ISSUE: MARKETING MIX FOR FAST FOOD INDUSTRY

1. INTRODUCTION

The purpose of this article review is to compare the two different journal but focusing on
the same issue which is marketing mix for fast food industry. One of the factor enhance
us to discuss on this topic is because nowadays, the number of fast food has increased
year by years and this proved that the important of fast food to general public is so
clear. Besides that, since fast food industry are growing and competence, it is
interesting to know what kind of marketing mix can be proved to be outstanding in this
battle.

Lin (2011) is concentrating on Marketing mix (7P) and performance assessment of

western fast food industry in Taiwan. This study is discussed on the mutual influence of
marketing mix (7P) in fast food industry. Besides that, this paper also discuss on
importance ranking of marketing mix (7P) in fast food industry, and helps to do
performance evaluation of five Taiwan’s western chain store fast food suppliers.

Study done by Vignali (2001) generally focusing on McDonalds marketing mix and
specifically discussing on how the company combines internationalization and
globalization element accordance to various fast food markets.

BACKGROUND OF THE STUDY

Taiwan industry
Lin (2011) in his writing focus on the empirical survey that his conducted in Taiwan.
In a small Taiwan with population of only 23 million, there are as many as 714 fast food
stores, and such high density is really unbelievable. it can be seen that lots of fast food
suppliers withdrew from Taiwan market in the period 1995 to 2010, some fast food
suppliers even show negative growth, and some show stable growth, that is, the
development result shows two extreme cases. In such competitive environment, each
fast food supplier has its marketing way, some succeed and some fail.
Therefore Lin come out with the survey. In order to get more practical verification,
Taiwan’s current five western chain store fast food supplier are put into afore research.

McDonald’s background

Vignali (2001) in his writes regarding Mc Donald anf focused on the globalization
process. He began his writing with the story of founder of McDonald, Richard and
Maurice McDonald founded McDonald’s in 1937. The brothers developed food
processing and assembly line techniques at a tiny drive-in restaurant east of Pasadena,
California. In 1954, Ray Kroc, a milk-shake mixer salesman, saw an opportunity in this
market and negotiated a franchise deal giving him exclusive rights to franchise
McDonald’s in the USA. Mr Kroc offered a McDonald’s franchise for $950 at a time
when other franchising companies sold restaurant and ice-cream franchises for up to
$50,000. Mr Kroc also took a service fee of 1.9 per cent of sales for himself plus a
royalty of 0.5 per cent of sales went to the McDonald brothers. The McDonald’s brothers
sold out for $2.7 million in 1961.McDonald’s first international venture was in Canada,
during 1967. Shortly afterwards, George Cohon bought the licence for McDonald’s in
eastern Canada, opening his first restaurant in 1968. Cohon went on to build a network
of 640 restaurants, making McDonald’s in Canada more lucrative than any of the other
McDonald’s outside the USA. The key to the international success of McDonald’s has
been the use of franchising. By franchising to local people, the delivery and
interpretation of what might be seen as US brand culture are automatically translated by
the local people in terms of both product and service. McDonald’s now has over 20,000
restaurants in over 100 countries, and around 80 per cent are franchises.

2. LITERATURE REVIEW

Globalization versus internationalization

Globalization involves developing marketing strategies as though the world is a single
entity, marketing standardized products in the same way everywhere. Globalization of
markets requires total commitment to international marketing; it embodies the view that
the world is a single market.

Internationalizations involve customizing marketing strategies for different regions of the

world according to cultural, regional and national differences to serve specific target
markets. In order to standardize the marketing mix, the strategy needs to group
countries by social, cultural, technological, political and economic similarities.

Ohmae (1989) state that, large companies must become more global if they hope to
compete. They must change from companies that treat their foreign operations as
secondary, to companies that view the entire world as a single borderless market. Levitt
(1983) suggests that, as markets become increasingly similar and more global, the key
to success lies in the ability to globalize.

Czinkota and Ronnenken (1995) believe that multinational companies should have to
find out how they must adjust an entire marketing strategy, including how they sell and
distribute, in order to fit in with new market demands. Altering and adjusting the
marketing mix determinants are essential and vital to suit local tastes, meet special
needs and consumers’ non-identical requirements (Czinkota and Ronnenken, 1995).

