McDonald’s concern…”Raise the customer age group”

McDonald’s concern…”Raise the customer age group”

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by Roadsidepictures, flickr https://flic.kr/p/4EUvjk

by Roadsidepictures, flickr
https://flic.kr/p/4EUvjk

A few days ago, I spoke with the person in charge of content services targeting teens~20s. #A_service_anyone_would_know. Filled with envy, I said “it must be great to have such high popularity for your service” and then this is the answer I got.

“The main customers of our service are young people and I wish they would continue to use our service even after they age. So we are wondering if we need to create job search or career change related contents.”

The meaning behind this can be twofold. Increasing user class database and securing age groups with higher purchasing power.

When I visited McDonald’s a few days ago, I remembered those words that I had forgotten.

They were selling handmade burgers.

McDonald’s 3 signature burgers.

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On the 11th, McDonald’s revealed that they plan to present premium handmade burgers called ‘signature burgers’ in 6 stores in the GangnamGu area starting with the Chungdam DT store by the end of this month. McDonald’s first presented the signature burgers in the Sinchon store, Seoul, in August and the service allows customers to choose out of over 20 different premium ingredients, order using the digital kiosk, and the exclusive worker will cook then deliver to the customers’ tables. – McDonald’s opens ‘handmade burger stores’ in 6 places of Gangnam (eDaily)

Handmade burgers at McDonald’s… Were they not handmade until now? Just joking.

Selling handmade burgers at McDonald’s seems to be an intention for targeting 2030 customers.

‘Handmade’ methods, that is, making/cooking on the spot and serving, is rising as a hot keyword in the dining market. Daegu Catholic University’s Food Service Management professor HyunChul Lim says, “handmade foods’ advantages are high quality food ingredients and freshness and they are explosively rising in preference among all ages, including middle aged people who prioritize health the most as well as the 2030 generation who seek premium tastes.”– ‘Handmade’ rising as the recession fighter in the dining market (Asia Today)

The main target of McDonald’s until now had been the 1020 generation. The price range of lunch menus is 4500~5500 KRW. A price range that 1020 can easily access is established. The 1000 KRW brewed coffee is well-known too. When one orders coffee, the workers often ask, “would you like syrup in your coffee?” The cheap price and sweet taste is probably more suiting to new coffee drinkers. It is thus most likely targeting young people.

The location of McDonald’s stores support this hypothesis. The stores are located in areas where students, and not workers, are the main floating population. Details can be found in the related writing below about the analysis and locations of domestic McDonald’s, Lotteria, and Burger King.

However, in terms of purchasing power, 1020 fall short. More profits can be made when 30s and even 40s are included as main customers.

Eventually, McDonald’s begins to target the 3040 generation.

An example would be the ‘mothers surprised’ campaign that had been held since 2013. This campaign involves allowing customers to visit stores to check the McDonald’s management system and food ingredients’ quality in order to feel safe about feeding McDonald’s hamburgers to their children.

Moreover, character figures of One Piece, Minions, Super Mario etc. were offered as Happy Meal Set gifts to stimulate the desires of Kidults.

It is a ‘Happy Meal Crisis’. 2030 generations wanting not the hamburgers but to collect the entire figure package are visiting McDonald’s stores all over Seoul.

This sort of strategy reveals that McDonald’s is trying to target generations over mid 20s with higher purchasing powers.

Why would a popular fast-food company well-known for its cheap prices try to target a different generation of customers?

There are signs that McDonald’s, which had once seemed to forever be the leader in the market, is recently facing troubles. This April, McDonald’s announced their organization restructuring plan to close down 700 stores globally with low performances.

Furthermore, the generation that had been opening up their wallets at McDonald’s is beginning to leave and is seeking higher quality hamburger stores instead. Below is an article from 2014 about McDonald’s global trouble.

According to the Wall Street Journal(WSJ) resources that had been requested by the restaurant consulting company ‘Tecnomic’, the 20s and 30s generation that had long been the main customers of McDonald’s are now moving to rival companies such as fast casual restaurant Chipotle, and Gourmet Burger Kitchen’s chain company, Five Guys. With a rising trend for healthier and fresher foods, more chain restaurants offering customized menus slightly expensive than McDonald’s combos have been created. The monthly rate of McDonald’s visit for customers aged 19~21 have declined 12.9% compared to early 2011 and saw no increase for customers aged 22~37. However, during the same period, the monthly rate of fast-food restaurant visit increased 2.3% and 5.2% accordingly. – McDonald’s facing its worst slump, the problem is this (WSJ Korea)

Some claim that McDonald’s has grown too much in size already to create another innovation. It is a reasonable diagnosis.

However, it should be remembered that McDonald’s is changing in Korea in order to match the customers’ needs. Sockets were installed at individual tables to allow users to stay longer comfortably, and drinks are being focused on rather than just the hamburger sales.

McDonald’s wants their customers, who had been eating Big Macs in their teens, to continue to visit even after they grow older. Therefore, age customized services such as ‘mothers surprised’, ‘figures’, and ‘handmade burgers’ are being carried out. Hamburgers are merely a method. We can observe the direction that contents companies should move towards through McDonald’s.

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