The Issue of Marketing and Environmental Factors - Essay Example

McDonalds: Marketing and Environmental Factors Introduction The economic aspect of the world currently is dependent on markets that are available to organizations both locally and internationally. Economic progress is clearly a factor of the interdependence between different economic entities. Without the endless opportunities presented by global marketing, there would be limited growth prospects. In this era, numerous organizations are successfully conducting marketing campaigns both locally and globally. One such example is McDonalds, which has managed to build a brand that is distinctive and recognized globally. This paper will look into the marketing operations of McDonalds, addressing some of the environmental factors that have an influence over the marketing decisions of the company. To this effect, the paper will look into the effect of demographic characteristics of markets and cultural differences. Additionally, there will be a discussion on social responsibility, international relations, and technology. Environmental Factors and McDonald’s Marketing Decisions Economic Interdependence, Trade Practices, and Agreements Partnerships among various businesses are vital if global marketing is to succeed. These partnerships are instrumental for McDonalds to become aware of territory that is unchartered, and even build the capacity to expand their operations into these regions (Gilpin, 2008). These interdependent entities are successful since they have access to large reserves of services and most importantly, ideas on how to improve on the operations. Because of global interdependence, there are endless opportunities created for the expansion of McDonalds, within America and even outside its borders. Global interdependence creates the need for laws and agreements on what should be the convention in marketing practice that traverses borders. Since the inception of the idea of free trade, there has been numerous free trade agree agreements signed. For example, within Europe is the European Union. Such trade agreements expand the capacity of organizations like McDonalds to operate. When globalization creates increased capacity for such organizations to operate under subsidized tax rates, it benefits the expansion endeavors of the company (Werz and Fried, 2008). Demographics and Physical Infrastructure The success of the market for McDonald’s product is dependent on the knowledge of demographic attributes of their market. In order to know where to set up their maneuvers it is essential for them to be aware of some of the demographic characteristics of their target, for example, the age of the population, their eating habits and the income distribution. One of the attributes of McDonalds is that their products are most popular among the young (Knicker, 2013), who have a high affinity to fast foods. In addition, most of the clients are those that earn reasonable incomes. This is such that, when chartering markets in developing countries, for example, they know to set up in urban centers as opposed to rural (Gilpin, 2008). Physical infrastructure of the market area is also an important consideration for the company while setting up operations. For example, the organization itself has to consider the costs of setting up, that is, the equipment that they need to kick start their business in new areas has to be readily available; a viable venue, kitchen equipment. In addition to this, marketing works best when the business is set up in areas accessible by road or the most widely used form of transport in the area (Werz and Fried, 2008). This accessibility increases the prospects for attracting new clients. Cultural Differences Companies that are expanding globally need to take into account the values, symbols and traditions of their target markets. Culturally, diversity affects the reception of new franchises into the market. For example, Knicker (2013) sets out to explore the advertising strategies adopted by McDonalds around the world. She points out the differences in advertisements as McDonalds moves from one region to another. In Malaysia, she points out that McDonald’s advertisements focus on the family dynamic, appealing to the audience’s sense of togetherness. The advertisement depicts McDonalds as a possible venue for family bonding (Knicker, 2013). On the other hand is the USA, where family is not as such of an appeal. Here, the organization reaches out to potential clients by portraying McDonalds as fun. In India, where it is culturally wrong to eat beef, McDonalds created the McVeggie and uses this is in their advertisements (Knicker, 2013). This strategy, whereby the company incorporates culture into marketing is both genius and effective. Social Responsibility, Ethics, and Legal Obligations McDonalds, in its operations, has a set of rules that govern its sense of responsibility to the community around. McDonalds prides itself in the company’s sense of social corporate responsibility. For example, in Dublin the company helped to set up the Ronald McDonald House Charity of Ireland (RMHC), as a home away from home for ill children receiving treatment (Gilpin, 2008). The same sense of responsibility is visible in the way the company treats its employees. Ethically, the company has adopted a marketing style that promotes healthy lifestyles among children especially. That is, in the character of full exposé on the harmful effects of living on junk food (Werz and Fried, 2008). In the legal sense, the company maintains reserves its obligations to refrain from offering bribes and to abide by the set regulations of the new operation centers. Political systems and International Relations The political systems in the host country are an important factor determining the penetration of franchises into their territories. Some of the barriers that McDonalds has to contend with in their expansion include campaigns that encourage the locals to stick to local products (Werz and Fried, 2008). This might have to do with political systems that stand for culture identity and preservation of the nation’s economic systems. International relations also affect the reception that McDonalds receives. There are nations that would like to identify with American brands. Additionally, there are occasions whereby the reception is more hostile than welcoming, given the fact that this particular brand, McDonalds, stands for what many deem to be unhealthy living (Werz and Fried, 2008). Foreign Corrupt Practices Act of 1977 and Legislation Corruption is frowned upon, both locally and internationally. There are strict laws that are meant to protect against corrupt practices in every economy. This is due to the nature of the vice to raise the cost of conducting business (Strahler, 2013). Therefore, as pertains to legislation on this, McDonalds has had to ensure that their operations are in agreement with the legal procedures in place. One of the biggest milestones against corruption by the US is the “Foreign Corrupt Practices” of 1977. Under this act, bribery of local or foreign government officials is illegal (Strahler, 2013). Therefore, this law is applicable to United States Organizations wherever they are in the world. For McDonalds, this implies that there has to be deliberate steps against corruption. This has driven the organization to come up with its own anti-corruption policies. Technology Technology is the one of the best things to happen to McDonalds marketing. Through technology, McDonalds is able to reach a large audience easily. This is especially as pertains to the internet, where the organization can put up advertisements that reach a variety of potential clients globally. In addition, one of the main uses of technology for any organization is research. The internet has a myriad of information on opportunities, cultural values, and other bits of information that boost the business (Werz and Fried, 2008)Technology has also smoothed over the process by which customers place orders for their food; it is more orderly and fast. Conclusion McDonalds is an example of an organization whose local and global marketing strategies remain viable and effective for growth. The organization takes into consideration influential environmental factors such as cultural diversity, the different political systems, and legal channels of their target markets. This is strategic and eventually profitable to the company. References Gilpin, N. (2008, February 28). Richard McDonald, 89, Fast-Food Revolutionary. New York Times. Retrieved from . Knicker, N. (2013). Global E Brands. McDonald’s: Winning at Global Marketing Strategies. Retrieved from http://globalebrands.com/mcdonalds-winning-at-global-marketing-strategies/ Strahler, S. (2013, February 25). Corporate lawyers' challenge: Keeping overseas execs on right side of the law. Crain’s Chicago Business. Retrieved from http://www.chicagobusiness.com/article/20130223/ISSUE02/302239996/corporate-lawyers-challenge-keeping-overseas-execs-on-right-side-of-the-law# Werz, M., and Fried, B. (2008) Modernity, Resentment, and Anti-Americanism: Anti-Americanism: History, Causes, and Themes. Westport, CT: Greenwood World. Retrieved from . Read More