Global Branding Strategies of Service Industries

This assignment examines the global brand expansion strategies employed by four prominent service industry brands: Marriott and Accor in the hospitality sector, and Starbucks and McDonald's in the fast-food industry. It explores various modes of international market entry, such as exporting, licensing, franchising, wholly owned subsidiaries, and joint ventures. The report delves into how these brands have effectively adapted their offerings and marketing approaches to cater to diverse international consumer preferences.

Running head: Service Industry
Competitive strategy
Service Industry analysis

Competitive Analysis 1
Executive Summary
In the era of increasing globalization and changing lifestyles, brands are also enhancing their
presence across various parts of the globe and establishing effective marketing strategies for their
business. The brands which have broken geographical boundaries and spread across to
international markets are known as global branding. While moving to international boundaries, it
is imperative that brands know their exact set of customers they tend to cater to. This set of
customers is known as the brand’s target market. It is recommended that the brand is well aware
of the needs and demands of this particular target market.
Upon moving to an international boundary, there are various modes of entry which are available
to the brand so as to ensure their presence in another country. These modes of entry include
exports, franchising, licensing, wholly owned subsidies and joint ventures. This report has laid
emphasis on four leading brands from two of the service industries. Their global branding
strategies, target markets and modes of international entry are explained which have led them to
become world renowned and make a significant mark in the marketing world.

Competitive Analysis 2
Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................2
Global Branding...............................................................................................................................3
Target market and modes of entry...................................................................................................4
Marriott international...................................................................................................................5
McDonalds...................................................................................................................................7
Accor hotels.................................................................................................................................9
Starbucks....................................................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Competitive Analysis 3
Introduction
Marketing is an important part of every business. Strategic marketing helps firms in reaching out
to their targeted customers in the more effective manner. There are various industries which have
broken the barriers of geography and marked their significant presence in the globe. This report
throws light on two important marketing strategies adopted by leading firms. The two strategies
are global branding as well as target marketing and modes of entry.
Global branding refers to brands that are recognized throughout the world. These brands are then
known as global brands (Steenkamp, 2017). On the other hand, target market refers to the group
of customer segments whose needs the company intends to fulfill. These are consumers towards
whom the company targets all their marketing strategies. Every time a company wishes to enter
another country, there are various modes of entry that the company can choose from. These entry
modes are exports, franchising, wholly owned subsidies as well as joint ventures. This report has
laid emphasis on the marketing strategy adopted by four leading firms belonging to fast food and
hospitality industry.
Both fast food as well as hospitality are service sector industries which believe in providing an
experience to the customer (Skaalsvik & Olsen, 2014). For this report the companies chosen are
McDonald’s and Starbucks from the fast food industry. On the other hand, Marriott international
and Accor hotels have been selected from the hospitality industry. Marriot group of hotels and
McDonalds are global brands with a wide presence across the world. On the other hand,
Starbucks and Accor hotels are leading organizations with a strong brand name owing to
strategic selection of their target markets and appropriate entry strategy into various countries.

Competitive Analysis 4
Global Branding
When any brand is globally renowned, then the strategy adopted by the organization is that of
global branding. Brand positioning plays an important role in ensuring that the brand is globally
known. This positioning refers to the image of the brand that consumers have in mind. Global
branding has various aspects that play a very crucial role in the effective awareness of the brand
across different parts of the world. These aspects include the company logo, the marketing
strategy adopted by the company, the promotional tools of the company as well as the brand
positioning approach adopted by the business

Competitive Analysis 5
Target market and modes of entry
Target market for any company includes the set of customers whose needs the company aims to
fulfill. It is essential that the company identifies and decides upon its target market in the early
stages of operation (Vigneron & Johnson, 2017). It is imperative that every company aims at
catering to its specific target market.
Every time any organization aims to break its geographical boundaries and expand into newer
areas of the globe, it is important the firm strategically decides upon its mode of entry. There are
many modes through which a company can cater to an international market (Hitt, Li & Xu,
2016). These modes are as below:

Competitive Analysis 6
Marriott international
Marriott international is an American reputed chain of hotels which specialize in hotels and other
lodging facilities. The group of hotels is headquartered in Washington DC. The company owns
over 6000 properties spread across 110 countries (Marriott, 2018). There are over 1.2 million
rooms that operate under the brand name of Marriott hotels presently. The Marriott group has
been working with a distinctive strategy of effective brand positioning. Their hotels run under
the 30 distinct brand names targeted for 8 different kinds of customers. The hotels provide a
similar look and feel irrespective of their geography. The level of customer service is top notch
and is considered to be one of the most trusted brands in the hospitality industry. The presence of
Marriott across the globe has made it a global brand.
All of its 30 brands have different logos and cater to a different target market. Today Marriott’s
presence in different countries is marked by Franchising and management contracts. A
management contract differs from a franchisee in the sense that under a management contract,

