Understanding the Marketing Expansion of McDonald in India
Table of Contents
Chapter 2: Literature Review.. 3
2.3.1 The Importance of Market Expansion in Multinational Companies (M.N.C.s) 4
2.3.2 International Expansion in Indian Fast Food Market 4
2.3.3 Success Strategies Used by M.N.C.s for Expansion. 6
2.3.4 Adapting to New Markets. 7
2.3.5 Marketing Mix as an Innovative Marketing Strategy in the Fast Food Industry. 8
2.3.6 Effective Approaches for Expanding Business in India. 10
Chapter 2: Literature Review
2.1 Overview
The research scholar of this study aims to focus on the market expansion of multinational companies in India. It will also stress the marketing strategies by which company like Mc Donald’s has gained success in expanding its market to the borders of India. Different companies also used adopting market strategies for entering the market in a fluent manner. The marketing mix has also been noticed playing a vital role in bringing innovative marketing strategies for the multinational companies that are trying to expand its market to the intentional borders. A conceptual framework is also presented for making it easier for the readers to understand the research objectives following the literature review.
2.2 Previous Research Work
As per the previous researchers, it can be understood that globalisation has helped the companies to expand their market to international borders. It has also helped the companies to understand the demands of the countries in respect of different sectors. In this way, the fast-food industry has also gained the chance to expand its market by delivering healthy and delicious food items to all the companies in the global market. Through this procedure, McDonald’s also gained the chance to know every market where it can expand its business. After achieving success in the local market, this company tried to expand its boundaries to the global market. Through this process, they were successful in reaching millions of customers all over the world. As per the study of Panwar and Patra (2017), their products and services have also gained recognition amongst other companies. In this way, the other multinational companies are also increasing their business by entering new markets and meeting the needs of those people.
The business expansion also helps in increasing the growth of the company by increasing their scopes of development to the international market. By increasing their business, they gain the opportunity to achieve foreign currencies. On the other hand, companies also acquire global recognition. Dixit (2017) explains that the demands of the worldwide customer increase and it helps them to improve their market boundaries. By delivering compelling products and services, the companies create a positive image in the minds of the customers. Through different marketing strategies, many companies have achieved success and growth. However, some of the other companies also become incapable of expanding the market in the global market. Hence, it can be known that the companies need to understand the needs of the market in respect of price and products before entering for business purposes.
2.3 Theoretical Framework
2.3.1 The Importance of Market Expansion in Multinational Companies (M.N.C.s)
Market expansion plays a vital role in increasing the scope of multinational companies. As per the study of Radulovic and Pindzo (2017), multinational companies have the aim of improving their business to the external borders. These companies can gain the satisfaction of the customers by producing useful items for the customers. In this way, they can also increase their sales. By acquiring markets, they can create a better image in the global market competition. Kotabe and Kothari (2016) mention that companies like McDonald’s and Nike have used various operations to satisfy the needs of European customers. They have also gained massive amounts of foreign currencies, which helped them to improve their system as per the trends. By market expansion, a company can also achieve diversification and growth. International marketing also allows companies to gain success in one market by overcoming their loss in another market. The global market expansion also helps the companies to have unique items by which the products and services can be improved.
Estrin, Nielsen and Nielsen (2017) mention that international marketing also helps in increasing the competitive advantages of the companies that are moving on to different locations for business purposes. It has been noticed that companies like McDonald’s have gained brand awareness among customers that have helped the success of this company. On the other hand, it also increases the chance to acquire marketing demands and global operations. Brand recognition also helps the business of these fast food companies to achieve better success from sales. With the support of new business operations, fast-food companies can meet the needs of global customers. Lynch and Jin (2016) state that companies can also have additional investment opportunities by which they can offer better services to global customers. With the help of this process, many companies in the U.K. and the U.S. have gained advantages by presenting a prestigious brand image in market.
2.3.2 International Expansion in Indian Fast Food Market
As per the understanding of IELTS Mentor, (2020), India’s fast food industry has gained success from 2013 to 2016 by receiving the amount of $1.12 million. From this, it can be understood that companies have better scopes in the Indian market. A company like McDonald’s entered the market in 1996, and from that time, it has been gaining success by expanding its business to meet the needs of the customers. India is a secular country, and for this reason, people have different food choices as per their religious beliefs. In this way, by meeting the needs of the Indian people, the companies can gain success in expanding in the Indian market. Such scopes and opportunities cannot be observed in other countries. As per the demographic trends, the companies can achieve more success from India as it is turning out to be the next mega-market for the international fast food industry. Keshari and Mishra (2016) state that after researching different markets like China and India, McDonald’s got to understand that they have better chances with India as the Chinese market is not better as a fast-food area. They cannot gain success from this market, which can be achieved by the company in the Indian market.
