Mc Donald's Brand Strategy

Abstract:
Mc Donald's Brand Strategy has changed markedly in the last couple of years.

It has changed its look and has stridden forward to venture in new market segments, namely middle income group. This article would try to
shed light on the restructured strategy of Mc Donald's.

Introduction
Brand strategy is not a static concept but a dynamic one. It needs to be changed from time to time for keeping up with changing time and demand. Mc Donald's is also changing
its look and attire for re-establishing its brand with a new get-up. It is projecting itself as a brand meant for the young and happening through a Wi-Fi look.

Objectives of Mc Donald's Brand Strategy

Mc Donald's Brand Strategy revolves around the following objectives:-

 Widening customer base

 Re-inventing its brand image

 Stressing on the value aspect of the consumer
 Expansion of food items

Widening Customer Base

Mc Donald's, all over the world, mostly attract the upper or upper-middle class consumer segment. Generally, the middle income customer group shies away from the Mc
Donald's joints due to a perception of high range food products. Hence Mc Donald's is trying to tap this market segment by offering

 Low priced food

 Family oriented environment where a person could chill out with his/her family.

In India Mc Donald's is offering ice-creams within the range of ten rupees which is accessible to the middle section people. People from this class have started thinking of
spending quality time with their family in these joints.

Re-invention of Brand Image

Mc Donald's has brought change in its traditional color composition for re-inventing its brand image. The dominant yellow color would be replaced with golden and red with terra
cotta. Color combination would also include sage green and olive. Restructuring would include prevalence of wood along with bricks, lessening the earlier plastic texture. Mc
Donald's is attiring its restaurants with lights having mild touch for a soothing ambience.

Restaurants of Mc Donald's are re-designed to 3 segments in accordance with target audience:-

 Linger Zone - This zone is especially meant for the young audience where the techno-savvy young generation could access technologically advanced equipments
and linger around on sofas and armchairs.
 Flexible Zone - This segment is meant for families where a person could relax with his/her family.
 Grab and Go Zone - This part of the Mc Donald's joint caters to the lone diners. Its characteristic features include bar stools, tall counters and plasma televisions.

Stress on the Value aspect of Consumer

Mc Donald's is stressing on the value acquired by the consumer on per unit of money spent. Primary goal of this strategy is to woo the middle class families which itself is a huge
market in the developing countries, especially India. Mc Donald's has started offering food articles which are relatively cheap. In India, they have termed this ad campaign as
"value-for-money promise".

Expansion of food Items

Mc Donald is extending its food item base in accordance with the special needs of women and children. Especially for women they are catering premium salads. They are also
offering skimmed milk and sliced apples to children.

Conclusion
The focus area of Mc Donald's has changed from being a fast-food joint to an eatery for all market segments including young families and loners. Young generation or more
specifically the techno savvy and fashion conscious X, Y-generation is their main target audience. Mc Donald's is also trying to allure the middle class group by introducing low
priced food articles for expanding its customer base.

The Demise of Positioning

"Positioning" is dead, and McDonald's has just put up the tombstone. But what is really
interesting for branding is what is taking its place.
The signs of "positioning's" demise are everywhere. The number of branding failures, many
based on "positioning," exceeds 90%, according to the consultancies Ernst & Young and
McKinsey & Co. McDonald's, the premier mass market branding giant, announced that it has
abandoned positioning. Says Larry Light, McDonald's chief global marketing officer:
"Identifying one brand position, communicating it in a repetitive manner is old-fashioned, out
of date, out of touch." Even more bluntly, Light highlights "the end of brand positioning as
we know it," calling it "marketing suicide." Even a top executive at advertising giant Leo
Burnett is willing to stand before his CEO peers and admit, "the old ways of marketing are
not working any more."

The best epitaph for the death of positioning was written in the April 2 issue of the
Economist. The cover story, entitled "Power at Last," illustrated how consumers now buy
based on research and personal value, not on companies seek to "position" their products. "I
am constantly amazed at the confidence level and sophistication of the average consumer,"
says Mike George, Dell's chief marketing officer.

From the beginning, "positioning" had a fatal flaw in its DNA that made its death inevitable.
That fatal flaw? A lack of measurement. In their landmark book "Positioning," Jack Trout
and Al Ries even turned marketing away from the benchmarks that drive the rest of business
by stating "mind share is more important than market share." Market share is generally
measurable; mind share, unfortunately, isn't.

