Friday, December 28, 2007

Dumaguete McDonalds

Some argue Dumaguete has changed for the worse with the recent arrival of a McDonalds on Legaspi Street. Others laud the arrival as a sign of progress to this provincial town. Whether you are a fan of McDonalds or not, this article will open your eyes to the differences between McDonalds east and west.

This is an excerpt of a review I did on a book about McDonalds establishing fast food restaurants in Asia circa 1998. While it is not specifically about the Philippines, when you visit the Dumaguete McDonalds, you will immediately observe many of the behaviors outlined in the article.

There is more to the fast food business than food. For example many Asians patronize McDonalds for the ambiance and the “American experience” rather than the food, which is considered secondary. Typified by Japan’s example, many Asians adopt selective American traits as desirable and reject others. They often love the American “style” but reject the restaurant behavior required to make the McDonalds concept work (from a profit standpoint). An example is the Asian tendency to linger and enjoy the air-conditioned ambiance, when to be profitable, McDonalds relies on rapid turnover of customers. Another is the widespread Asian trait to hold a burger with the paper wrapper around the burger bun.

The clever and sometimes humorous solutions required by restaurant owners are interesting. One such case might be called the napkin wars. Chinese McDonalds customers when presented with self-bussing and self-service would simply steal all the napkins from the dispensers if they were left unattended. In Singapore the restaurant owners actually catered to the hordes of teen age customers descending on McDonalds after school. They recognized that these were the future adult customers as well as teenage consumers with disposable income. Additionally, Asian patrons often would not queue up in lines to order but would mob the counter and fight for service. Retraining was necessary to establish order.

McDonalds goes into great depth analyzing both the behavior and expectations of the various cultures, and then adapts in order to ensure economic viability and acceptance. Treading a fine line between product uniformity and catering to local tastes, McDonalds goes to great lengths in order to ensure success. In the Philippines observe the burger McDoo, and chicken and rice dishes.

Is McDonalds a cultural imperialist as some claim, or a valuable partner in transnational business? McDonalds encourages co ownership of the Asian franchises. Local businessmen wholly own several Asian concerns. However, in Korea this tactic was employed out of necessity in order to penetrate the less than enthusiastic Korean market. In Korea and to a lesser extent elsewhere in Asia, eating is a political act, not simply a sustenance or social act. McDonalds was forced to alter the perceptions of Koreans and other Asians to accept the fact that bread and hamburgers were a politically correct food in lieu of native rice.

McDonalds not only researched local tastes, but also did extensive market research to determine the best way to advertise their product in Asian countries. One example was the way they determined that television advertising in China would be of little value because of the viewing habits of the Chinese. There is no advertising during a TV program in China, advertising only occurs between programs. Chinese viewers generally switch channels between shows rendering TV ads ineffective.

McDonalds encountered difficulty conveying to the Asian consumer that hamburgers were more than a snack. This was one of the most difficult tasks they faced in all the Asian markets. Hong Kong was the exception, as Hong Kong had a long history of cross-cultural influences. Another issue facing American style fast food businesses was the value meal concept. Asian languages had no word for value and McDonalds was forced to come up with another way of describing combination meals. The solution was using the term “sets” which approximated the meaning in Japanese and Chinese.

If for no other reason, McDonalds must be admired for their business savvy in bringing American fast food to Asia while at the same time addressing Asian tastes and social custom.

For those interested in reading the book, which I highly recommend, here are the particulars.
Golden Arches East. Watson, James L. (Stanford: Stanford University Press, 1997. Pp. xi, 200.

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