Real Marketing NCI McDonald's: Serving Local Markets with a Global Brand Most Americans think of McDonald as their ‘very own. The fist McOanaldS stand popped up in California in 1954, and what could be mote American than burgerandfries fast food? But as it turns out, the quintessentially alk~american company now sells more burgers and ‘fies outside the county than within Neatly 65 percent of McDonalds $23 biion of sales last year came from outside the United States, and its international sales grew at close to twice the rate of domestic sales growth. McDonalds today isa sprawling global enterprise, is 32,000 restaurants serve more than 60 million people in more than 100 coun- ties each day, Few firms have more interna- tional marketing experience than McDonalds, hs restaurants around the world employ a ‘common global strategy—corvenient food at affordable prices. And no matter where you goin the world—trom Moscow to Montreal or Shanghai 10 Cheboygan, Michigan—you'l find those good old golden arches and a menu full of Quarter Founders, Big Macs, fies, mlk- shakes, and other famiiar items. But within that general strategic framework, McDonalds adapts tothe subtleties of each focal market. ‘Adapting its proven formula to local mare kets hasn't always been easy, and McDonalds has learned many important lessons in ts jour- nays overseas. Consider its experiences in Rus- sia, a market thats very diferent culturally economically, and political from our own, McDonald’ frst set its sights on Russia (then a part of the Soviet Union) in 1976, ‘when George Cohon, head of McDonald's in Canada, took a group of Soviet Glympics of- ficals to a McDonald’ wile they were in town for the Montreal Olympic Games. Co» hon was struck by how much the Soviets Tked McDonalds hamburgets, fries, and ‘other fate. Over the next 14 years, Cohon flew to Russia more than 100 times, first to get Soviet permission for McDonalds to pro- ood for the 1980 Moscow Olympics and later to be allowed to open McPonald’s restaurants in the country. He quickly learned that no one in Russia had any idea what McDonalds was. The Soviets turned Cohf down flat on both requests. Finalyin 1988, as remier MkhalGorbachev bbegan to apen the Russian economy, Cohon forged a deal with the city of Moscow to launch the fist Russian McDonald in Moscow’ Pushkin Square. But obtaining per- iission was only the frst step. Actually opens ing the restaurant brought a fresh set of challenges. Thanks to Russia’ lage and bus reaucratic government structure, MeDonald’s had to obtain some 200 separate signatures justto open the single location. Ithaddificulty finding reliable suppliers for even such basics as hamburgers and buns. So McDonalds forked over $45 millon to build ftility to pro- duce these things itself, even broughtin tech- ‘ical experts from Canada with special strains of disease-resstant seed to teach Russian farm- ers how to grow Russet Burbank potatoes for french fies, and it built its own pastevszing plant to ensure a plentifl supply of fresh milk, When the Moscow MacDonalds at Pushkin Square finaly opened its doors in Jan- Lary 1990, it quickly won the hearts of Russian consumers. However, the company faced still more hurdles, the Pushkin Square restaurantis huge—26 cash registers (more than you'l find in a typical Walmart supercenter) and 900, seats (compared with 40 to 50 seats in a typi- ‘al US, McDonalds), The logistics of serving customers on such 2 scale was daunting, made even more difficult by the fact that few: employees or customers understood the fast- food concept. Although American consumers were well acquainted vith McDonalds, the Russians ‘were clueless, So, to meet its high standards, for customer satistaction in this new market, the USS. fast feeder had to educate employees about the time-tested McDonald’ way of do- ing things. tt trained Russian managers at Hamburger University in tinois and subjected each of 630 nevs employees (most of whom didn't know a chicken MicNugget from an Egg Metuffin) to 16 to 20 hours of training on such essentials as cooking meat patties, as- sembling filet-O-Fish sandwiches, and ghv= ing service with a smile. Back in those days, MeDonald’s even had to train. consumers— host Museovites had never seen a fast-food restaurant. Customers waiting in fine were shown videos telling them everything—from how to order and pay at the counter, to how {o put their coats over the backs of ther seats, tohow tolhandle a Big Max, However, the new Moscow McDonalds got off to a spectacular start. An incredible Ser Aa