Day 037 - 14 Oct 94 - Page 15


     
     1        421; there is a small quote here; the second complete
     2        paragraph about halfway through; they are talking about
     3        one of McDonald's earliest experiences in foreign markets
     4        in the Netherlands.  It starts:  "And instead of
     5        introducing the standard McDonald's menu, the joint
     6        venture eliminated the popular Quarter Pounder and added a
     7        couple of Dutch favourites - applesauce and deep-fried
     8        chicken croquettes."  Then a comment from a McDonald's
     9        executive:  "'We got spooked into thinking that we had to
    10        have indigenous foods,' Turner says."
    11
    12        Again, when I read this several years ago it set warning
    13        bells up in my mind.  This is not traditional marketing of
    14        any sense at all.  Traditional marketing would have
    15        listened to what the local market was interested in
    16        having.  It would not have attempted to force its own
    17        product range down, as it is rather inelegantly expressed,
    18        the indigenous market's throat.  But this is clearly what
    19        is happening.  In fact, it could well be argued that in
    20        traditional marketing McDonald's is a total and abject
    21        failure.  They do not understand how to listen to their
    22        consumers; instead they prefer to subvert them.  That is a
    23        word I will be using again in a moment.
    24
    25        If I can refer you to page 224, again the second complete
    26        paragraph.  This talks about their earliest experiences in
    27        the Canadian market:  "Frustrated by a string of losing
    28        years and by his failure to raise his stores' average
    29        sales volumes to anything approaching those in the United
    30        States, Cohon and Turner agreed that a much bolder measure
    31        was needed.  Thus, in 1971, Cohon took a step McDonald's
    32        had never taken in the United States and likely would not
    33        have taken in Canada if the operation had been run out of
    34        Oak Brook: he cut prices 20 percent across the board.  'We
    35        had to do something dramatic to get Canadians to come in
    36        and try the product,' Cohon says."
    37
    38        Again, a very clear example that the indigenous market in
    39        McDonald's marketing speak that they were going into was
    40        simply not interested in them.  They had lost countless of
    41        millions of dollars in that market, and were taking
    42        desperate measures to try and persuade the local consumer
    43        to taste their product.
    44
    45        On page 426 we can see how McDonald's again marketed
    46        themselves in a highly unethical way in the Japanese
    47        market.  Once more it is the second complete paragraph on
    48        that page.  Their local person was somebody called
    49        Fujita:  "Fujita had the entrepreneurial credentials
    50        McDonald's was now looking for abroad.  So, in 1971, it 
    51        agreed to form a Japanese joint venture with McDonald's 
    52        controlling 50 percent and Fujita and Daiichiya Baking 
    53        Company splitting the other 50 per cent.  Fujita was made
    54        president and chief executive of McDonald's Japan, and he
    55        soon bought out Daiichiya's interest.  From the beginning
    56        Fujita called the shots in introducing McDonald's to
    57        Japan.  Confident that he could import a concept as
    58        foreign as the hamburger to a culture whose diet was
    59        oriented to fish and rice, he insisted that there was no
    60        need to tailor McDonald's menu to Japanese tastes in the

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