Remember, a wrong approximation of just one aspect can cost the company dearly.
Pricing: Different people have different purchasing powers; while some are low income earners, others have high income and their spending is also high. All these customers have one thing in common; they get to determine the price of a commodity being charged based on their perceived value. Therefore, any business should consider the purchasing powers of the people it sells to in the society. McDonald’s China took the opportunity of using the tier pricing model as of 2007, to sell its products at a range of prices (adjusted to consumer index and income level among other costs in the partitioned areas) to its potential consumers, who had varying purchasing powers (Ko, 4). The price given for a commodity should also be considered; it is not always that lowering prices could generate profits. In fact, some consumers could feel as if the quality is being compromised. Again, high prices could push consumers to other alternative solutions. By 2008, McDonald China among other fast food companies had raised products costs to cover for the material costs harmoniously (Ko 4).
The strategy was reasonable since it was done in union; hence no company was getting a competitive advantage over the other. Deciding on a product price should consider competitors price among other factors. Similarly, pricing should make room for customer discounts, especially while targeting a specific market. According to Ko, McDonald employed the plan by offering coupons to customers who shopped for their products online via Taobao. Com, as an encouragement to place food orders online (3). Product: The creation of the product is always under scrutiny from the consumer’s side; before being produced, the consumers’ preference and needs should be researched. Each age, group, or culture could want something different from the other, and it has to be considered. While others want their cultures to be incorporated, others want a totally different feel. At one point McDonald’s fantastic rice burger was not appealing to mainland Chinese consumers, even if the rice was their staple food (Ko 3). Assuming they had ventured fully without the test, it could have cost them heavily. Unlike KFC, McDonald and Burger King had experienced low returns initially, because their products were made of beef instead of chicken, which was well accepted and suited to the Chinese (Ko 9). With time the wants or preferences change, and the company has to adjust with the changes. Today, some Chinese prefer alternative food instead of their locals, hence McDonald use the opportunity to create and offer the western brand , for example beef burgers alongside chicken burgers, hence giving the people a choice. The product name (such as McDonald), trademark, and the unique brand have to differentiate it from the competitors and market itself within the society. Another important factor is the packaging for consumer familiarity, quantity, and quality to be worth the price. Promotion: It covers all types of the marketing communication, from TVs, Radio, internet, shows, posters, and the press to conduct advertisements. Most of this advertising comes with a cost for airing the information to the society, but there are other cheaper modes of marketing communication. One basic, though expensive strategy that McDonald Company did upon entry in China was to seek a partnership through joint ventures with local