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Macdonald’s Hotel in Kenya: Marketing Plan Report

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Updated: Jul 8th, 2020

Introduction

A marketing plan is an important tool for the growth of any business. A marketing plan is a set of selected ideas and planned actions that identify and direct decisions in the appropriate manner to build, introduce, distribute, and promote goods or services (Skilton and Bernardes 1689). A marketing plan is a defined process that can allow an organization such as McDonald’s to streamline its limited resources on the greatest opportunities presented in a country like Kenya to increase sales and attain a sustainable competitive edge. Without an appropriate business strategy, the efforts by the enterprise to gain market share are random and ineffective.

The preliminary stage must focus on ensuring that the product fulfills the needs of the consumers coupled with establishing a prolonged relationship with the consumers (Ramaseshan, Ishak, and Kingshott 1224). Before establishing a company in Africa, it is necessary to understand the African consumers and overcome the challenges of poor infrastructure and inadequacy of modern technology to reach the target market sections with a tailored plan.

This paper describes a business strategy that can be adopted by McDonald’s to invest in Kenya. The hotel industry is an important form of trade around the globe since it encompasses various areas of the economy such as tourism and recreation. Besides, it is among the world’s largest generator of employment. With the economy of Kenya growing steadily over the last half decade, it has become appropriate for many organizations to start targeting the Kenyan market and a few African countries since they will be leading economies in a few decades to come. Conventionally, the McDonald’s has relied on the European market that is swiftly becoming saturated due to stiff competition. However, there is limited scope for development in this market, thus creating the need to look at new markets in Africa to continue thriving. This paper will generate a strategic plan for McDonald’s in the Kenyan market. The plan involves the supply of fast foods in the major towns in Kenya.

Understanding the market

In the Kenyan hotel industry, various hotel companies are owned by both locals and foreigners. This diversity assists Kenya in its domestic and foreign activities since the country is a tourist attraction center. However, the McDonald’s must expect intense competition since other brands are targeting Kenya; hence, the need for a comprehensive and viable market strategy is inevitable. One of the main advantages that the McDonald’s has is that Kenya is a naturally tourist attraction center and friendly to many nations. For any consumer product company intending to increase market coverage, it is necessary to collaborate with local businesses to get an insight into the state of the market or hire locals to execute market research.

However, reputation is not enough in the present global market due to competition, and thus McDonald’s must convince the target populations that it is introducing something unique. This difference can be attained by offering affordable prices, quality services, or issuing a different service from what is available in the market. A marketing plan provides a reference point in case of barriers or something that needs to be altered. The needs of the Kenyan consumers are different from the ones of the company’s already exploited markets. As Cadogan identifies, marketing must be understood from a new perspective of satisfying customer needs through diversity rather than the traditional sense of making sales (32).

Currently, the Kenyan economy is rapidly growing thus creating space for more investors in different industries such as manufacturing, transportation, education, tourism, and hotel industry. All of these sectors depend on the hotel industry for the fast supply of food for the workers. Traditionally, McDonald’s is known for its precise targeting and positioning in the market. The key target segments should include the children, youth, and the young urban families.

If the company considers children and the youth, these groups are highly attracted to delicious foods. Besides, most young families and youth prefer such joints for their recreation and various occasions such as birthday parties. However, the economic conditions in Kenya are not predictable due to poor infrastructure, insecurity, unemployment, and the high rate of dependency. Thus, marketing should entail a long-term relationship building process to realize the potential risks and formulate methods to cushion against such risks (Skilton and Bernardes 1690).

Risks factors

Although Kenya presents lower risks for undertaking business as compared to other nations in Africa, some challenges must not be overlooked. A large proportion of the energetic population is unskilled due to existence of an environment that presents limited job opportunities. Consequently, due to the high dependency status, the rate of insecurity and corruption is high. For instance, in 2011, Transparency International ranked Kenya at position 154 out of 183 on the corruption index (Murray, Ju, and Gao 60). The legal channel to invest in Kenya is slow and expensive thus attracting most investors to corrupt their way through to target markets.

The transportation sector is poor due to high traffic congestion because of poor road networks. Crime and violence have become rampant in Kenya. Additionally, the country is currently vulnerable to political turmoil due to the highly heated tribal divisions and party affiliations. This situation has made it hard to predict what might happen in the country and the potential to cause destruction in the market.

Rationale for introducing these services

The Kenyan market has a great potential for expansion as expressed by the looming demand for quality products, services, experiences, value, and satisfaction. These needs have always been growing, but the current investors have fallen short regarding diversity and value. This need gap can be appropriately filled by the McDonald’s given its sense of culture, flexibility, and the urge to meet the customers’ tastes and perception.

To introduce the services in Kenya, McDonald’s should embark on a promotional campaign to seek new customers’ attention and steer its interests towards particular services. This approach can entail raising the customers’ expectations about how they will benefit from the products. This approach should ensure a balance in the expectations generated by the promotional campaigns since too much expectation might leave a client demoralized following his/her experience with the services. On the other hand, too little expectation might fail to generate interest in the products, thus leading to limited market share.

Additionally, the Kenyan trade policies have changed dramatically to lure foreign investors into the country. Following the current global competition, Kenya has started a process of opening up to the global trade through bilateral ties. Lowering trade tariffs and forging free trade agreements with other countries is an added advantage to foreign investors (Patel 23). This approach is intended to improve the quality of services and generate employment.