For a long time, this inability to incorporate measurements did not matter. In 1979, when the
book "Positioning" was first published, the mass economy ruled. Armed with the monolithic
power of the mass media, companies could "position" mass-produced products to mass
markets. Any measurement besides total sales was too hard, too rudimentary or too late.

But now, measurement is critical, whether it takes the form of customer equity, ROMI
(return-on-marketing-investment), ROMO (return-on-marketing-objective), cash-to-order
cycles, retention rates or any other spreadsheet-driven metric. Despite its importance, fewer
than 20% of companies surveyed have developed meaningful metrics for their marketing
organizations, according to the technology-based CMO Council. Over 80% of the companies
surveyed expressed dissatisfaction with their ability to benchmark their marketing programs'
business impact and value.

The result of focusing on "positioning" instead of measurability is having an unfortunate

impact. The research consultancy Forrester recently reported that companies are looking at
disbanding marketing departments and distributing its function among sales, customer
service, etc. While that is definitely eyebrow-raising, it's a logical outcome for a function that
represents the second biggest outlay for most companies, yet cannot generate the metrics to
justify those expenditures. "Awareness and "position" just don't cut it anymore in executive
suites.

"Positioning" has other defects as well. The exercise is a company-driven process that reflects
how companies wish to sell ("the leading provider of ...") instead of determining what - and
how - customers seek to buy. Such posturing worked well in the mass economy, but the tactic
is doomed to failure in, as the Economist pointed out, a customer-driven world.

Another weakness is "positioning's" commandment to seek the #1 or #2 space in a category.

If those spaces are occupied by competitors, then "positioning" advises creating a category
where you can play top dog. In addition to the fact that it now extremely difficult to establish
a meaningful category in a highly competitive world, it also means that your branding
strategy is being driven by your competitors. Branding must be driven by your customer
demands for value, not by the market timing of competitors.

So if "positioning" has faded into mass-economy history, what has taken its place?
McDonald's advocates "brand journalism," or tailoring products and messages to both targets
and media. "Positioning" advocates are apoplectic at such apostasy. "The notion that
McDonald's should abandon the positioning philosophy and instead adopt a brand journalism
approach is lunacy," says Laura Reiss, who is still echoing the precepts in her father's 25-
year-old book. Lunacy? The abandonment of "positioning" and adoption of brand journalism
has played a large part in the burger giant's remarkable turnaround recently.

By recognizing that it is better served by adapting itself to customer requirements instead of

preaching a "position," McDonald's is definitely on the right track with "brand journalism."
but the term is awkward for several reasons. A better term for this customer-driven strategy
that reflects today's branding realities is "brand wikization."

Born from the Internet's ability to link an archipelago of people and information, wikis are
the mirror-image of blogs. While blogs reflect one person's worldview, wikis, written
collaboratively by contributors from all over the world, reflect a common judgment on an
issue. Definitions depend not on what Funk or Wagnall or Webster say they should be, but on
what thousands or even millions of people agree on what they are.

In much the same way, brands today are collectively defined by their customers. Based on
personal or business requirements for economic, emotional or experiential value, this wiki-
based definition derives from personal experiences, word-of-mouth, research and multiple
marketing tactics. Companies can "position" themselves as anything, but unless there is
essentially a customer-driven consensus on the brand"s wiki, then the "positioning" is no
more than corporate posturing. Instead of seeking to unilaterally "position" their products,
companies focused on branding today must devote resources to defining, delivering,
measuring and sustaining the value that customers feel they receive.

Brand wikization has numerous advantages over "positioning." First, it is a customer-driven,

not a corporate-driven, strategy, ideal in a highly-fragmented, highly competitive world
where deeper relationships ultimately mean greater profits. Second, wikization forces
companies to respond to customer requirements, or risk their brand. Companies can
"position" themselves as customer-centric or leading providers or whatever, but the
"position" means nothing if callers are put on hold for eternities. Finally, and most important,
wikization is measurable by a variety of metrics. If you know what customers value (or how
they hold you accountable), then you can measure how you are delivering against those
benchmarks for accountability.

