1. Identify the key elements in McDonalds global marketing strategy. Despite a slowdown in global fast-food consumption,...
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2. Do you think government officials in developing countries such as Russia, China, and India welcome McDonalds? Do consumers in these countries welcome McDonalds? Why or why not?
3. Is it realistic to expect that McDonaldsor any well-known companycan expand globally without occasionally making mistakes or generating controversy? Why do antiglobalization protestersand sometimes government officialstarget McDonalds?
4. Assess the changes McDonalds is making to its marketing strategy in the United States and around the world.
McDonalds Corporation is a fast-food legend whose famous golden arches can be found at more than 35,000 locations in 118 different countries. The company is the undisputed leader in the quick-service restaurant (QSR) segment of the hospitality industry, with more than twice the system-wide revenues of Burger King. McDonalds built its reputation by promising and delivering three things to customers: inexpensive food with consistent taste regardless of location; quick service; and a clean, familiar environment.
The company was also a pioneer in the development of convenience- oriented features such as drive-through windows and indoor play areas for children. Today, thanks to memorable advertising and intensive promotion efforts, McDonalds is one of the worlds most valuable brands: In 2013, Interbrand ranked it as the worlds number 7 brand overall (Apple is a top riser at number 1). The golden arches are said to be the second-most-recognized symbol in the world, behind the Olympic rings. In 2014, McDonalds was named Creative Marketer of the Year at the Cannes Lions International Festival of Creativity.
Despite these successes, however, the company faces competitive attacks from several directions. During the 1990s, a wide range of upscale food and beverage purveyors arrived on the scene. For example, consumers began flocking to Starbucks coffee bars, where they spend freely on lattes and other coffee-based specialty drinks. The fast-casual segment of the industry, which includes companies such as Baja Fresh, Chipotle Mexican Grill, Panera Bread, and Cosi, is attracting customers seeking higher-quality menu items in more comfortable surroundings. Millennials in particular have begun shunning McDonalds and seeking out alternative fast-dining options such as Five Guys, a better burger chain that features freshly cut fries made from locally sourced potatoes.
Meanwhile, Subway overtook McDonalds as the restaurant chain with the most outlets in the United States. McDonalds U.S. menu offerings had grown rapidly, and, some would say, quality and service had suffered. Some industry observers also suggested that, in terms of both food offerings and marketing, McDonalds was losing touch with modern American lifestyles.
Until recently, the picture appeared brighter outside the United States. Thanks to changing lifestyles around the globe, more people are embracing the Western-style fast-food culture (see Exhibit 1-12). McDonalds responded to the opportunity by stepping up its rate of new unit openings. McDonalds International is organized into three geographic regions:
(1) Europe;
(2) Asia/Pacific, Middle East, and Africa (APMEA); and
(3) Other Countries.
In 2005, the offices of the country heads for Europe and Asia were moved from the U.S. headquarters to their respective regions; now, for example, the head of APMEA manages his business from Hong Kong. Commenting on the change, Ken Koziol, vice president of worldwide restaurant innovation, explained, McDonalds was built on a strong foundation of a core menu that we took around the world but we need to make sure we are more locally relevant. Taste profiles and desires are changing.
Exhibit 1-12
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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