Friday, July 13, 2012

Research Paper on McDonald’s and McArabia

Research Paper on McDonald’s and McArabia

McDonald’s is one of the largest networks of fast food restaurants in the world. In fact, this multinational company currently operates worldwide and its further exposition is the strategic goal of the company. It is necessary to underline that McDonald’s fast food restaurants were traditionally characterized by the high speed and quality of services, though it can hardly be said about the quality of its products which has been severely criticized since the negative impact of fast food on human health was discovered. This is why the company is under a constant pressure from the part of the opponents of the spread of fast food restaurants.

At the same time, this does not really prevent the company form the further growth, though in recent years a substantial slow down in the development of the company was marked. To put it more precisely, in 2002 McDonald’s announced the first quarterly net loss in its history. Nevertheless, the company is still progressing and its positions are quite strong in the world market.


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In this respect, it is worthy of mention that one of the strategic directions of the development of McDonald’s fast food restaurants was the adaptation of traditional American restaurants to local culture, food habits, and lifestyle to the extent that its fast food restaurants in different parts of the world incorporated both American and local elements. As a result, the traditional McDonald’s spacious fast food restaurants with high speed and quality of services are combined with local peculiarities such as McDonald’s restaurant in the Arab world with strictly divided male- and female-only lines. At the same time, the adaptation of restaurant to the local conditions of life and local food culture imply not only adaptation of restaurants but also the changes in traditional menu and cuisine of McDonald’s which may vary substantially in different part of the world. For instance, in the UAE, as well as in other neighboring Arab states, the company launched a new product known as McArabia that is supposed to match the local tastes and preferences increasing the popularity of McDonald’s fast food restaurants and its services.

Opportunity identification and selection
Basically, the identification and selection of the new product, i.e. McArabia, were motivated by the necessity to adapt McDonald’s fast food restaurants menu to the local peculiarities of the UAE. It should be said that the main goal of the company was to find the product that would match both the traditional principles and standards of Mcdonald’s in all countries of the world and the local cuisine and habits of local population (Benedetto 2004). In such a way, the company focused on the research of the product that could fully match this demand.

Obviously, the choice of McArabia was quite reasonable since it was actually the adaptation of the major product of McDonald’s fast food restaurants which was just modified to local conditions. To put it more precisely, McDonald’s needed a product that would constitute a traditional burger but did not hurt the food habits and traditions of the local culture. It should be pointed out that the selection of the product should be very careful as traditional Arab cuisine has some products that are simply forbidden to be used and consumed, such as pork and similar products. This is why the company focused on the product that could use elements of traditional local cuisine and, at the same time, correspond to the brand and image of McDonald’s.

Eventually, the company has dwelled upon McArabia as the perfect product to the local market since it continued McDonald’s traditions and cared about the local market as it was supposed to be a sandwich containing some local ingredients, including Arab bread, grilled chicken, lettuce, tomatoes, and Arab sauce (Alkhereiji 2003). In such a way, the essential combination was found and should be pointed out that this product was actually selected because it was probably the most recognizable dish served in McDonald’s fast food restaurants throughout the world and, consequently, it would be quite logical to select exactly this product and adapt it to the local market.

Concept generation 
Naturally, the idea of the new product, McArabia could not be immediately implemented in practice. At first, it was necessary to analyze to what extent the idea of the implementation of this product would be successful. In this respect, it should be said that several factors were taken into consideration that actually predetermined the decision concerning the choice of McArabia and development of this product.

First of all, it should be said that it was necessary to decide whether the product would be really popular and whether it would mach the local tastes. To forecast the perspectives of McArabia, McDonald’s specialists analyzed the local cuisine and local food market. Eventually, they excluded all ingredients that could be unaccepted by local people and substituted them for the local one which were actually equal to traditionally used in other countries, such as Arab sauce, Arab bread, etc.

