
Spicy Chicken Filet
Burger,
Cheeseburger,
Double Cheeseburger,
Egg Beef Burger,
Quarter Pounder
Cucumber Vegetable.

McChicken,
Chicken
McNuggets,
Spicy
McWings,
McCrispy
Chicken
Wrap,
Spicy
Chic ken
Sandwich. McFlurry,
Hot Tea,
Neastea Ice
Rush,
Coca -Cola,
Fanta,
Qoo Apple
Juice.
Chinese McDonald's Menu

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Now McDonald's has 670 restaurants in China, and they are located in 25 provinces, 108 in
sub adm inistrative areas . McDonald's marketing strategy in China was always from the start
to make the company what it is truly about and that is, children, parents, family. Until now,
McDonald's has successfully set up a brand as "family" fast -food in China. The y focus on
selling the products to children, and then consideri ng the parents and young people.
 Price
The Chinese products believe it or not are more expensive than local fast food in China,
popular options like the Filet -O-Fish, Double Cheeseburger, McNug gets, McPuff, and the
Mala Pork Burger are all getting a discount. China is developing country with a lower
economic level than the American level so considering the customer's consumption level,
McDonald's tend to use low -price strategy in this market. Th e same product would get
different prices from the Chinese and American market, so don't be surprised if you find that
Big Mac is much cheaper in Beijing than in Boston.
At the end of 2008 when the economical crisis began, Chinese economy dropped down the
pace of expansion and its growth fell to 6.8 per cent in the spring of 2009. Facing with that,
McDonald's cut down about 40% of its products' price in the beginning of 2009, just so they
could attract customers and lift the lackluster sales. 19
 Place & Cooperation Partner
When it comes to opening a new restaurant, McDonald's goes by opening them near the large
scale business establishments and choose the area which can easily be adaptted to the
American fast -food. This is one of the factors that lead every branch into success, even though
they usually don't suggest spending too much money in developing new markets, but more to
find the markets which are suitable to develop to McDonald's. Before opening the restaurant,
they go a nd do a market research, gathering every information they can find, such as, the
amount of population, economic level, buying ability and the potential development scale,
income levels, development of shopping opportunities and so on, in order to find the right
place where to open the next McDonald's restaurant.
Another strategy they use to attract more customers, is delivering coupons. Customers can
download the coupons from Mc'Donald's website. According to a study, e -coupons are very

19 Comparative Market ing Mix between China and India: McDonald's.

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common in western coutries, however, because of the barriers in real life and customers'
habits, coupons have not been widely used in the Chinese market. When developing the
business in China, the team chose to cooperate with the Cool -Peng Network. With the help of
this net work's wide influence and huge market, McDonald's easily delivers the e -coupons to
the consumers in the Chinese market.
Another strategy that I find interesting and very up to date, is the new feature that they added
and that is, the "create your taste" feature. The feature gives you the opportunity to choose
your favorite ingredients and make your own McSandwich.
 Advertisement
When we talk about McDonald's advertisements, the company uses different ones in different
countries due to the fact that each country is different and it comes down to different regions,
cultures, customs and customer behaviours.
Their McDonald's ads don't go far away from their cultures and traditions. They use a warm
picture, showing a family enjoying their meal, the red colors still being present in the ad, and
also, when it comes to Happy Meals, the gift surprise for the children, are still cartoons from
the country.
McDonald's tends to establish a good relationship with the consumers. Thus, the
advertisements are alwa ys emphasizing the traditional customs and values which are
cherished and followed by Chinese people, such as the celebration of Chinese New Year,
New Year wishesm calligraphy and so on.
The team always has in mind whenever they want to bring something ne w to the market, in
this case McDonald's, the Chinese culture, therefore the McDonald's restaurants are the ideal
place for young lovers and couples to go. It is clear that when they make an ad, no matter if
it's a tv one, which is the most common, or leaf lets, the romantic atmosphere has to stand out.
3.3. The 4Ps of McDonald's
3.3.1. PRODUCT STRATEGY
As we mentioned before, the main target of McDonald's is family. In a way of viewing and
understanding the consumer's behaviours better, McDonald's targets t he right customers so

