CONTEMPORARY ISSUE ON SEMINAR A STUDY ON

BRANDING STRATEGIES OF MNCS IN INTERNATIONAL MARKETS

Session: 201113
Presented at

Submitted: Aparna Kalla vinod kumar

Submitted by

ACKNOWLEDGEMENT

The beatitude, bliss & euphoria that accompany successful completion any task would not be completed without the expression of appreciation of simple virtues to the people who made it possible. So, I take my immense pleasure in expressing a whole hearted thanks to all the faculty members who guided me all the way making this project successful. It is my privilege to express a deep sense of gratitude and thanks to Ms MAHIMA RAI for providing us various information directly related to project. I am also thankful to MS APARNA KALLA for his/her guidance & cooperation in this work. I extend my gratitude and thankfulness to Apex Institute of Management & Science.

Date: Place: Jaipur

Submitted By: Vinod kumar

PREFACE

The underlying aim of the seminar on contemporary issue as an integral part of MBA program is to provide the students with practical aspects of the organization working environment. Such type of presentation helps a student to visualize and realize about the congruencies between the theoretical learning in the premises of college and actual followed by the organization. It gives the knowledge of application aspect of the theories learnt in the classroom. The seminar project BRANDING STRATEGIES OF MNCS in International Markets is a complete experience in itself, which provide me with the understanding. This has become as inspirable of my knowledge of management being learned in MBA program.

SUMMARY
Many firms have realized the potential of globalization and new markets in different locations of the world. When expanding globally a global brand strategy has to be developed and when entering international markets different strategies have to be considered. The purpose of this thesis is to investigate the branding strategies of MNCs in international markets. The branding strategies used by MNCs may be mixtures of the two types I .e product branding or corporate branding, but emphasis is typically on one of them. A product brand strategy is characteristically used when a company offers multiple products within different business segments, and when there are several different target groups. With a corporate brand strategy, the corporate name and the brand are the same. The methodology used for the purpose of this project is the multiple case study approach to investigate the contemporary phenomena within its real-life context. A holistic multiple-case design is used so that the global nature of organizations and businesses can be effectively examined. Both products based and service based businesses and organizations have been included as case studies. Various elements of strategic importance like marketing mix, brand architectures, segmentation, positioning have been included in the various studies to clearly understand how decision making and strategy formulation in terms of branding is carried out by multi national companies. This project hence, helps the reader in gaining a deeper understanding on MNCs choice of branding strategies.

TABLE OF CONTENTS

TOPIC

PAGE NO

Introduction

5-8

Review of Literature

9-15

Methodology

16-19

Analysis & Interpretation

20-30

Summary of Findings

31-34

Scope for Further Research

35

Conclusions

36-37

Bibliography

38

INTRODUCTION

1. Indian Journal of Marketing The big four banks: dealing with the on-line challenge, Journal of Financial Services Marketing Background In order to be competitive in todays global marketplace, MNCs need to set up effective branding strategies. Depending on the structure of the company and the products offered, MNCs can use different strategies. There are certain characteristics that will affect the type of strategy chosen. In order to reach economies of scale, many MNCs standardize their branding- and marketing activities. However, MNCs are often required to adapt to local preferences and cultures. There has been a lot of research within the area of branding strategies; however there is limited research on how MNCs choose which strategy to adapt in different international markets. What is a Brand? A brand is defined as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors (Kotler & Keller, 2006). According to Album , Durer and Strandskov (2005) a brand is anything that identifies a sellers goods or services and distinguishes them from others. Van Gelder (2003) states that when defining a brand; everything is carefully prepared and planned in order to create value for the customers that will benefit the organization.

Functions of a Brand
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The basic purposes of a brand are universal, and these are:

To distinguish a companys offering and differentiate one particular product from its competitors.

To create identification and brand awareness

To guarantee a certain level of quality and satisfaction

To help with promotion of the product

The Value of a Brand Kotler and Keller mention that a strong brand creates higher profits which in turn create higher value for the shareholders. New brands in a global marketplace have a tiny chance of competing against established brands, and creating a brand from scratch involves enormous investments. The return on the investments spent on branding is converted into brand awareness, image and loyalty and the concept summarizing the value of the brand is referred to as brand equity. According to Keller (2007) different marketing programs must be created to satisfy different market segments in building brand equity:

Differences in consumer behavior have to be identified

The branding program has to be adjusted accordingly through the choice of brand elements, the nature of the actual marketing program and activities, and the leveraging if secondary associations.

