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How McDonald's keeps winning over Singaporeans
Innovation

How McDonald's keeps winning over Singaporeans

21 Jun 2016

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.

The first McDonald’s restaurant in Singapore was established in 1979. Since then, the chain has expanded rapidly across the island. To date, there are over 130 McDonald’s restaurants in Singapore – a number that is set to grow.

On average, McDonald’s serves a million customers in Singapore each week. Their customers come from all walks of life – they are students, parents, young children, mature citizens, and working professionals. These customers have discerning and ever-changing tastes, which McDonald’s must continually adapt its strategies to cater for. Here are three innovations, which McDonald’s undertook to keep up with the evolving taste buds of its Singaporean customers.

Healthier, more balanced and more wholesome menu options
To match the demands of increasingly sophisticated customers, McDonald’s innovated to include more wholesome and nutritious choices to its menu. In 2008, apple slices were first introduced as a delicious, balanced snack option for all meals. Adjustments to the menus continue to be made – in 2011, free Corn Cup swaps became available for customers’ meal customisation; in 2014, wholegrain options were introduced, including the McWrap and Sunrise Rolls. Healthier options were also made available with the introduction of the Garden Side Salad and Delight 500 menu. Canola Blend Oil was introduced in cooking to reduce saturated fat.

Create Your Taste (CYT)
In 2015, in response to findings from market research and consumer focus groups, McDonald’s launched the “Create Your Taste” concept - a first for a fast-food restaurant in Singapore. The innovation gives customers the opportunity to explore their creativity and to customise a burger which is uniquely theirs. Users of the “Create Your Taste” kiosks, like Nur Fatimah Bte Azizan (above), like it as it allows them to decide what ingredients go into their burger. They also enjoy an efficient service which allows them to bypass the queue at the counter.

 

Customers can also order from the standard menu from the kiosks, which serve as a self-ordering option for all items on the menu. As of end-2015, there are 15 outlets that host the kiosks in Singapore.

RFID technology
To enable table service, Create Your Taste also uses a table management system with RFID Technology (Radio Frequency Identification). The table management system uses RFID reference tags that are placed under the tables in the restaurant to set up location reference points. This makes it easier for the service hosts to identify them and serve them their burgers. The RFID technology was developed by McDonald’s headquarters, and each individual market had the option to adopt it. The technology was introduced in Singapore to offer greater convenience to diners.

With the new technology, customers at McDonald’s can now sit down and wait for their creations, which are made straight off the grill and served to their tables. McDonald’s Singapore’s Managing Director Robert Hunghanfoo shared that the initiative was conceptualised with customers in mind. He said, “We wanted to raise the bar in the Quick Service Restaurant industry and to meet the growing sophistication among consumers as they demand more out of their dining experience.”

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.