Figure 1: Demands for Fast-Food Multinational Companies in India
(Source: IELTS Mentor, 2020)
From the figure above, it can be understood that the demand for fast-food is rising in the Indian market. India is now gaining success by meeting the needs of every fast-food company that is coming to enter its market. Today, India has 2,700 chain fast food outlets through which the companies can achieve growth in increasing their sales. Panwar and Patra (2017) mentioned that McDonald’s has been successful in meeting the needs of the Indians by understanding their wants and desires. They have satisfied the customers by encouraging them and promoting them to experience the services that they provide. In accordance with Miller (2016), McDonald’s has created a better position in the Indian market by fulfilling the increasing demands of the consumers. Similarly, other fast-food companies are also gaining success in this market by increasing mobility among consumers. On the other hand, the expansion of the companies in the Indian market has also been increased due to the advanced services they use for delivering the food items as quickly as possible. Hence, it can be asserted that the Indian market is best for the expansion of fast-food companies like McDonald’s.
2.3.3 Success Strategies Used by M.N.C.s for Expansion
For expanding the market of multinational companies (M.N.C.s), they used different success strategies by which they can meet the needs of the consumers. In this international competitive run, the fast-food industry has also gained prosperity. McDonald’s, being the company of the United States, has always followed the wants of the Indian customers to increase their satisfaction. According to the perception of Anitharaj (2018), they have focused on the tastes, lifestyle, language, and understanding of the customers. By maintaining the consumer’s needs, it has been achieving definite success in this market. Nowadays, people prefer enjoying the foods that McDonald’s delivers to them. In this way, another company like Burger King, has also achieved growth in the market. The fast-food companies try to produce products that can meet the needs of both vegetarians and non-vegetarians in the market.
The companies also used their strategies to meet the needs of every age group. It has satisfied the children’s requirements as well as the needs of teenagers and older adults. Researching on the market wants, it managed prices of products effectively that it can be affordable for teenagers and for parents who want to treat their children. Waweru (2016) mentioned that different fast food companies used their strategies accordingly to meet the wants of the customers. They made their products adaptable according to the needs of the consumers. Thus, it can be asserted that the companies provided their possible support to increase their business in the Indian market. On the other hand, due to the standardised products of the company, the consumer’s demands are also increasing.
Figure 2: McDonald’s India Sales
(Source: Shah and Mujtaba, 2016)
From the figure, it can be understood that McDonald’s is gaining success in every part of India. As per the viewpoint of the customers, it can be noticed that McDonald’s delivers standardised products that will represent the unique taste of the company. Various multinational companies entered the market by getting into ventures with other companies. Similar to this, McDonald’s also tied up their business with Bharat and Hindustan Petroleum Petrol Pumps. Through their support, they get to know about the market in a more justified manner. Such knowledge also helped the company to understand the wants of the customers in respect of fast food items. According to Panwar and Patra (2017), they presented their products and services that can go with the desires of the customers. With the help of these success strategies, the M.N.C.s are accomplishing success and growth in the Indian market.
2.3.4 Adapting to New Markets
Multinational companies have to get adapted to the markets for achieving success in those markets. Previously, they have to know the market and their customers, and this can be done through the help of market research. Miller, Jayaram and Xu (2018) explain that different fast food companies have failed to enter the market due to their inefficacy in understanding the market. They applied a similar strategy that is used by them for the other markets. It has been noticed that the demand for different places varies from each other. The demand for food which is in the U.K. is not found in India. For this reason, market research is necessary for adjusting as per the needs of the customers. In this way, McDonald’s used its market research capability to understand the wants of the customers. Through their understanding and knowledge, they produced products and services that can meet their expectations. Marcatto and Anderson (2018) state that for adapting to the Indian market, the company also came with joint ventures from which they recognised the competitors and customer’s requirements. However, they also looked over the quality control of the products delivered to the end customers.
Every customer demand for such companies that can satisfy their needs within a short time. They also require effective products and services that are of high quality but can be available at an affordable price. According to the perception of Day and Schoemaker (2016), it can be understood that McDonald’s maintained its flexibility by gaining success in delivering better services to the customers and accomplishing a significant position in the market, keeping the competitors behind. Customer loyalty is also maintained through the3 help of this process. The company has been successful in controlling the Indian markets by following its culture and preferences. In this way, the other fast food companies are also concentrating on Indian food culture. Innovation is brought in every product, and uniqueness is also maintained so that the consumer’s demand for their food gets increased. It also helps in lowering the chance of any substitute products available in the market. Hence, it can be stated that the companies have been using their innovative and applicable measures for adopting those in a specific market.
