McDonald’s Launching Stores In Eastern Europe
McDonald’s Launching Store in Eastern Europe
One of the guiding elements of McDonald’s strategy was: convenient and timely meals. Where, food could be ordered at any of the restaurants in the chain and the customer could expect the same consistency. At the heart of this philosophy was fast and friendly customer service. However, before McDonalds began utilizing this basic strategy, most restaurants consisted of sit-down meals. If there was more than one restaurant with the same owner, the consistency varied from location to the next. The application of the assembly line techniques behind the counter allowed McDonald’s to create meals more: quickly, consistently and cheaply.
The first McDonald’s drive-in started in 1948 in San Bernardino, California. As, this simple concept allowed the company to: innovate and change over the course of time. To capitalize on the family crowd, McDonalds began offering a toy in every child’s meal, known as a Happy Meal in 1979. The toy promotion assisted McDonalds in two ways to include: families were spending more money inside each store and it allowed the company the ability to rebrand its image. (Dobrow, 2005).
Along with toys, advertising with catchy jingles and nonstop marketing have raised the corporation’s image to that: of a status symbol of America. An example of this image can be seen with Ronald McDonald (the red-haired clown) who exemplified the care-free, kid friendly atmosphere (MacArthur, 2005). This is important because, it is showing how the company would take this image and use it to continually reinvent themselves. In the case of opening many different Eastern European stores the company would to take this image and rebrand it. To fully understand how this was accomplished requires looking at: the initial marketing strategy, the changes that were made to their plans, the mistakes that occurred, how the product evolved and if it helped to be more closely associated with America. Together, these different elements will provide the greatest insights about the marketing strategy that McDonalds was utilizing.
The Initial Strategy
The basic strategy that McDonald’s was going use in Eastern Europe was to take proven concepts that were tested in America and other known international locations (i.e. Western Europe). The idea was to emphasize the fun, family orientated atmosphere of the restaurant and transfer it to these countries. Over the course of time, this would be augmented with new products that could create a foundation for the company. (Cavusgul, 2002, pp. 207 — 215)
What changes were made to the product or business operations due to cultural/social issues?
The basic strategy provided background for implementing these plans in Eastern Europe. However, in reality there were a number of changes that were made to the basic operations of the company. The most notable was inside the supply chain itself. What was happening is many nations were known for having high amounts of corruption. This would lead directly shortages and other issues for a number of businesses. To address these challenge McDonalds began to work directly with local government officials (by funding a host of infrastructure projects). At the same time, they set up a distribution center that was: close to each store and key transportation routes. This allowed McDonalds to be able bringing in a variety of products to include: lettuce, tomatoes and other ingredients. (Cavusgul, 2002, pp. 207 — 215)
What mistakes were made?
There were no mistakes that were made by the company. This is because they were able to augment different cultural factors, with other elements to create a one of a kind product. A good example of this can be seen with McDonald’s celebrating the 20th anniversary of opening their first store in Russia. This store served as the testing ground that allowed the company to open over 240 restaurants throughout the country. (“Anniversary of Hamburger Diplomacy,” 2010)
Whether this product is still in the marketplace and how it has evolved over time?
The various products and services that are being offered by McDonalds are still in the marketplace. However, they have evolved over the last several years. This is because there has been a company wide effort to address the issues of obesity. As a result, the restaurant has changed their menu by offering healthier products to customers. This is having an effect on the kinds of food that McDonald’s is serving. (White, 2006)
Is the product profitable? Has it helped the product to be closely associated with America?
Obviously, the company’s strategy has proven to be tremendously successful. This has helped their products to be more closely associated with America. The reason why, is because of the changes that are occurring in many American locations will have an impact on restaurants in Eastern Europe.
Clearly, the basic strategy that McDonald’s used to address many of the challenges facing their stores in Eastern Europe was: to work closely with local government officials. As, McDonald’s began to: invest heavily in different infrastructure projects that were near some of their stores. This would help the company be able to bring in the necessary ingredients to offer the same kind of products that were sold in the U.S. At the same time, they began adapting their menu with the shifts that were occurring in the eating habits of the general public. This is important, because it is illustrating how the company is continuing to adjust with the changes that are taking place in consumer tastes. In the case of many Eastern European locations, this meant that they would augment their general menu with various cultural factors to create positive images. Once this occurred, McDonald’s became a cultural icon that went beyond that of America and became a part of the community inside these counties. In this aspect, one could argue that they are now transcending national boundaries because of these changes.
Anniversary of Hamburger Diplomacy. (2010). About McDonalds. Retrieved from: http://www.aboutmcdonalds.com/mcd/students/amazing_stories/the-anniversary-of-hamburger-diplomacy.html
Cavusgul, S. (2002). Doing Business in Emerging Markets. Thousand Oaks, CA; Sage.
Dobrow, Larry. (2005) McBrand: It’s not easy being pop culture icon. Advertising Age. 76(30).
MacArthur, Kate. (2005) Health-Minded Ronald buffs image. Advertising Age. 76(30).
White, M. (2006). Healthy Menu Choice. Associated Content. Retrieved from: http://www.associatedcontent.com/article/46571/healthy_menu_choices_at_mcdonalds.html?cat=51