McDonald’s brand strategy / positioning case study

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McDonald’s Brand Strategy Analysis
McDonald’s
ABOUT

Category:
Restaurants  fast food chains, coffee shops

Owner of the brand:
McDonald’s

Key competitors:
Burger King, KFC, Subway, Wendy’s, Starbucks, Dunkin’

Brand essence

Feeding and fostering communities by making delicious feel-good moments easy for everyone.

Brand values

Happiness, taste, togetherness, accessibility.

Brand character

Warm, friendly, positive, familiar, American, global.

Dominating archetype
EVIDENCE
Comments
1

McDonald’s is the world’s largest chain of fast food restaurants in terms of market capitalization[1] and is a global branding icon. It was founded in San Bernardino, California in 1940 by two brothers, Richard and Maurice McDonald, and began its global expansion in the late 1960s. McDonald’s, similarly to its competitors, is primarily a franchise business – more than 90% of its restaurants are owned and managed by franchisees[2] and the company’s goal is to increase this number to 95%[3]. Interestingly, McDonald’s owns a large number of the properties in which its restaurants are located and they are leased to its franchisees[4] (it is even perceived by certain analysts as a real estate business). In addition to its classic restaurants, McDonald’s also owns a chain of coffeeshops called McCafé.

2

McDonald’s, next to Coca-Cola, has become a symbol of globalization and unification – wherever in the world you are, McDonald’s products are expected to taste the same. Although the brand’s global character is undoubtedly one of its key success factors, the fact that the company adjusts its menu to local tastes has also significantly contributed to its growth. For example, McDonald’s serves beer in Germany and some other Western European countries, meat pies in New Zealand, McRice burgers (chicken patty between two rice cakes) in Indonesia and Ebi (prawn) burgers in selected Asian countries[5]. In 1986, The Economist even came up with the concept of the Big Mac Index showing “how much one currency is under- or over-valued relative to another”[6] based on the prices of a Big Mac in different currencies.

3

Global character is not the only brand strategy component shared by both McDonald’s and Coca-Cola. Both brands represent the Innocent archetype, focus on positivity, happy moments (“building memories that last a lifetime”), being together with people we care about and use a warm and inclusive tone of voice. However, there are a few elements of McDonald’s positioning which stand out. Firstly, the company places a much stronger emphasis on attracting families and kids. Secondly, it makes a greater effort to build its accessibility attribute, understood on several levels as brand approachability (everyone is welcome), affordability (low prices) and availability (wide network of restaurants).

4

In recent years, McDonald’s has introduced multiple changes to its operating model in order to boost sales growth, improve its brand image and stay relevant to new generations of customers. In 2017, it announced the strategy called the “Velocity Growth Plan”. The overall objective of the plan was to serve more customers more often, which meant opening new restaurants, increasing the number of consumption occasions and reaching an even wider audience by introducing changes to the menu. Steve Easterbrook, McDonald’s former CEO, commented on the plan: “We don’t want to alienate anyone and we will always stand for value. But as we continue to invest in the brand, as we invest in quality and the properness of our food, in the physical real estate and technology, what you tend to do is broaden you customer base. What we end up doing is appealing to a broader range of customers on more occasions, more often.[7] Examples of the initiatives in line with this strategy included introducing customised menus, more healthier options (e.g., fresh fruit), all-day breakfast, premium burgers (e.g., Gourmet Creations), table service in selected restaurants, self-serve electronic kiosks, mobile ordering platform, delivery services (e.g., in cooperation with Uber Eats) and an increased focus on selling coffee and snacks. In response to increasing health concerns, McDonald’s started emphasising in its communications transparency related to the food production process and usage of fresh, local ingredients. The company executives claimed they wanted “to become a modern, progressive burger company“[8].

 

5

In 2020, McDonald’s announced a new strategy called “Accelerating the Arches”. When compared with the plan from 2017 − which concentrated on improving the perception of McDonald’s and broadening its customer base by introducing healthier options and expanding premium offers − the 2020 strategy is far more focused on reinforcing McDonald’s existing assets.  “Accelerating the Arches” places a greater emphasis on brand building activities, with a particular focus on the newly defined brand purpose (“feed and foster communities”[9]) and mission (“making delicious feel-good moments easy for everyone”[10]), further strengthening the core offering (chicken, beef and coffee, constituting 70% of McDonald’s sales[11]) and accelerating improvements in three channels related to dining off-premises: “delivery, digital and drive thru”. Michael Gonda, VP of Global Communications at McDonald’s explained that the company needed a newly-defined purpose to translate its values into a more contemporary language. He said: “We knew what they were [the values], but we needed to bring it from Shakespearean to modern-day English. We needed to clearly establish what our role is beyond the product we sell and what are the behaviours that let us fulfil that.[12]

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Dominant colours: yellow & red.