International Branding Kevin Keller states that the reasons for going international are:

Perception of slow growth and increased competition in domestic markets

Belief in enhanced overseas growth and profit opportunities

Desire to reduce costs from economies of scale

Need to diversify risk

Recognition of global mobility of customers

Global Brand Many companies adapt a global strategy. Global brands are usually positioned and marketed similarly throughout the world with slight modifications. A global brand reflects the same set of values around the world, and the key in global brand strategy is formed by those values or brand character forms. In order to succeed, global brands have to foresee cultural trends and consumer values. The benefit of a global brand is higher acceptance of products by consumers and intermediaries, and the drawbacks are loss of local flavor. Strategic Decision When developing an international brand strategy, the company has to decide; which markets to act on (new or existing), new products or modifying existing products, and also the accessibility of the products in the international market. Companies can gain competitive advantage in international markets through quality and performance. Furthermore, the companies have to sustain competitive advantage in their branding
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strategy, and they make that achievement through; brand equity, financial strength and international distribution. There are four brand architectures that firms may use: 1) Corporate branding 2) Product branding 3) Corporate-and-product (with dominant use of the corporate brand) 4) Product-and-corporate (with dominant use of product brands) Some MNCs, for example IBM, may put emphasis on their corporate brand, whereas other MNCs such as Procter & Gamble (P&G) put most emphasis on their product brands Other MNCs choose to set up their strategies by focusing on corporate- and product branding simultaneously. Corporate branding is on the firm-level, whereas the product branding is focused on the actual product or service. Many MNCs shift focus from product brands to corporate brands as they move towards globalization. Firms which are successful in building a strong corporate brand is more competitive than firms which rely simply on their product brands. Outline The introduction will give a brief background of the topic. Literature review will give the relevant secondary literature concerning the main issues and research questions. The methodology will give the explanation of the procedure and method for collecting the data on the research questions. Data analysis will analyze and compare the data collected with the literature and theory. Finally, the discussions, findings and conclusions would be presented.

Introduction

Literature Review

Methodology

Data Analysis

Conclusions 9

LITERATURE REVIEW
Branding Strategies of MNCs in International Markets Branding Decisions The first choices that have to be made by companies are: to select a good brand, and to choose how many brands that should be included in the product line. Furthermore, there are different decisions that have to be made: A single/family brand, this strategy indicates that all products under the same brand

name have the same quality, and also simplifies the advertising. An individual (local) brand, which is a strategy that adapts to local preferences. Multiple brands, is a strategy to have the same product but within different segments in one national market. This strategy differentiates products from its quality or characteristics. Country of Origin Effects Countries can take advantage of their country-of-origin, and acquire other companies in order to enter a market. It is important to have a stable international distribution system when acting in international markets in order to keep the costs low. However, a large well organized distribution system can create barriers to entry. Global Brands Global brands have gained popularity with the rise in globalization. With the ubiquity and reach of the internet, people learn what is going on around the world more than before. Global brands are more appealing to the younger segments. Furthermore, global brands are more common in urban areas, than in rural areas. Consumer behaviors are more similar between large cities in different countries, than in a large city and an area in the same country.
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Global brands are positioned in the same way all around the world and the consumers take country-of-origin in consideration when buying a global brand. Most of the global firms have the same product line all around the world; this is because it is difficult to be too diversified when acting on a global scale. Strategy Approaches Different forms of strategy approaches that a company can undertake are shown below At one extreme, product brand strategy can be found. This is where one individual product has a specific name and a specific positioning; every new product gets its own brand name and positioning. At the other extreme the corporate umbrella brand strategy can be found, this means that a company has different products that share the same brand name.

Brand Function: Indicator of Origin

Corporate Umbrella

Umbrella Brand

Range Brand

Line Brand

Brand Function: Product Product Differentiation Brand

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Standardization versus Customization By using a strategy based on local preferences, the company can get advantages of: Customer needs Distribution and promotion methods to be used Competitive market structure Economies of scale in production and distribution Legal constraints Operational structures Corporate Branding Corporate branding is defined as the strategy in which the brand and the corporate name are the same. Corporate brands simplify communications with government, the financial sector, the labor market and society. organizational values, core values and added values. Characteristics of Corporate Brand Cultural. Corporate brands have cultural roots that stem from Some examples of corporate brands are IBM, Nike, Virgin and Sony. The base for corporate branding consists of

the sub-cultures that are contained within the corporate brands. The personnel have responsibility since they are the key stakeholder group since they communicate the organizations values by everything they say or do.

Intricate. Corporate brands are intricate because they are

multidimensional and multi-disciplinary, have a range of stakeholders, both internal and external, they also have controlled or uncontrolled communications through for example, word-of-mouth.