However, Taylor (1991) supports the view that companies should use both
internationalization and globalization elements to create a competitive advantage:

… it is important to heed the maxim “think global, act local”. The firm must ensure that
its structure fits in with its international environment, while at the same time, have the
internal flexibility required to implement its strategic goal (Taylor, 1991).

The debate between these two schools of thought is continuous and, as trade barriers
throughout the world diminish and we move towards a single economy, more firms
seem to be entering the international arena:
Growing internationalization of tastes and buying patterns has made the development of
global and regional brands more feasible (Doyle, 1994).

As a result, organizations are experiencing a change in focus from developing into a

global company over time to being a “born global”. Born global operate on a worldwide
scale from birth rather than developing with the business.

The concept of “think global, act local” has become the business phrase of the twentieth
century and increasingly topical when looking at the debate between internationalization
and globalization. Crossing borders, both physically and electronically, is becoming
increasingly vital for even the smallest businesses to remain competitive.

3. RESEARCH METHODOLOGY

In research done by Lin (2011), the study use Decision Making Trial and
Evaluation Laboratory (DEMATEL), Analytic Network Process (ANP) and Simple
Additive Weighting (SAW) method.

Vignali (2001) are using the effect of strategically and tactical models in
conducting study.

In our view, Vignali has wrote a beautiful conceptual writing regarding the 7Ps of
marketing mix in 2001 and Lin has using the models in 2011 to relates it with
competitive environment in certain areas in Taiwan to look for the best marketing
mix can be proved to be the outstanding in the battled.
 4. ANALYSIS OF FINDING

Marketing Mix

McCarthy (1975) formulated the concept of the 4Ps – product, price, promotion, and
place marketing mix. For many years these have been used as the principal foundation
on which a marketing plan is based. However, with particular attention being paid to
services marketing in recent years, theorists have identified additional variables which
could be added to the 4Ps. Fifield and Gilligan (1996) recognized the following variables
as an integral part of the marketing mix – process, physical, and people.

According to Booms and Bitner (1981) describe that marketing management is the
concept of the marketing mix (Figure 1). The marketing mix is not a theory of
management that has been derived from scientific analysis, but a conceptual framework
which highlights the principal decisions that marketing manager’s make in configuring
their offerings to suit customers’ needs. The tools can be used to develop both long
term strategies and short term tactical programs (Palmer, 2004).

Mohammed and Pervaiz (1995) show how the 7Ps framework can be applied to
consumer goods and reports the results of a survey of UK and European marketing
academics which suggest that there is a high degree of dissatisfaction with 4Ps. It also
suggests that the 7Ps framework has already achieved a high degree of acceptance as
a generic marketing mix among both groups of respondents. Overall, it provides a fairly
strong support for the view that Booms and Bitner's 7Ps framework should replace
McCarthy's 4Ps framework.

Booms and Bitner (1981) defined 7Ps of the marketing mix as follows:

i. Product - It must provide value to a customer but does not have to be tangible at
the same time. Basically, it involves introducing new products or improving the
existing products.
ii. Price - Pricing must be competitive and must entail pro- fit. The pricing strategy
can comprise discounts, offers, and the like.
iii. Place - It refers to the place where the customers can buy the product and how
the product reaches out to that place. This is done through different channels,
like internet, wholesalers and retailers.
iv. Promotion - It includes the various ways of communicating to the customers of
what the company has to offer. It is about communicating about the benefits of
using a particular product or service rather than just talking about its features.
v. People -This refers to the customers, employees, management and everybody
else involved in it. It is essential for everyone to realize that the reputation of the
brand that you are involved with is in the people's hands.
vi. Process - It refers to the methods and process of providing a service and is
hence essential to have a thorough knowledge on whether the services are
helpful to the customers, if they are provided in time, if the customers are
informed in hand about the services and many such things.
vii. Physical (evidence) - It refers to the experience of using a product or service.

