With the increasing globalization of the world economy as a whole and the fast-food industry in particular, major fast-food chains continuously seek new markets to expand their operations. Populous and rapidly developing non-Western countries are a fairly obvious option in this respect, but due to cultural differences, operating there entails a question of adapting to foreign conditions. As any company that seeks to expand into a different cultural environment, fast-food chains wishing to enter foreign markets have a choice between two strategies. Localization strategy requires adapting to local cultural and gastronomic preferences, while standardization strategy maintains the menus and mode of service developed in the company’s country of origin. With India being one of the world’s largest and fastest-growing markets for fast food, the question of which strategy is better suited to it is fairly acute. Research on the fast-food chains’ expansion to China as well as India’s demographic statistics suggests that localization is the optimal strategy in the Indian case.
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Before identifying the best strategy for fast-food chains’ expansion into the Indian market, it is necessary to briefly cover the options available and the difference between them. Localization strategy presumes that, when expanding into a culturally different foreign market, the company needs to adjust its goods and service to correspond to the local customer expectations better. An example of the application of this strategy in practice would be KFC’s expansion into China. By adapting its menus to local expectations and adding dishes similar to those consumed by the Chinese people regularly, KFC was able to make China its greatest market with almost 5,600 locations (Turner). Moreover, it also allowed it to become the largest fast-food chain in China (Turner). In contrast, McDonald’s expansion into the same market is an example of the standardization strategy, when the company maintains goods and services as developed within its market of origin. McDonald’s persisted with its traditional menus and “bright, warm colors along with soft, comfortable seating” to provide a characteristically American experience (Yan and Jones). In short, both strategies are actively used when expanding fast-food chains into Southeast Asia.
Choosing an optimal option for India requires a thorough consideration of the country’s demographics. As of now, the fast-food market in India grows by double digits percentage a year (Joseph et al. 13). The group with the highest consumption of fast foods in India is those between 25 and 35 years of age, although the other age groups are not far behind (Rout 6918). Males are more likely to consume fast-foods than females, and separated couples are more likely to eat fast-foods than singles, married couples living together, or divorcees (Rout 6919). Overall, these statistics point out that the groups with the largest intake of fast-foods in India are young professionals with demanding jobs, which may also explain familial separation. Other sources also confirm that young adults are the group most interested in consuming fast-foods in India (Bagri). It is also worth noting that 80 percent of the country’s population are Hindu and, thus, do not eat beef (Panwar and Patra 73). Hence, Indian fast-food consumers most likely expect a quick and efficient intake of calories in a familiar form rather than receiving a particular cultural experience.
With this in mind, one may presume that localization rather than standardization strategy is the optimal approach for fast-food chains seeking to expand into the Chinese market. As noted above, the main customer base for fast-food chains is young professionals interested in a quick and efficient calorie intake. In order to achieve that, they need to recognize the dishes on the menu, as being unable to do so would increase the valuable time spent on making a choice. Apart from that, one should also take into account the aforementioned prohibition of eating beef among India’s predominantly Hindu population (Panwar and Patra 73). Similarly, Muslims, who do not consume pork, are a fairly numerous minority. Serving non-adapted dishes with beef or pork would alienate most of the potential customer base. Given that, the localization of menus to suit local traditions is a crucial requirement for a fast-food chain expanding into India. In contrast, attempting to use the standardized menus devised for a home market different from that of India is unlikely to broaden the customer base because India’s fast-food consumers are after a filing meal rather than a cultural experience.
To summarize, any fast-food chain that seeks to establish a firm presence in India should pay sufficient attention to the country’s complex and diverse cultural and gastronomic traditions. Generally speaking, the two strategies for expensing into a culturally foreign market are localization, which adapts goods and services to local conditions, and standardization, which maintains them as designed in the company’s home market. Indian fast-food consumers are predominantly young professionals interested primarily in a quick and efficient meal rather than receiving a characteristically foreign cultural experience. Moreover, the vast majority of the population is Hindu or Muslim, with strong reservations against certain types of meat. As such, choosing any strategy but localization for expanding fast-food chains into the Indian market means invariably alienating most of the potential customer base.
Bagri, Neha T. “A Growing Taste for US Fast Food in India.” CNBC, 2014, Web.
Joseph, Nitin, et al. “Fast Food Consumption Pattern and Its Association with Overweight Among High School Boys in Mangalore City of Southern India.” Journal of Clinical and Diagnostic Research, vol. 9, no. 5, 2015, pp. 13-17.
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Panwar, Diksha, and Sidheswar Patra. “Localization in Fast Food Industry: A Case Study in McDonald’s Strategy in India.” Researchers World – Journal of Arts, Science, and Commerce, vol. 8, no. 3, 2017, pp. 70-74.
Rout, Himanshu B. “A Study On the Demographic Profile of the Fast Food Consumers in India.” International Journal of Scientific and Technology Research, vol. 9, no. 3, 2020, pp. 6917-6920.
Turner, A. “This is How KFC Became the Biggest Fast-Food Chain in China.” CBNC, 2018, Web.
Yan, Fang, and Terril Jones. “McDonald’s to Double China Restaurants by 2013.” Reuters, 2010, Web.