Tangible. Corporate brands encompass tangible elements

such as business-scope, geographical coverage, performance-related issues, profit margins, pay scales, recruitment etc. Ethereal. The stakeholders of the corporate brand are

subjective and emotional when judging the brand; this can be for
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example, country-of-origin or the type of industry. Commitment. The total organizational commitment is very

essential and the CEO and the board-level is the prerequisite for corporate branding. Commitment is hence the core and the cornerstone in corporate brand management.

Product Branding

Product branding may be defined as the strategy of building separate brand identities for different products. Product brands are short term and live in the present. The ambition of product brands is to attract customers and boost sales. Examples of product brands include Sprite under the Coca-Cola Corporation, Lux and Dove from Unilever and Toyota and Lexus from Toyota. A product brand strategy is where one individual product has a specific name and a specific positioning. Every new product gets its own brand name and positioning. Thus, a product brand strategy has a strategy of product differentiation. This is undertaken by P&G. The product is at focus and the only way to customer needs. strategy extend the

product is by a renewal of the product, and to improve the product in order to adapt to

Characteristics of a Product Brand

It is flexible which allows firms to position themselves against different segments in different markets. It creates differentiation and preference for a product or service in the mind of the customer. Failure of one brand does not affect another brand, or the is because every brand is individual. company name, that

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Factors Determining MNCs choice of Branding Strategies in International Markets The development of brand strategy in an emerging market should be based on an understanding of its economic, technological, socio-cultural, and competitive conditions. Other factors that may influence the MNCs initial branding strategy when entering an emerging market are Stakeholder Interest

Corporate Image and Reputation

Market Complexity

Marketing Costs

Product Characteristics

Stakeholder

Corporate Image and Reputation Market

Choice of Branding Strategy: Corporate Branding Product Brand

Marketing Costs

Product 14

Stakeholder Interest The focus of product branding is on the customer and the focus of corporate branding is on the stakeholders. Corporate branding is successful when the values of the corporation are attracted by the stakeholders. An advantage with a strong corporate brand is that the company may attract investors, and potential employees. Corporate Image and Reputation: Customers perception of a product brand typically comes from the communicated image and advertising, whereas the corporate image is derived from the customers interaction with the firms employees, physical presence and overall marketing efforts. MNCs have to create positive customer perceptions. However, that is much more complicated in emerging markets due to heterogeneity in the market structure. Market Complexity Branding strategies become difficult to set due to complex international environments. There are some barriers that MNCs have to face: On a macro environment

Consumer characteristics and behaviors The legislative infrastructure Existing competition

On the task environment

Inter-institutional relationships Behavioral norms and channel structures

On the organizational environment

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 Cost structures and operational flexibility Management styles and cultures

Five environmental factors that may influence brand-name standardization/adaptation strategy: (a) Religion may affect certain items in society which may be perceived as taboo. (b) Language, translation blunders may occur. (c) Education, the degree of illiteracy within a society has to be considered. (d) Technology, technological differences across nations may affect marketing. (e) The economy, standardization is more practical in markets that are economically comparable. Marketing Costs Creating a brand is very costly and it is very expensive to sustain an existing brand. There may be high marketing costs when targeting different brands at separate small segments. Corporate branding is efficient in communicating market and product information. A way of reducing the marketing costs may be to create an integrated marketing communication program rather than promoting different product brands. Companies can reduce costs by adapting a corporate brand strategy, since they can exploit the economies of scale in advertising and marketing. This strategy is suited in markets where the product life cycle is declining and hence the costs would be high to continually creating new product brands. Product Characteristics Consumer products are typically more culturally sensitive than industrial products, especially in emerging markets. New entrants in emerging markets are more likely to use corporate branding for industrial products rather than consumer products due to the fact that consumer products are more culturally sensitive. When targeting new markets, product branding
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should be suited. Product branding should also be used when entering markets with new products, since a new approach is expected from the customers. Product branding should be used for service brands in different situations.

