mcdonalds

There’s a terrific analysis of McDonald’s from this past weekend’s New York Times that is instructional to any marketer. After years of languishing, focus on product, operations and marketing has returned and along with it, profitability: McDonald’s is one of two companies in the Dow Jones (along with Wal-Mart) whose share price rose in 2008, reporting growth of nearly 6%.  

What did McDonald’s do?  In some respects, it’s what it didn’t do. Rather than continue on a path to aggressive expansion as a the means to off-set slowing growth in same store sales, McDonald’s went back to the basics, fixing some inherent problems in its service delivery, product offering and even its imagery. 

Forcing reappraisal of an existing brand is a difficult endeavor. In the Brand Bubble, we explain how differentiation becomes increasingly more challenging for a brand with strong existing equities because consumers feel they aldready know everything there is to know about the brand.  They begin to sleepwalk through their relationship with the brand if energy isn’t injected into the relationship to keep things fresh and to force reappraisal. 

And that was McDonald’s problem for much of the nineties. Perceived as unhealthy, with inconsistent quality and commoditized products, McDonald’s disrupted its brand with unsuccessful silver bullets (like The Arch Deluxe).  Now led by CEO Jim Skinner, a life-long McDonald’s veteran, McDonald’s got back to reminding consumers about the multitude of ways McDonald’s was ‘theirs’.  In so doing, McDonald’s realized it wasn’t one big thing, but a lot of little things. After all, one of McDonald’s core values is ‘inclusivity’. Why not find ways for everyone to define and cheirsh their own brand experience? 

McDonald’s energy returned by mastering a more holistic approach to the brand. In place of one product, there were several, including McCafe for lattes and cappuccinos, fresh salads and other more healthy options like wraps and chicken sandwiches. Adapting to changing eating and social behavior, McDonald’s optimized its growing drive-through business, while adding wi-fi and wide screen TV’s in its restaurants. McDonald’s then instituted a renewed focus on cleanliness, once an iconic aspect of the McDonald’s experience (anyone remember the ‘grab a bucket and mop’ commercial?). 

In finding its way back, McDonald’s didn’t have to change its brand as much as remind itself what it stood for: Families, conversations, happiness, cleanliness, quality and value. Then it just became a question of listening to the marketplace and applying these values through experiences that met consumer needs. Simple, yet we often feel we have to ‘bet the brand farm’ to get back on track. But McDonald’s demonstrates that if you’re true to who you are while embracing change, the profits will follow.

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