McDonald's sales in Asia continue to collapse under the weight of a food scandal, aggravating the company's headaches in markets around the world.
Food safety's effect on profits in Asia sent a clear message to financial markets in areas where indigenous street food and corporate image commodities are contestable commodities. Corporate local relations in provisioning clearly seems to be failing in terms of quality control, symptomatic of so many intercultural elements of globalized consumer marketing.
Food-quality scares are hurting McDonald's in China and Japan, where weakness contributed to a key global sales figure falling 1.8 percent.
The world's largest hamburger chain said sales dropped 12.6 percent in January at locations open at least 13 months in the division that includes the Asia region. That overshadowed a 0.4 percent rise at U.S. locations and a comparable 0.5 percent increase in Europe.
McDonald's shares fell $1.16 to $92.83 in morning trading.
McDonald's Corp. said its performance in Asia was hurt by customer perception issues in Japan, where a human tooth, plastic pieces and other objects have been found in its food. In China, McDonald's is trying to recover from the ongoing fallout from another food-safety scandal.
Over the summer, an undercover TV report in the country showed one of McDonald's major suppliers repackaging meat that was alleged to be expired. The claim has not been publicly confirmed by the supplier or the government. But the plant stopped operations, and many of McDonald's restaurants in the country were left unable to sell burgers, chicken nuggets and other items. The chain's reputation took a hit as well.
When implementing the promotion strategy, McDonald‟s emphasizes absorbing Chinese culture into their strategic decision. It can be divided into three areas to consider. Firstly McDonald‟s respects local language and value in Chinese market. Secondly, to satisfy the demand of customers in developed cities in China, McDonald‟s opened 24-hour-operated and take-away services. Lastly, McDonald‟s cooperates with native companies in order to know the value and buying habits of Chinese consumers better.