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Brand Analysis: McDonald’s

Gina Giaquinto

June 5, 2016

Comstrat 564

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Table of Contents

Introduction Page 3

Company Story Page 3

Customer Story Page 6

Brand Inventory Page 7

Brand Promise Page 7

Brand Personality Page 7

Brand Elements Page 9

Brand Portfolio Page 9

Current Brand Strategies Page 10

Competitor Analysis Page 11

Burger King Page 11

Wendy’s Page 12

Insights and Recommendations Page 14

Specific Insights and Recommendations Page 14

Appendix A Page 17

References Page 18

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Introduction

Company Story

McDonald’s is a fast food restaurant chain which has evolved into a major corporation known

for selling cheap food in a fast-paced environment. McDonald’s began as McDonald’s Bar-B-Q in

San Bernardino, California in 1940. It was first run by the two McDonald’s brothers, Dick and

Maurice (Mac). In 1948, they shut down the Bar-B-Q in an effort to revamp the building into a self-

service drive-in restaurant. The menu started with a total of nine items including: hamburgers,

cheeseburgers, soft drinks, milk, coffees, potato chips and a slice of pie. Before the golden arches

became arguably one of the most recognizable logos in the world, Speedee, a miniature animated

chef, became the company symbol in December 1948.

1948 1949 1955

A major milestone in the McDonald’s history was the addition of French Fries on the menu to replace

potato chips in 1949. This choice would become one of the most valuable menu items for

McDonald’s and their brand to date (McDonald’s History n.d.).

Ray Kroc was a multimixer salesman who traveled to the San Bernardino McDonald’s in

1954. What began as a business trip to sell the McDonald’s brothers multimixers became a life-

changing journey. Kroc realized that his future was in hamburgers and became a nationwide

franchising agent for the brothers. On April 5, 1955, he opens the first McDonald’s in Des Plaines,

Illinois. The building is designed by architect Stanley Meston who utilized red and white colors and

golden arches to draw attention. In 1961, Kroc bought out the McDonald’s brother’s shares and

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continued expanding the McDonald’s brand and franchise. The restaurant was so well received that

by 1965 there are over 700 McDonald’s restaurants across the United States (McDonald’s History

n.d.).

By 1958, McDonald’s has sold its 100 millionth hamburger and continues to expand their

customer base opening more and more restaurants across the country. McDonald’s has been in

existence for over 60 years with thousands of stores worldwide spanning 119 countries. Through the

60s and 70s they create menu items that would become icons of their brand.

To add to their menu item selections they introduce the Big Mac burger in 1968. This burger

becomes one of the staple items only recognizable to this major chain. That same year they continue

to refine their brand by replacing the red and white tile buildings with masard roof buildings. The

very next year they update their logo to place more emphasis on the golden arches.

They continue to expand their menu choices by creating the breakfast sandwich and later

developing the kid-friendly ‘happy meal’, complete with toy in the box for family friendly branding.

Continuing their quest to provide quality food at a low cost to the customer, McDonald’s launches the

Dollar Menu in 2002 which lists several regular menu items for only one dollar. These promotional

deals become another staple in the franchises’ arsenal (McDonald’s History n.d.).

1968 1975 1979 2002

Big Mac Breakfast Happy Meal Dollar Menu

added to Menu at McDonald’s Introduced Launches

Not only does the company provide food for its customers, McDonald’s has committed to

giving back to the community through building relationships with families. In 1974, the first Ronald

McDonald Charity house is built in Philadelphia, PA, when McDonald’s partnered with Philadelphia

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Eagles football player, Fred Hill. Hill’s child was battling leukemia at the time. The Ronald

McDonald house helps provide support via emotional and financial help to families impacted by child

illnesses. Today there are 356 Ronald McDonald Houses around the country which provide grants

with the focus on the needs of children and provides scholarships to students across the United States

(McDonald’s History n.d.).

Today, according to QSR Magazine, McDonald’s is the number one burger brand with 2014

U.S. system wide sales of over $35 billion. These sales totals are four times greater than the next

biggest competitors, Burger King (roughly $8.6 billion) and Wendy’s (roughly $8.5). From a fast

food category McDonald’s is still considered the number one brand by their staggering U.S. system

wide sales numbers. The next closest competitor is Starbucks at $12.6 billion and Subway at $11.9

billion (Quality System Registrars 2015).

