September 26, 2006

 

McDonald's aims to boost beef consumption in China

 

 

McDonald's, the world's most famous fast food chain, is going all out to woo the younger set of China's increasingly affluent population to eat beef, a traditional mainstay on its menu.

 

The ad campaign comes at a time when the global behemoth is introducing its quarter-pounder to China as it shifts its focus away from selling menu items like hamburger and French fries to adopt a marketing approach that tries to sell consumers a lifestyle.

 

Beef costs more than other meats in China and a set meal at McDonald's can cost several times more than a regular meal at China's eateries.

 

For the past few years McDonald's has been courting the young: teenagers and young adults more open and eager to accept western culture than the previous generation, who were brought up in a closed communist China.

 

Now, to expand its appeal, or rather, to grow with the generation that gave McDonald's its footing in China, the company is tinkering with its marketing yet again to court the young, hip, mobile and affluent generation. The appeal towards the generation's vanity and obsession with all things western has led to campaigns where ads focus on the sex appeal and energy of a generation that eats beef the way their predecessors eat rice.

 

In this, McDonald's campaign has been aided by the traditional Chinese notion that eating beef boosts energy and denotes, panders to the notion that eating beef would enhance a man's social attractiveness. manliness and strength. In fact, the company's ad campaigns, in various lifestyle magazines The iconic hamburger and big Mac, along with its other beef compatriots which propelled McDonald's to world fame, only make up a third of the company's sales in China, while chicken products make up more than half, a testament to China's significantly stronger preference for chicken.  

 

Still, the company's campaign may have more to do with boosting sales rather than the imposition of a lifestyle. The company has seen its market share being chipped away and sales eroded as more players enter the market and aggressive campaigns by competitors make the golden arches work more for the consumer dollar.

 

Still, the fact remains that despite China's red-hot economy, no nation-wide fast food chain has emerged to challenge McDonald's domination of this sector, although smaller players, dominant in their respective cities,pose a formidable challenge. The only other significant foreign competitor McDonald's has in China is Kentucky Fried Chicken, whose sales were relatively unaffected even in the midst of the bird flu scare in China. 

 

To halt the decline, Jeffrey Schwartz, chief executive of McDonald's China operations, was chosen to lead an executive team sent to China a year ago to stop the malaise.

 

He holds the view that McDonald's China customers are young, modern, bilingual and very much in tune with technology. Consumers like these are not going to wait for McDonald's to catch up, he said.

 

McDonald's hopes the campaign, which aims to remake the golden arches into an aspirational brand, would help differentiate it from the competition and boost flagging sales.