MK(CASE STUDY)-min

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National Higher National Diploma Exam–June – July 

2016 Session 

Specialty/Option: MK 

Paper: Case Study 

Coef: 05Duration:6hours 

MCDONALD’S: BREAKING INTO THE CAMEROONIAN 

MARKET 

MCDONALD’S OPERATES OVER 21,000FAST – 

FOOD restaurant in 104 countries. Its golden arches 

overlook piazzas and shopping mall from Moscow to 

Manila. And it’s also the world most famous trademark- in 

1996, it was rated the world’s top brand by Interbrand, a 

consultancy, beating Coca-Cola into second place. 

In recent years, faced with greater competition in 

the United States, the company has increasingly relied on 

overseas markers as a source of profits. Its forays into 

international markets had generally been successful. In


2045 as part of its overseas empire building, McDonald’s 

made its first venture into Cameroon. Like many American 

multinationals, McDonald’s had long its eye on the 

Cameroonian market, but waited until now. It however, has 

a registered world famous trade marker. McDonald has 

finally decided to press ahead with an investment in the 

Cameroon. 

However, by the time the first McDonald’s restaurant 

opened in 2015, it was clear to the American giant that it 

was entering a rather unusual market. For years, behind 

the shelter of sanctions and its own protective tariffs, 

Cameroon had spawned a first-world consumer industry. 

Some of its fast food companies had built up strong local 

brands specifically catering to Cameroon tastes. 

The company also discovered that s local trader had 

applied both to register the McDonalds’ trade marker for 

his own use, and to have the American company’s right to 

the trademark withdrawn (its trademark) registered had 

technically expired). McDonald’s instantly filed a case 

against the trader, and applied to register the trademark


for itself. As one of the world’s leading brands, McDonald’s 

was plainly associated with the trademark around the 

globe and the company could reasonably expect the 

Cameroonian courts to protect it from lookalikes. Although 

its trademark registration had expired in the country, 

McDonald’s argued, under a clause in Cameroonian law, 

that ‘special circumstances’ had prevented it entering the 

market: namely, trade sanctions against, when the case 

came to the Supreme Court, in October 1995, things did 

not turn out quite the way McDonald’s had expected. 

Three cases, in fact were heard at the same time. Two 

were brought by Cameroonian traders, each of which 

already ran a fast-food restaurant under the name 

McDonald’s and each of which wanted to deprive 

McDonald’s of the right to trade under that name. The third 

case was brought by McDonald’s, which was suing the 

other companies for using and imitating its brand. The 

cases rested on two questions. One was whether 

McDonald’s was a ‘well-known mark’. If it was, then the 

company would be instantly entitled to protection from


imitation by local traders, and the impostors would have to 

pack up shop. The second was whether McDonald’s claim 

of ‘special circumstances’ could be justifies. 

For McDonald’s managers the answer to the first 

question was self-evident. Though they recognized that 

Cameroon had a relatively sophisticated fast-food industry 

of its own, the idea that such a famous global brand might 

not be well known Cameroon seemed preposterous. Two 

market-research surveys conducted in Cameroon 

confirmed that the brand was indeed well known. The 

judge presiding I the Supreme Court case, however, 

argued that the surveys were conducted among the rich 

living Bonanjo, Bonamoussadi, and could “by no stretch of 

the imagination be regarded as representative of the entire 

Cameroonian population; 76percent of which is black. The 

judge threw McDonald’s case out. What of the second 

question, concerning the firm’s claim that ‘special 

circumstances’ had kept it out of the Cameroonian 

market? McDonald’s had first registered its trademark in 

Cameroon in 1965, and then renewed it at regular


intervals until 2008. Under Cameroonian law as it stood at 

the time, a company lost its right to the trademark if it’ 

languished unused on the books for five years, unless 

there was a good reason. Again, the judge did not believe 

that ‘special circumstances’-were the real reasons that 

McDonald’s had left its trademark unused for so long: 

‘there is no explanation for the failure to commence 

business in Cameroon, he declared, ‘other than the fact 

that Cameroon simply did not rank on McDonald’s list of 

priorities’. 