METHODOLOGY AND DATA

A qualitative research approach is suitable when human activities or when behavioral patterns will be investigated. Research Strategy: Case Study

Data Presentation

Case Study 1: Procter & Gamble

Company Background

According to P&Gs webpage, the company consists of over 138,000 employees working in over 80 countries worldwide. P&G is a public company and is listed on the New York Stock Exchange (NYSE). Additionally, the company is on the Fortune 500 list. The headquarter is based in Cincinnati, Ohio. P&G has nearly 300 brands in different areas. The company has one of the largest and strongest portfolios of brands, for example Pampers, Tide, Ariel, Always, Pantene, Bounty, Folgers, Pringles, Charmin, Downy, lams, Crest, Atonal and Olay. The companys operations are listed into three global business units (GBU), with each GBU divided into different Business Segments: Beauty Beauty Segment Grooming Segment

Household Care
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Baby Care and Family Care Segment Fabric Care and Home Care Segment

Health & Well-Being

Health Care. Snacks, Coffee and Pet Care

Branding Strategy of P&G in International Markets Product Branding Strategy P&G focuses merely on product branding and uses a global strategy. There is no real home market since P&G is global company, but it is originally an American company. P&G as a corporation is more publicly known in USA and Great Britain than in other countries. But the actual corporate brand, P&G, is never marketed; instead focus is on the different product brands. P&G has around 300 brands in total worldwide. However, the number of brands may change monthly and sometimes even weekly. The brands that are not successful are sold. For example, many of the family care brands have previously been sold, but instead P&G has acquired the global brands Walla and Gillette. The reason for using a product branding strategy is because P&G has many different kinds of products: baby care, health care, pet food, coffee, etcetera. When there are diverse kinds of products it is better to focus on product branding rather than corporate branding. The focus will stay on product branding. However, P&G sometimes uses an umbrella strategy where one product brand is extended to several additional products such as Ariel with different products/sub brands under the Ariel brand. Traditionally, the brands strengths have been driven by innovation - to be best in
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class. Today, the focus lies more on commercial innovation. Hence product innovation is losing importance for brand management. For P&G people and managerial resources are important. Additionally, it is important with first-mover advantage. In order to build a competitive advantage, P&G has traditionally been very focused on innovation. However, focus has shifted to be more driven by marketing knowledge. To sustain competitive advantage P&G makes huge investments. There is a huge R&D infrastructure, as well as marketing functions. In some cases P&G acquires other companies with strong global brands in order to sustain competitive advantage. Two recently acquired strong global brands are Wella and Gillette. Hence, P&G focuses only on acquiring truly global brands, or brands that have the potential of becoming global. P&G would never acquire a small local supplier just to open the market. P&G focuses on traditional advertising such as TV-advertising etcetera. P&G does not want to change its type of branding and marketing strategy. The company wants to create global brands. When the company has a new product idea, it has to be considered how that specific product can be taken into other markets. Hence, there has to be consensus for a whole continent. That is the reason why P&G prefers to bring in successful brands from one country to another, instead of developing new products. When developing a strategy for specifically emerging markets, P&G takes the best ideas from other markets and sends the best people to the new markets. P&G opened up China and Russia by sending 10 of the best people. After a few years time, the number of employees had risen to 200 people. P&Gs main reason for going international is to boost sales and reach economies of scale and scope. It also has to do with international communication. P&G simply tries to find out what works internationally. Management of the Brand The product brand is undoubtedly the most important. The whole organization
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focuses on product branding except for some special functions which may deal with the corporate brand. Since P&G focuses on product management it is the marketing organization which manages the product brands. The PR department is the ones who make some kind of corporate branding for P&G. There is a Global Business Unit (GBU) which is responsible for the strategic development of the brand. P&G also has regional GBUs on each continent, as well as Market Development Organization (MDO) in each region. When it comes to managing the brand image, the GBU and MDO have the main responsibility. Both entry level position management, middle level management, as well as senior level management are responsible. The more important a brand is; the higher level of management responsibility. When delivering the product brand, most of the work is made by the MDO at the entry level management. Generally, marketing is mainly managed by entry level management and middle level management.

Focus on Stakeholders For P&G all stakeholders are important, and the most important stakeholders are the customers. It is vital for the company to understand and please the customers. Other important stakeholders include employees (since it is a very strong focus on personal development within P&G), local governments, shareholders, and investors. P&G has a commitment to invest in about 20 billion dollar in sustainable products and grow 5-6% per year; hence the investors are important to consider. P&G has a long-term focus measured in both financial success, as well as sustainability. When it comes to brand-building a long-term focus means up to 20 years, and when it comes to investors it means at least 5 years. Standardization versus Adaptation P&G tries to position all the brands similarly in all markets. However, some
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brands may have a stronger position in some markets, and a weaker position in others. There are some markets such as South America where some special brands, for example shampoo, is positioned differently because of different income structures. P&G tries to standardize as much as possible, and the aim is that the product should work throughout at least one continent. Hence, there are many different languages on the packages. The same type of product branding strategy is used all over the world. P&G sees what works in one market and takes it to another market, and tries to do it the same way. A lot of research is made before entering a new market in order to find out if the brands have to be adapted. Research is made in order to get to know the customers, the culture and the country. Adaptation is made only if it is necessary, so in some cases there might be adaptations made to each local market when needed. The color green for example cannot be used in the Near East due to cultural reasons.