The political and legal environment in Kenya has become highly conducive to investors because the country lacks adequate technology and expertise to produce services of the much-needed value and satisfaction. Given that investors are flocking Kenya to invest in other industries such as mining, the hotel industry needs to adjust to the needs of the new population. As noted earlier, the current market lacks diversity, and thus the Kenyan government has found it inevitable to implement laws that encourage investors as the McDonald’s to come in and fill these need gaps.

The demographics of the Kenyan population present one of the most diverse in the world concerning age, the level of education, race, ethnicity, and gender. Kenya hosts a substantial number of nearly all races in the world, thus providing a wonderful mix of a target market for the hotel industry. Additionally, the Kenyan urban areas are flooded by the young population and the working class and such individuals are favorite targets for fast food services. Even though most foreign people adapt quickly to the Kenyan culture, not all are willing to abandon their cultural practices including eating styles and preferences. Thus, there is a need for diversity in production to cater for all customers.

Market entry strategy

A comprehensive marketing data is essential to enable the organization to gain enough knowledge concerning potential customers. Market analysis, planning, implementation, and management should be followed to build a marketing plan (Patel 44).

The analysis should be done by conducting a market research to help demonstrate the dynamics coupled with what changes need to be introduced into the sector. Planning entails the steps taken to address and exploit the opportunities identified in the market. Having the data might not be adequate, and thus the organization must take steps to design a plan to satisfy the demands that manifest. The implementation of the plan should kick off to turn the theory to practice by considering unforeseeable changes and risks in the market. With the unpredictable tilts in the world market, an organization cannot afford complacency once it starts running. Management plans should aim at monitoring the product reception in the market and adjust accordingly if necessary (Patel 33).

Marketing theories

After analyzing the market, it is fundamental to find a marketing mix plan to address needs for such a diverse population. A marketing mix addressing the product, place, price, promotion, and population is essential to speed up the growth of the organization. The 5 Ps marketing mix theory covers the essential aspects of the marketing environment by combining various tasks to provide a formula to help steer an organization towards a certain task. According to the Pestel’s analysis theory, economic, legal, political, and technological aspects should be considered before an organization seeks to introduce its product in the market (Mathur and Dewani 35).

The company should consider how the product or service is designed to meet customer expectations. McDonald’s should include various elements that are missing in the market or better them such as outlook and desirability among others. Due to cultural diversity, McDonald’s should study the various cultures and bring a different menu alongside the one offered in the international markets. The place entails the establishment of outlets and the distribution chains of the organization.

The location is very critical because the services must be availed to the customer at the precise end with the right timing and class. The outlets should be approximately around a walking distance from learning institutions, industries, bus stations, and shopping malls. Internet services should also be available and delivery should be timely and hygienic. Pricing is the most sensitive part of the marketing mix. The price has to consider the demand and supply equation by evaluating the Kenyan market. Within the Kenyan market, the pricing should aim at attracting the lower and middle-class people since they are the straightforward consumers of the fast food meals.

The promotional activities should seek to communicate effectively with the target population. The promotion should be done through advertising, personal selling, and public relations strategy. These platforms should target at reaching large populations within the shortest time possible while ensuring that cultural, religious, and ethical values are not violated (Patel 43). The populations involving both the workers and the customers should be treated well to ensure sustainability. McDonald’s should understand that Kenyans enjoy a welcoming culture and respect for all regardless of class. Therefore, the importance of customers and employees should be a priority.

The McDonald’s do not need an existing competitor to buy market share in Kenya because it is a highly reputable organization with extensive facilities and huge presence. Furthermore, buying market share might not be necessary since Kenya presents a rapidly growing economy. This organization has to produce its products in Kenya and if need be import various raw materials, technology, and expertise to maintain its class and taste.

Conclusion

The introduction of the McDonald’s services in the Kenyan market may face different challenges, but adopting the strategy outlined in this paper can give the organization an upper hand in overcoming the obstacles. Besides, Kenya is a major logistical conduit in Africa and a regional financial powerhouse. Organizations with a strong corporate reputation such as the McDonald’s are highly needed in the Kenyan market. The paper has identified the 5 Ps marketing mix theory to present what the McDonald’s has to do to ensure success in the Kenyan market. The mentioned steps can assist the McDonald’s towards attaining its desired goals.

Works Cited

Cadogan, John. Marketing Strategy, London: Sage, 2009. Print.

Mathur, Sameer, and Prakash Dewani. “Market Entry, Product Quality and Price Competition.” Studies in Business and Economics 10.2 (2015): 33-39. Print.

Murray, Janet, Min Ju, and Gerald Gao. “Foreign Market Entry Timing Revisited: Trade-Off Between Market Share Performance And Firm Survival.” Journal of International Marketing 20.3 (2012): 50-64. Print.

Patel, Vinod. Theories and Techniques of Marketing Management, Jaipur: Oxford Book Co., 2007. Print.

Ramaseshan, Bernard, Asmai Ishak, and Russel Kingshott. “Interactive Effects of Marketing Strategy Formulation and Implementation upon Firm Performance.” Journal of Marketing Management 29.11 (2013): 1224-1250. Print.

Skilton, Paul, and Ednilson Bernardes. “Competition Network Structure and Product Market Entry.” Strategic Management Journal 36.11 (2014): 1688-1696. Print.

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