McDonalds Going to Russia - Coursework Example

McDonalds Going to Russia of Module Lecturer’s McDonald Going to Russia Introduction McDonald is an international food restaurant that is known to a majority of us. Its considered the leading food restaurant as it has more than 36,000 restaurants considered local, which serves more than 69 million clients coming from over 100 countries in their daily operation. The company is operated by a mission that is determined to continuously improving their social and environmental performance. The company is much concerned about sustainable future to an extent that they work hard with their suppliers and their independent restaurant franchisees to achieve a sustainable future. The company does this by itself and in consideration of the communities around which they operate. One major factor that has made the company going is that, they have been a focused on doing the right thing just from the beginning. This has made their values define who they are, what they do and how they operate (McDonald, 2010). The Cs of Marketing If McDonald would like to take its restaurant services to Russia, there are various considerations that the company management should take into consideration before doing the launch. The considerations are on the marketing issue of the company. After carrying out an adequate environmental analysis of the companys external environment, it would be wise for the company to include an analysis of how the possibility of launching its products and services in Russia. To be able to do this, the company can consider the analysis around communication, consumption, country culture, and consumer behavior. These are issues in marketing that re usually categorized under 12Cs of marketing. However; for this kind of assignment, just the five Cs are found more appropriate and will highly count when trying to launch McDonalds products in Russia. This report will majorly dwell on the discussion of the consideration of McDonalds entry into Russia and the extent to which part of the 12 Cs mention above will influence its entry into this market. Communication The first C that McDonald would mind thinking about before deciding to enter into Russia will be on Communication. Communication in this sense will mean a lot as communication usually means a lot in any form of business. McDonald, to begin with, will have the task of knowing the major language that is being spoken u the Russians. This would be important as it is a language that facilitates communication. The essence of this is that, it is usually necessary that the company staff communicates with the customers on various issues of concern so that most of the business can be solved. The management at McDonald, may not be conversant with the Russian language and most Russians may also not be conversant with the language that will be spoken by the McDonald management. As a result, there could be a language barrier between the company staff and the locals. To be able to solve such an issue, McDonald may be faced with two option on how to facilitate their communication strategies I this country. The first option could be entering Russia through a franchise. In this case, a Russian company with Russian people could be given the franchise to set up the McDonald restaurant in Russia. In this case, the issue of the language barrier will not arise since the management, in this case, will be made up of the locals who understand the Russian language very well. The second way of going around this issue is by the McDonald management hiring local staff to work in its restaurants in Russia. The locals will have no problem with language since they understand the local language. Another dimension of communication will be on the major or most attractive communication media that the company might use to reach the most number of the audience when carrying out its awareness campaign in the country. There will be a great need to identify the targeted audience and apply appropriate communication strategies using most effective media to reach them. Consumption The second important C that McDonald is supposed to consider analyzing is that of consumption. The company deals in food and foodstuff as it operates food restaurants. In this case, it will mean that it should find out the kinds of foodstuff that are majorly consumed by the Russians and major on them. Consumption will mean analyzing the consumption behavior including the foodstuff consumed, the consumption rate, and other factors affecting consumption such as price, income level, and social class. Once it is clear about those kinds of products the Russian people like taking or do not like taking, it will be easy for the company to know its focus products during its launch. It will also help the company to know what group of customers to produce what type of foodstuff to and how much can be produced to them at what price. Country Another important C that any company should analyzed before thinking of launching its operations in any country is the country itself. Talking about the country may be confusing, but looking at it as a country, elements such as political impact, tax effect, import and export duty and regulations, legal conformation as well as trade barriers may majorly affect McDonalds entry into Russia. Russia has been known for the nuclear weapons, a fact that has seen it scramble for the superpower with America, leading to many wars. It, therefore, can be categorized as a country with a considerable rate of violence, a fact that may seem a barrier for the launching of McDonald. However, Russia has improved its political stability with time and currently it is a calm country with adequate political stability that can facilitate new foreign investment. McDonald will have to analyze the tax rates, import duty, and regulation as well as the legal regulations of Russia and whether they are favorable for the launch of their business in the country. Russia, as a sovereign state may want to protect its local restaurant industry to stirrup growth. As a result, they may impose a high tax on international companies trying to enter the industry. This might create a barrier. At the same time, the trade regulations might be favorable to promote new entrants into the industry. Culture Culture plays a major role especially when a food company would like to enter a new country where different cultures prevail. Food restaurant is one very difficult businesses to run as far as different cultures are concerned. Different cultures mean different eating behaviors where the Russians could not be affiliated with some types of foodstuff. At the same time, according to the Russian culture, there are certain kinds of foodstuff that are preferred by almost everyone. The mode of preparation of the food should also be considered since the Russians could probably be having their ways of preparing food that could be different from how McDonald has always considered preparing it. McDonald must also realize that the feeding habit of the Russians could not be as much as that of the Americans who highly prefer consuming much of the fast foods. Consumer Behavior To sum up, consumer behavior also plays a major part in considering to launch McDonald into Russia. Consumer behavior in this respect refers to the products that the consumers like purchasing, the quantity in which they want them, the price they are willing to offer for the products as well as the value and quality of the product and services they would prefer. For the McDonald to be able to study the consumer behavior appropriately and use the results in launching its products in Russia effectively, there would be a need for consumer grouping known as segmentation. The consumers need to be grouped into various segments depending on their various purchasing behaviors. The result will be various segments of the consumers who have similar consumer behaviors hence a creating an easy way of handling them. The possible consumer segments that the McDonalds may come up with may include a different segments in the social structure that categorizes the consumers based on their levels of income. This will help the company when making certain foodstuff for a particular social class. There is foodstuff that are known to be expensive. Hence, they will only be prepared for those with higher disposable income. Another segment can be focused on the age groups of the consumers where the children, youth, and adults can be focused on differently depending on their different consumption behaviors. Conclusion In a nutshell, McDonald still has an opportunity to enter the Russian market, however, to enter the market effectively, there is a need for the company to carry out a thorough analysis of the 5 Cs of marketing as discussed above. With the result of the analysis, it will be very easy for the company to decide on the strategies to focus on while entering this market. This will act as the driving factor when they enter the Russian market, to lead them through and enable them form a stronger foundation in the strange land. Reference McDonald, 2010. Getting to Know Us. [Online] Available at: http://www.aboutmcdonalds.com/mcd/our_company.html [Accessed 5 May 2015]. Read More