International Marketing

McDonald’s Marketing Strategies in Vietnam

Vietnam Fast foods Market Analysis

McDonald’s Marketing Strategies in Vietnam

Discussions

Vietnam Fast foods Market Analysis

• Overview • PEST Analysis

• Achieving higher political stability and absence of violence

• Open door policies: facilitate enterprises , business, investor all over the world.

• Right moment for McDonald’s to enter Vietnam

• Vietnam has emerged as the most recent of Southeast Asia's economic success stories, posting the highest GDP growth throughout the region, and third in global average annual GDP growth, behind China and India (Lehmann, 2010)

• Low Labor cost

• Vietnam joined the WTO in January 2007 give a major boost to Vietnam's export led economy and should spur on the country's economic liberalizing reforms

• Young population: population of around 90 million people, with 70% under the age of 35 (Ahmad, 2010)

• Young and dynamic people easily accept and adapt new trends from western countries

• More pressure for time fast food has been playing an essential role in modern and busy life

–

• Internet users had reached 24 million in 2010, which accounted for 27.1% of the population of 86 million in 2010

• Rich in raw material: chicken, pork, beef, vegetable, etc.

Vietnam is a potential but challenging market for McDonald’s to penetrate.

McDonald’s Marketing Strategies in Vietnam

• Worldwide Strategies

• STP

• McDonald’s Vietnam Marketing Mix

Standardization

Foster customer awareness of the brand

Save cost considerably

French fries: McDonald’s signature

Adaptation

Satisfy different customers’ preferences and needs

Improve sales in specific regions

• Adapt prices according to the country and the location of the stores within the country

• Criteria: - Supply and demand - Evaluation of the competition - Production cost - Quality of ingredients • Offer variety of combos => Lower price and increase sales

• Over 35,000 restaurants in nearly 120 countries

• Aggressive and strategic expansion

• Location requirements: - 50,000 square feet - At the corner with visible signs

from two major streets/near a major intersection with traffic signals

- Ample parking space - Adapted for mall, airport and

some downtown locations.

Brand globally

- Same brand name with the golden arches logo

- Partner with Walt Disney => universal strategy

- Sponsor World Cup since 1994 => reached approximately billions of people

• Advertise globally

- Advertising: Utilize different ways and channels to deliver the message

- Public relations: Different tactics in customer care

• Staff locally and promote from within => understand both the corporate and local cultures

• Recruitment: Look for right attitude rather than technical ability

• Training: - 22 languages - Standard practice worldwide

while adapting the content and teaching methods to each region

–

• Segmented based on demographic factors, particularly ages

• Target:

- Children and families

- Consumers with cars: medium/high income

• Position: a high-class fast food chain for high-class consumers

Standardized meals

BigMac- French Fries – Coca Cola

Standardized ingredients

Australia

Thailand

Atlantic and Pacific Ocean

Russet Burbank potatoes

Standardized Services

• Drive-Thru

• 24/24 service

Vegetables from Dalat

(lettuces, tomatoes, onions)

1st to introduce McPork

1st to introduce Hot Tea

ADAPTATION

ADAPTATION

“McDonald’s brings us the strictest requirements ever. They have their own

standards from the color of the buns, the burgers’ thickness, and even the sesame

amount on the products. We have to import new baking equipments and tools

to meet high standards from McDonald’s”

Mr. Kao Sieu Luc, CEO of ABC Bakery

Relatively high prices (compared to KFC, Lotteria, Jollibee and Burger King)

Big Mac Index:

•85.000 VND (about 4 U.S dollars)

•Lower than the US index

•Higher than indexes in other Southeast Asian countries (Singapore, Indonesia, Philippines, Malaysia)

1st Restaurant: Dien Bien Phu Street, District 1.

•Total area: 3000 m2

•In-house: 1300 m2

•Seating capacity: 350

•Drive-Thru service.

Largest fast food restaurant in Vietnam

until now

2nd Restaurant: Ben Thanh, HCM city

•Beside 23/9 Park in city center

•May 2014

•Total area: 260m2

•Seating capacity: 260 indoor, 80 outdoor

•“To Go” counter

•Conveyor belts: show food transportation process directly to customers

3rd Restaurant: Phu Lam, HCM city

•August 2014

•1600m2; in-door: 800m2

•2 floors: 280seats (including 230 in-doors)

•Drive Thru, Play Place,

•2 private room for parties

•Can go through Galaxy Cinema

Advertising Zalo and modern Social media channels

Sales Promotion Various sales promotion campaigns and

discount programs,

Public Relation Call upon the public - especially the youth

- to follow the active and healthy lifestyles.

The Iconic character: Ronald One of the most recognizable characters in

the world, along with Santa Claus.

•Workforce diversity: Mc Family •Standardized training •Hired foreign staffs and foreign managers

Discussions

• Advantages • Drawbacks • Comparisons • Recommendations

STANDARDIZATION

Locating Strategy Serve hundred customers at the

same time.

Promotional Campaign seem to run effectively.

Rating: 4.3 stars

ADVANTAGES

Moderately Effective pricing Strategies • Target: middle and high-income customers;

• For middle-income customers: relatively high price

• High income customers: seem not to prefer fast food

Drive Thru • most customers go on motorcycles, while car-driving customers seem not prefer fast foods.

• Customers: less than 25 years old relatively low income and disloyalty to products

• Inconsistence in the process: take around 15 minutes for one customer arrival

Service Quality • Customer complaints: unsuitable music, slow services; orders missed, sauces charged

• Negative staff attitude on 1st restaurant

3 worldwide problems

Bad financial performance: revenues and stock prices have not increased through at least 13 months

Healthy issue: junk foods, intensive farming and production methods…

Labor force issues: high turnover rate, worker strikes

• Child obesity rate: 20%

• Main customer target: children => unethical

• Solution: clear about the nutrition and calorie counts of their products

• Recommendation: add green dishes to the menu

• Strong brand name, image and reputation

• Specialized training for managers

• Unique features: drive-through and 24/7 service

• Search for restaurants, order

and pay through cell phones. • Provide information: nutritional

values, discount programs

Create better customer loyalty, increased purchase frequency,

and faster line throughput

Green Menu

Thank you for listening!