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Procedia - Social and Behavioral Sciences 65 (2012) 1054 – 1059

International Congress on Interdisciplinary Business and Social Science 2012

(ICIBSoS 2012)

A Comparative Study on International Marketing Mix in

Chan S. Yeua, Kong C. Leonga, Lee C. Tonga, Su Hanga, Tang Y.a, A. Bashawirb,
M. Subhanc*
a
OYA Graduate School of Business, Universiti Utara Malaysia, Sintok 06010, Malaysia
b
Department of International Affairs, UUM COLGIS Universiti Utara Malaysia, Sintok 06010, Malaysia
c
Department of International Business, UUM COLGIS Universiti Utara Malaysia, Sintok 06010, Malaysia

Abstract

This study examines the international marketing mix in two different important markets.
The objective is to analyze and understand the similarities and differences of the international marketing mix strategy
implementation by the company. Using comparative analysis, this study focused on 4P approach of marketing mix
which is based on product, price, promotion and place analysis. strategy in China and India
were used for this study. The study found that the McDonald has adopted different kind of its 4P in their
international marketing mix based on both, localization and globalization approaches.

© 2012
2012ThePublished
Authors.by ElsevierbyLtd.
Published Selection
Elsevier and/or
Ltd. Open peer-review
access under responsibility
under CC BY-NC-ND license. of JIBES University,
Selection and peer-review under responsibility of JIBES University, Jakarta
Jakarta

Keywords: Marketing strategy, Business development, International marketing mix, National cultures, McDonald , China, India

1. International Marketing Mix

According to Sheth & Parvatiyar (2001), the area of international marketing provides three
comparative determinants for understanding of marketing practices by firms. The first is the so-called
comparative descriptions which explain how marketing is carried out in different countries; the second
determinant is comparative explanations that describe the structural determinants attached to country
differences; and the third is the comparative prescriptions on how a country is positioning itself to specific
marketing strategies and operations by multi-domestic firms. The main focus is on description,

*
Corresponding author. Tel.: +60164094416; fax: +6049284205.
E-mail address: [email protected].

1877-0428 © 2012 The Authors. Published by Elsevier Ltd. Open access under CC BY-NC-ND license.
Selection and peer-review under responsibility of JIBES University, Jakarta
doi:10.1016/j.sbspro.2012.11.370
 Chan S. Yeu et al. / Procedia - Social and Behavioral Sciences 65 (2012) 1054 – 1059 1055

explanation, and managerial control of marketing practices across national boundaries (Toyne, 1989).
Many authors believed that current international marketing will later be substituted by an integrated global
marketing and, in the process, it will have a two-dimensional shift (Sheth & Parvatiyar, 2001; Gronroos,
1994). The first is to integrated marketing will focus more on cross-functional integration and
coordination and less on functional adjustments across national boundaries. The second shift will focus
more on transnational similarities for target markets across national boundaries and less on international
differences.
The concept of the marketing mix and the 4Ps product, price, place and promotion entered into
academic discussion around 1960s. According to Gronroos (1994), the marketing mix built from a

ion is optimized, or rather satisfied. Yoo, et al. (2000)

studied the important of marketing mix in relation to the creation of brand equity. Their study focused on
elements of price, store image, distribution intensity, advertising, and price promotion. They found that
elements of marketing mix have either positive or negative relationship to brand equity.
According to Riyad & Myfanwy (2002), in the electronic age, the Internet plays significant roles in
international marketing. Firstly, the international Internet marketing has changed some elements of the
marketing mix. The key is to be more interactive in strategy. Secondly, the Internet provides a
fundamentally different environment for international marketing and requires a different approach.
Consequently, a new international marketing prototype may have to be able to explain the international
marketing in the digital era. In this case, we study McDonald
restaurant and as it has successfully built its global standardization as its value of products as pointed out
by Martin (2000), and marketing mix strategies in China and India become our main focus.