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ANALYSIS and INTERPRETATION

Branding Strategies of MNCs in International Markets Similarities and differences between the two companies type of branding strategies are provided in the discussion that follows. Strategy P&G has a typical product branding. P&G has around since each individual brand has its own identity. Since P&G has several diverse kinds of products, it has a more functional approach. Each brand is positioned differently and towards different segments in different markets. Management of the Brand In the case of P&G, the whole company is about product branding. However, it is the marketing function within P&G which manages the product brands and specifically it is the entry level management and middle level management who mainly manage the marketing. It is the market development organization (MDO) within P&G which delivers the brands. Focus on Stakeholders When it comes to drawing attention from stakeholders, P&G state that the most important stakeholders are the customers. In the case of P&G it is vital to understand and please the customers. However, there are other important stakeholders such as employees, local governments and investors. Standardization versus Adaptation P&G is a global company acting on multiple international markets.
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300 different brands

worldwide; therefore the best suited strategy is to use a pure product brand strategy

For that reason, it strives for using a standardized strategy. P&Gs aim is to try to standardize as much as possible and to use the same type of branding Strategy all over the world. However, even if the intend is to standardize as much as possible, it is sometimes needed to adapt to the local markets. P&Gs aim is that the product should work at least throughout a whole continent. The reason for P&G to use a standardization strategy is to reach economies of scale and scope. Before launching a product on a new market there is careful research made in order to find out the preferences of the customers and so on. When the preferences differ, there are adaptations made before launching the product. Factors Determining MNCs Choice of Branding Strategies in International Markets Stakeholder Interests The first variable discussed in this section is stakeholder interests. The stakeholders are Important for all companies, and it is important to have good relations with them. Since P&G is a public company that is listed on the New York Stock Exchange (NYSE) it is Important to take the investors in consideration because this affects the quotation. However, since P&G uses a product brand strategy the corporate brand has less connection with the products since they are individual with individual brands. The customers are very important for the companies since they need to have a good relationship with these in order to increase sales. But the relationships are different between the companies. Since P&G uses a product brand strategy the customers have no relation with the P&G corporate brand, but with the individual products and it is important to know the customers needs and demands. The employees are important for both companies since they create the perception of the brand. The government relationships are an important factor for P&G. This depends on the major differences regarding rules and regulations in international markets. Companies acting on a global scale need to have satisfactory relationships with the government in order to maintain the business in that market. There is no information whether P&G has partnerships with manufacturers; however,
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the company sometimes acquire already existing global brands such as Wella and Gillette.

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Corporate Image and Reputation For P&G the corporate reputation is not that important since the corporate name is not visible on the products. However, the expectations of stakeholders are important for both companies. For P&G stakeholder expectations are important first of all since the company is listed on the NYSE, but also since customer expectations create customer demands. For P&G the brand personality does not have to be inline with the core values of the company since the company has different sorts of brands that suit different target groups. Hence, it is not important to have consistency throughout the company. Since P&G has different individual products with individual brands it cannot give added value to products and services. Since P&G is listed on the NYSE, it is important to have a good reputation, and a good reputation makes the stock more attractive and might increase the stock price. The benefit with a product brand such as P&G is that there is less harm if one individual product fails, because this product can easily be taken out of the market. Because of the fact that P&G has many different products, the marketing costs are therefore higher since the company needs to put marketing actions on every single product. This is therefore an important factor for a product brand acting on an international market. Market Complexity For all companies market complexity is an important factor when determining the choice of strategy in international markets. Since P&G and others act on a global scale, it is important to have a strategy that can be adapted worldwide. Although companies use a standardized strategy, they adapt different dimensions of the marketing mix in order to maximize customer value. Different factors have to be taken into consideration such as consumer characteristics, because this varies around the world and customers have different preferences depending on culture and/or values. Competition is another factor to consider since there might be other companies that are cheaper or have more market shares.
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Marketing Costs For P&G, the marketing costs are very important to consider when deciding strategy in international markets. Since P&G uses a product brand strategy, the company has to invest in all individual brands and there are high costs related to this and also when acting in different diverse markets. However, P&G uses a standardized strategy, and therefore, the company can benefit from that.