Top 50 burger brands

Top 50 brands in quick services and fast casual

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(Quality System Registrars 2015).

Customer Story

McDonald’s does not have a specific customer group. They cater to any and every one ages 5-

100+ (if you can eat solid foods you can eat McDonald’s). The idea behind the brand is that it offers

cheap food quickly and therefore, if you have 99 cents you can afford to buy something on the

McDonald’s’ menu. McDonald’s doesn’t discriminate between targeting men, women, and children

or based on your level of wealth. However, McDonald’s has a reputation for being cheap, unhealthy

food which tends to turn off wealthier or health food conscious clientele.

Customers tend to be loyal to McDonald’s because it has upheld its promise of fast, cheap,

food. While it may not always be healthy, in a pinch, it’s an option for a quick meal on the go. With

the expansion to breakfast foods McDonald’s has also grown its brand and customer base. “Among

adults over the age of 18 who eat breakfast at a restaurant at least once a month, some 46 percent of

them say they might eat at McD's for their next meal. That's up from 39 percent in July” (Little &

Whitten, 2015). This change has certainly impacted sales, “Within McDonald's own lineup, breakfast

accounts for roughly 25 percent of sales and 40 percent of profit in the United States alone” (Little &

Whitten, 2015).

Where the customer base has a distinct separation is in regards to quality. McDonald’s doesn’t

over extend its brand or make claims that it offers overly healthy products. While it has tried to

incorporate healthier menu items (apple slices, salads, yogurt parfaits), a majority of the food options

are burger-related. Being number one in the fast food industry comes with many down falls, “Not

only has it been at the center of high-profile lawsuits, but as the preeminent leader in the fast food

industry, it's come to represent what some people consider dangerous about big corporations, fatty

foods and the spread of American culture” (McGrath, 2008).

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Brand Inventory

Brand Promise

The McDonald’s brand promise revolves around quality service, cleanliness and value:

“putting people, processes and practices into place to make better food, more sustainable sourcing,

happier people, a stronger community and a healthier planet” (News n.d). The statement, found on the

McDonald’s website, encompasses four different values that McDonald’s wants to promote through

their restaurants worldwide. Their promise is to offer more balanced meal choices that are great-

tasting, high-quality, safe, affordable and more sustainable. “Since its humble beginnings, it has

succeeded due to its dedication to streamlined service, but it was an ambitious visionary who took the

idea of fast food and ran with it” (McGrath, 2008).

The biggest promise that is easily identifiable with the brand is the affordable food choices,

“Capitalizing on brand recognition, McDonald's is known for selling consistent, simple, low-priced

American food. As a result, it has become the world's largest restaurant chain (McGrath, 2008).

McDonald’s also promises to make the environment a better place by being environmental stewards

and taking responsibility to use recycled goods to extend the life of this planet. They also value their

employees, franchisees, suppliers and customers and look to find opportunities to grow and develop

these relationships. McDonald’s is more than just a fast food franchise, they are promoters of lasting

relationships that make a difference for everyone.

Brand Personality

A brand personality is made up of five main dimensions: excitement, sincerity, ruggedness,

competence and sophistication. The McDonald’s brand personality can be described using the terms

below:

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Excitement: affordable, promotion/sales offerings, quality product. McDonald’s generates

excitement through the use of the multifaceted promotional deals each year.

Sincerity: Transparency in ingredients (100% real beef burgers no fillers, preservatives or additives),

strives to make a difference in communities (Ronald McDonald charity house), dedication to youth

sports, charities and giving back. McDonald’s has been quite open about the ingredients they use and

their commitment to make the world a better place.

Ruggedness: Offering an array of nutritional menu options, bringing these values to 119 different

countries for over 60 years.

Competence: The fact that they have been in business for over 60 years, serving millions of

customers daily in 119 countries with over 36 thousands outlets worldwide proves their competence

and lasting ability. The brand has sustained for many years and continues to be a powerhouse in the

burger/fast food franchise category. As they have owned this market for quite some time they have

consistently demonstrated their competence in their business.

Sophistication: Consistency in their product has lead them to become the number one fast food

franchise and burger restaurant in the world. Their product line appears to be unmatched and more

innovative than their competitors (happy meal, breakfast items, Big Mac) as indicated by their sales

numbers.