1.1. International Franchising and

The fast growth of franchise operations in emerging economies such as China and India is beeping a
strong sound to well-established franchises and newly-established franchises alike that international
franchising is remaining preferred. According to Franchisedirect (2012), fifteen years ago, relatively few
franchisors were operating globally, and the ones that had gone international were typically the very large
ones. By early 2011, 32 percent of the franchise units operated by the top 200 franchisors in the United
States were located outside the country. It was a 33 percent increase in the total of international units
operated by those franchisors over the last decade.
In Latin American countries or in China, according to a report by Franchisedirect (2012), firms are
likely to run business based on their personal relationships, not on contractual obligations. The emerging
markets, typically the first countries to be in
Brazil, Russia, India and China, along with maybe a couple others (Franchisedirect, 2012). McDonald's as
the leading global food service retailer is now serving nearly 68 million customers in 119 countries every
day in which 85% of its restaurants are franchised (Aboutmcdonalds, 2012). It includes BRIC countries.
ted by several companies

1.2. and China Franchising Industry

According to Franchise (2012), franchising first emerged in China in the late 1980s. It experienced a
period of disordered development in the early days. In the poor legal environment, some franchisers
conducted substandard business or even defrauded franchisees of money. In some cases, franchisees
delayed payments to the franchisers or infringed on their intellectual property rights. In 1997, the Ministry
of Internal Trade established the first Chinese franchise law, the Regulation on Commercial Franchise
Business, which included guidelines on such issues as trademarks, copyrights, and intellectual property
protection (Franchise, 2012).
1056 Chan S. Yeu et al. / Procedia - Social and Behavioral Sciences 65 (2012) 1054 – 1059

The first McDonald's in mainland China was opened in October 1990 in the city of Shenzhen,
Guangdong province, three years after in 1987
(Wikipedia, 2012; Franchise, 2012). However, within two years, in 1992, the world's largest McDonald's
opened in Beijing with over 700 seats (Wikipedia, 2012) in 2011,
Shanghai McDonald's successfully opened 200 new restaurants in China, crafting a new record as the
McDonald's the world's third-largest market. McDonald's will remain to increase investment in China.
The total investment in China in 2012 is expected to grow by 50% over last year that is mainly used for
the opening of a new restaurant, upgrading existing restaurant image and expanding more convenient
services. The company plans to open 225-250 new restaurants in 2012 (McDonalds China, 2012).

1.3. and India Franchising Industry

growing at an astonishing 25-30% year-over-

happening elsewhere in the world (Fransmart, 2012). Even at that trajectory rate, according to Fransmart,
there is still a gap that continues to widen in India between the under-supply of quality food franchise
this growth, it represents
various opportunities for many foreign international brands to open businesses in India. According to
Franchising World Top 100 annual survey, which included over 1000 franchise brands currently in India,
this growth rate will continue to rise at the same pace for the next coming years. The report also
highlighted that franchising was one of the most ideal method of expanding business and brands within
the Indian consumer market (Franchise Business, 2012).
Moreover, the franchise industry in India has been growing at an optimistic speed and most of the
brands have been choosing for the franchise means to tap the massive Indian consumer market (Franchise
Business.com). Dale Tasharski, Deputy Commercial Counselor at the U.S. Embassy in New Delhi,
reports that citizens under the age of 35 represent a staggering 71% of the population in India. This
emerging Indian middle class is well educated, modern and social. They are the new peak earners in the
booming India economy, and they love US food franchise brands. This presents an unprecedented
opportunity for growth-minded US food franchises and well-capitalized entrepreneurs, investors, and
restaurant operators in India to work together to profit from the growing gap between food franchise
supply and demand (Fransmart, 2012). In 1996, for the first time, McDonald's entered India market by
opening its first outlet in New Delhi (Wikipedia, 2012).

2. Mix

Vignali (2001) argued that the key to global success of has been the use of franchising in
which the delivery and interpretation of US brand culture are automatically translated by the local people
in terms of product and service. Once its key audiences have been identified
the marketing mix (namely product, price, promotion, and place) is created that appeals specifically to
In general,
products and services. However, in some countries like India th religious
laws and local customs (Vignali, 2001; Goodstein, 2001; Goyal & Singh, 2007).

2.1 Product

Ac
customers is that there is a huge amount of choice available to those potential customers with regard to
how and where they spend their money. Therefore McDona
developing a menu which customers want. Market research is very crucial in this regard. However,
 Chan S. Yeu et al. / Procedia - Social and Behavioral Sciences 65 (2012) 1054 – 1059 1057

order to meet those changing preferences to introduce new products and phase out old
ones over time.