These legal setbacks were temporary. McDonald’s 

was allowed to press ahead with opening restaurants 

while it prepared its case for the Appeal Court. In last 

2015the American burger chain won this second battle: 

the Appeal Court. In essence, applied a less strict test of 

what it meant to be well known in Cameroon, and 

accepted the evidence in the two surveys because it 

thought that whites represented McDonald’s target 

markers. The case was a harbinger of the sort of trouble 

that McDonald’s was to experience throughout Cameroon.


But McDonald’s had not given up easily. The firm 

continued to invest in opening new outlets after that. At the 

end, it operated 35 restaurants in the country- a small –fry, 

though, compared to the 227it runs in nearby NIGERIA. It 

has scored well against local rivals in slick service and a 

studied appeal to children. However, there are still worries 

that McDonald’s is treating its Cameroonian market as if 

chicken products as alternatives. Some of its local 

managers have expressed how odd the choice is given 

that the majority of local black consumers tend to favour 

chicken, which is cheaper than red m eat. White 

consumers, by contrast, tend to be beef-obsessed. They 

argue that ‘politically correct’ McDonald’s seems unwilling 

to acknowledge, in the overt way that its local rivals do, 

the point that the split between beef hamburgers and 

chicken has as much to do with race as with products, 

McDonald’s judged that the South African market was 

not different enough to merit product adaptation from 

the start. It would wait instead to see how the standard 

McDonald’s menu went down. McDonald’s experience in


the market is a stark reminder of the challenges facing 

companies seeking to penetrate new country markets. 

Even the most powerful, established, global brands from 

developed countries can hit a number of unexpected 

barriers to entry in to a foreign market. 

Importantly, the company cannot expect to trample 

all before it in developing or e merging country market – 

particularly when local consumers can choose established 

local alternatives. If the owner of the world’s leading brand 

encounters such troubles, companies with a less wellknown 

trade mark must think twice before venturing into 

foreign markets. When deciding to take advantage of an 

international marketing opportunity, firms should consider 

a number of questions. 

QUESTIONS 

SECTION A: 40MARKS (8X5MKS) 

1. Briefly discuss four reasons why firms venture 

internationally. (1.25m k each)


2. Give four risk a Global firm like McDonald’s can face 

in a country like Cameron (1.25mk each) 

3. Apart from product adaption as an international 

product and promotion strategy, what other four 

strategies are available in the category? 

4. Identify the approach used by McDonald’s to enter the 

Cameroonian market (2mks). Give two advantages 

on such an approach (1.5mk each) 

5. Apart from the approach mentioned in (4) above, what 

other two methods can be used to enter the foreign 

market? Bring out two advantages of these strategies 

combines. (2.5mks each) 

6. Apart from branding as a major product decision, 

state any other product decision bringing out two 

advantages (5mks) 

7. What four criteria can a firm consider when deciding 

on which country market to enter? (1.25mkseach). 

8. Briefly discuss two pricing strategies that a firm can 

use achieve its objectives (2.5mks each) 

SECTION B: 60 MARKS (4X15mks)


1. Relative to the Igor Ansoff growth matrix, show how 

McDonald’s could use these strategies to grow in the 

Cameroonian market (15mks) 

2. McDonald’s entry into Cameroonian market is reliable 

to face competitions. Use Michael Potter’s five forces 

to appreciate competition. 

What competitive or 

generic strategies could McDonald’s adapting? 

3. If McDonald’s chose to use distributors rather than its 

direct investment, identify three distribution strategies 

available to McDonald’s (15mks) 

4. At what stage of the product life cycle is the firm in 

relation to the Cameroonian market? What strategies 

are available at this stage? (15mks)

MK(CASE STUDY)-min

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