Question

write a paper that describes one of the three typical marketing strategies that firms use to obtain a foothold in a foreign market. Choose from either differentiation, cost leadership or focus strategy. Use an example of a real-life situation where a firm used one of these strategies and describe whether or not they were successful.

Answer 1

Cost leadership

In this marketing strategy, companies often set a low cost of their products in the foreign market to attract consumers in the market. This provides a great competitive advantage to the firm in the foreign market because it can take benefits of their large scale of production, experience to bring down the prices of their products.

A great example of a firm using this strategy is the company McDonald's in India. The Indian customer base of the company is largely the middle-class society which is thriving and growing at a rapid pace in India. The company had to face competition not only from established companies in the countries but also non-established little restaurants which are very popular among Indian consumers.

To compete with them, McDonald's was aware that simply relying on their foreign goodwill, and reputation won't be enough. Also, the company had more experience in selling meat products where Indian consumers were largely vegetarian. This could have been a dilemma for the company but the company started introducing vegetarian products on its menu. From veg burgers to appetizers. Also,  it started introducing products including a full-sized meal for individuals at a really low cost of rs100 to attract consumers. This not only helped the company in attracting the large vegetarian customer base in India but the low cost of the meals helped the consumers in keeping eating at the restaurant well under their budget.

All these strategies helped McDonald's in becoming popular in India.