2.2 Promotion

g channels including advertising, sales

promotions, point of sale display, merchandising, direct mail, telemarketing, exhibitions, seminars,
loyalty schemes, door drops, and demonstrations Advertising is conducted on
TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and
magazines. Key objectives of advertising are to make people aware of a product or service, feel positive
about it and remember it.

2.3 Price

There are a number of possible pricing strategies.

own mental picture of what a product is worth. The bad thing of using low price as a marketing strategy is
that the customer may consider that a low price is indicative of compromised quality. When we decide on
the price, we must be fully aware of the brand and its integrity. Otherwise, we will be reducing the profit
margin without increasing the sales.

2.4 Place

The place is where the customer receives the product and service. Place, as an element of the

distribution points for products. It incorporates the management of a range of processes involved in
bringing products to the end consumer.

3. Comparing Marketing Mix Strategy between China and India

ing franchising as its business

branches worldwide have its different and similar features in running the operation. For instance,
China and India are different in culture and norms, but they still have some similarities in the
4 marketing mix implementation. Due to the franchisor control over the decision making of the
business operations, some of the original concepts still put into practice in different geography area across
China and India. For instance, the core products of rious flavor
of burger), french-fries, soft drink and desserts. This menu is still
in China and India.
In terms of service, s self-service concept, where customers make order in
front the counter, pay and carry the foods to dine-in or take away by themselves. In terms of place, the
same decoration either interior or exterior is also implemented in
China and India. ng mix strategy
in China and India.
1058 Chan S. Yeu et al. / Procedia - Social and Behavioral Sciences 65 (2012) 1054 – 1059

Table 1. Summary of marketing mix strategy of the study

MARKETING
CHINA INDIA
MIX

Preference and culture - Adopt beef, pork, fish Preference and culture - Took chicken but neither
Product and and chicken. beef nor pork.
Service Taste - Less salty, less fried and less spicy. Taste - Prefer spicy, example: McCurry
Product Division - Depend on different Product Division - Vegetarian and non-vegetarian
provinces.

Price setup is quite higher compare with normal Implemented pricing strategy to fix to the different
fast food restaurants. market segment.
Price
Lightly adjust the price in difficult time. No price Prime value product (Branded Core Value) serve for
segmentation. middle class and economy value product (Branded
Affordability) focus to lower class of the customers.

Formerly rules strict the basic requirement of The outlets are very evenly spread throughout the
choosing outlet location is more than 50,000 cities and high accessibilities location.
Place
residents within 5km radius. Now revised to
allocate the outlet with built in the bustling
commercial area.

Method - More to network and internet Method - More to traditional and printing media
Target and Aims - New and younger generation Target and Aims - Children and kids
Others - Utilize the network facilities and Others - Make awareness of the item, creates
Promotion
creating various function activities to attract positive felling, and tries to remain the positive
younger customer participation. image in people mind.
Attract new and younger customer which may
lead to whole family consumption behavior.

4. Conclusion

This approach of its 4P marketing mix in their

China and India outlets. The approaches are very greatly depending on their localization strategy and
globalization strategy. menu tends to be standard in all its products and services,
for example burger or sandwich, fries, and a drink (Coca-Cola) for its main course. But when it comes to
specific countries where religious laws and customs are quite sensitive such as China and India, it
requires localization approach.
implementation is closely related to its
preference fulfillment. In China and India, is also successful in identifying and making
proper changes to suit with the local customer needs and requirement.
China uses beef, pork, fish, and chicken for burger with less spicy but in India, it has to avoid using beef
and pork in its burger products. Only in vegetable McNuggets and a mutton-
based Maharaja Mac. Such differences are taken in the country to appreciate Hindus who do not eat beef
or Muslims who do not eat pork. In terms of pricing strategy, McDonald China does not apply market
n at
busy commercial areas with well-developed premises, whereas in India the outlets are spread throughout

the promotion uses network, social media, and the internet as its preference. The targeted customers for
promotio
advertisement
 Chan S. Yeu et al. / Procedia - Social and Behavioral Sciences 65 (2012) 1054 – 1059 1059

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