How do you think McDonalds and Starbucks are able to establish their brands to fit local markets through architectural design of the stores, their e–commerce strategies and service to accommodate the local markets and culture? Explain their approaches individually and see if there are any differences or similarities. Do you think Starbucks benefitted from the missteps by McDonalds that you will read about in your research? Both these companies follow the business dictum “think globally but act locally” (Montgomery Research, 2008).
Both make effort to establish their brands by experience differentiation. Both corporations focus their local and global marketing on identification of the emotional experience as part of the consumer connection with their products. Both use various marketing strategies to become synonymous in the consumers mind with a product category. For example: if a consumer wants fast food they think of products like a Big Mac (hamburger), a McRib (pork) or some McNuggets (chicken) so they think McDonald’s and if a consumer wants a quality cup of coffee they think Starbucks (Montgomery Research, 2008).
It’s a trade brand category identifier but one company has a wider range than the other. Both company’s use similar techniques of blending standardized corporate and unique local design structures together for their stores. They also make specific accommodations in service strategies to make their companies benefit. Both of these types of actions show respect for the local areas and their native cultures. Linking these customer environments with their brand offers a psychological identification for the consumer.
McDonald’s has added new local specialty food items to fit the local market environment (Mininni, 2009). For example in France most burgers contain the much loved additional bacon, facilities are air-conditioned, have free Wi-Fi, and are open late. And in India, McDonald’s removed beef to accommodate Hindus and in Morocco on certain holidays the menu includes “dates, milk, and Moroccan cookies”. In Morocco McDonald’s employs female receptionists to seat customers. And in Arabia they offer a sandwich named McArabia.
McDonald’s has also been credited by local newspapers with raising the standards of bathroom cleanliness in Hong Kong. And Starbucks also seeks to blend with their local environment in many ways. Starbucks has altered menus to accommodate local tastes and some menu offerings include meat buns in Asia and mince pie in Britain but coffee has always been the primary focus. Starbucks worldwide decor scheme includes using their standardized nautical theme blended with local icons.
Included in the Starbucks overseas strategy, they purchased retailers that already had local followings, for example: in 1998 they purchase the chain Seattle Coffee Company in the United Kingdom with 38 existing retail facilities serving the public (Blanchard, 2008). With this kind of acquisition Starbucks capitalizes on acquiring pre-existing customers. Starbucks did not take full advantage of McDonald’s “missteps” as much as McDonald’s has taken advantage of some of the mistakes Starbucks has made.
Because McDonald’s has a wider product category under name brands that is broader in product repertoire than Starbucks and they can add additional items for test marketing and if successful add them in permanently (Martin, 2008). Recently McDonald’s added a successful line of premium coffees to their full menu directly competing against Starbucks. The ongoing strategy of offering more diverse quality food items comprising a complete meal associated in the public consciousness consistently gives McDonald’s a larger appeal than Starbucks focus on their premium coffee or tea (Blanchard, 2008).
In an attempt to keep sales up over time, Starbucks has tried altering stores environment, changing background music, offering discounted Wi-Fi, promoting discount club cards, and making variations in their basic menu and they even experimented with one dollar coffee but generally these methods have not stopped the drop in their sales over time (Winslow, 2008). Current E-commerce strategies of these two corporations vary greatly. Differences are obvious between the design styles and offered number of actual customized foreign websites.
There is customization showing real differentiation for each specific country (114 different worldwide) McDonald’s websites than for the one primary Starbucks website with links to thirty countries worldwide. All the McDonald’s websites are more colorful, hip and show big pictures of the newest food products, a toll-free consumer hotline, offer free Wi-Fi, links for food nutritional values, careers and having local fun (Startz, 2009). In France McDonald’s downplays U. S. roots and uses France’s Asterix (a local cartoon character) for marketing on their French website and on TV instead of the traditional Ronald McDonald (Mininni, 2009).
Starbucks uses a simplistic low key corporate website that offers standardized links to their history, charities, local events, buying their coffee and tea, discounted Wi-Fi time and the Starbucks coffee card. Starbucks has not set up separate foreign websites for each country where they have locations. They use a main page link to show thirty foreign locations of their stores worldwide. Starbucks website makes corporate announcements and one of the quotes known for causing bad public reaction was when spokesman Howard D.
Schultz announced details of a “corporate turnaround plan” that included “discontinuing warm breakfast sandwiches” at its stores because “the scent of the warm sandwiches interferes with the coffee aroma in our stores” (Martin, 2008). I have noticed that when these corporations post on their websites or talk to the news media there are differences in their demeanor. Starbucks talks about removing sandwiches or dollar coffee from their product line or in having to close underperforming locations and McDonald’s always seems to puts a more positive wording and spin on their company and all released information.
References Blanchard, C. (2008). Starbucks’ Price Positioning Misstep. WordPress. com. Retrieved from http://thetransfer. wordpress. com/2008/01/31/starbucks-price-positioning-misstep/ Martin, A. (2008). Starbucks to Close Stores and End Sandwich Sales. NYTimes. com. Retrieved from http://www. nytimes. com/2008/01/31/business/31sbux. html? _r=3=business=slogin=slogin Mininni, T. (2009). McDonald’s: Taking the Snobbery Out? MpDailyFix. com. Retrieved from http://www. mpdailyfix. com/McDonalds-taking-the-snobbery-out/ Montgomery Research. (2008).
Visibility Into The Ultimate Consumer Is Key To Customer Growth – McDonalds. CRMProject. com. Retrieved from http://www. crmproject. com/documents. asp? d_ID=2912 Startz, S. (209). McDonald’s Free Wi-Fi Should Worry Starbucks. BrandCannel. com. Retrieved from http://www. brandchannel. com/home/post/2009/12/16/McDonalds-Free-Wi-Fi-Should-Worry-Starbucks. aspx Winslow, L. (2008). New Customer Loyalty Programs and Missteps – Starbucks Case Study. Ezinearticles. com. Retrieved from http://ezinearticles. com/? New-Customer-Loyalty-Programs-and-Missteps-Starbucks-Case-Study=3218771