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that they can accept eastern fast -food culture easier. The product strategy is always influenced
by the consumer's behaviour.
More so, according to a lot of marketing researchers, the product is a tangible object.
Intangible products are often service -based. When McDonald's wants to expand and develo p
in a new market with different national culture, in this case China, the product should be
suitable to local customers, such as the product information. Chinese customers tend to prefer
the food with low calories and Chinese fast food gives emphasis to t he usage of grains, beans
and vegetables. Focusing on this, McDonald's keeps bringing out special products every year
to adapt to local people in China, some of these products cannot be found in the American
market. However, besides popularizing some speci fic products which are suitable to this
market, McDonald's still makes great efforts on keeping the original flavour of McDonald's as
muc as possible. Consumer values their buying behaviours affect the product strategy very
obviously.
We mentioned below that Chinese people prefer food that is low in calories, therefore the
McDonald's Chinese management, decided to add information on ingredients, calories and
carbs on the packaging. W e believe this kinda of strategy will make customers happy to know
what exactly they are eating.
As we all know that the family is the main targeted markting customer, McDonald's doesn't
want to change their core products in Chinese market. More so, they always add some kinds
of localized products into the menu, such as the Spicy Chicken Sandwich, scrambled eggs, hot
tea and so on. They have a group in Hong Kong where they reshearch new food with typical
Chinese elements. Therefore, we can say that when a company wants to enter into a new
market with different culture, its marketing strategy of product is affected by loca l culture
very obviously.
Family is an important part for the Chinese people and when McDonald's entered the Chinese
market, they had that in mind. The people love to spend time with their loved ones and the
managers designed the locations in such way tha t each customer that comes in with their kids,
have the privacy they need. Inside the restaurants, there are booths that give the privacy.
3.3.2. PRICE STRATEGY
As mentioned before, when entering the Chinese market, the low -price strategy is chosen to
use. The price of the product in China is much cheaper than in America. China is a developing

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country, and the per capita income in the country is lower than in the United States. Thus, the
operators of McDonald's chose to use low -price strategy in Chinese market so that the
customers have the ability to purchase its product. In 2009, McDonald's started ent ering the
largest low -cost marketing with the plan of defeating its competitors. The product was sold at
the same price level as 10 years ago. Because of the economic crisis which happened in the
end of 2008 , more and more restaurants and shops had to red uce prices in order to attract
customers and lift the depressed sales in China. And during this period, many consumers tend
to seek extra valuable products and services. The products with high quality and low price
become more and more popular than before. Considering this social phenomenom,
McDonald's decided to reduce its price in order to adapt to the market environment. To sum
up, price strategies are influenced by consumer behaviour, such like consumers' perceptions,
expectations and ability to pay an d so on. Otherwise, it is also affected by the value of
consumers.
3.3.3 PLACE STRATEGY
Social culture factors such as local law and government policy, religion, language, customer
buying behaviour could affect place strategy in different ways. Having McDonald's as an
example, the manage r mentioned that the company doesn't suggest spending too much money
creating new markets for their products, but to find suitable ones. In fact, McDonald's tends to
set up stores which are near large -scaled business establishments and just choose the plac e
which accept American fast -food, such as hamburger. In China, the eastern part has higher
retail sales in catering industry, and urban people are the most frequent customers of fast food
restaurants. The choice of address of opening stores could be affec ted by local economic
developing level and demands of customers. Thus, the company has done a lot of market
research and information collection before making decisions, such as the population,
economic level cocnsumption power and the development scale and potential, income level,
development of shopping opportunities and so on. All these considerantions would influence
consumer buying behaviours. Thus, the place strategy is affected by culture very greatly.
3.3.4. PROMOTION STRATEGY
A good promotion strate gy can impel consumer behaviour which is one of the determinant
motivations of consumption. Promotion has four distinct elements – advertising, public
relations, word of mouth and point of sale. Through analyzing, apart from the ones mentioned

