The product mix strategies that McDonalds has taken in the expansion Essay

The product mix strategies that McDonalds has taken in the expansion to the markets of the foreign countries - Essay Example This research will begin with the statement that in simplest language, international marketing can be defined as a process of planning and executing marketing mix strategies on a worldwide scale to take the advantage of the structural and operational differences between nations to benefit both the individuals and organizations. The product mix strategies include the product type, promotion strategies and price as well as distribution channels. With the advent of globalization, international marketing became an integral part of the firm’s growth strategy, primarily to increase the profit base and diversify the market risk associated with a concentrated local market. Globalization has also improved the demand from overseas customers, which is giving to be a lot of incentive to the firms to get lured into the foreign markets. The attitude of the governments in the recent times is fuelling the drive of globalization and multinationals. McDonald’s which is one of the leading American restaurant chains, founded in 1940 by Dick and Mac McDonald, has successfully expanded its business through franchising into countries across the continents. The successful company has a wide range of eatables to cope with the evolving taste of the customers. The quintessential product is hamburgers and cheeseburgers. The additional platters include chicken, French fries, breakfast essentials, soft drinks and desserts. The company began to witness worldwide growth and success when Ray Kroc joined the company as a franchise agent and bought the chain from the McDonald brothers. The company has been using its corporate logo since 1968. The boom of the fast food industry began from 1975 when fast food sales in America had soared to 900% from 1975 to mid-2000s. This provided a huge boost to the fast food restaurants to expand chains of outlets across the country. McDonald’s made the first move towards establishing a chain of fast food restaurants through franchising in the 1960s. It was the first restaurant to have introduced the concept of mass food production in the food business and become a market leader in paving the way food is to be marketed, distributed and sold. The fast-food industry also depends to a large extent on the supply chain for an adequate supply of raw materials. The tight integration of the agents implies that the growth of the fast-food sector chain has deeper resonance on the entire economy. Rationale for Internationalization Globalization has hugely increased the number of jobs and working hours in both the developing and developed countries. This implies that demand for quality fast food has also increased to a great extent owing to the young working professionals. The successful fast-food chains of the West saw this as a great opportunity to cash on such expansion. Since 1990s, the attitude of the government in the developing countries has been to reduce the market barriers and trade restrictions have made the process of internationalization more convenient process for the firms. Mode of Entry It has been observed from the experiences of the leading giants in the fast-food industry that out of the various methods of modes of entry, which includes exporting, licensing, Joint venture, Franchising, Strategic alliance and Subsidiaries (wholly owned or partly owned), fast food restaurants have actively considered franchising as the most convenient method. The experience of McDonald’s reflects the same strategy. Franchising is chosen as the most common mode of entry by the big businesses because the investment burden and the liability of the franchisor are greatly reduced owing to the franchise.