Naturally, the forecast about the future implementation of the product was made. In this respect, it is necessary to underline that McArabia matching to the local food preferences had really good perspectives. To put it more precisely, it could be successfully implemented not only in the UAE, for instance, but also in other countries of the Arab world as well as predominantly Muslim countries with similar food habits. In such a way, the potential market of McArabia was quite large.

Furthermore, the universal character of the product could increase its applications and the number of consumers since due to the large implementation in various markets of Arab countries it could gain the recognition and popularity of consumers due to the correspondence of the product to the local food traditions. In such a way, the potential markets could involve all Arab countries that meant the increasing sales of the product to local customers and, consequently, the growth of sales potential of McArabia and the growing popularity of McDonald’s at large since it would be perceived not as a foreign company with strange cuisine but rather as fast food restaurants friendly to local cuisine and traditions.

Concept evaluation 
However, before practical realization of the concept of the new product, it was necessary to evaluate McArabia. It should be said that the company carefully analyzed the perspectives of the implementation of the new product and conducted a marketing research focused on the analysis of the potential of McArabia. It should be pointed out that the opinion of customers was taken into consideration since they were questioned as for their food preferences and their opinion about the implementation of the new product was investigated. Basically, the consumers’ opinion was quite positive.

Naturally, McDonald’s could not ignore the opinion of specialists and this is why the dietologists were also involved in the development of the product since it is due to their help the company had managed to clearly define what ingredients were the most applicable to the new product that could be the most popular among the local population and, at the same time, preserve McDonald’s traditions.

Also, the company initiated the financial analysis of the implementation of McArabia and it was found out that the new product would not be more expansive than analogical traditional products sold by McDonald’s. At the same time, it was found out that the commercial potential of McArabia was really great since Arab countries were the potential markets and consumers of the new product that could stimulate the growth of popularity of McDonalds which was often viewed as a hostile network of fast food restaurants with cuisine that did not match the interests of local population.

Concept development and product launch 
On realizing the fact that McArabia has a good commercial potential, it was necessary to practically implement the concept in practice. First of all, it was necessary to create the product and test it. Using the suggested ingredients the product was carefully researched and its qualities were analyzed. In the result of such a profound analysis it was found that it was possible to start the production of the product.

However, naturally, it was necessary to initially develop an effective business plan of the introduction of the new product in the market. Basically, it was naturally to find the suppliers of the product and provide efficient strategy of promotion and distribution of McArabia.

First of all, McDonald’s defined its major suppliers to its fast food restaurants in the UAE and other Arab countries. In this respect, it is worthy of mention that, regardless its concept as a local product, McArabia turned to be in actuality a really international product since the Arab bread for the sandwich was imported from Britain, while the chicken was imported from Malaysia, though Arab sauce, for instance, was really the local product (Leiby 2003). Nevertheless, such the use of international suppliers did not affect the price of the product dramatically and, nowadays, McArabia-with-fries-and-a-soda meal cost at average $3.40 (Leiby 2003) that is quite a plausible price for the local market.

Naturally, McDonald’s amply used its widely spread network of fast food restaurants to distribute the new product that was quite effective and the distribution was not very expansive. In fact, it is possible to say that McDonald’s used a traditional system of the distribution of McArabia similar to other products which effectiveness has been already proven by the large experience of the company’s work in the market. At the same time, it was obvious that the effective distribution solely cannot contribute to the growing popularity of McArabia. This is why the company launched a carefully planned and prepared advertising campaign. Taking into consideration local peculiarities, McDonald’s amply used billboards and printed media in order to promote the new product. The main idea of the advertising campaign was the idea of the creation of a totally new product adapted to the national cuisine and food preferences which was available at low price in any fast food restaurant of McDonald’s network.

Thus, taking into account all above mentioned, it is possible to conclude that the implementation of McArabia was essential and strategically important step undertaken by McDonald’s in Arab countries such as the UAE in order to change its public image and get closer to the local customers. It is not a secret that the popularity of McDonald’s in Arab world was decreasing and, in such a situation the launch of the new product adapted to the local food habits was simply essential.
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