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Looking for Opportunity Abroad: Mc Donald’s in Moscow
While Mc Donald’s is facing threats at home, it is aggressively looking for opportunities abroad. Mc Donald’s in Moscow is a good example. George Cohon spent 14 years dreaming about opening the first Mc Donald’s in the former Soviet Union. The president of Mc Donald’s Restaurants in Canada saw 290 million Russian citizens whose principle diet consisted of meat , bread, and potatoes and thought: ”This is what we sell. This has to be an unbelievable market for us.” In the beginning, he did not know how right he would be.
With domestic sales decreasing because of a change in America’s eating habits, by 1991 soaring sales from its 2,600 foreign units were the only thing boosting Mc Donald’s net income. When Mc Donald’s finally opened a restaurant in Moscow 1990, it was more than a fulfillment of Cohon’s dream; it was an act of necessity for the stagnating chain. There was only one problem: Russia was unlike any foreign country where Mc Donald’s had outlets. So Cohon had to write the marketing rules from scratch.
First, he decided that since he had no competition, employing media buys and billboards would be wasted effort. Instead of defining or segmenting his market, he decided to introduce Mc Donald’s as a broad concept by educating Russians about fast foods. That involved Mc Donaldizing Moscow, whose city council has a 51 percent stake in the operation. Reasoning that Russians ate with utensils, never with their hands, he spent his ad budget on brochures and tray liners explaining how to eat a Big Mac, not why to buy one. He also stayed away from using the company’s mascot, Ronlad Mc Donald, figuring it would merely confuse potenti ...