Case Study 3 - McDonalds Goes Upscale Due to Changing Lifestyles (31 marks)

A Big Mac, fries, and ... a freshly-brewed cappuccino? These days, when consumers go into a McDonalds in France, they can order meals made from fresh, locally grown produce and healthy ingredients and drink more sophisticated beverages. The fast-food chains well-known hamburgers are still the main attraction, but it is not just the food that is changing. Todays consumers are increasingly focusing on pleasure-seeking products and services to make them feel good and happy. In light of this, the restaurants are redesigned to look more luxe, some with designer coffee bars and stylish armchairs to provide customers an upscale and comfortable environment to deliver that pleasure-seeking dining experience of relaxation and happiness. McDonalds plan to move upscale started in Europe. McDonalds European sales were lagging as local consumers disliked the few healthy choices and the unattractive store designs. The movement actually began in France, where people are famously particular about what they eat as they do not like fast food. To make McDonalds and a Big Mac work in the country of slow food and fine dining, we felt we had to pay more attention to more upscale restaurant designs and healthy menu offerings to offer a unique pleasure-seeking dining experience, remembers Denis Hennequin, who was then in charge of McDonalds change in France. Hennequin and his team started by modifying the menu for local tastes, introducing salads, desserts, and smoothies featuring fresh fruits and vegetables from French suppliers. In light of Frances popular Croque Monsieur sandwiches, McDonalds also introduced a hot ham-and- cheese sandwich called the Croque McDo. His team worked on giving McDonalds restaurants in France an updated, upscale look to match with the more upscale and healthy menu items. In the new interiors, the designers replaced McDonalds usual bold red with a rich burgundy and toned down the glaring neon lights for a subtler and stylish look. Reflecting these changing lifestyles, McDonalds is also stepping into the coffee culture in a big way in order to add to consumers pleasure-seeking dining experience by offering freshly-brewed coffee while chatting with their friends. In the United States, McDonalds cappuccinos, iced coffees, and flavored teas served in its 1,000 McCafs are attracting many consumers. An ever- growing menu of old items and newer menu choices like salads and wraps gives McDonalds customers more healthy choices. Some of its U.S. restaurants now feature amenities such as big-screen TVs and fireplaces as well as wireless Internet access, letting customers relax and enjoy themselves if they have the time. In addition, more menu items catering for all age groups are added as well as newly designed playgrounds for addressing consumers value on spending quality family time with their children. We really wanted to make sure that we were the customers destination of choice, notes the chief operating officer of McDonalds, adding that this goal means providing convenience, pleasure dining with or without family, and great locations, along with the right offerings. (source: adapted from Hoyer, W.D., Maclnnis, D. J. and Pieters, R. (2018), AE Consumer Behavior (7th ed.). Asian Edition, Cengage Learning)

a) Discuss the TWO changing consumer lifestyles that are being addressed by McDonalds to move upscale in its restaurant designs and new menu offerings in France. (8 marks)

b) Discuss the marketing implications of the lifestyles you identified in (a) for McDonalds (i) market segmentation, (ii) communication and, (iii) new product strategies. (10 marks)

c) Discuss the THREE values reflected by the changes that McDonalds has made. (9 marks)

d) Discuss how McDonalds can address the lifestyle of voluntary simplicity as they plan for (i) new menu items and; (ii) restaurant changes in the future. (4 marks)