After we done the GAP ANALYSIS between this two writing we identified as
listed below;
Marketing Mix Vignali Lin
Product -McDonald’s aim to -From the survey result
create the same taste. Lin has identified that the
Learns from globalization expert agreed that
-adapt to environment product have highest
Adaptions for taste, weighted that shows is
preferences and the most important
law/customs like religious relationship with the most
laws. effective improvement. In
-In Singapore and the other hand, he
Malaysia McDonald identified that in
underwent rigorous comparison with the
inspections by Muslim other fast food supplier-
clerics to ensure the ritual KFC and MOS Burger, its
cleanliness that rewarded product is the worst.
 with HALAL certificate. Lin agreed that if the
-offered product based supplier wants to improve
on nationality other factors it should
environment start from “product”

Place -McDonald’s realizes the Place will effects physical

potential growth and evidence and process.
competition as well. Lin believed that place
The stategy is still a has influenced for most
“glocal” focus for food industry compare to
-McDonald in term of other industry in term of
sharing ideas, best convenience and speed.
practices and human
resources across
borders, thus enhancing
its competitive advantage
and strengthening its
leadership proposition.

Price -McDonald realized that, Price comes to third

the cost saving inherent place as one of important
in standardization, factors for improvement.
success can often be Lin believes that affects
attributed to being able to place, physical evidence
adapt to a specific and process.
environment.
-It is come up with
different pricing policy for
different countries.
-in each country they look
at the demand for their
product as a barometer
for setting the price.
-in USA and Japan, McD
had to lower prices in an
attempt to increase
revenues
-McD look at the
competitors as guideline
in each country to set the
appropriate prices
 - McD look at the Product
Life Cycle to select
pricing strategy.
Promotion -McD analyze marketing Promotion is second
communications strategy important factor after
as it needs consider product.
cultural, consumers Lin believed that
attitudes, usage pattern promotion will affects
an ethnic, moral, religious price, place physical
and environment evidence and process.
considerations. It means in order to
-Brand globally, advertise attract customer, good
locally. promotion is needed to
promote the new
information and
customer’s purchase
desired will triggered.
People -McD considered the If the supplier performs
labor laws, schedules of improvement from factors
part time or flexible “people” other factors will
worker and numbers of benefit from it indirectly.
hours that employee can Lin believe that “people”
work. affects the others 6 Ps as
-McD has managers who well
understand both the
corporate and local
cultures.
-McD emphasized on
recruitment advertising
and continues preliminary
screening to comply with
the standard.
-built hamburger
university due to provide
programs that globally
observed and adapted for
locally.

Process -standard procedure for Process is affected by all

making food perspectives. Although
-each restaurant are McDonald worst in
 identical globally-same product but it stand the
kitchen layout first place in overall
-local touch when performance. It shows
preparing different menu: that it has clear
therefore new food marketing positioning.
preparation techniques
are used.
-speed up production
really consistent and
standard all over the
world.

Physical evidence -in every premise, the According to Lin,

message of a family Physical Evidence only
environment conveyed- affects process.
covered with posters and
slogans with family
values.
Maintaining service and
cleanliness.
- Change image by
adopted a more personal
approach to the
customers rather than
just let the customers
experienced it.

5. CONCLUSION
As we analyst the writing, we identify that the study done by Vignali (2001)
generally focusing on McDonalds marketing mix and specifically discussing on
how the company combines internationalization and globalization element
accordance to various fast food markets. Meanwhile the study that conducted by
Lin in 2011 using the factors that discussed by Vignali to relates it with
competitive environment in certain areas in Taiwan to look for the best marketing
mix can be proved to be the outstanding in the battled.
Vignali’s study conceptual and concentrating to McDonald globalization and how
they successful to adapt in local environment meanwhile Lin’s study more
focused in certain area in Taiwan as comparative McDonald with its close
competitor in term of improving the performance that effected by the 7Ps factors.
We can say that the study that conducted by Vignali is conceptual due that no
specific researched conducted in supported the statements. It is just based on
some data taken from various sources like web. In the other hand, study
conducted by Lin shows empirical due that research was conducted in specific
area within specific target audience. Lin has using comparative fast foods
supplier in measuring which factors of the 7Ps that gives high impact compare to
the rest of the factors. The high impact factors ware believed will lead to the
better improving performance of the fast food supplier.