McDonald's and the Hotel Industry
Case Memo
Problems and Challenges
Should McDonald’s enter into the hotel industry, opening its own hotels? If so, which segment of hotel market should McDonald’s be targeting?

Analysis

1. Associations and meaning of the McDonald’s brand from consumers’ perspective
First of all, we should conduct survey among consumers to get full understanding of the brand.
Below is a full list of associations collected with detailed meaning explained.
Associations
Detailed Meaning
Fast
The whole ordering profess is fast.
Standard
Many aspects of different McDonald’s restaurants are identical.
Service and food is the same across different McDonald’s restaurants. Store decoration looks the same. Locations are similar.
Everywhere
McDonald’s restaurants are in many convenient locations.
Hamburger, chips
Food is the core product.
Value
The food and service is worthy of the money paid.
Cheap
The price of food in McDonald’s is low compared with people’s income.
Not delicious, but with standard quality
Taste in McDonald’s is not targeting gourmet level, but still not bad.
Not healthy food
Hamburger, cola and chips are not considered very healthy daily food.
Clean
All stores are very clean.

2. Analysis the relationship between above associations and the attributes / benefits that consumers are looking for in the hotel industry.
These associations could be positive, negative or neutral, which depends on certain conditions.

Associations
Attributes/Benefits looking for in the hotel industry
Fast
Positive association.
Fast handling process of check-in and check-out
Standard
Positive association.
All hotels have same or similar locations, decorations and services. So consumers can expect similar stay experience. The hotel could be a safe choice in foreign areas.
Everywhere
Positive association.
Easy to access to hotels is also an advantage for travellers.
Hamburger
Neutral association but connected.
Food and sleep
Value
Positive association.
Every consumer wants to spend their money wisely.
Cheap
Neutral association.
It only relates to budget and economy segments of hotel industry, but not other segments.
So it could be negative if McDonald’s wants to position its hotel in high price segments.
Not delicious, but with standard quality
Negative association.
Consumers’ perception could be that McDonald’s hotel is not providing good or luxurious quality.
Not healthy food
Negative association. Consumers’ perception could be that they don’t want to bring their kids to the hotel.
Clean
Positive association.
People all love hotels to be clean.

3. Evaluation of the current hotel market and its segments and its correlation with McDonald’s branding attribute.
Segment
Average Price Level
Relevant of Attributes/Benefits to McDonald’s brand
Position or Negative
Luxury
$300
N/A
Negative
Upscale
$150-$300
N/A
Negative
Mid-market with food and beverage
$100-$150
Hamburger (Food and beverage)
Partly negative, partly positive
Mid-market without food and beverage
$45-$70
Clean, fast, easy
Positive
Economy
$40-$65
Cheap, highly accessible locations, friendly staff, clean
Positive
Budget
$30-$60
Affordable, clean, friendly
Positive
Extended Stay
$60-$90