So how can companies adapt to the realities of the customer economy and wikize their
brands? Stay tuned for the next commentary.
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Mickey D's McMakeover
The heavy plastic look is history. A clean, simple design is on the way in

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A comfortable armchair. Cool hanging lights. Funky graphics and photos on the walls. Wi-Fi access. Premium coffee. Isn't Starbucks great? Except...this is When Gas Rises, Approval Tanks
McDonald's (MCD )? That's right. After 30 years without a major design overhaul, the 51-year-old fast-food giant is adopting a hip new look. The world's largest
is redesigning its 30,000 eateries around the globe in a 21st century makeover of unprecedented scale. Mickey D's McMakeover

The redesign is risky and has many franchisees up in arms over the high costs of a makeover. But company officials believe the overhaul is needed. McDonald's, whose restaurants are visited by more than 40 milli
day, has moved aggressively over the past three years to revamp its menu and attract a new breed of customer. It has added healthier items like premium salads targeted at women, and apple slices and skim milk
more upscale items like Asian chicken salad show up on its menu, the chain's typical starkly lit, plastic-heavy look is at odds with the contemporary, welcoming image the company wants to present. "McDonald's pr
'forever young' brand," says John Miologos, vice-president of worldwide architecture, design, and construction at McDonald's Corp. "We have to deliver on that promise." The last major change at McDonald's restau
introduction of play places for children in the early 1980s.

NEW COLORS 
What will the new McDonald's look like? "Think iPod: clean lines, simplicity," says Miologos. The signature mansard roof? History. "The big red roof looks too dated today," says John Bricker, creative director at des
brand-strategy arm, Studio 585. It's being replaced by a flat roof topped by a newly designed, contemporary, golden sloping curve. Ronald McDonald appears safe: The mascot was given a leaner, sportier look just
iconic twin golden arches will still play a big role in the branding.

After conducting a global contest among design firms, the burger giant chose New York-based Lippincott Mercer in the summer of 2004. Peter Dixon, the design firm's creative director, spent 2005 with McDonald's
architecture and design team testing and prototyping the new look, which is being officially rolled out this year. Lippincott Mercer, which until it signed McDonald's had few clients in the restaurant business, has mad
working with companies going through a shift in brand identity and image. In 2002, for example, it helped redesign Nissan Motor Co. (NSANY ) dealerships to reflect the company's launch of several new upscale ca
the redesigned dealerships saw an average of 57% sales growth, vs. 33% overall.

The traditional McDonald's yellow and red colors will remain, but the red will be muted to terra cotta and olive and sage green will be added to the mix. To warm up their look, the restaurants will have less plastic an
wood, with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls. Bob Dixon, a private school fund-raiser in Chicago, says of an Oak Brook (Ill.) restaurant
design: "It's bright, it's lively, it's clean. It stunned me how beautiful it was."

The dining area will be separated into three sections with distinct personalities. The "linger" zone will offer comfortable armchairs, sofas, and Wi-Fi connections. "The focus is on young adults who want to socialize,
linger," says Dixon. Brand consultant Robert Passikoff, president of Brand Keys, a brand consulting firm, says that Starbucks has raised the bar: "A level has been set by Starbucks, which offers the experience of re
clean environment where people feel comfortable hanging out even if it's just over a cup of coffee."

The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; plasma TVs will offer them news and weather reports. And in the "flexible" zone, families will have booths featuring fabr
colorful patterns and flexible seating. The new design allows different music to be targeted to each zone.

RESISTANCE 
McDonald's won't confirm the cost of a redesign. Richard Adams, a former franchisee and consultant to current owners, estimates they will have to pay $300,000 to $400,000 to renovate an existing outlet -- an amo
to a restaurant's annual profit. Tearing down a store and rebuilding from scratch could cost $1 million, Adams says. The franchisees will have to pay for the renovations themselves, which has some of them seethin
franchisees are dead set against this change, especially because they already spent millions remodeling their restaurants in the past four years," says Adams. In 2002, when McDonald's introduced premium salads
number of franchisees to spruce up their dining rooms, but it wasn't a major redesign project. McDonald's says it worked collaboratively with franchisees to jointly develop a strategy for the current "re-imaging" of its
 In a recent letter to management at the company's headquarters in Oak Brook, about 160 franchisees from North Carolina spelled out why they oppose the new plan. They say the roof change erases 40 years of b
that "there has been no business case presented which justifies the change." Says Frederick Huebner, who owns 11 McDonald's in North Carolina: "We don't want to lose the iconic look of what we've got." If franch
McDonald's can refuse to renew their contract.

