Since it first arrived on Singapore’s shores in 1979, the well-known fast food chain has kept abreast with consumer trends and adapted its offerings through continuous innovation, helping it remain a household name in Singapore. Photojournalist Ray Chua learns more.
How McDonald's keeps winning over Singaporeans21 Jun 2016
In an exclusive interview, McDonald’s Managing Director Robert Hunghanfoo shares the secret sauce that has helped McDonald’s keep its competitive advantage through innovation in Singapore, a market known for its discernment in the food department.
Q: What have been some of the key business challenges McDonald's has faced in Singapore in recent years? Are these universal or Asia-specific?
In Singapore, our consumers are well-travelled, better-educated, and are increasingly sophisticated in their dining preferences. They want thorough services, regardless the price point; the option of making smarter choices, such as more balanced and better quality food items; and convenience at their fingertips.
I’m not sure I’d classify that as a challenge per se, but all brands, including ours, definitely need to adapt to the evolving consumer landscape, customer expectations and preferences. We hear them, and we’re working to evolve our offerings in the same direction. Across the board, expectations of quick service restaurants (QSRs) are changing. Younger diners prefer what they perceive as “fast casual” – the idea of freshly prepared food ready within minutes.
Diners are also increasingly looking for more variety and choices, with some amount of customisation and balanced options. This can be in terms of more wholegrain options or meals that have fewer calories.
While our market research has shown that over the past year and a half, the public is much more aware that we have improved nutritional content and feel better about eating at McDonald’s regularly, we would like to improve this even more by continuing to be transparent and by communicating how we’ve evolved.
These challenges are also seen on the global front, as similar trends are surfacing across the globe.
Q: What were McDonald's responses to these challenges, in terms of business strategy / product innovation?
We hear what our customers are saying and we have evolved our menu to meet their changing tastes and preferences. We have included new menu items, and have adapted our menu to suit a broader audience.
To cater to the preference of younger diners, Create Your Taste (CYT) allows customers to customise and personalise their own burgers, while making sure that they are enjoying premium tastes at good value. It is a new dining experience that is different from other QSRs. Customers get to order from digital kiosks with help from the outlet’s friendly hosts, and are also served at their tables once their items are ready. Greater convenience and elevated service are what we are striving for with Create Your Taste. CYT also enables us to learn even more about customer tastes and behaviour based on the collection of data from their CYT orders.
Other new menu items such as the Breaded Salmon Burger with Paella Spice Mix and the Crispy Chicken Sandwich, have also been added recently. The Salmon burger is made with Hokkaido Salmon flash-frozen to retain freshness before it is deboned, and a lightly-toasted multigrain bun topped with oat flakes, linseeds, rye flakes, sunflower seeds, and served with young baby leaves. The Chicken sandwich is made with breast meat (white meat), which is a leaner cut and has lower fat content.
McDonald’s also appeals to consumers’ desire and needs for healthier options. We started introducing a variety of balanced options in 2008, including apple slices, skinless grilled chicken salad, a free swap to corn cup, wholegrain muffins, and Delight 500. This enables customers to plan their meals according to their caloric needs. We also use Canola Blend Oil, which is lower in saturated fats and is transfat-free, and offer more than 20 menu sets that are 500 calories or under.
Q: Can you walk us through the process of how McDonald’s derived the responses to these challenges?
Market research and focus groups have enabled us to gain insights into our audience, their perceptions and taste preferences so that we can formulate our solutions. The menu planning team then comes together to brainstorm on what can be done, for example – experimenting with new menu items.
Led by Angela Fong, McDonald’s Menu Manager, new offerings are conceptualised with customers’ interest in mind. We use ingredients such as Hokkaido salmon and chicken breast in our new burgers to be more in line with younger diners’ needs. Feedback from customers motivates us in the innovation of new products and initiatives.
For example, Create Your Taste offers customers more choices than the regular menu. This comes at a time when our customers are becoming more individualistic and value their uniqueness, and they want their dining options to reflect that as well. By giving them an option to customise their burgers, customers are better able to create a burger that is uniquely theirs.
As new initiatives are launched, we continue to gather feedback in order to find out what our consumers think. The cycle then continues as we work towards our new findings.
Q: How effective were these responses in addressing the challenges?
Based on the feedback that we have received, we believe that our responses have been effective. Singaporeans are more aware of the nutritional content of our food, and they are more inclined to visiting McDonald’s more regularly. Results from our market insights research found that between October 2014 and February 2015, the number of customers who felt that we were improving the nutritional content of our food increased by 13 percent.
We can do better on that front, however, and we’ll continue to be transparent and open on how we communicate about our food. Singapore’s landscape is dynamic and ever-changing and we will continue to evolve and adjust to our consumers.
Q: What’s next for innovation? Does McDonald’s have anything planned as consumers continue to evolve?
2016 will be an exciting year for us at McDonald’s.
Earlier this year, we saw the launch of both the Breaded Salmon with Paella Spice Mix burger and the Crispy Chicken Sandwich. These new offerings are just the beginning of our ‘You Said It. We Made It’ campaign, which seeks to adapt to the evolving consumer landscape and our customers’ expectations and preferences.
In coming months ahead, customers can expect more from McDonald’s as we continue to grow and cater to our customers.
As for our technology, our self-ordering kiosks were designed globally and markets have the option to adopt. Technology for our Radio-Frequency Identification (RFID) system was also considered based on what was available in the market, with emphasis being placed on accuracy, time to "lock" in the position of RFID tags as well as pricing and post deployment maintenance by the support team.
With this, we can connect our services to portable applications and offer greater convenience to our customers.
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