Market Development Narrative Essay
This was done by using the marketing strategies that may have been used in the past. Strategies such as repackaging of the products such as Big Macs into paper-based cartons and the redesigning of the plastics and paper bags used in its restaurant franchises are among these. This strategy goes after the target market of the company which mainly focuses on the younger segment of the market. Market development went deeper into the marketing strategy employed by the company whereas the current product offerings of McDonald’s Corporation are marketed into new markets.
The term market here is used to address either a new market overseas or a new market segment locally in the United States. For example, the company found it as an opportunity to open a new store in East Germany before and introduce the Big Mac or Happy Meal there. Eastern Germany was a new market and the market for McDonald’s Corporation there needs to be developed . On the other hand, an example of market development wherein a new market segment is targeted is the marketing of the current beverage offerings of McDonald’s to the older segment of the market.
In the current scenario, the fast-food company targets the younger segment of the market and the move to market its products to the older segments of the market is an example of market development . Product Development The concept of product development is summarized as developing new product offerings into the current market that McDonald’s caters to. This was seen as a move to capture a fresh market base loyalty for the company wherein McDonald’s could be positioned as a company which values the needs of the customers and adhered to most of their demands.
A perfect example of this is the development of the McRice Burger in its Asian franchises wherein the demand to eat rice, which is a staple food in this part of the world, is recognized through the development of a product that caters to that specific need. A high cost was needed in the research and development of new products. However, McDonald’s Corporation has the capability to do so with the benefit compensating the costs in no time. Diversification The concept of diversifying the market offering of McDonald’s Corporation was considered as a phase wherein there is a high risk as well as a high return is observed.
Under this strategy, the company developed a new product line-up for a new market in which it would penetrate. This was considered then as a long-term investment for the company whereas the new market could grow bringing in new source of profits for the company. The example of the Russian market franchise could suit well in this aspect. Under such situation, McDonald’s Corporation set-up a new branch in the country which is a new and unchartered in the 1980s while at the same time brought in new product offerings that suited the local taste of the new potential customers.
Profitability under this situation will be made depending on the strategies that the company will take. Should McDonald’s Corporation fail on its assumptions, it could cost the market share for that market. VI. Addressing Current Company Challenges The radical change in the fast-food service industry today caused business people to think of innovative ways of catching up with the high-growth of the market. Although it requires the changing of the internal foundations of modern day business, the goal is still to keep up with the rapidly changing environment.
To achieve this, the companies that undergo business ventures in the internet, called e-business, streamlined specific strategies in order to gain access to the world of fast business. The main arguments that the plan addresses was the maintenance of the market share that McDonald’s Corporation has in its global operations. The large scope of operations are then divided into specific segments wherein various competitors which offer the same product offerings that the company has. A specific plan must be put in place in order to address such issues and be able to maintain its dominance among the other companies that serve as a threat.
McDonald’s Corporation operates in a centralized environment. Meaning, all decisions that are to be implemented in its global franchises all come from the mother office in the United States. Although controlling here is made easy, the efficiency of the decisions made by the central management especially if it involves culture and regional competition could go out of bounce. The management of McDonald’s Corporation would rely on smart assumptions. However, once the assumptions made by the central management fail, everything else could go wrong. VII. Being Part of the American Culture
McDonald’s Corporation along with its restaurant chains was well expressed as an important export product in itself that the United States has. The culture of dining out in a fast service restaurant can be attributed to the company. However, the culture that McDonald’s has been successful in spreading the world over also needs to adapt to certain cultures in order to penetrate specific markets and gain market shares. Much can be said to the adaptation done in India wherein sensitivity to the culture is prioritized. India is a Hindu dominated nation which pays a lot of respect for Cattle which they consider as sacred.
McDonald’s uses beef in the majority of its burger product offerings and also uses beef essences in their fries. What McDonald’s did is to modify its product offerings for the country eliminating all of the products which may be deemed offensive to the local beliefs of Indians. As a result, McDonald’s retained its market share in the emerging Asian country. This is a perfect example of how a company adapted to the social structure of a place. McDonald’s Corporation has been doing this in all of its branches around the world and so far has been successful in doing so.
