Day 037 - 14 Oct 94 - Page 17
1 while Fujita kept the McDonald's System intact, some of
2 the chain's international managing directors initially did
3 not follow his lead and used their autonomy to make major
4 changes in menu and store format that no franchisee could
5 make in the United States. In Australia, the menu was
6 designed to cater to Australian tastes; as a result,
7 Ritchie's initial units featured English-style fish and
8 chips instead of the regular McDonald's Filet-O-Fish
9 sandwich. The biggest seller was not a hamburger but a
10 fried chicken product that was unknown in McDonald's in
11 the United States but at one time contributed thirty per
12 cent of McDonald's sales in Australia. And the most
13 popular hamburger was one containing lettuce, tomato, and
14 mayonnaise - the way most Australians prefer hamburgers.
15 By contrast, the regular McDonald's hamburger - garnished
16 with pickles, onions, ketchup, and mustard - accounted for
17 less than 1 percent of sales. Australians obviously had
18 difficulty accepting McDonald's notion of putting pickles
19 on all its regular hamburger products. 'We had pickles all
20 over the store - sticking on the ceiling and the walls,'
21 Ritchie says. 'If we put up a wall mural of Ronald
22 McDonald, he would have pickles in his eyes by the end of
23 the day.'
24
25 But gradually the Australian managers realized what Fujita
26 had discovered early on: McDonald's had better luck
27 changing local eating habits than adapting its menu to fit
28 them." I emphasise that point. "The sales of McDonald's
29 units in Australia are now dominated by the same hamburger
30 products as the chain delivers in the United States.
31 Meanwhile, the fried chicken offering has recently been
32 replaced by Chicken McNuggets, while the lettuce and
33 tomato hamburger and fish and chips product were dropped
34 from the menu. And Ritchie now estimates that less than 5
35 percent of his customers remove the pickles from their
36 hamburgers. The Australian president attributes that
37 change to the influence McDonald's has on children, whose
38 tastes are not yet biased against the American menu. As
39 they grew up, McDonald's succeeded in winning more
40 customers over to the standard American menu, and when
41 McDonald's Australia finally revoked the menu
42 modifications it had made, its operation moved into the
43 black after eight consecutive losing years."
44
45 Again, a very clearly depicted portrait of an organisation
46 that initially tried traditional marketing strategy and
47 tactics and failed and resorted to a strategy of
48 subversion.
49
50 The next page is also worth pointing out; page 437; it is
51 the second complete paragraph from the top relating to
52 Germany. I shall not read the whole paragraph. I will
53 just pick it up because the same point is being made, but
54 there is a quote here from a McDonald's executive; it is
55 about halfway through the paragraph and begins: "And
56 McDonald's Germany, which failed to turn a profit in its
57 first six years, earned $15 million pre-tax in 1985, more
58 than double its pre-tax earnings in 1980. 'It seemed that
59 any detour we made from the standard McDonald's did not
60 work,' Rettenwender explains. 'We realised it was better