2.3.5 Marketing Mix as an Innovative Marketing Strategy in the Fast Food Industry
Before entering a market, multinational companies use the marketing mix as another strategy for knowing the market. Similarly, the fast-food companies that expanded their market in India also used the marketing mix for their benefits. The marketing mix has become a matter of great importance to different industries. It refers to the actions and tactics used by the company to promote its brand and to know the desires of customers. The figure below states the 5Ps of Marketing Mix relevant to the fast-food industry.
Product
Lopez (2018) states that product plays a vital role in satisfying the needs of the customers. Through the products, a company can attract its customers towards them. On the other hand, the behaviour of Indian customers is also noticed through this marketing mix method. In India, these companies are trying to maintain the traditional and cultural sentiments of different people. It also produces such products that can meet the needs of every group age.
Price
Similarly, price is also another vital factor through which the consumers get influenced. As per the study of Sulaiman et al., (2017), Indian customers demand those products that can be affordable. For this reason, different fast food companies adjusted the price strategy according to the requirements of the consumers. For increasing the sales volumes, the fast-food companies are also producing bundling and value pricing strategies that can meet the expectations of the majority of the customers.
Figure 3: Marketing Mix
(Source: Created by Author)
Place
The place also creates a significant impact on the growth of multinational companies. In India, every location is far from each other, and for this reason, the companies aim to produce outlets for reaching to every customer. Dagevos (2016) explains that fast food companies like McDonald’s introduce a better and eco-friendly environment for the consumers and their children. In this way, other multinational fast food companies are also achieving growth by improving its outlets.
People
Fast food M.N.C.s are also focusing on the needs of the customers. Their prime focus is on delivering services that can make the people happy. According to the viewpoint of Kraak et al., (2017), the employee’s capabilities are also improved so that they can bring a sophisticated environment for the customers. For improving the systems, Indian employees are also taken with whom, and the customers can get comfortable with it.
Promotion
For gaining better recognition, the fast-food industry also promotes its business through different online channels. Dadzie et al., (2017) expresses it uses sales promotion, public relations, personal selling, advertising, and direct marketing for expanding their image in every part of India. It also promotes services it delivers in addition to the products that they are going to be present in the market.
2.3.6 Effective Approaches for Expanding Business in India
India, being the famous market for fast food companies, provides more future opportunities for them to increase their growth in sales. In the context of Jaiswal and Ha-Brookshire (2016), it can be noticed that Indian people prefer having three meals a day. For this reason, companies like Burger King and McDonald’s takes the initiative to introduce a menu for lunch and breakfast, which is offered in the majority of the restaurants. On the other hand, it can be recommended that companies should provide healthy and tasty food products for maintaining the health of consumers. Indians prefer products of the multigrain wrap. Accordingly, the companies should deliver such products to the customers. They should promote their products by using billboard advertising as it is also observed to be useful for many multinational companies.
Vance (2018) explains that the delivery services of these fast food companies should also be useful so that the customers can get satisfied. It has been noticed that many customers of India stop ordering from that company from where they get lousy behaviour or services. Seasonal offers and discounts should be given to attracting more customers towards them. As per the study of Hu, Cui and Aulakh (2019), they should follow the localisation method for creating a better place in the mind of the consumers. Indian people are also price-sensitive, and for this reason, the companies should develop an appropriate pricing strategy that can meet the Indian customer’s satisfaction level. Hence, it can be asserted that the companies should support such approaches for expanding their business in India.
2.4 Conceptual Framework
Figure 4: Conceptual Framework
(Source: Created by Author)
From this conceptual figure, it can be understood that market expansion of multinational fast-food companies is being influenced by the marketing mix strategy such as place, price, product, people and promotion.
2.5 Literature Gap
In this research study, the scholar states about the importance of market expansion in different multinational companies. It also mentions the way it has adapted to the Indian market. Success Strategies are also observed by which the company has gained growth and prosperity for many years. The future approaches that can be used for business expansion are also mentioned in addition to the 5Ps of the marketing mix. However, it fails to provide an amount of statistical data for supporting the shreds of evidence presented in this research study. On the other hand, the scholar also becomes incapable of gathering information about the physical evidence and process of the marketing mix in response to the fast-food industry.
2.6 Summary
Fast food multinational companies are gaining opportunities to expand their business to the international market. It uses various strategies for understanding the needs of the consumers. Like this way, McDonald’s has also created a better brand image in the Indian market by satisfying the needs of the consumers. However, it can also be noticed that the Indian market has enormous demands for the fast-food industry and for this, most of the multinational fast-food companies are expanding their business to conquer over the market of India. It has also tied up with several companies for adapting to the market. Apart from this, companies concentrate on maintaining the culture and tradition of India. Hence, fast food M.N.C.s are using every possible strategy to meet the expectation of the customers.
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