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below, we fin d that different aspects of promotion strategy have different impacts from
culture.
Numerous researchers have examined the impact of culture on various aspects of consumer
behaviour, such as persuasiveness of advertising appeals, attractiveness of product options,
brand extensions evaluations. And as one tool of advertisement, language is very important .
There is no doubt that the language used in the ad used in the Chinese market, is Chinese. In
advertisement, McDonald's gives more attention to the cultu ral transmission in China.
Because the biggest target of McDonald's are children, families with children, when the
company is implementing the ad, McDonald's uses some symbolic cartoon characters and free
toys to attract those people. Also, in order to sho w the respect to the culture, McDonald's
chooses to integrate the Chinese value into its ads. This style of advetising is accepted and
enjoyed by Chinese customers much easier. Evidently, the advertisement strategy is affected
by culture, including local l anguage and value in Chinese market.
Services
Promotion activities play a role of introducing the product and service, motivating and leading
the demand of the customers and also making the products and services be sold easily.
(Kotler, 2001). 20In west, fa st-food operations achieved a great success, for saving time; it has
become the first choice for workers. This idea seems to have been also introduced in China.
People enjoy the highly efficient and clean services which are carried out in a different way
from local culture. As we mentioned before, some 24h services were opened only in the
developed cities such as, Guangzhou, Shangai, Shenzhn and Beijing, due to the fact that
different economic levels might lead to different demands of customers which should be
distinguished. Thus, this kind of services are decided by the demand of customers. That
means it could be influenced by the local culture, especially, by consumer behaviours.
What we also find interesting is the order online feature that they have added. A feature that
in our experince (as wr iter of this paper) we've never seen, only knowing of the drive in/drive
through feature.
Although we believe the "order online" feature is a well thought strategy that is in step with
the modern technology from today and for sure it makes things more eas ier for the customer.

20 Promotion definition, Kotler, 2001

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The "order online" feature is implemented in both China and India.
3.4. STRATEGY AND REPOSITIONING THE BRAND MCDONALD'S IN INDIA

Despite globa l showdown, Indian economy is resurgent and offers fresh opportunities as well
as challenges to global players. McDonald's still treats the Indian market as one of their young
markets although what they have achieved in 15 years here , would have been achieved a lot
harder if it were another market . Given the poor environment that India faceses, it was pretty
easy and quick for McDonald's to addapt and succeed in the Indian market. McDonald's
philosophy of Quality, Service, Cleanliness and Value is the key behind its stellar service to
customers. However, there is still a huge potential in the Indian food market that remains
unused in terms of family restaurants, quick service restaurants and breakfast eateries , which
should be adressed and the managers should do more than the mere change of the logo and
signuature when it comes to rebranding the products . There is a need to critically evaluate the
right marketing mix, which is what we will do in this part of the chapter.
3.4.1. Fast Food Industry in India
The Indian fast food industry has evolved over time and always has been in line with the
needs of people of all ages and segments. There are enterprises which s cale from one room
outlet to a chain having hundreds of outlets like McDonald's in India.
As per new research report "Indian Fast Food Market Analysis", India is blessed with one of
the fastest growing fast food markets in the world. The indian fast food market is growing at
an annual growth rate of 30 -35%. Although the market has witnessed robust growth i n the
past couple of years, it remains largely under resolved and intense in the metropolitan cities.
Therefore, the r ural areas are still untouched by the fast -food industry due to the lack of
developed environment and infrastructure
In 2013, the global fast food market had a value of $200 bilion, an increase of 29.3% and a
volume of 94.7 billion transactions, an increase of 10.4% since 2008.
The consumer spending on process ed food has increased at an average rate of 7.6 per cent
annualy from 2008 to 2010 and until 2013 it rose to an average of around 8.6 per cent.

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Almost all big fast food brands of the world have succeded in making their presence felt in the
country most of them are posting appreciable growth. 21
We have learned that the average Indian spends just $11 as compared to his Chinese
counterpart who would ideally spend $20 on fast food .22 Yet, if we see the Indian spending on
food in totality, they spend 23% of their earings on the same while the Chinese spending is
20%. So, what can we understand from this is that the Indians, prefer to eat at home and
woul d spend on cooking ingredients over fast food. We believe that the majority of people
who choose to eat at McDonald's are probably the younger generations, the teenagers,
whereas the ones who choose to eat at home are the people from the older generation.
However, this doesn't spell good news for the industry. Indian market is expected to recieve
new entries on the market with a vengeance with international giants like Dunkin Donuts and
Starbucks being amongst them and we are curious to see how the indian people will react to
the new entries on the indian market.
Business Model
To understand better the plan of McDonald's when it comes to implementing strategies, here
we have their business model, which is a franchise -based model coupled with strong
corporate branding :