Case 2: McDonalds: Behind the Golden Arches

The McDonalds Story Genesis

The story of McDonalds started in 1954, when its founder Raymond Kroc saw a hamburger stand in San Bernardino, California and envisioned a nationwide fast food chain. Kroc proved himself as a pioneer who revolutionized the American restaurant industry. Today McDonalds is the worlds largest fast food chain serving 47 million customers daily. McDonalds is now one of the most valuable brands globally, worth more than $25 billion. The Golden Arches and its mascot Ronald McDonald have gained universal recognition. Though the company has roots in the US, McDonalds today has become an accepted citizen of the world.

Year 1955

Events Ray Kroc opens his first restaurant. McDonalds Corporation is created

1957

Quality, Service, Cleanliness and Value (QSC & V) becomes company motto

1963 1965 1968

Ronald McDonald makes debut The company goes public Big Mac is introduced`
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1974 1996

Happy Meal is launched McDonalds opens in India, the 95th country

McDonalds in India
McDonalds entered India in 1996. McDonalds India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. Apart from opening outlets in the major metros, the company is now expanding to Tier 2 cities like Pune and Jaipur.

Challenges in Entering Indian Markets Regiocentricism: Re-engineering the menu - McDonalds has continually adapted to the customers tastes, value systems, lifestyle, language and perception. Globally McDonalds was known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to consume beef or pork. To survive, the company had to be responsive to the Indian sensitivities. So McDonalds came up with chicken, lamb and fish burgers to suite the Indian palate. The Vegetarian Customer India has a huge population of vegetarians. To cater to this customer segment, the company came up with a completely new line of vegetarian items like McVeggie burger and McAlooTikki. The separation of vegetarian and nonvegetarian sections is maintained throughout the various stages.

Positioning of McDonalds in India

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It is established that kids reign supreme in FMCG purchase related to food products in India. So to attract children McDonalds has Happy Meal with which toys ranging from hot wheels to various Walt Disney characters are given (the latest in this range is the toys of the movie Madagascar). For this, they have a tie-up with Walt Disney. At several outlets, it also provides special facilities like Play Place where children can play arcade games, air hockey, etc. This strategy is aimed at making McDonalds a fun place to eat. This also helps McDonalds to attract the young urban families wanting to spend some quality time while their children have fun at the outlet. To target the teenagers, McDonalds has priced several products aggressively, keeping in mind the price sensitivity of this target customer. In addition, facilities like Wi-Fi are also provided to attract students to the outlets like the one at Vile Parle in Mumbai. Mc Donalds mein hai kuch baat projects McDonalds as a place for the whole family to enjoy. When McDonalds entered in India it was mainly perceived as targeting the urban upper class people. Today it positions itself as an affordable place to eat without compromising on the quality of food, service and hygiene. The outlet ambience and mild background music highlight the comfort that McDonalds promises in slogans like You deserve a Break Today & Feed your inner child. This commitment of quality of food and service in a clean, hygienic and relaxing atmosphere has ensured that McDonalds maintains a positive relationship with the customers.

McDonalds Marketing Mix (5 Ps)

The 5 Ps used by McDonalds are: 1. Product 2. Place 3. Price 4. Promotion 5. People

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Product: How should the company design, manufacture the product so that it enhances the customer experience?

Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the behaviour of the Indian customer and provided a totally different menu as compared to its International offering. It dropped ham, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Chicken Maharaja Mac. McDonalds brings with it a globally reputed brand, world class food quality and excellent customer specific product features.

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Place: Where should be the product be available and the role of distribution channels? The place mainly consists of the distribution channels. It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonalds outlet. There is a certain degree of fun and happiness that a customer feels each time he dines at McDonalds. There are certain value propositions that McDonalds offer to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. Now McDonalds have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. There are certain dedicated areas for children where they can play while their parents can have some quality time together. Price: What should be the pricing strategy?

Pricing includes the list price, the discount functions available, the financing options available etc. It should also take into the consideration the probable reaction from the competitor to the pricing strategy. This is the most important part of the marketing mix as this is the only part which generates revenue. All the other three are expenses incurred. The price must take into consideration the appropriate demand-supply equation.

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McDonalds came up with a very catchy punch line Aap ke zamane mein ,baap ke zamane ke daam. This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base McDonalds has now. McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes.

Promotion: What is the suitable strategy and channels for promotion of the product? The various promotion channels being used by McDonalds to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonalds are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonalds does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonalds are: You Deserve a break today, so get up and get away- To McDonalds Aap ke zamane mein ,baap ke zamane ke daam. Food, Folks, and Fun Im loving it. People: How to converge the benefits of internal and external marketing? McDonalds understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer.

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McDonald continuously does Internal Marketing. This is important as it must precede external marketing. This includes hiring, training and motivating able employees. This way they serve customers well and the final result is a happy customer. The level of importance has changed to be in the following order (the more important people are at the top): 1. Customers 2. Front line employees 3. Middle level managers 4. Front line managers The punch line Im loving it is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.

