Day 037 - 14 Oct 94 - Page 18


     
     1        to stick with the system and, if necessary, wait for the
     2        German consumer to accept it.'"  Of course, they do not
     3        actually wait; what they do is try to change the culture.
     4
     5        "Nor was the Australian and German experience unique on
     6        that score.  In effect, McDonald's realised that it could
     7        only be successful abroad if it stuck to the very same
     8        menu and store design that worked at home. 'McDonald's is
     9        an American food system,' reasons Steve Barnes, chairman
    10        of McDonald's International. 'If we go into a new country
    11        and incorporate their food products into our menu, we lose
    12        our identity.  We're neither fish nor foul.'"  That
    13        strikes me as an extraordinary attitude.
    14
    15        Finally, I just mention -----
    16
    17   Q.   The next sentence seems to be relevant after "fish nor
    18        foul".
    19        A.  Yes, it goes on to make the same point again.  I just
    20        hope I am not making it rather tedious.
    21
    22   Q.   Just read the next sentence.
    23        A.  "Rather than change their menus or their stores,
    24        McDonald's foreign partners made major changes in
    25        marketing in order to sell the American System.  Among
    26        other things, advertising went back to the basics, back to
    27        the 1950s, when even in the United States McDonald's was
    28        explaining what its fastfood system was and how it
    29        worked."
    30
    31   Q.   That last sentence, "made major changes in marketing"?
    32        A.  In its marketing strategy, I think would be clearer.
    33
    34   Q.   So these changes that they are making, did it seem that
    35        marketing was the key?
    36        A.  Marketing of a most unorthodox nature.  As I
    37        have explained, it is not traditional marketing, which
    38        studies the market, follows what the consumer wants, and
    39        survives or fails on its ability to satisfy needs and
    40        wants.  McDonald's clearly are not very good at doing
    41        this.  Their whole strategy is to establish themselves
    42        with a huge amount of cash that their American operation
    43        produced initially and go into another culture, change
    44        that culture to suit the product; change it, in my view,
    45        very often for the worse; change it without any regard for
    46        what was there previously.
    47
    48        When I first read this chapter, my blood as a marketer ran
    49        cold.  The final page I refer you to is page 439, which is
    50        another quote from a McDonald's executive.  It is right at 
    51        the top of the page.  It is the final sentence of the end 
    52        of that paragraph:  "Noust", who is a McDonald's 
    53        executive, "Noust says of the approach:  'We never want to
    54        position McDonald's as an American company changing the
    55        German culture, but rather as a company that feels it is
    56        German.'"
    57
    58        That too, that is essentially untrue, because precisely
    59        what they do has, I think, been amply illustrated in
    60        previous quotes.  So, again it reinforces my view that

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