This is the final paper presented by Wendy Wei Chang Spadavecchia, a recent graduate of the Global Digital Marketing and Localization Certification (GDMLC) program. This paper presents the work being produced by students of The Localization Institute’s Global Digital Marketing and Localization Certificate program. The contents of this Paper are presented to create discussion in the global marketing industry on this topic; the contents of this paper are not to be considered an adopted standard of any kind. This does not represent the official position of Brand2Global Conference, The Localization Institute, or the author’s organization.
What would you like to order at McDonald’s – Hamburgers, Fried Chicken, or Beef Curry Rice?
A Case Study of McDonald’s Failed Rice Dishes in Taiwan
In 2002, McDonald’s introduced several rice dishes in Taiwan; including, ginger beef, beef curry, and spicy chicken with tomatoes, all served with high quality and delicious rice from Miaoli County. These are all common dishes that are available everywhere in Taiwan. People should be relatively familiar with the flavors. The business rationale behind these new rice dishes is sound. The company observed that when a family dines at McDonald’s, children usually order hamburgers and french fries, but their parents or even grandparents, who do not prefer American fast food, have nothing to eat. In order to provide alternative food options to the parents and grandparents, the company decided to sell rice dishes at its restaurants in Taiwan.
When entering a foreign market, it is natural to think about product localization – how to adapt the product in a way that the target market will accept and enjoy. For example, McDonald’s hamburgers incorporated street food for its Indian market, and Oreo removed the cream inside its cookies for the Japanese market. Each market is unique. Taking into consideration the target markets’ value and culture will ensure a more successful product.
It is important to customize products (product localization) to target local customers. In 1996, McDonald’s localized its menu by including fried chicken on its Taiwanese menus, so the customers could enjoy hamburgers and fried chicken, a very popular American fast food in Taiwan, at the same time instead of having to go to another fried chicken fast food chain to get fried chicken and McDonald’s for hamburgers. This strategy of tailoring customers’ needs and localizing its food product was a huge success.
Unfortunately, the same cannot be said of the rice dishes McDonald’s introduced to the Taiwanese market in 2002. It was a big mistake. The dishes were only in McDonald’s franchises for approximately six months since no customer wanted to try, let alone eat, those rice dishes. Rice has always been a main source of food in Asia; so, it seemed logical to include rice on the menu for a country, like Taiwan that favors and heavily depends on rice as a staple. Indeed, other fast food restaurant had success with serving rice on their menus. For example, Moss Burger, a Japanese franchise, uses rice instead of bread for their hamburgers and created the “rice burger.” The rice burger; was and continues not only to sell well, but also is an excellent example of a successful product-localization strategy. So, what is wrong with McDonald’s rice dishes?
- Failed Product Localization Strategies
Product localization is a global trend, McDonald joined this trend and bravely introduced rice dishes to its Taiwanese customers. It was logical to incorporate rice into its products given the indispensable role rice plays in Taiwanese food culture. Many companies incorporate local elements into their products. And, for McDonald’s rice seemed to be a great ingredient to start with. It not only expanded McDonald’s food offerings, it also expanded the market reaching a wider range of target consumers – eating at McDonald’s no longer would be solely for children; parents and grandparents would be able to enjoy McDonald’s famous food as well as a traditional Taiwanese meal.
- Brand recognition
Indeed, McDonald’s correctly identified Taiwanese consumer’ taste for rice. However, in deciding to add the rice dishes to its Taiwanese menus, McDonald’s undermined the force of its brand. When people think about McDonald’s, they think about typical American fast food: hamburgers, french fries, chicken sandwiches, etc. When people go to McDonald’s, they want to have hamburgers. There is no way a customer visits McDonald’s and specifically looks for Taiwanese rice dishes – even in Taiwan.
Furthermore, McDonald’s fast food is easy to eat: you eat your hamburger, fries, chicken nuggets with your hands. On the contrary, with the rice dishes, you need to use utensils to enjoy rice. It is not as convenient as eating hamburgers. Neither is it compatible with American fast food dining style. As a result, customers had an extremely hard time connecting rice dishes with typical American fast food, dining style, and even McDonald’s brand image.
- Target Market
The reason McDonald’s wanted to introduce rice dishes was to expand its offerings and market to parents and grandparents who bring their children and grandchildren to the restaurant. Although McDonald’s tried to use local ingredients and craft its flavors as authentic Taiwanese– as any fast food chain possible could, there are millions of competing local restaurants, food stands, street vendors outside of the store, selling equally good dishes. What McDonald’s missed was that old-fashioned parents and grandparents preferred food from these traditional restaurants, food stands, and vendors rather than the ones from fast food chains. Their reasons were simple: How good or traditional can the food made by an American fast food chain really be? Price was also a crucial factor. The rice dishes sold at McDonald’s were on the higher end – around 3 U.S. dollars per dish, whereas a rice dish from a food stand could be as cheap as 1 U.S. dollar. If there are cheaper options that offer the same or even better quality food, why would anyone want to eat rice at McDonald’s?
Each product has a brand; and every brand has a core value. This core value is shaped by the customers a company attracts. This core value should be unique, different from other products. Once a company understands its core value, it helps the company to create an impressive brand. McDonald’s brand was clear before the rice dishes were introduced: an American style fast food restaurant. When people go to McDonald’s, they expect to enjoy all sorts of high-calorie, greasy, yet so delicious American fast food. This type of food is exactly what people want from McDonald’s. The connection between the food it serves and McDonald’s brand is strong.
When McDonald’s started to sell rice dishes, the dishes confused everyone – it was neither American nor fast food. Customers were lost. McDonald’s brand image was no longer clear to them; and in fact likely diluted by the addition of rice on its menu. While it is tempting to offer it all; and attempt to localized your products to traditional Taiwanese tastes, once a company has decided on its brand image, it is crucial to continue developing that particular brand and nurturing the relationship with its customers accordingly. It is extremely risky to derail from its brand image and develop something completely different. It will not only confuse a prospective customer and but also may destroy existing customers brand loyalty.
When localizing a product, companies must make sure their new products consistently resonate with their original brand. It is true that some localization will make the product more acceptable for a local culture. McDonald’s introduction of rice dishes was a great effort to localize its products to adapt to Taiwanese food culture; but because the company only focused on localization, without considering what the company’s core value, the result was a failed product. McDonald’s failure provides a valuable lesson: when a localized product is disconnected from the company’s own brand and core value, the customers will be lost, the company is likely to suffer, and the product is all likelihood will fail..
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Wendy is a native Chinese speaker from Taipei, Taiwan. She has extensive experience in localization, translation, and project management. As a Project Manager and business consultant, she has led projects in quality management, DTP automation, and website localization; helping companies optimize and create success in their localization processes. Wendy has worked for private sector and public sector clients, starting her localization career at the World Bank in Washington, DC, and is currently a Project Manager at Globalization Partners International (GPI). She holds a MA in Translation and Localization Management from Middlebury Institute of International Studies. Wendy has translated a number of published children’s books from English into traditional Chinese and enjoys teaching (or, at least attempting to) Chinese to pre-kindergartners!
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