McDonalds Corporation in Hong Kong - Case Study Example

?Case Study Analysis: McDonalds Corporation Executive summary The perceptions of a consumer towards a company’s products are affected by the way the company markets and presents the products. Marketing a product does not just involve the aspects related to a specific segment. Marketing a product usually requires a company to perform extra promotions to increase consumer awareness towards the company. However, the promotions that a company decides to run in a market have to be agreeable to all segments of the population. This is because the market in which a company operates is diversified and the customers have to be equally satisfied. The case study regarding McDonalds is centered on one such promotion, where the company did not consider all segments of the population before running the promotion. A quick summary of the case study indicates that the company tried to present its customers in the Asian market with gifts resembling the twelve Chinese Zodiac signs. However, because of a small Muslim population in Singapore, the company decided to eliminate the pig figurine from the zodiac toys collection. Therefore, the company offended many parts of the population. An analysis of this case study will reveal that there are many issues that the company should have considered before deciding to run the promotion without consideration for all members of the society. Case Issues From the case study, it is evident that McDonalds Corporation in Hong Kong and Singapore decided to run a promotion that would connect with the local Chinese astrology (Ling, 2011). This was to be done by introducing a lucky charms promotion that included twelve of the Chinese zodiac signs. The promotion was conducted by having customers buy the toys whenever one Happy Meal was consumed, and it ran well in Hong Kong because of the predominant Ethnic Chinese population (Wong-Anan and Ng, 2010). However, the real case issue arose when the company decided to run the promotion in Singapore. The Singaporean population is divided into many religions, including 14.9% being Muslims (Ling, 2011). Because of the presence of Muslims in the city, McDonalds Corporation decided to change the promotion. This was done by removing the pig toy in the toy collection, ostensibly to avoid insulting the Muslims who do not eat pig. The first case issue is the fact that the company did not perform efficient market research to determine whether the Muslims would be offended by the pig effigy. The second ethical issue that affected the promotion is the apparent disinterest of the company in the religious views of the population. The Doraemon toys are a significant part of the Chinese culture (ChineseZodiac, 2011); therefore, removing one part of the collection would make the entire collection useless. The failure by the company to consider the wishes of the other parts of the population and their religious views is also contentious. In modifying the promotion, McDonalds Corporation focused only on the views of the Muslim population. The people who complained about the promotion cited the fact that the Sikh community does not take ‘halal’ food, or the Hindus beef. Therefore, the marketing issue that McDonalds failed to consider was the expected reaction of the consumers to the promotion. The other issue that can be identified from this case is the failure of the company to consult the Muslim leaders before conducting the apparent sensitivity promotion (Wong-Anan and Ng, 2010). The response of the company is also a major issue, since the company responded by further denting the cultural significance of the Chinese zodiac. This is illustrated by the fact that the response promotion re-introduced the pig toy into the collection, but after the lunar year had ended. Case Issues Analysis Any firm operating in an international environment should always be cross-culturally sensitive to the population in which they operate (Schiffman et al, 2008). Cross-cultural sensitivity refers to the attitudes and perceptions that a company has of the people in the cultural divisions in the area of operations. In the case of McDonalds, it is evident that there was a breach of the cross-cultural sensitivity ethos. This is because the company decided to consider the cultural significance of the toys to one culture, and excluded the other cultures. The consideration of the Muslim culture or religion in the decision to exclude the pig toy points to the fact McDonalds Corporation did not consider the cultural significance of the other religions, or the cultural significance of the zodiac to the Chinese population. Research indicates that the Chinese Zodiac is an important part of the peoples’ culture (ChineseZodiac, 2011); therefore, McDonald’s decision to exclude one part of the zodiac is a serious ethical issue. The perceptions of people to the products of a firm are affected by the perceived reaction of the firm to the cultures of the people (Rurak, 2007). This means that a firm that is considered respectful to the culture in which it operates will gain customers and be able to sell their products. From the case study, it can be seen that the sales of the Happy Meal increased in Hong Kong where the company offered the whole toy set collection. However, the decision by the company to remove a part of the collection destroyed customer perception of the company in Singapore, therefore, the company lost sales and customers. An analysis of the case also reveals the flaws in the corporate social responsibility strategy used by McDonalds Corporation in the Asian market. Corporate social responsibility refers to the ethical, moral and business considerations that a business has for its consumers (McWilliams, Siegel and Wright, 2005). In the case study concerning McDonalds Corporation, the CSR issues are varied, starting from the decision to exclude a part of the Chinese culture from the toy collection, the decision not to consult the Muslim population, and the decision to consider only one part of the population. Corporate social responsibility techniques dictate