McDonald’s has clearly distinguished itself far and above all other fast food and burger

restaurants. Their points of difference fall into the excitement dimension as they continually generate

excitement for the brand through promotions of their quality and affordable products. They also

differentiate in the competency and sophistication dimensions based on their standing amongst their

competitors. They have become a staple in the fast food breakfast market, their fries and signature

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burgers (Big Mac) signify their dominance. McDonald’s is a powerhouse brand as demonstrated by

its staying power and ability to evolve over the last 60 years.

Brand Elements

Logos: Packaging: McDonald’s Restaurant:

McDonald’s Characters- Ronald McDonald (Clown), Hamburglar, Grimace)

The golden arches have become one of the most iconic logos. It can be found on all their

packaging which has been reinvented over the years to include pictures of the quality ingredients used

in their products. Although McDonald’s restaurants have undergone some renovation, many continue

to exist in the red and yellow coloring that has become synonymous with the brand. In the 60s and

70s McDonald’s created several characters who appeared in their advertising campaigns. Some of the

most recognizable today include Ronald McDonald himself the McDonald’s clown.

Brand Portfolio

Product Line:

• Fast Food

o Burgers

▪ Hamburger

▪ Cheeseburger

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▪ Double Cheeseburger

▪ Big Mac

▪ Quarter Pounder with Cheese

o Chicken Sandwiches

▪ Artisan Grilled Chicken Sandwich

▪ Premium Buttermilk Crispy Chicken Deluxe

▪ McChicken

o Salads

▪ Bacon Ranch Salad

▪ Southwest Salad

o Snacks/Sides

▪ French Fries

▪ Apple slices

▪ Cuties

▪ Yoplait Go-GURT

▪ Fruit ‘N Yogurt Parfait

o Breakfast Foods

▪ Egg McMuffin

▪ Hash Brown

• Drinks

o Beverages

▪ Soft Drinks

▪ Water

▪ Chocolate Milk

▪ Milk Shakes

o McCafe Collection

▪ McCafe coffee

▪ McCafe Latte

• Desserts

▪ Hot Fudge Sundae

▪ Apple Pie

Current Brand Strategies

PLATFORM USE

Social Media

- Facebook, Twitter, Linkedin, YouTube

McDonald’s has a very active social media presence.

Their accessibility throughout these sites allows it to

reach a large customer base that will raise awareness

of new promotions at little to no cost. McDonald’s

can reach their customers real-time and these

mediums allow customer interaction with

McDonald’s directly.

Our Food Your Questions Campaign As part of their website promotions they include a

site specifically geared toward questions or FAQs

about McDonald’s’ products. They even had a TV

advertising campaign geared toward people on the

street asking questions about the ingredients they

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use. These questions and answers highlight the

transparency in their brand to deliver quality food

and build relationships (seen in Appendix A).

Promotions

- Movie Promotion

McDonald’s utilizes advertising through, TV, radio

and print (magazine, newspaper) mediums. They

often promote deals such as the Bogo Big Mac deal

(buy one get one free) and the Monopoly game

offering chances to win prizes. These advertisements

and deals are widely popular and extend their reach

in the market place (examples shown in Appendix

A).

- McDonald’s often partners with movie

productions to promote movies as part of

their packaging. It has worked with

DreamWorks SKG and 20th Century Fox

studios and most recently Rovio Animation

(Angry Birds) (Appendix A)

Competitor Analysis

Burger King

Brand Promise: The Burger King Brand promise is to offer good food quickly made to order the way

you want it.

Product Line:

• Burgers

o Quarter Pounder (sesame seed bun, flame broiled patty)

o Flame Broiled Whopper

o Cheeseburger

o Double Cheeseburger

• Chicken

o Original Chicken Sandwich

o Flame Grilled Chicken Burger

o Chicken Fries Rings

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o Crispy Chicken Jr.

• Salads

o Garden Grilled Chicken Salad

o Bacon Cheddar Ranch Chicken Salad

• Sides

o French Fries

o Onion Rings

o Hash Browns

• Hot Dogs

• Breakfast

o Supreme Breakfast Sandwich

o Bacon, Egg & Chees Croissan’wich

• Coffees

o Smooth Roast Coffee

o Smooth Roast Iced Coffee

o BK Mocha Frappe

Points of Similarities: Burger King is a similar brand to McDonald’s in that they both offer signature

burgers in a fast food setting. Burger King has been in business for 60 years, which is just around the

same time as McDonald’s. Burger King has over 15 thousand locations domestically and worldwide

and in 2014, Burger King’s revenue tipped the scales at around $8.6 billion dollars (Quality System

Registrars 2015).

