HindustanTimes.com

Wednesday, October 1, 2003

McDonald's, rebranding in China, tries to avoid mistakes

Associated Press
Beijing, September 25

McDonald's Corp launched its latest branding campaign in China on Thursday,
trying to make sure it stays "forever young" as it works to expand its
repertoire of fast food in its third-largest Asian market.

The company, based in Oak Brook, Illinois, wants to make sure it learns from
mistakes made in other markets, the company's Asia-Pacific vice president
said.

"We're very new in China ... so we have the opportunity to learn some of the
lessons from the last five years from around the world," Alex Howson told
Dow Jones Newswires.

"We as a company built our business by being forever young," he said. "We
didn't do that in the past five years or so or 10 years, according to many
people around the world."

McDonald's opened its first China store in Beijing in 1992. It now has 566
outlets in 94 cities across the country. The company plans another 100
stores in key markets including Beijing, Shanghai and Guangzhou in 2004.
China is McDonald's third-largest Asian market behind Japan and Australia,
Howson said. He wouldn't discuss revenue or profit. The new worldwide
branding campaign, "I'm Lovin' It," is aimed at rejuvenating the company's
corporate image and turning around a steady erosion in revenues in other
markets.

Falling revenues in its global operations in recent years led McDonald's to
a decision in November to close 175 under-performing restaurants in 10
countries and to cut 400 to 600 jobs. Howson said a new round of
management-level layoffs in the company's Japan operations were announced
Wednesday.

The China version of the global branding effort will focus on the young,
childless urban dwellers who have benefited from China's convulsive economic
growth in recent years.

"The China plan will look very different than other markets," Howson said.
"We'll have to attract the local consumer who is younger than the consumer
in the US and Japan." He added: "It's not about building stores, its about
winning hearts and minds of consumers and as we do that we can justify
building more stores."

© Hindustan Times Ltd. 2003.
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