Right now, only 20 recently opened restaurants in the U.S. sport the makeover in its entirety. Another 20, primarily in Tulsa and Columbus, Ohio, have been completely remodeled. All brand-new restaurants will hav
redesign blueprints, and by the end of 2006, more than half of the 13,720 U.S. restaurants will feature some element of the design. Says Gensler's Bricker: "It's something that McDonald's has to do if it wants to be
century."

 
Aussie Rules - Sleeping with Ronald McDonald
by John Allert

February 25, 2002 issue

Think of Switzerland and you're likely to think of private banks and beautiful scenery. Think a bit deeper and you might picture cowbells, cheese fondue and the inimitable

Swiss Army Pocket Knife.

After a recent visit to Zurich, however, these cliched images of Switzerland have been forever shattered in my mind, and replaced with one succinct, memorable mnemonic.

 
No, not a red flag with a white cross – more a Golden Arch.

Golden Arch Hotels, as they are known (there are two), are a high stakes experiment in brand leverage. After lobbying by Urs Hammer, Head of McDonalds in Switzerland,

McDonalds has made the brave move to exploit their core competence (no, not making hamburgers - delivering absolute product consistency) to develop a holistically

branded hospitality offer.

Sitting incongruously in a lush green field, just minutes from Zurich's busy international airport, the prototype Golden Arch Hotel offers business travelers (read cheap-suited

sales execs) a no-fuss, highly processed experience, replete with brand reinforcement at every turn. And yes, you can have fries with that.

From the 'McDrive' in the hotel car-park, to the show piece “restaurant” (read regular McDonalds outlet), to the licensed Golden Arch Lounge (where one can order McNuggets

as bar nibbles) the hotel takes every opportunity to maximize your exposure to the brand.

The Golden Arch logo itself is a seemingly sacrilegious half form of the ubiquitous 'M' mark to which we are accustomed. This is duly represented in the car park fountain,

shaped most precisely in the same 'h' shape, a symbol that is replicated throughout the hotel. Indeed, the arch logo finds its way onto most fittings and fixtures, from security

smart-cards to luggage trolley handles and even bedroom furniture. Each bed is embellished with a red nylon sash (featuring the logo), and in case you temporarily forget who

is behind all of this, your padded, shaped golden arches bedhead is there as a comforting reminder.

The rooms, though modern and very clean, are functional and austere in the extreme. One feels like a specimen or an inmate, and it’s not until you recline on the remote

control bed (after removing the sash) that you feel inclined to relax and marvel at the incongruity of it all.

Dinner means queuing up at the in-house “restaurant” for dinner. On a sunny evening one can dine al fresco, subject to the exhaust fumes in the busy carpark. The snow
 capped Alps provide a contrasting backdrop to the sea of red and yellow logos, and coupled with the passing parade of Teflon suited in-line skaters, one feels vaguely like an

extra in “The Wizard of Oz.”

Down on the ground floor, seated behind the sound proofed windows in the Golden Arches Bar, the weary salesperson can enjoy a cold alcohol-freis bier (that’s lite, to you

and me), while watching silent Swissair planes approaching to land above the adjoining forest.

At night there are various in-house entertainment options – all of which involve telephone, internet or TV in various combinations. I was lucky (!?) enough to chance upon a

French game show, where contestants dressed as baguettes were launched from a giant toaster into an equally large bol of café au lait.

Come morning, coffee in regular sized cups is served in the in-house Aroma Café (McDonalds’ scaled down answer to Starbucks) – or alternatively the main restaurant is

open for a more (Mc)traditional cooked breakfast.

The hotel’s staff are courteous, responsive and eager to please, in true McDonalds tradition. Their keenness forgives them the problems of a hotel still suffering teething

issues, and their smiles run far deeper than an automatic “have a nice day.”