Like McDonald’s, Burger King also has a big social media presence which allows it to stay connected

to its customer base. Burger King stays dedicated to giving back to the community through, The

Burger King Mclamore Foundation, a philanthropy effort to impact the advancement of education

around the world.

Points of Difference: While McDonald’s has had success with signature burgers and meals like the

Big Mac and Happy Meal, Burger King has not been able to replicate these efforts to the extent

McDonald’s has. In recent years, Burger King has tried to imitate the deals and menu items that

McDonald’s has even going so far as creating the ‘Big King’ which is supposed to replicate and

compete with the Big Mac. While Burger King offers a breakfast menu they have not yet countered

the McDonald’s brand by offering it all day.

Wendy’s

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Brand Promise: The Wendy’s brand promise is about delivering quality in their recipe to provide

good food quickly.

Product Line:

• Burgers (square patty)

o Dave’s Single, Double and Triple

o Baconator

o Jr. Cheeseburger Deluxe

o Jr. Bacon Cheeseburger

• Chicken

o Asiago Ranch Chicken Club

o Spicy Chicken Sandwich

o Grilled Chicken Sandwich

o Crispy Chicken Sandwich

• Salads

o BBQ Ranch Chicken Salad

o Apple Pecan Chicken Salad

o Spicy Chicken Caesar Salad

• Sides

o Ghost Pepper Fries

o Sour Cream and Chive Baked Potato

o Rich & Meaty Chili

o Natural-Cut Fries

o Apple Slices

• Beverages

o Green Tea

o Soft Drinks (Coca-Cola, Sprite)

o All-Natural Lemonade

o Strawberry Lemonade

o Iced Coffee

o Hot Tea

o Frosty

Points of Similarity: Wendy’s was established 46 years ago which makes it a baby franchise

compared to the likes of Burger King and McDonald’s. The main menu items offered by Wendy’s are

burger related. Wendy’s, like the two burger franchises ahead of it, attempts to compete with

promotional deals and ‘dollar menu’ items. Wendy’s initiated the 4 for $4 deal, which allows you to

choose four of their ‘dollar menu’ items costing only $4. McDonald’s soon countered this deal by

offering the McPick 2.

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Points of Difference: Wendy’s does not offer a breakfast menu and is not known for its coffee brand.

They do not sell a variety of morning coffee related products and are only open for lunch and dinner.

While it has distinguished itself by the use of the square burger patty, it has not had the same success

that McDonald’s and Burger King have reached over the years. In 2014 its U.S. based sales reached

roughly $8.5 billion (Quality System Registrars 2015).

Insights & Recommendations

SWOT Analysis

Strengths Weaknesses

• Very strong social media presence

• Strong brand recognition and

representation around the world.

• They have taken ownership of their

brand and put to rest questions

surrounding the ingredients they use

(combating the pink paste questions).

• Consistency of the product they offer it

may not be everyone’s choice but they

have upheld certain expectations (fast

and cheap).

• Commitment to community (Ronald

McDonald House/Charity).

• While McDonald’s has added more

healthy choices their lack of non-burger

sandwiches make them less of a threat

against the likes of other fast food

chains such as Subway/Starbucks.

• Being at the top of the fast food market

leaves it suspect to fast casual

competitors (Jersey Mikes Subs,

Chipotle, Five Guys) with customers

who will pay a little more for a better

quality product.

Opportunities Threats

• McDonald’s is always looking to

change up their menu and product

offerings. The all-day breakfast has had

a positive impact with customers.

• They continue to experiment with new

menu options such as the build your

own burger initiative which has not

launched nationwide yet

• Creating more non-burger menu items

such as artisan sandwiches might help

combat other fast casual franchises.

• Because McDonald’s is the top fast

food and burger brand out there it’s

open to criticism and backlash from

competitors and customers alike.

• As other fast food franchises work to

complete against McDonald’s (Burger

King, Wendy’s) they have to stay

relevant on prices and promotions.

• Fast Casual franchises have offered an

alternative, higher quality product than

McDonald’s.

Specific Insights & Recommendations

• Still the One: No matter your personal feelings about McDonald’s it’s undeniable that it’s

currently the number one fast food and burger franchise in the world. The brand along with its

golden arches have become one of the most recognizable images out there. Although

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competitors exist and there has been a customer shift to more fast-casual (Jersey Mikes Subs,

Five Guys Burgers and Fries) food establishments, McDonald’s has continually stayed

relevant in the market.

