Question

) There has been rapid growth of western fast food outlets in both India and China. McDonalds, identified with the Big Mac and beef, has established itself as the leading fast food chain outlet in India, in a country where the majority of people not only do not eat beef but do not even want to eat in a restaurant that offers beef. In contrast, Yum! Brands, the operator of KFC, Pizza Hut and Taco Bell has been more successful in China. In fact China is one of the few countries in the world where McDonalds is not the number one western fast food chain. Yum, on the other hand, is planning to use its successful experience in China to expand in India and challenge McDonalds. Do your own independent research and discuss the following:

a. What economic, social and demographic changes in Asia motivated McDonalds and other western fast food chains to enter the Asian markets in the 1990s?

b. What socio-economic groups did they target, and why did they pick those segments?

c. What strategies did they adopt to overcome (a) barriers due to consumer preferences, such as the anti-beef attitude in India in the case of McDonalds

d. How did McDonalds cope with lack of domestic supply chains and what specific marketing strategies did they use to appeal to the Indian consumer e. Critically discuss the challenges facing McDonalds and Yum in India and whether the models will need to be further changed if economic growth slows.

Answer 1

a) .In 1990, when McDonalds was first introduced to China, fast food restaurants from western countries were not widely accepted in China. In fact, many Chinese had never heard about the typical menu such as French fries and hamburgers that were offered in fast food restaurants. Businessmen were also curious about McDonald’s management mode. NBC news observed “when McDonald’s first opened in China in 1990,

The number of restaurants that have been built in mainland China indicates the drastic change in the development of McDonalds, and the total number of employees also suggests that this successful fast food chain has occupied most food retailing environments in mainland China.

b)

Segmentation is the dividing of a populations into groups according to certain characteristics. Dudovskiy (2016) claims that McDonalds uses these segmentations and segmentation criteria:

• Geographical; region, density
• Demographical; age, gender, life-cycle stage, income, occupation
• Behavioural; degrees of loyalty, benefits sought, personality, user status
• Psychographic; social class, lifestyleTargeting implies choosing specific groups identified as a result of segmentation to sell products
• Targeting implies choosing specific groups identified as a result of segmentation to sell products
• However, according to Carol Sagers (McDonald’s Director of US Marketing) the company seeks specific segments of its target population,and then customise or position their products to each segment

C).  Many questioned why McDonald's was serving beef meat in India where 80 percent of the 1.3 billion people are Hindus. The McDonald's menu in India has no beef or pork products, serving instead a range of vegetarian options as well as chicken and fish.

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d)

The biggest problem McDonald faced was during the launch of its product in India was the public image it was carrying as an International food chain and not matching Indian standards. There were concerns raised about how the burgers are made in McDonalds. Offering the cheapest burger in the world was not easy.

For that, McDonalds 5P's marketing strategy that follows product, place, price, promotion and lastly people. Product consists of how the company must design, manufactures the products which improve the experience of every customer. Product refers to physical product and services provided by the business to its patron