The McDonalds Experience

McDonalds has consistently excelled due to its ability to successfully integrate the customers perspective in its products and operations in a comprehensive manner. The revamped menu in India is an example of McDonalds strategy of integrating the customers perspective in its products. And, the operational integration is evident from McDonalds emphasis on its suppliers as its customers as well as its treatment of its consumers as co-producers of services. The ultimate aim of Service Marketing is not just to become a Service Leader but to create a Service Brand. The Service Delivery Process is the key to achieving this aim of Service Market

Service Delivery Process

Core Product

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Supplementary Process

During the Service Delivery Process, each moment of interaction between the firm and the customer, called Moments of Truth, helps understand the opportunities that a firm has to win or lose the customer. For example, these moments of truth are created for McDonalds every time the guard at the McDonalds outlet meets the customer, every time an attendant takes down the order from the customer waiting in the queue, every time the cashier interacts with the customer, every time the attendant helps the customer guided the customer towards the table, every time the attendant cleans the table, etc. Managing these moments of truth is a great challenge in Service Marketing especially due to customers involvement as a co-producer of services (e.g. McDonalds selfservice concept wherein the customer not only collects the order but also cleans the table after consuming the food). However, McDonald's has been able to create a great experience for its customers by understanding the nature of the entire Service Delivery Process and the various stages in the process that are exposed to the customers. Transparency in the processes at its outlet has helped McDonalds bring the back office in its outlet at the front so that the customer is able to know the operations and provide feedback on service design improvements.

Internal Customer Focus is equally important as External Customer Orientation in order to win these moments of truth. McDonalds focus on its People and their service delivery methods therefore plays a very important role in creating a successful Service Brand. The quality and the consistency of the service delivered by McDonalds have been greatly enhanced by the combination of the factors mentioned above. This has helped McDonalds become Service Leader and a successful Service Brand. This is evident from the fact that very few of its customers opt for take-home parcels or home

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deliveries while most of them prefer to eat at the outlet and enjoy the McDonalds experience.

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SUMMARY OF FINDINGS How can the branding strategies of MNCs in international markets be described?
Companies focus either mainly on a product branding strategy or mainly on a corporate branding strategy. However, there may be mixtures of the two types, but in most cases there will be a dominant use of one of the mentioned strategies.

Product branding is suited when a company offers multiple products that are targeted towards different segments. In that way, each product brand can have its own brand identity. Additionally, different products belonging to the same product category can be targeted towards different segments in order to increase sales. Although product branding is being used, it is still possible to create brand extensions under one of the individual brands. In this way, companies might be able to increase sales by taking advantage of an already existing strong brand.

The advantage with using a product brand strategy is that the corporate brand will most probably not be affected if one of the individual product brands fails or is put under the pressure created by bad publicity. Companies using a product brand strategy rely heavily on each individual brand. Since each product brand has its own brand identity, large investments are required in order to create and sustain a strong brand. Due to the above mentioned factors, a product brand is therefore more functional than a corporate brand.

Corporate branding is used when the corporate name and the brand is the same. The strategy is suited when a company offers several products which go under the corporate name. With this strategy companies may use the corporate brand as the master brand,
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and under the master there may be sub-brands. With this strategy companies invest in the master brand and the sub brands rather than in the different products. This strategy has a strategic approach, and the values of the company affect the brand. The advantage with this type of strategy is that each product offered can benefit from the corporate brand. However, that also makes it more complicated since it is very important for the company to have a good reputation as well as having a strong and stable corporate brand. If there is bad publicity for the company, that will affect the products negatively. There are some differences between product branding and corporate branding regarding brand management. When it comes to product branding, it is mainly the marketing function which manages the product brand, whereas management of the corporate brand is on a higher level i.e. the senior manager. In addition, the corporate brand is delivered by the whole organization, whereas the product brand is delivered by the marketing function. For MNCs, regardless of the strategy being a product brand or a corporate brand strategy, the customers are the most important stakeholders. However, there are naturally other important stakeholders such as employees, local governments and investors.