Their promotions and deals help to stay competitive. In 2015 Wendy’s initially offered the 4

for $4 combo meal. Customers would choose four limited menu items (junior bacon

cheeseburger, soft drink, chicken nuggets and fries) for just four dollars. “McDonald's

followed Wendy's with the McPick 2 menu, a bundled deal that that company said helped

drive a 5.4% first-quarter increase in sales at US locations open more than a year” (Taylor,

2016).

• Community Impact: McDonald’s has made a name for itself by not only providing good

food quickly to their customers but they have spent a great deal of time establishing and

building their relationships with the community. McDonald’s continues to foster growth in

youth through the Ronald McDonald House Charities which have impacted millions of

families since 1974. McDonald’s also places high importance on developing and operating the

most environmentally efficient restaurants worldwide.

• Strong Social Media Presence: McDonald’s has a very strong presence on social media and

the web. The Twitter and Facebook accounts allow the brand to grow by interacting with

customers on a real-time basis. Feedback is provided directly to the company which allows it

to respond accordingly. The fact that McDonald’s partners to help promote movies (2016

Angry Birds Movie) also allows them to remain relevant in the customer’s mind.

• Competitive Edge: In order to maintain their dominance in the market, McDonald’s must

continually analyze and re-evaluate their business strategies and marketing. Aside from the

regular fast food burger competitors (Burger King, Wendy’s), McDonald’s has an ever

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growing concern with the fast-casual franchises that seem to offer a higher-quality product for

slightly more money. “Stuck in a tailspin that has seen declines in domestic sales and traffic,

McDonald’s is struggling to resonate with a consumer base that is increasingly demanding a

higher-quality product” (Oches, 2015).

In order to stay competitive McDonald’s has noted a few efforts they will undertake in hopes

of gaining some momentum back, “…McDonald’s will continue to roll out more digital

ordering and payment opportunities, which it did with the partnership with Apple Pay;

reorganize the company structure; focus its marketing efforts on transparency and quality…”

(Oches, 2015). They are always looking to revamp current menu items as evidenced in 2015

when they announced the Quarter-pounder burger (one of their signature menu items) would

be getting a bigger patty. “The change "improves the taste, texture and appearance of the

burgers" since the "patties retain more moisture resulting in a juicier and more flavorful

burger,"” (Little, 2015). McDonald’s is constantly looking for ways to maintain their

competitive edge and has been successful thus far.

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Appendix A

https://www.ispot.tv/ad/ATaQ/McDonald’s-the-angry-birds-movie-launch

https://www.ispot.tv/ad/A1W4/McDonald’s-money-monopoly-prizes-are-coming

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References

Little, K. (2015, June 25). McDonald’s Quarter Pounder is Getting Bigger (Really!). Retrieved May

24, 2016, from http://www.cnbc.com/2015/06/26/mcdonalds-quarter-pounder-is-getting-bigger-

really.html.

Little, K. & Whitten, S. (2015, October 14). Breakfast finally pulls McDonald's out of its funk.

Retrieved May 23, 2016, from http://www.cnbc.com/2015/10/14/McDonald’s-brand-perception-at-a-

two-year-high.html.

McDonald's History. (n.d.). Retrieved May 21, 2016, from

http://www.aboutMcDonald’s.com/content/mcd/our_company/McDonald’s-history.html.

McDonald's TV Commercials. (n.d.). Retrieved May 23, 2016, from

https://www.ispot.tv/brands/AoR/McDonald’s.

McGrath, J. (2008). How McDonald’s Works. Retrieved May 21, 2016, from http://money.howstuffworks.com/McDonald’s.htm.

Oches, S. (2015, January). Tale of Two Brands. QSR. Retrieved from

https://www.qsrmagazine.com/fast-casual/tale-two-brands.

Quality System Registrars. (2015) [Chart illustration listing top quick service and fast casual brands].

Retrieved from https://www.qsrmagazine.com/reports/qsr50-2015-top-50-chart.

Taylor, K. (2016, May 24). McDonald’s, Burger King, and Wendy’s Used a Simple Trick to Sell 100

Million Extra Meals. Retrieved May 24, 2016 from http://www.businessinsider.com/fast-food-boosts-

sales-with-combo-deals-2016-5.