McDonald's Localization Strategy
BUSINESS TIPSCASE SHARING
River Chan
4/30/20246 min read
What International Business Expansion Strategy does McDonald's use?
With over 40,000 restaurants in more than 100 countries, McDonald's has successfully penetrated diverse markets and cultures.
The secret of McDonald's international business expansion strategy for their global success? Localization.
The Power of McDonald's Localization
Localization is the process of adapting a product or service to meet the needs and preferences of a specific market.
For McDonald's, this means tailoring their menu to suit the tastes and dietary preferences of customers and tailoring their international business expansion strategies in different countries.
The localization strategy has been instrumental in McDonald's global growth, with international sales accounting for 59% of their total sales.
McDonald's Localization Strategy in Action
McDonald's has mastered the art of localization, creating unique menu items that cater to local tastes while maintaining the brand's core offerings.
Besides the local menu, they applied different marketing strategies that aligned with trends in local markets, effectively arousing interest.
International Business Expansion Strategies - India McDonald's Localization Menu: McAloo Tikki Burger
McDonald's has made significant alterations to its menu to cater to the country's unique dietary preferences and religious beliefs.
The majority of Indians are vegetarians, and beef is not consumed due to religious reasons.
In response, McDonald's introduced the Maharaja Mac, a version of the Big Mac made with mutton patties instead of beef.
They also introduced the McAloo Tikki Burger, a vegetarian option featuring a potato and pea patty blended with Indian spices.
Another popular item unique to the Indian market is the Vegetable Pizza McPuff.
McDonald's also serves a garlic-free sauce catering to the dietary restrictions of the Jain community.
International Business Expansion Strategies - McDonald's Localization Menu in China
McDonald's faced initial challenges due to the diverse flavors and food preferences of the Chinese people.
However, they managed to build a strong reputation by focusing on local tastes.
The McSpicy, a product that started as a local taste variation, has been adopted internationally.
They also introduced unique items like Pineapple Pie, Taro Pie, Congee, and Red Bean Boba tea.
In China, McDonald's focuses on chicken instead of beef, and they use thigh filet rather than chicken breast, considering the meat preferences of Chinese people.
International Business Expansion Strategies - McDonald's Localization Menu in Japan: McDonald's Japan Caramel Melts
McDonald's in Japan offers customers two meat options to choose from and different portion sizes of fries and drinks.
The menu in Japan includes a wide variety of unique snacks such as chocolate with potatoes, Avocado Hamburgers, 4 floors of Giant hamburgers, Shrimp burgers, Rice burgers, and Seaweed shakers.
2023 McDonald's Localized Marketing Campaigns in Japan
In 2023, McDonald's Japan released a series of animated advertisements recently that gained widespread popularity on the internet.
Animated video is one of the most popular and common styles in Japan.
This ad depicted a young couple's awkward yet cute relationship, evoking a sense of nostalgia and romance among viewers.
The previous animated ad from McDonald's Japan had focused on a family sharing a meal, demonstrating their ability to connect with audiences through relatable and emotionally resonant themes.
International Business Expansion Strategies - McDonald's Localization Menu in South Korea: K-Pop crossover
NewJeans, a South Korean K-Pop girl group, and McDonald's Collaboration first launched in South Korea on June 1, 2023, and subsequently spread across various Asian countries like Indonesia and Hong Kong.
It included two types of chicken burgers, chicken tenders, drumsticks, nuggets, and a new spicy cheese sauce.
The meal was expected to be available in two combinations in Malaysia: one with a Spicy Crispy Chicken burger and another with a Spicy Crispy Chicken Wrap, both accompanied by a side of fries that could be upgraded with seaweed seasoning and a drink.
The Role of Franchisees and Local Experts in Localization Strategy
Local McDonald's restaurants are managed and owned by franchisees or licensees.
These local experts use customer research to craft new items that resonate with the local market.
This approach allows McDonald's to incorporate local flavors in several ways, from adapting McDonald's staples to fit specific tastes to creating completely new offerings.
The Impact of McDonald's Localization Strategy
Localization has had a significant impact on McDonald's sales.
For example, the introduction of the BTS menu in South Korea led to a 40% increase in global sales from the year before and significantly boosted McNugget sales during that period.
McDonald's: Think Global, Act Local
McDonald's localization strategy serves as a powerful example for businesses looking to expand internationally.
By understanding and catering to local tastes, businesses can increase their chances of success in new markets.
As McDonald's has shown, localization is not just about translating a product or service into a different language; it's about understanding and respecting cultural differences and preferences.
In an increasingly globalized world, localization is more important than ever.
Businesses that can successfully adapt their offerings to meet the needs of different markets will be better positioned to thrive in the global marketplace.
As McDonald's has demonstrated when it comes to international business, thinking globally and acting locally is a proven recipe for success.
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McDonald's Localized Marketing Campaigns in Japan
In 2016, McDonald's became the first brand to partner with Pokémon Go, transforming 3,000 of its restaurants in Japan into virtual "Pokémon gyms."
This innovative marketing move was aimed at leveraging the global gaming phenomenon to attract players to their physical locations, enhancing customer engagement and foot traffic.
According to McDonald's CEO, Steve Easterbrook, this collaboration was part of a localization strategy to engage with leading partners in new and innovative marketing platforms, contributing positively to the company's business.
2024 McDonald's Localized Marketing in Japan: WcDonald's
McDonald's is launching a unique global campaign called "WcDonald's" starting February 26, 2024, spanning over thirty regions worldwide.
This playful initiative transforms the iconic "M" in McDonald's to a "W," even featuring its website.
The campaign is inspired by a common practice in Japanese anime and manga, where "McDonald's" is humorously altered to "WcDonald's" to skirt copyright issues, appearing quite natural.
This clever localized marketing move by McDonald's embraces this cultural reference, engaging fans and consumers in a new and intriguing way.
Image credit: WcDonald's
River Chan is a marketing director of ToAsia.biz with over 10 years of experience in marketing from strategic planning, project execution, and data analysis across different industries.