Thursday, April 13, 2017

What United can learn from McDonald's - Jeffrey Towson

Jeffrey Towson
United Airlines was the latest to discover the ire of the China consumers, and they were not the first. China consumers are changing the rules of the game many Western companies thought they knew how to play, says Beida business professor Jeffrey Towson on his weblog.

Jeffrey Towson:
I also made the point that the China consumer phenomenon works in both positive and negative directions. If you have a popular in-vitro fertilization center in Los Angeles or lavender farm in Tanzania, you can find yourself literally overwhelmed by Chinese tourists. Right now, there is a small town in the UK called Kidlington that has become over-run with Chinese tourists, for no reason that anyone can figure out. Chinese tour groups just decided they like stopping there to take pictures. Also recently, avocados are becoming popular in China for the first time. According to Produce Report, avocado imports to China jumped 375% between 2014 and 2015. And so on. 
These types of surprise China consumer stories happen virtually every week, in both positive and negative directions. When Chinese consumers change their mind about something in significant numbers it now ripples out into the world. As United Airlines has just discovered. 
The best approach is smart offense and fast defense. 
For multinationals and other companies, the reactions and changing preferences of Chinese consumers create a challenge. You can no longer wait for an issue to happen and then try to respond. You need to proactively engage with Chinese consumers all the time. The best approach I know of is “smart offense” and “fast defense”. And the best example I know of this is McDonalds. 
McDonalds in China (and Japan) has been hit by a couple of food scandals in recent years. This is an expected event given the rampant problems in the food supply system of China. If you are a famous restaurant in China, you are going to have a widely reported food quality issue at some point (whether real or fake). 
McDonalds does a very good job of smart offense in this situation, especially on social media. They pro-actively market themselves as safe food for Chinese consumers virtually every day. They widely publicize the quality of their ingredients on their webpage. And they are known for giving tours of their kitchens to show how clean they are. If you’ve ever been in a typical Chinese restaurant kitchen, you can see how effective that would be. That’s smart offense. 
And when an issue does happen (or is fabricated or charged), they play “fast defense”. Social media can whip accusations into a frenzy within hours. When McDonalds was the subject of a food quality expose (not the 2014 one), they responded on their Weibo account within 1 hour of the report. And they closed the outlet in question within 24 hours. That’s fast defense. And the speed of their response actually reinforced their reputation for caring about customers and food quality. Compare this to how United Airlines has responded this week.
More at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you interested in more stories by Jeffrey Towson? Do check out this list.    
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