1. Identify the key elements in McDonald€™s global marketing strategy. Despite a slowdown in global fast-food consumption, McDonald€™s continues to be a success story. What is the key? Does McDonald€™s think globally and act locally? Does it also think locally and act globally?

2. Do you think government officials in developing countries such as Russia, China, and India welcome McDonald€™s? Do consumers in these countries welcome McDonald€™s? Why or why not?

3. Is it realistic to expect that McDonald€™s€”or any well-known company€”can expand globally without occasionally making mistakes or generating controversy? Why do antiglobalization protesters€”and sometimes government officials€”target McDonald€™s?

4. Assess the changes McDonald€™s is making to its marketing strategy in the United States and around the world.

McDonald€™s 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. McDonald€™s 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, McDonald€™s is one of the world€™s most valuable brands: In 2013, Interbrand ranked it as the world€™s number 7 brand overall (Apple is a €œtop 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, McDonald€™s 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 €œfast-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 McDonald€™s and seeking out alternative fast-dining options such as Five Guys, a €œbetter burger€ chain that features freshly cut fries made from locally sourced potatoes.

Meanwhile, Subway overtook McDonald€™s as the restaurant chain with the most outlets in the United States. McDonald€™s 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, McDonald€™s 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). McDonald€™s responded to the opportunity by stepping up its rate of new unit openings. McDonald€™s 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, €œMcDonald€™s 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

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