McDonald's Phyllis Cheung

Other news in Greater China

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SHANGHAI--McDonald’s Corp. has promoted Shanghai-based Phyllis Cheung to chief marketing officer, China, taking over a position left vacant by the resignation of Gary Rosen, McDonald’s VP-chief marketing & corporate affairs officer, China after two years. The Hong Kong native will be responsible for formulating marketing strategies to build the McDonald’s brand and sales at a national level as well as oversight for the development and training of the marketing teams in China.

Previously, Ms. Cheung was senior director of national marketing. She joined McDonald’s in Shenzhen in 2000, to oversee its family and youth marketing programs in China, and was promoted in 2002 promoted to regional marketing director for southern China.

At the end of 2003, she returned to Hong Kong to lead McDonald’s cross-functional teams for product promotion, menu strategy and the company's kiosks business. Prior to joining McDonald’s, she was strategic planner for China & Hong Kong at Leo Burnett Worldwide, and she worked for other agencies such as Saatchi & Saatchi, JWT, D’Arcy and Bozell.

Mr. Rosen left McDonald’s to join InterContinental Hotel Group in Singapore as senior VP, Asia/Pacific, in charge of branding, marketing, sales, revenue management, research and communications for the group’s properties. The hotel group's brands include InterContinental, Crowne Plaza and Holiday Inn.

“Early on, I identified Phyllis as my successor in the marketing discipline and have worked intensely on preparing her for this role upon my departure,” said Mr. Rosen. “Phyllis will continue to lead the marketing efforts which will now include leading the marketing team for the 2008 Olympics.”

The other areas included in Mr. Rosen’s former position, such as communications, government relations and media relations, will report directly to McDonald's China CEO, Jeffrey Schwartz, also based in Shanghai.

During the past two years, McDonald’s has invested heavily to build its business in China, a market where global rival, Yum! Brands’ KFC restaurants, had taken a signficant lead. KFC entered China early with an aggressive localization strategy led by Taiwanese managers who understood mainland taste preferences.

In January 2006, McDonald’s had 735 restaurants in China, just two of which were drive-thru outlets. Today, it has 815, including two dozen drive-thru stores. That means McDonald’s is likely to fall short of its target to have at least 1,000 Chinese outlets by the start of the Olympic Games in Beijing in August 2008. Last year, McDonald’s opened its first 24-hour restaurant in China. Today, about half of its mainland restaurants never close.

Yum! Brands, by contrast, operates more than 1,800 KFC restaurants in China in over 400 cities. To help even the scales in China, McDonald’s has rolled out programs recently to promote its Olympic sponsorship. With less than one year to go, popular interest in the games remains high in China.

In response, McDonald’s is pumping investment into Olympic-related marketing, and has been one of the most active Olympic sponsors in China so far, said Mr. Rosen. The company’s activities surrounding the 2008 Olympic Games “will be McDonald's biggest marketing related Olympic efforts ever.”

For example, it has created a reality-style competition, “McDonald's Champion Kids,” with state-run China Central Television (CCTV). Under the program, which kicked off last month in China, up to 300 children from around the world will travel to the Beijing 2008 Olympic Games, and attend sporting events and meet Olympic athletes.

The company has also continued efforts to create products that resonate with local palates, such as an Asian Big Mac, made with Asian-inspired sauces and vegetables, which was introduced last month, and chicken wraps. Over the summer, McDonald's released a line of fruit smoothies in flavors like honeydew melon, pineapple and peach. It has also been running brand ads to promote its staple, beef burgers, in a market where consumers historically preferred chicken and pork.

McDonald’s also added healthy items like fresh corn that can be substituted for French fries in value meals, yogurt and fruit juice. And breakfast service has expanded from a handful of restaurants to all mainland outlets.

“There has been a hell of a lot of change at McDonald’s over the past 12 months, including marketing, launching drive-thrus, updating the stores, and increasing opening hours,” said Richard Cotton, group account director at TBWA Worldwide in Shanghai, one of McDonald’s creative agencies in China.

Other appointment news in Greater China

[shanghai] Chrysler, which was acquired by Cerberus Capital Management this summer, has appointed China auto veteran Phil Murtaugh, a longtime executive at General Motors Corp., as chief executive of its Asian operations. Mr. Murtaugh worked at General Motors for 32 years, the last five of which he served as chairman of its operation in China. During his tenure, GM became one of the leading foreign auto manufacturers in China with Buick and Chevrolet. GM also produces Cadillacs in China, and sells imported units of other models.

In June 2006, Mr. Murtaugh left GM to join Shanghai Auto Industry Corporation (SAIC), the U.S. auto giant’s main partner in China, as exec VP, in charge of steering SAIC’s international expansion. He was also VP of Sangyong Motor, a South Korean auto company controlled by SAIC, a major Chinese automaker with global ambitions. Chrysler, meanwhile, is a minor player in China’s car market, but recently signed a joint venture with Chery, another Chinese car company with ambitious overseas expansion plans.

[hong kong] Neil Cotton has resigned as the Hong Kong-based partner at Naked Communications in Asia. Naked, an independent communications agency that specializes in media planning, has offices in Japan and Australia, and is looking at opportunities in the rest of Asia, namely China. Mr. Cotton’s future plans have not been disclosed.

[shanghai] GroupM has appointed Thomas Liu in Shanghai as managing director, China, where he will lead the WPP Group media arm’s strategic investment team. Previously, he was the Beijing-based VP of News Corp.’s Star Group, responsible for business development and investment projects in traditional and digital media sectors. Before that, he was director of corporate development at Tom Online, where he led M&A, investment and business development projects in internet and wireless sectors.

[taipei] DDB Worldwide has appointed Taipei-based Roy Soetanto as managing director of its operation in Taiwan. Previously, he was managing director, Publicis Worldwide, Shanghai.

[shanghai] Yang Yeo will join JWT in Shanghai as chief creative officer, effective November 15, 2007, reporting to JWT’s exec creative director for Northeast Asia, Lo Sheung Yan, in Shanghai. Mr. Yang is currently group executive creative director, China at TBWA Worldwide, a position he has held since early 2006.

[hong kong] Y&R has appointed Tom Kao as chairman, Greater China, based in Hong Kong. Most recently, he was deputy chairman, Asia/Pacific at BBDO Worldwide. Also, Chen Weiwei, currently Y&R’s CEO, Greater China based in Shanghai, will take on a new role as brand leader on Olympic programs for Y&R clients who are sponsoring the games, such as the Chinese appliance manufacturer, Haier Group.

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