“Stronger marketing” was one of the four identified strategies in a late 2012 “growth strategies” report from McDonald’s Holdings Japan. The chain desperately needs some positive strategy in Japan, where McDonald’s has reported 12 consecutive months of decreasing sales and a nearly 18 percent drop in operating profit.
Stronger marketing includes recruiting quality employees and brand ambassadors. To this end, McDonald’s Japan has introduced the “Dancing McCrew,” a viral hit about dancing through the workday.[more]
Individual elements of the “Dancing McCrew” include, amongst others, “Welcoming,” “Assembling Hamburger,” “Making Drink,” “Washing Hands,” “McDelivery” and “Star Crew.” With over a million views for various versions, the Dancing McCrew video is at once a keen celebration of the McDonald’s brand as a bubbly recruitment video that makes working at McDonald’s appear a little bit more creative and fun than it might really be.
It may be mere coincidence but McDonald’s “Dancing Crew” push comes at a time when the Japanese government has committed to helping Japan’s discouraged youth to find gainful employment. One program will offer per hire subsidies of 150,000 yen ($1,676) to employers that train young new workers. Japan will also offer employers 500,000 yen ($5,780) per year for two years if these young achieve full-time jobs. That kind of subsidy could help McDonald’s in Japan.
One additional McDonald’s Japan growth strategy for 2013 is shoring up its brand by closing 110 restaurants and to “continue with strategic relocation and closures.” A better value proposition and “breakfasts” are citied as additional strategies.
McDonald’s will need all the luck it can get with the breakfast endeavor. The Golden Arches’ longtime nemesis in Japan, MOS Burger, recently announced it would begin serving breakfast at all of its restaurants by the end of 2013. While MOS Burger also saw year-over-year same store sales slip during periods last year, the fast food maker was able to post some positive growth in four of the last six months.
McDonald’s long term sales slide in Japan has occurred despite numerous pricing and menu adjustments. Unlike in China, where McDonald’s has seen steady, if slowed, growth, Japan’s 2012 same store sales declined 3.3 percent. McDonald’s Japan CEO—the former head of the nation’s operations for Apple—recently credited the brand’s woes to “declining creative ability” and an inability to “astonish our customers.” The Dancing McCrew has certainly demonstrated some creative ability, but can it help McDonald’s change course in Japan?
Don’t count on it. The Bank of Japan recently served McDonald’s a giant griefburger by sticking it with its quantitative easing policy aimed at propping up the struggling yen. McDonald’s responded to the policy by announcing a 20 percent increase in menu prices, a strategy that many consumers in Japan may find hard to swallow as the nation struggles with a second “lost decade.”