Tagline
Most important campaigns

1. “New Crispy Chicken Sandwich” (2021, US)

2. “Interview | Breakfast” (UK, 2019)

3. “Mobile Order & Pay: Avoid The Line” (US, 2018)

4. “McCafé” (UK, 2017)

5. “Love/ Not Love” (US, 2016)

6. “Saver Menu” (UK, 2017)

Official brand statement:

Our Mission
Our mission is to make delicious feel-good moments easy for everyone.

This is how we uniquely feed and foster communities. We serve delicious food people feel good about eating, with convenient locations and hours and affordable prices, and by working hard to offer the speed, choice and personalization our customers expect.  At our best, we don’t just serve food, we serve moments of feel-good, all with the lighthearted, unpretentious, welcoming, dependable personality consumers know and love.

Our Values
The backbone of our Brand is, and always has been, a commitment to a set of core values that define who we are and how we run our business and restaurants.
When we live our values every day and use them to make decisions – big and small – we define McDonald’s as a brand our people, and the people we serve, can trust.

Serve
We put our customers and people first

Inclusion
We open our doors to everyone

Integrity
We do the right thing

Community
We are good neighbors

Family
We get better together

Our values are the filter through which all business decisions are made because actions are bigger than words.[13]

Interesting facts:

McDonald’s owns the so-called Hamburger University, a training facility for its employees located in Chicago, Illinois.[14]

Must-reads

1. Ad Age on McDonald’s new packaging
A.-C. Diaz, “See McDonald’s Playful New Packaging Design”, Ad Age, Feb 2021,
https://adage.com/creativity/work/see-mcdonalds-playful-new-packaging-design/2315281 

2. Campaign on McDonald’s new purpose
D. Bradley, “McDonald’s Refreshes ‘Intangible’ Brand Purpose”, The Campaign, Nov 2020,
https://www.campaignlive.co.uk/article/mcdonalds-refreshes-intangible-brand-purpose/1699672

3. Marketing Week on McDonald’s strategy
S. Vizard, “McDonald’s CEO: We Are Not Trying To Take The Brand Upmarket”, Marketing Week, Jul 2018,
https://www.marketingweek.com/2018/07/26/mcdonalds-ceo-we-are-not-trying-to-take-the-brand-upmarket/

4. Alistair Macrow, McDonald’s UK Chief Marketing and Communications Officer explains the company’s marketing strategy
S. Gwynn, “Alistair Macrow Brings Good Times To McDonald’s”, Campaign, Sep 2016,
http://www.campaignlive.co.uk/article/alistair-macrow-brings-good-times-mcdonalds/1408656

Sources:
References:
  1. C. Majaski, “McDonald’s Vs. Burger King: What’s the Difference?”, Investopedia, Oct 2020, http://www.investopedia.com/articles/markets/111015/mcdonalds-vs-burger-king-comparing-business-models.asp
  2. https://www.linkedin.com/company/mcdonald’s-corporation/about/
  3. “McDonald’s Reports Good Results, To Continue Growth In 2019”, Forbes, Feb 2019, https://www.forbes.com/sites/greatspeculations/2019/02/04/mcdonalds-reports-good-results-to-continue-growth-in-2019/#3e02e69319ec
  4. C. Purdy, “McDonald’s Isn’t Just A Fast-Food Chain—It’s A Brilliant $30 Billion Real-Estate Company”, Quartz, Apr 2017, https://qz.com/965779/mcdonalds-isnt-really-a-fast-food-chain-its-a-brilliant-30-billion-real-estate-company/
  5. https://en.wikipedia.org/wiki/McDonald%27s
  6. “The Big Mac Index”, The Economist, Jan 2019, https://www.economist.com/news/2019/01/10/the-big-mac-index
  7. S. Vizard, “McDonald’s CEO: We Are Not Trying To Take The Brand Upmarket”, Marketing Week, Jul 2018, https://www.marketingweek.com/2018/07/26/mcdonalds-ceo-we-are-not-trying-to-take-the-brand-upmarket/
  8. S. Vizard, “McDonald’s To Roll Out Table Service Across UK As Premium Focus Pays Off”, Marketing Week, Jan 2016, https://www.marketingweek.com/2016/01/25/mcdonalds-to-roll-out-table-service-across-uk-as-premium-focus-pays-off/
  9. https://corporate.mcdonalds.com/corpmcd/our-company/who-we-are/accelerating-the-arches.html
  10. Ibid.
  11. “Accelerating The Arches”, McDonalds, Nov 2020, https://corporate.mcdonalds.com/content/dam/gwscorp/assets/news-articles/2020/November2020/MCDN-ATA-InfoSheet.pdf 
  12. D. Bradley, “McDonald’s Refreshes ‘Intangible’ Brand Purpose”, The Campaign, Nov 2020, https://www.campaignlive.co.uk/article/mcdonalds-refreshes-intangible-brand-purpose/1699672 
  13. https://corporate.mcdonalds.com/corpmcd/our-company/who-we-are/our-values.html
  14. https://en.wikipedia.org/wiki/Hamburger_University
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