Where’s the Beef? It Depends on What Your GIS System Says

Where’s the Beef? It Depends on What Your GIS System Says

If you had to associate any large corporation with the word carnivore, it would have to be McDonald’s. Over the decades, the company has gone from boasting sales of millions of burgers to billions.

It doesn’t take an advanced business degree program to know that’s a lot of patties over a global organization and one of the most recognized brands in the world. And yet, this behemoth of meat is going vegetarian — at least in parts of India. This is marketing done local style, and a perfect example of why GIS could benefit corporate managers in both strategic and tactical planning.

After more than 15 years in the country, McDonald’s, working with two Indian companies, has managed to place only around 250 of its fast food restaurants in the country. Given that there are 33,000 locations globally — and as a good-sized American city can seem to have one on every corner — it’s a relatively low market penetration in a country with more than 1.2 billion people.

One way McDonald’s has thrived in other parts of the world is by studying the preferences of the local populace. In Hong Kong, it serves such soups as tomato and pumpkin, as well as shrimp burgers. There are kosher locations in Israel and, yes, Argentina, while those in countries with large Islamic demographics are often halal. Belgium ones have a variation on a croquet-monsieur. (The McKieƂbasa, however, was a flop in Poland.)

The McDonald’s in India will roll out, starting next year, some locations that will only serve vegetarian food because of local preferences. According to a 2006 poll, about 40 percent of the country does not eat meat. That translates into 480 million people, and McDonald’s wants to sell to them. Successful global operation means understanding that not all markets are the same. Taste is a product of culture, which can vary widely, even in a single country. Major food distributor Sysco typically needs different product mixes and marketing strategies in parts of the U.S. At the same time, running upwards of 150 different distribution centers in an industry where 5 percent margins can look good means a need for central coordination.

Such situations cry out for GIS analysis. Instead of treating a large region as a single entity or depending on what local managers assume will work, a company can test various product variations, services, and campaigns to see how they work on a local level. Management can then adjust and adapt actions to better match local demographics, spending patterns, socioeconomic factors, and sales history.