that a company should consider all the factors before making any relevant decision to the business (Sharma, Sharma and Devi, 2009). In the case study, it can be seen that the Muslim population would not have been offended if the pig toy had been included in the collection. This is because, despite the religious significance of the pig, the Muslims considered the toy harmless. Therefore, the company should have consulted leading Muslim decision-makers before deciding to remove the pig toy. This would have reduced the effects of the apparent cultural inconsideration. The case study also reveals the importance of market research to the firm in the industry of operation. Market research involves a study into the factors that may affect a company’s operations in a sector, including the age, sex, race, and religious issues associated with the population (Kotler, 2011). If McDonalds Corporation had performed efficient market research, it is evident that consumer perceptions would have been efficiently interpreted. This would lead to a correct analysis of the market; therefore, the company would not have removed the pig toy from the collection. As already mentioned, the Muslim population would not have minded the inclusion of the pig in the Zodiac collection, since the toy is just a toy and would not have affected their religious affiliation. Market research would have helped the company determine the relative importance of the pig toy to the Muslims and the Chinese population. This would have helped to determine the reaction of each part of the population to the inclusion or exclusion of the toy in the collection. Alternative Options From the case analysis above, it is evident that the decision by McDonalds to exclude the pig toy from the zodiac collection was the wrong decision. The alternative option for the company to appease both the Muslim and Chinese groups would have been to perform prior consultation. As already identified, the Muslims would not have minded if the toy had been included in the collection. This fact, coupled with the importance of the zodiac to the Chinese, would have been revealed if the company had conducted efficient market research. Therefore, the best option would be conducting market research before any major decision is arrived at by an international company. Another alternative option would be to introduce separate products for both the Muslim and Chinese population. From the case study, it can be seen that the company decided to replace the pig toy with a cupid figure, a fact that infuriated the Chinese population because of the apparent disregard for their culture. Therefore, the best option for McDonalds would have been to introduce both promotional products into the market. This would ensure that the Muslim population who would be offended by the pig effigy would buy the cupid figurine, while the Chinese part of the population who need the zodiac toys for collection get what they need. Final Recommendations Once the image of a company has been tainted by the actions that the company performs, it is difficult for the original perception of the company to be restored (Vrontis and Thrassou, 2007). Consumer perceptions of a company’s operations are delicate and a firm should ensure that any errors concerning consumer perception are correctly handled. From the case analysis above, it can be seen that consumer perception for McDonalds Corporation was severely dented by the decision to remove the pig toy from the zodiac collection. Therefore, the first recommendation is that the company should engage in efforts aimed at improving consume perception. This can be done by demonstrating their understanding of the affected culture and a commitment to respect the cultural needs of the people. The other recommendation for the company would be to improve their understanding of the cultural factors in the operating environment (Bailie, 2011). The case study revealed the flaws in the corporate social responsibility strategies of the company; therefore, research should be conducted to determine the factors that affect the different demographic groupings in the population. From the case study, it is evident that the demographic groupings in Singapore are based on religious and ethnic differences. This means that the company should ensure that each part of the population is served without apparent discrimination for any other part of the population. The case study indicates that the company provide a promotion that favored one part of the population, therefore, future promotions should be evenly considerate of al the demographic groupings. Additionally, the company could introduce promotions that are targeted at specific parts of the demographic divide, therefore, ensuring that no demographic group is isolated. References Bailie, H. (2011). Developing Multicultural Leaders: The Journey to Leadership Success. Competitiveness Review: An International Business Journal incorporating Journal of Global Competitiveness, Vol. 21(3). Pp. 328-329. Chinese Zodiac. (2011). Chinese Zodiac Elements. Retrieved on October 4, 2011 from: Kotler, P. (2002). Marketign Management. New York: Prentice Hall. Ling, P. (2011. McDonald’s Promotion: Where’s the Pig. McWilliams, A., and Siegel, D., and Wright, P. (2005). Corporate Social Responsibility: Strategic Implications. Rensselaer Working Papers in Economics. Rurak, Z. (2007). The Neglected Role of Cultural Sensitivity in International Business. Retrieved on October 4, 2011 from: Schiffman, L., and Bednall, D., and O’Cass, A., and Paladino, A., and D’Allesandro, S. (2008). Consumer Behavior. Boston: Pearson Education. Sharma, S., and Sharma, J., and Devi, A. (2009). Corporate Social Responsibility: The Key Role of Human Resource Management. Business Intelligence Journal, Vol. 2(1). Pp. 205-213. Vrontis, D., and Thrassou, A. (2007). A New Conceptual Framework for Business-Consumer Relationships. Marketing Intelligence & Planning, Vol. 25(7). Pp. 789-806. Wong-Anan, N., and Ng, F. (2010). Singapore Snorts over McDonald’s Toy Pig Blunder. Reuters. Retrieved on October 4, 2011 from: Read More