Product Quality Product Consistency Excelent Ambience
Consistency in Service Exhilarating Experience Value for Money

Customer Loyal ity Word of Mouth Repeat Purchase High Quality
Corporate Branding Strategy

21 Indian Fast Food Market Analysis
22 Euromonitor International and Credit Suisse Emerging Consumer Survey

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McDonald's realized very early in their business that in order to achieve happiness amongst
customers, is to have happy, motivated and committed employe es who had to understand its
customer, so they went with the customer first strategy . In India they adopted the same
strategy.
Coorporate Branding – McDonald's describe a corporate branding framework that is based on
three elements:

McDonald's Service Pyramid
McDonald's Efforts of repositioning its Brand – Recently, McDonald's management has
decided to change its strategies. They now want to provide not only a place to sit and eat but
also an experience that can be enjoyed by their customers. 23

23 Strategy and Repositioning the Brand McDonald's In India Customers
Middle
Level
Managers Front Line
Employees
Top Level
Managers

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Corporate Branding
The recent McDonald's rebranding strategy is a part of this thou ght and vision. McDonald's
road to success has not always been hearts and flowers . They have been receiving very bad
reviews from the media media's after they exposed the don'ts of the unhealthy menu of
McDonald's and showed to the world that people in the US was facing a generation suffering
from obesity and he art diseases among many more ali ments.
Besides that,there were employment issues internally which showed that they did not treat
their workers well which is why they rethought their strategies again and came up with new
objectives that strength ened their previous aims and gave a new direction to them as well. 24
.
The 4ps of McDonald's India
 Product : McDonald's has intentionally kept its product depth and product width
limited. McDonald's studied the behaviour of the Indian customer and provided a
totally different menu as compared to its International offering. I t dropped ham, beef
and mutton burgers from the menu. India is the only country where McDonald's serves
vegetarian menu; even the sauces and cheese used in the country are 100% vegetarian.
McDonald's continuously innovates its products according to the cha nging preferences

24 Strategy and Repositioning the Brand McDonald's In India Corporate
Branding Strategic
Vision
Coorporate
Image Organization
Culture

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and tastes of its customers. McDonalds bring with it a globally reputed brand, world
class food quality and excellent customer specific product features.
McDonald's Product Success
 Place: Nearly 50% of USA is within a 3 minute drive from McDonald's outlet. There
is a certain degree of fun and happiness that a customer feels each time he dines at
McDonald's. There are certain value propositions that McDonald's offers to its
customer based on their needs. It offers hygenic environment, good ambience and
great service. Now McDonald's have also started giving inte rnet facility at their
centers and they have been playing music through radio instead of normal music.
There are certain areas for children where they can play while their parents can have
some quality time together.
 Price : This is the most important part of the marketing mix as this is the only part
which generates revenue. All the other three are expenses incurred. The price must
take into consideration the appropiate deman -supply equation. McDonald's has certain
value pricing and bundling strategies such as happy meal, combo meal,family meal to
increas overall sales volume.
 Promotion: There are three main objectives of advertising for McDonald's to make
people aware of an item, feel positive a bout it and remember it. The right message has
to be communicated to the right audience through the right media. McDonald's does Engineering

Possible &
Feasible
Useful & Desirable

Design Marketing

Sellable &
Distributable

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its promotion through television, hoardings and bus shelters. They use print ads and
the television programmes are also an imp ortant marketing medium for promotion. 25
Some of the most famous marketing campaigns of McDonald's are:
 You deserve a break today, so get up and get away – to McDonald's
 Food, Folks and Fun
 I'm lovin' it!
3.5. Competitors Analysis
KFC in China
KFC enter ed Chinese market in 1987 and it opened its first restaurant in Beijing. It then
started development in this country which has the biggest population in the world. On 25th
June in 1996, the one hundredth restaurant was opened in Beijing which has the rema rkable
meaning of KFC's Chinese market development. According to the report from AC Nielsen
Company, KFC was the top one among all the foreign companies in China. 26
Product and Position
KFC Chinese Menu
Chicken Burger Side dish Other
Chicken Loaf Hot and Spicy
Drumstick Corn salad Sundae
Original chicken Triple Crunch
Zinger Sandwich Porridge Pastries
Roast Chicken
Wing Crispy chicken
pastoral burger Soup Mashed
Potatoes
Chicken Strips Cheese egg
burger Fried bread
stick Black Tea

Beside s of what is m entioned in the table above, there are also some new products that are
sold in the Chinese market and some of them have special recipes for Chinese people. For
instance, original chicken in China involves mixing all the ingredients and dig chicken pieces
in beaten eggs, then turning them over in a regular bread crumbs, finally plunging them into
the secret spices and heating them in the oven at 350 degrees.

