Online Exclusive: Marketing News

MCDONALD'S EYES FURTHER EXPANSION IN CHINA

Will Open Its First Drive-Through Restaurant in Shenzhen This Fall

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CHICAGO (AdAge.com) -- Facing the challenge to continue the robust sales McDonald’s Corp. has enjoyed for two years, the company is looking toward China, the annual shareholder meeting was told today.
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A drive-thru in China
McDonald's revealed it will open its first drive-through restaurant in China this fall, in Shenzhen in the Guangdong province. The company said other drive-throughs would follow but declined to disclose how many.

China, the world's fastest growing economy, is a key market for the global fast-food giant, which plans to add 100 restaurants to its existing 660 units there as it ramps up its presence ahead of the 2008 Beijing Summer Olympic Games.

The shareholder meeting was the first hosted by CEO Jim Skinner and President-Chief Operating Officer Michael Roberts following the deaths last year of their predecessors, Jim Cantalupo and Charlie Bell. Mr. Skinner vowed to keep the chain on its growth course. “One thing we will not be, that’s complacent,” he said.

CEO's priorities
Mr. Skinner told the audience his priorities were long-term sustained growth, talent development and balanced lifestyles, a theme within a food industry under attack for contributing to the nation's expanding waistlines.

Marketing and advertising played a prominent role at the meeting. The audience saw several TV spots, including those for the fast-food company's balanced lifestyles initiative, Fruit and Walnut salads and Happy Meals.

Two spots shown, which were still in development, were aimed at changing the image of crew jobs and reigniting pride for the job. McDonald’s has been working to change its workforce image after the 2003 edition of Merriam-Webster's Collegiate Dictionary defined a "McJob" as a "low-paying job that requires little skill and provides little opportunity for advancement." Mr. Skinner said 40% of top management started as crew.

Benefit of a McDonald's job
One execution highlighted how successful adults from an Olympic swimmer to an astronaut benefited from what they learned on their first jobs at the Golden Arches. “What I learned there will last forever,” a voice over says. Another spot set on a muddy soccer field follows a team of hard-playing girls making dives and kicks and getting muddier and muddier. A female voice over asks, “Who am I? I’m someone who works at McDonald’s,” as the camera zooms in on her crew visor.

Mr. Roberts later compared the effort to the employee pride ads from Wal-Mart, though he carefully noted that the average Wal-Mart employee doesn’t have the opportunity to own the company the way a McDonald’s crewperson has. “We want to tell more people about that.”

Disney marketing pact
When asked about the company's options outside of the 10-year marketing pact with Walt Disney Co., now in its ninth year, Mr. Skinner said, “We will continue to work with Walt Disney through 2006 and we are looking forward to the opportunity to have flexibility in these programs.” Later in a press briefing, Mr. Skinner wouldn’t speculate on what deals the marketer might be interested in making. “We’re looking at all opportunities to leverage our part of the business,” he said.

The marketer highlighted technology innovations, including expansion of its cashless gift cards to 11,000 U.S. stores by year-end. In a meeting with reporters, Mr. Roberts said the chain would test a CD-burning kiosk at a combined McDonald’s and McCafe, set to open May 16 near the chain’s U.S. headquarters in Oak Brook, Ill.

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