McDonald’s Goes Upscale from Paris to Peoria

March 28, 2012

Hongyeon Lee

Topics to be covered

Ⅰ. McDonald’s Corporation

Ⅱ. Description of the Case

Ⅲ. Case Questions & Answers

Ⅰ. McDonald’s Corporation

• The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald in San Bernardino, California

• McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with the de-scription "Drive-In Restau-rant Services"

http://www.youtube.com/watch?v=GxXDD_7lgYw

Ⅰ. McDonald’s Corporation (continued)

• McDonald's restaurants are found in 119 countries and territories around the world and serve 58 million customers each day

• McDonald's operates over 33,000 restaurants worldwide, employing more than 1.7 million people

Ⅰ. McDonald’s Corporation (continued)

• Most standalone McDon-ald's restaurants offer both counter service and drive-through service, with indoor and some-times outdoor seating.

• Some McDonald's in sub-urban areas and certain cities feature large indoor or outdoor playgrounds

Ⅰ. McDonald’s Corporation (continued)

• Approximately 15% of McDonald's restaurants are owned and oper-ated by McDonald's Corporation directly

• The remainder are op-erated by others through a variety of franchise agreements and joint ventures

Ⅰ. McDonald’s Corporation (continued)

• In 2006, McDonald's in-troduced its "Forever Young" brand by redesign-ing all of its restaurants, the first major redesign since the 1970s

• McDonald's has increased shareholder dividends for 25 consecutive years, mak-ing it one of the S&P 500 Dividend Aristocrats

Ⅱ. Description of the Case

• McDonald planned to move upscale in Eu-rope.

• Modifying the menu.• Upscale in space and showcasing.• New modern interior and decoration.• 5% revenue increase in France.• 15% revenue increase in Europe.• Changing Lifestyle for coffee culture.

Ⅱ. Description of the Case

• Customers can order meals made from fresh, locally grown produce and sip more sophisticated beverages

• The restaurants look more luxe, some with sleek cof -fee bars and stylish arm-chairs that give customers a comfy place to linger over their lattes

Ⅱ. Description of the Case

• McDonald’s moved up-scale in France by modi-fying the menu for local tastes, introducing sal-ads, desserts, and smoothies featuring fresh fruits and vegeta-bles from French sup-plies

Ⅱ. Description of the Case

• The next step was to give McDonald’s restau-rants in France an up-dated, upscale look to showcase the more up-scale menu and to invite consumers to savor the fast food

Ⅱ. Description of the Case (continued)

• Now McDonald’s cus-tomers in Lisbon can order soup for lunch or dinner while customers in London can settle back into leather seats and use wireless inter-net access

Ⅱ. Description of the Case (continued)

• In USA, the cappucci-nos, iced coffees, and flavored teas served in its 1,000 McCafes are attracting many cus-tomers who otherwise would have gone to nearby Starbucks out-lets

Ⅱ. Description of the Case (continued)

III. Case Question No.1

1. How do the changes that McDonald’s has made to move upscale address changing con-sumer lifestyles?

III. Answer to Case Question No.1

• McDonald’s provided convenience, comfort-able seating, great locations, along with value and the right offerings by satisfying consumers in different countries having characteristic life-styles.

III. Case Question No.2

2. What values seem to be reflected in the changes that McDonald’s has made?

III. Answer to Case Question No.2

• Values such as materialism, the home, family and children, health, hedonism, authenticity, the environment, and tech-nology have been reflected in the changes that McDonald’s has made.

• People in different countries are exposed to different cultural experiences, a situation that leads to cross-cultural differ-ences in values.

• All cultures can be classified according to four dimensions of individualism versus collectivism, uncertainty avoidance, mas-culinity versus femininity, and power distance.

III. Case Question No.3

3. What aspects of personality do you think Mc-Donald’s marketers should pay particular at -tention to as they plan future menu and restaurant changes?

III. Answer to Case Question No.3

• I think McDonald’s marketers should pay par-ticular attention to national character based on the following reasons:Personality traits can sometimes be used to stereotype people of a particular country as having a national character. These characteri-zations represent only very broad generaliza-tions about a particular country; obviously, in-dividuals vary a great deal.

Q & A Session