25 Strategy and Repositioning the Brand McDonald's In India
26 KFC's China's Recipe for Success.

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Just like McDonald's, KFC looks to find new taste in order to fit the Chinese customers
because it wo uldn't be easy for KFC to succeed worldwide if it only supplied the American
tastes giving any consideration to the diversified cultures and customs of local consumers in
other countries. In addition, KFC also offered the seasonal vegetables in their resta urants, in
spring they offer the bamboo shots and besides that some of the dishes are cooked by adding
Chin ese spices, such as aniseed, Chinese cinnamon and sesame oil.
The main target group of KFC in China is Chinese families just like McDonald's . They focus
on the young peop le especially, who can easily and quickly adopt foreign cultures and new
ideas .
The 4P marketing strategy that describes the best reflection of the target market, it is believed
that the managers of transnational corporations should provide appropriate products according
to the local consumer values and buying behaviours of the certain market. When trying to get
a balance betwee n standardization and adaptation, one of the important factors which affect
the international management of products and services is the culture factor. From the
perspective of cross -culture, people in China are generally curious about new things. In order
to meet this curiosity to new products, KFC always launch new products quickly and thus win
a lot of new customers in China. By wrapping the "core" of Chinese traditional dining culture
with the "appearance" of the western food, KFC has gained the success of carrying out the
new product strategy in cross -culture marketing. KFC always launch new taste of products in
different seasons to cater to the needs of Chinese customers. The Chicken Roll of Old Beijing
and the beef wrap, for instance, demonstrate the innovation and creation of products in KFC
combined with the characteristics of Chinese culture providing more choices to the customers.
The product strategies implemented by KFC in the Chinese market, including the season of
launching new products, the t astes of food, the package style of chicken wings, are all deeply
influenced by the local culture of China.
Price
In the Chinese market, consumers can seldom hear the information about reducing the price of
KFC. On the contrary, KFC sometimes raises the price of its products in recent years. At the
beginning of 2012 they raised their price to some products, however that didn't stop the
customers coming to KFC. It's always gonna be a come and go strategy because the company
has to adapt to the change of market condition. In the end, KFC reduced the price of som e

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products and carry out some promotion strategies to attract customers. This promotion was
implemented in about 1400 KFC restaurants and 31 provinces in China.
Moreover, the young people in China often accept new things more quickly and easily, they
are also the important target group of KFC. Students sometimes can get a lower price in some
KFC restaurants. It can also reflect that the price strategy of KFC in China is affected by the
buying behaviour of Chinese consumers.
Place
When it comes to choosing a location where to open the restaurant, KFC has its own standard.
During this process, the political risk, the financial condition, the amount of population and
the specific culture of some certain areas are all the considerations to KFC. In addition, in the
middle and south -west of China, people of some minority nationalities often live together in
certain areas. They share the same language or a specific dialect and the similar value and
customs, eat food with the same test and keep the similar habits. To meet these people
demands, KFC opens several restaurants in this kind of places. The menu of products and
decoration of these restaurants are different from others. Therefore, we can see that the
Chinese political risk and the financial condition, the d egree of concentration and the minority
nationalities' specific dialect and customs can influence the place strategy of KFC well and
truly.27
Promotion
KFC implements some specific promotion strategies according to the Chinese culture in order
to do the sam e business well, including advertising, take -away service and the strategy of
choosing cooperate partner in China.
Customer values of a specific culture often play an important role when the marketers try to
make decisions, which help to enter a foreign m arket. Customer values can influence the style
and appearance of the advertisement . Since the family members in China often share the
similar value and most Chinese people consider that it is necessary to keep on the wonderful
family traditions such as res pecting, loving and supporting the elderly, helping others,
friendship between individuals and so on. Thus, many ads of KFC in recent years try to reveal