The verdict? If consistency is the aim, then consistency is certainly achieved. The product is unmistakably McDonalds. Clean, processed, bland and reliable. …Well, except

for the internet and phone. And the electronic check-in, pre-booked online...

It seems McDonalds is playing a risk-minimization game with this new sub brand – the Golden Arches name being familiar, but distinct enough from the masterbrand to

insulate it from any negative incidents, or indeed failure. Certainly consistency is a relevant attribute to bring to a hospitality business, but is it unique and compelling?

Numerous other branded hotel chains have provided consistency worldwide, at all levels of the hotel five star rating system. Only time will tell whether there is space for

another three star hotel offer. And only time will tell whether the world wants or needs a McHotel.

I, despite my brandist leanings, am happy to describe it as a “once in a lifetime” experience.

Starbucks, Mcdonalds And Marketing Strategy

Starbucks, McDonalds and Marketing Strategy

Both McDonalds and Starbucks are looking into dayparts penetration as a growth strategy:
McDonalds now owns the breakfast segment and is moving fast to take over the afternoon and
evening segments, Starbucks is moving in the other direction and going from primarily a breakfast
and afternoon snack stop to lunch and evening
Starbucks is still focused on opening new stores whereas McDonalds seems to have slowed down it’s
expansion, these expansion funds seem to be re-allocated to improving stores and service.

At this stage, I’d bet my money on the success of McDonalds’s strategy and here’s why:
Dayparts expansion is natural to McDonalds: the brand stands for fast food and afternoon and
evening snacks are… well, fast food. Starbucks on the other hand stands for coffee, and coffee is
great in the morning or an afternoon pick-me-up for some consumers, but one hardly makes a quick
leap from coffee to evening snacks or lunch fare.

Process changes in converting ovens and hot plates from grilling sausage patties to grilling burgers is
far more straight forward than introducing ovens that cook lunch but that preserve the aroma of
coffee in a store. McDonalds faces less risk in the strategy than Starbucks.
From a Marketing standpoint McDonalds is a winner too given that it positioning does not change: it
is still a purveyor of fast food, whereas Starbucks incurs the risk of  “getting stuck in the middle”: it
does not want to be viewed as a QSR and yet it wants to compete in that space. More disturbing still
is that Starbucks carved a whole category for itself and is now expanding into areas where the
competition is fierce, instead of accepting a lesser but defensible growth rate within the confines of
the “coffee shop” market, it is now exposing itself to competitive risks in the QSR market.

McDonalds’ investment in traditional advertisement pan out when it pursues strategies like this one:
given its high brand...

Starbucks, Mcdonalds And Marketing Strategy

Starbucks, McDonalds and Marketing Strategy

Both McDonalds and Starbucks are looking into dayparts penetration as a growth strategy:
McDonalds now owns the breakfast segment and is moving fast to take over the afternoon and
evening segments, Starbucks is moving in the other direction and going from primarily a breakfast
and afternoon snack stop to lunch and evening
Starbucks is still focused on opening new stores whereas McDonalds seems to have slowed down it’s
expansion, these expansion funds seem to be re-allocated to improving stores and service.

At this stage, I’d bet my money on the success of McDonalds’s strategy and here’s why:
Dayparts expansion is natural to McDonalds: the brand stands for fast food and afternoon and
evening snacks are… well, fast food. Starbucks on the other hand stands for coffee, and coffee is
great in the morning or an afternoon pick-me-up for some consumers, but one hardly makes a quick
leap from coffee to evening snacks or lunch fare.

Process changes in converting ovens and hot plates from grilling sausage patties to grilling burgers is
far more straight forward than introducing ovens that cook lunch but that preserve the aroma of
coffee in a store. McDonalds faces less risk in the strategy than Starbucks.
From a Marketing standpoint McDonalds is a winner too given that it positioning does not change: it
is still a purveyor of fast food, whereas Starbucks incurs the risk of  “getting stuck in the middle”: it
does not want to be viewed as a QSR and yet it wants to compete in that space. More disturbing still
is that Starbucks carved a whole category for itself and is now expanding into areas where the
competition is fierce, instead of accepting a lesser but defensible growth rate within the confines of
the “coffee shop” market, it is now exposing itself to competitive risks in the QSR market.
McDonalds’ investment in traditional advertisement pan out when it pursues strategies like this one:
given its high brand...