Regarding the dilemma of whether to standardize or adapt the branding strategy, our research clearly indicated that MNCs prefer to standardize as much as possible regardless of the company using a product brand strategy or a corporate brand strategy. When acting on different markets, companies standardize in order to reach economies of scale and scope. Efficiency is a lead word for MNCs; including efficiency in production, distribution and marketing. However, it seems like it is not possible for MNCs to use a standardization strategy exclusively due to heterogeneous markets. MNCs acting on the global marketplace need to adapt to local preferences and different income structures in order to succeed.
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How can the factors determining MNCs choice of branding strategies in international markets be described?
Based on our findings, the following conclusions can be made: The factors determining the choice of strategy used by MNCs in international market differ between product brands and corporate brands. Stakeholders is an important factor for MNCs when determining what strategy to use in international markets. The most important stakeholder for MNCs in international markets is the customers. Corporate image and reputation is a very important factor for MNCs using a corporate brand strategy in international markets. Corporate image and reputation is not important for MNCs using a product brand strategy in international markets since the products are sold on an individual level. Corporate image and reputation is to some extent important for an MNC using a product brand strategy that is public owned. Stakeholders expectations is an important factor to consider for an MNCs acting in international markets. It is important for a corporate brand to have a brand personality that is inline with the core values of the company. A corporate brand provides added value to the product since it delivers certain messages about qualities etcetera. For an MNC using a product brand strategy it is not important to have a brand personality that is inline with the core values of the company since the individual products carry its own brand personality.

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 It is not important for an MNC using a product brand strategy to have consistency throughout the company, and therefore a product brand is more flexible and can exclude failure brands. Market complexity is an important factor to consider for MNCs in international markets. MNCs implement a standardized strategy with some local adaptations to some markets. Consumer characteristics, competitors and environmental factors are important to consider for MNCs that act in international markets. There are high marketing costs for an MNC using a product brand strategy since it needs to market every product individually. An MNC using a corporate brand strategy has a central marketing function, and low marketing costs. MNCs strive to benefit from economies of scale through standardization when acting in international markets.

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SCOPE OF FURTHER RESEARCH

Throughout this thesis, we have been trying to investigate branding strategies used by MNCs in international markets, and the factors determining which strategies to be used. We have held our discussion on a somehow general level, and more research could be made within some specific areas. Therefore, the following areas can be explored for further research:

The importance of innovation (product innovation and/or commercial innovation) for MNCs related to product brand strategy as well as corporate brand strategy. Research on a private owned MNC using a product brand strategy.

Research on a MNCs in commoditized businesses like steel.

The country-of-origin effect, and how that affect MNCs strategies.

If a strong successful brand is connected to the type of strategy used. Study of how branding strategies of MNCs impact different stakeholders.

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CONCLUSIONS
Our research indicated that MNCs using a product brand strategy differs from MNCs using a corporate brand strategy (Procter & Gamble Sony Ericsson). The studies also showed that innovation is important for MNCs acting globally. However, emphasis seems to be put more on commercial innovation; i.e. brand management, when it comes to companies focusing on product brand strategy. Regarding companies using a corporate brand strategy, the emphasis seems to be more on technological and product innovation.

Based on our findings, the following conclusions can be made: MNCs acting on international markets use a product brand strategy, a corporate

brand strategy or a mixture of the two. A product brand strategy is suited when a company offers multiple products that are targeted towards different segments. A corporate brand strategy is suited when a company offers several products which

go under the corporate name. With a product brand strategy the corporate brand is not affected if one of the

individual brands fails or received negative publicity. The corporate brand may be affected negatively if one of the products fails when a

company uses a corporate brand strategy. With a corporate brand strategy, all products will benefit from a strong corporate

brand. The products will not benefit from a strong corporate brand if a product brand

strategy is used. The product brand is managed by the marketing function. The corporate brand is managed by the senior manager.

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 Customers are the most important stakeholders for all MNCs, regardless of whether a product brand strategy or a corporate brand strategy is used. A standardization strategy with some adaptations in local markets is preferred for all MNCs, regardless of whether a product brand strategy or a corporate brand strategy is used.

In the competitive Fast Food industry, in the new environment, fast, convenient service is perhaps no longer enough to distinguish the firm. At this time, a new critical success factor may be emerging: the need to create a rich, satisfying experience for consumers. This brings us to service and experience based competition which McDonalds can use for competitive advantage against KFC or the local Jumbo King.Competition also reduces product lifecycle; inducing firms to revise their products portfolios and to revisit their product market to understand changing needs, expectations and perception of different market segments.

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BIBLIOGRAPHY

1. www.pg.com 2. www.allbusiness.com/procter-gamble-co 3. www.annualreport.pg.com/annualreport2009/brands 4. www.docstoc.com/.../How-McDonalds-evolved-its-marketing-in-India 5. www.mcdonaldsindia.com 6. Marketing Management Kotler Philip, Keller Kevin, Jha Mithileswar 7. www.brandchannel.com 8. Corporate Branding - Perspectives And Experiences by Devi R J 9. www.marketingprofs.com

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