27 KFC's China's Recipe for Success.

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the background of common Chinese families.Evidently, the ads strategy of KFC is affected by
the langua ge, customer values in Chinese cultural environment.
Services
In some of the biggest cities of China, KFC restaurants supply take -away service so that the
customers can get their food and take away immediately. Moreover, customers in 16 cities of
China can book food online or by phone. Then the order will be answered soon, food will be
delievered to the appointed place in a short time. Besides, some KFC restaurants operate for
24h a day.Thus, the 24 -hour-operated and take -away services which are carried out in China
are also influenced by the local cultural environment. People's life styles and attitudes play the
most important role in affecting this tragedy.
KFC in India

KFC is the largest brand of Yum Restaurants, a company that owns other leading brands such
as Pizza Hut, Taco Bell, A&W, and Long John Silver. Renowned worldwide for it's amazing
tasty food, KFC is growing rapidly and has a presence in 20 countries with close to 107
restaurants.28
We have to add the fact that inside the restaurants they have Wifi but in order to access it, you
have to answer a fe w fun questions on your phone, before enjoying the free internet. We
believe this could be seen as a fun, interesting strategy.

28 KFC in India: Study Case.

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CONCLUSIONS

The intention of this paper was to present the two countries, China and India, a bit of their
history and their environment but more so, how the fast food industry is perceived by the
chinese and indian population.
We analyzed the McDonald's chain from the perspective of both countries, trying to
understand the marketing strategy that each country adopts for the biggest fast food chain of
the world.
Both countries have different populations, different traditions and cultures and in order to
make a business like McDonald's work, the marke ting strategy management had to addapt to
the culture and traditions of the countries. You have to addapt the business you are bringing in
a new country to the lifestyle of the people that are living there.
Besides that we analyzed the 4P's of McDonald's in both China and India, in order to
understand their marketing strategy which makes the fast food business work so well. We also
talked about a bit the competition, in this case KFC, in how it's better or less than
McDonald's, what is that brings differen t from McDonald's and which one the people prefer
most, McDonald's or KFC?
As we explained below, China and India are two different countries and in order to make
things easier, we decided to have a comparison table between the two with what each
McDonald' s has in each country.

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COMPARISON: CHINA AND INDIA

CHINA INDIA
They introduced the Seafood Soup and the
Corn Soup. Never uses beef. Only chicken and pork
meat.
Besides the traditional BBQ, Sweet&Sour
and Honey Mustard sauces, the chinese added
a Chilli Garlic Sauce, which is popular in
China. They have home delivery service.
They also introduced a local Value Menu,
where the y were offering a smaller and a
cheaper variation of the original product,
given the fact that Chinese people are not big
eaters of fast -food. They developed a 100%
They provide information about their
products in cooperation with their global
nutrition team, information that can be found
on the packaging. They also have samples with the core
products.
Create your own taste Some of their products are spicy
Egg & CheeseBurger McSpicy Chicken
Ham N'Cheese Burger Egg Wrap

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SOURCES
1. History of McDonald's, Wikipedia.
2. McDonald's: Behind the Golden Arches.
3. McDonald's Anual Report, 2016.
4. An analysis of the devel opment of the Chinese fast -food, Study Case.
5. Cultural adaptation pattern analysis of McDonald's, Study Case.
6. Rural Marketing in India: Challenges and Opportunities, Study Case.
7. McDonald's Quirky Campaign for new products, Article.
8. McDonald's China, Study Case.
9. American Fast Food in Chinese Market, Study Case.
10. How can foreign companies enter the chinese market, Study Case.
11. OECD Economic Outlook, 2017.
12. Comparative Marketing Mix between China and India: McDonald's.
13. Strategy and Repositioning the Brand McDonal d's In India
14. KFC's China's Recipe for Success.
15. KFC in India: Study Case.
16. https://www.cia.gov/library/publications/the -world -factbook/geos/print_in.html
17. https://www.cia.gov/library/publications/the -world -factbook/geos/print_ch.html
18. https://www.wttc.org/ -/media/files/reports/economic -impact -research/countries –
2017/india2017.pdf
19. https://www.wttc.org/research/economic -research/economic -impact -analysis/country –
reports/

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ANEXES

McDonald's Chinese Menu

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McDonald's Indian Menu

Source: WTO, International Trade & Tariff Data

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