Competitive Analysis 7
the operational control remains with the Marriott group. Marriott also sells its franchises, the fees
for which are different in different countries and different brands of the group.
Target market of the Marriott group of hotels is a massive group of customers. Different
categories of these customers are catered through their different brand names (Wang & Chung,
2015). These target segments are as given below:
1. Luxury and seasoned travelers
2. High and middle income groups of people
3. Business travelers
4. Business professionals for upscale business conferences and meetings
5. Special occasions (luxury weddings)
6. Seasoned travelers
7. Families and couples on their honeymoons.

Competitive Analysis 8
McDonalds
McDonalds is one of the leading players of the fast food industry. The company was founded in
1940 in California. Presently it is serving over 69 million customers on a daily basis through
over 40000 outlets spread across 100 countries of the world. The chain has garnered immense
attention and customer base owing to its fairly priced burgers and very quick service. Today,
McDonalds has become a global brand due to the similar taste and only slightly differentiated
food options (Crawford, 2015). There is a fun fact that in the year 2016, one McDonalds opened
every 14.5 hours. The brand has ensured that all their outlets carry the same logo with a large
oval shaped logo. The company owners have made it a point since the very beginning that the
logo is visible from a large radius around the store. The colors chosen are yellow and red which
are largely attractive. McDonalds has become a global food. It is considered the safest food
option to consume by tourists.

Competitive Analysis 9
Out of the many modes of entry, McDonalds has chosen franchisee option as well as company
owned outlets in various countries across the world. This entry style ensure that the values, look
& feel, culture, brand logo and company name is same as that of the original company. The
franchisor charges a fixed fee from the franchise every year. This works well for both the parties
as it offers independence of business and the strong brand value to the franchisee and franchisor
gets to spread its brand name across different parts of the world without actually being there.
McDonalds target market has widened with the advent of changing lifestyles. The fast paced
lives has allowed the shift into the fast food culture. Hence the target market of McDonalds
includes office goers who may wish to pick up a quick snack, school and college students who
prefer less expensive foods as well as families with children who are targeted consumers of
happy meals at McDonalds (Sachdeva, 2015). McDonalds has made a significant mark on the
world map and is expected to grow even further. The major reason behind the success of the
brand is its ability to customize and mold its food products as per the needs existing in the
country of operations. Immense credit behind McDonalds becoming a global brand goes to the
owners who have creatively designed the logo in the manner that it is the most recognized logo
in the world. The ‘I’m loving it’ tagline that accompanies all of McDonald’s promotions is
largely well known, creative catchy and easy to remember. Hence the large reach and the
intensive presence across the world, makes McDonalds one of the largest global brands of the
world.

Competitive Analysis 10
Accor hotels
Accor hotels is a renowned name in the hotel industry. The group is based in France and
currently operates in over 95 countries. The Accor group has over 3700 franchised hotels
running under its brand name. The group of hotels has not becoming a global brand with its
immense presence across different parts of the world as well as consistency in its customer
service.
Accor group has been widely indulging in franchisees, management contracts as well as wholly
owned subsidiaries. There is an Accor hotel that opens up at some part of the world every 36
hours (Accor hotels, 2018). Accord group has introduced different brands under the same
umbrella in order to target a wider customer segment. The various brands of the Accor group are
specified in the image above. The economy hotels are aimed at targeting lower income groups
and youngsters travelling with less budget. Mid-scale hotels are targeted towards families on
vacations and people who travel frequently for work. Lastly, their upscale and luxury hotels are
targeted to high income groups, luxurious weddings and for celebrity stays during important
events (Salvioni, 2016).

Competitive Analysis 11
Accor group of hotels is a leading global brand owing to number of hotels and rooms offered by
the brand across five continents. The widespread reach of the brand is as given below:
Region Number of Hotels Number of Rooms Number of countries
South America 288 45495 8
Europe 2852 321266 32
Middle East 102 31662 12
Africa 93 14036 18
Asia Pacific 777 157185 20
The branding of Accor groups is creatively done and every brand has a unique logo, tagline and
promotional strategy. All these brands have created a niche for themselves and hence have a
unique positioning of their own.

