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McDonald’s “think global, act local” – the marketing mix

McDonald’s “think global, act local” – the marketing mix

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McDonald's: ``think global, act local'' 97 British Food Journal, Vol. 103 No. 2, 2001, pp. 97-111. # MCB University Press, 0007-070X McDonald's: ``think global, act local'' ± the marketing mix Claudio Vignali Principal Lecturer, Manchester Metropolitan University, Manchester, UK Keywords Globalization, Marketing mix, Marketing management, Fast-food industry, Marketing, Franchising Abstract Focuses on the marketing mix of McDonald's. Highlights how the company combines internationalisation and globalisation elements according to various fast food markets. Using the effect of strategical and tactical models, the case illustrates the effect of McDonald's on the global environment and how they adapt to local communities. Describes future franchise plans for McDonald's. Introduction McDonald's background Two brothers, Richard and Maurice McDonald founded McDonald's in 1937. The brothers developed food processing and assembly line techniques at a tiny drive-in restaurant east of Pasadena, California. In 1954, Ray Kroc, a milk-shake mixer salesman, saw an opportunity in this market and negotiated a franchise deal giving him exclusive rights to franchise McDonald's in the USA. Mr Kroc offered a McDonald's franchise for $950 at a time when other franchising companies sold restaurant and ice-cream franchises for up to $50,000. Mr Kroc also took a service fee of 1.9 per cent of sales for himself plus a royalty of 0.5 per cent of sales went to the McDonald brothers. The McDonald's brothers sold out for $2.7 million in 1961. McDonald's first international venture was in Canada, during 1967. Shortly afterwards, George Cohon bought the licence for McDonald's in eastern Canada, opening his first restaurant in 1968. Cohon went on to build a network of 640 restaurants, making McDonald's in Canada more lucrative than any of the other McDonald's outside the USA. The key to the international success of McDonald's has been the use of franchising. By franchising to local people, the delivery and interpretation of what might be seen as US brand culture are automatically translated by the local people in terms of both product and service. McDonald's now has over 20,000 restaurants in over 100 countries, and around 80 per cent are franchises. Globalisation versus internationalisation Globalisation involves developing marketing strategies as though the world is a single entity, marketing standardised products in the same way everywhere. Globalised organisations employ standardised products, promotional campaigns, prices and distribution channels for all markets. Brand name, The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft
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BFJ 103,2 98 product characteristics, packaging and labelling are the easiest of the marketing mix variables to standardise. Globalisation of markets requires total commitment to international marketing; it embodies the view that the world is a single market. For example, Nike trainers, Levi's' jeans and Coca-Cola have all crossed global borders; however, even there, some tailoring of the message is visible.
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