Competitive Analysis 12
Starbucks
Starbucks is an American coffeehouse chain which was founded in Washington in 1971. At
present the company operates in over 24000 locations across the globe spread across 62
countries. Starbucks has been well positioned by the brand as one of the leading coffee chains
across the globe. Starbucks has become such a global brand that instead in certain places it is
becoming synonymous to coffee. The brand offers hot and cold beverages and few snack
options. Starbucks has indulged in a rather creative positioning by offering comfortable couches
and Wi-Fi enabled outlets to ensure that people spend quality time in the place. Starbucks has a
tendency to customize its products given the local demands of the country in which the brand
chooses to enter.
Starbucks has opened various outlets across the globe through opening wholly or majority owned
subsidies, offering franchisees as well as entering into joint ventures with other brands
(Garthwaite, Busse, Brown & Merkley, 2017). The aim is ideally to ensure protection of the
original taste, culture and feel of the brand. The brand started the concept of writing the names of
customers on their coffee cups which became a fad and took over social media platforms by the
storm. The logo of the brand is well known and easy to recognize.

Competitive Analysis 13
In order to promote the culture of sitting down and having coffee rather than a take away option,
Starbucks target market includes youth (Age 25-40). Starbucks target the men and women of this
age group with its contemporary décor and design. Starbucks has created the idea of a ‘third
place’ besides people’s homes and offices. Starbucks also targets various office goers as the
ambience of Starbucks’ outlets is largely suitable for conducting professional meetings owing to
presence of Wi-Fi and various mobile and laptop charging points through all of their outlets. For
specific products like ‘steamed milk’ and ‘babyccinos’, young children and teenagers are
targeted who are often seen with their parents.
Conclusion
Global branding is the concept that involves brands have become globally renowned through
their effective expansion plans across different parts of the globe. In the current era of
globalization, the expansion of leading brands into foreign lands is not uncommon. Various
companies have devised excellent marketing and communication strategies within their business
and have made a significant mark in the world map. Once a company breaks its geographic
barriers and enters into another country, it needs to decide upon strategies to cater to its
international consumers (Armstrong, Adam, Denize & Kotler, 2014). These strategies are also
known as various modes through which they enter into international markets. These strategies
include exporting their products, licensing and franchising their brand, opening up wholly owned
subsidies, entering into joint ventures or a combination of either of these. This report throws light
on four leading brands of the service industry. These brands include Marriott group of hotels and
Accor group of hotels (Hospitality industry) as well as Starbucks and McDonalds (fast food
industry). These brands have created a significant mark in the world by their excellent entry
strategies leading them to becoming global brands with a unique and highly efficient target
market (Lee, Yao, Mizerski & Lambert, 2015).

Competitive Analysis 14
References
Accor Hotels, 2018. ‘Our development strategy’. http://www.accorhotels.group/en/hotel-
development/accorhotels-choice/our-development-strategy. Retrieved on 16 January, 2018.
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson
Australia.
Crawford, A., 2015. McDonald's: A case study in glocalization. Journal of Global Business
Issues, 9(1), p.11.
Garthwaite, C., Busse, M., Brown, J. and Merkley, G., 2017. Starbucks: A Story of
Growth. Kellogg School of Management Cases, pp.1-20.
Hitt, M.A., Li, D. and Xu, K., 2016. International strategy: From local to global and
beyond. Journal of World Business, 51(1), pp.58-73
Lee, A., Yao, J., Mizerski, R. and Lambert, C., 2015. The strategy of global branding and brand
equity. Routledge.
Marriott, 2018. ‘Marriott brands’. http://www.marriott.com/marriott-brands.mi. Retrieved on 16
January, 2018.
Sachdeva, A., 2015. Evaluation and selection of differentiation as a strategy for McDonald’s.
Salvioni, D.M., 2016. Hotel Chains and the Sharing Economy in Global Tourism. Symphonya,
(1), p.31.
Skaalsvik, H. and Olsen, B., 2014. Service branding: suggesting an interactive model of service
brand development. Kybernetes, 43(8), pp.1209-1223.
Steenkamp, J.B., 2017. Global Brand Equity. In Global Brand Strategy (pp. 243-273). Palgrave
Macmillan UK.
Vigneron, F. and Johnson, L.W., 2017. Measuring perceptions of brand luxury. In Advances in
Luxury Brand Management (pp. 199-234). Palgrave Macmillan, Cham.

Competitive Analysis 15
Wang, Y.C., Wang, Y.C., Chung, Y. and Chung, Y., 2015. Hotel brand portfolio
strategy. International Journal of Contemporary Hospitality Management, 27(4), pp.561-584.