Download - Growing the mc donalds brand
Growing the McDonald’s Brand
Mansi SanghaniPGP31230Section B
About McDonald’s
Mc Donald's is operated either as a franchisee, an affiliate or the
corporation itself
It has 761,000 employees worldwide, more than the population of Luxemburg
It’s $27 billion revenue makes it the 90th largest economy in the world
McDonald’s sells 75 hamburgers every second
Largest Chain of hamburger fast food restaurant founded in 1940
McDonald’s daily customer traffic of 62 million is more than the population of Great Britain
One in every eight American worker is employed by McDonald’s
Challenges Faced
Market Saturation
Global Health Concerns
Slumping Economy
What did McDonald’s do???
The strategies employed by Mc Donald’s can be classified using the Ansoff Growth Share matrix
Market Penetration
• Used to follow the strategy of introducing hundreds of new outlets every year
• New corporate motto of “Better not Bigger” was adopted in response to the challenges
• Investments now were made in upgrading the existing facilities• 24 hour service introduced at many stores• To accommodate this extension, their menu has been constantly
modified• Breakfast became an essential part, contributing a quarter of
McDonald’s revenue• Snacks and smoothies were also introduced as between meals crowd
pullers• “I’m Lovin’ it” provided a perfect platform for new product launches
McDonald’s Breakfast Ad-“What makes you smile”
The ad emphasis on the different offerings along with coffee as an integral part
Market Development
• McDonald has made concerted efforts to expand globally• It operates 36,525 restaurants in 118 countries and serves
around 68 million customers a day• It has actively adopted it’s menu to different cultural and
regional preferences• It has also introduced Salads and other lighter menu options
to appeal to the health conscious consumer base particularly women
Japan
Japan
Different regional Offerings
India
China
Thailand
The following ad of McSpicy Paneer in India shows how it customizes its offerings and advertising campaign to appeal to its
target consumer base
Product Development
• McDonald’s faced severe criticism for its super size options and unhealthy offerings as concern over obesity and fast food contributing to poor health grew
• It revamped it’s menu by removing super size meals and by adding healthier options like salads, bottled water, healthier happy meals etc.
• It also promoted healthy lifestyles via it’s “Go Active” campaign• Ronald McDonald was recast as chief happiness officer with as a more
athletic version• It also tapped into the premium market trend by introducing roast
coffee, and premium hamburgers• Introduction of a 20 piece Chicken McNugget helped it enter the
shared meal segment endorsed by KFC
Exercising Ronal McDonald
Diversification
• Opened its first gourmet coffee shop “McCafe” in 2001
• It also has its ice-cream and dessert shop “McTreat”
• In Hong Kong, 3 McDonald’s offer wedding packages
• It is trying to foray into new territories though not with success always
Reason for Success of McDonald’s as a Brand
Strong Connections that cut across a variety of consumer segments
Consumer to brand connection hierarchy
An example of McDonald's effort to gain more trust of consumers is the Transparency Program launched by it called “Our food. Your Questions.” This was in response to increasing doubts about the quality of food especially chicken McNugget. McDonalds has hence always tried to show its trustworthy and retain if not gain further loyalty of its consumers.
Reasons for Success of McDonald’s Extensions
• Reduced Risk perceived by consumers due to strong positive brand connection
• The extensions were perceived as relevant and consistent by the consumers
• The advertising of the extensions focused on them rather than the parent brand.
• McCafe has outlets that are more sophisticated and have a different feel to the parent brand. The advertisement shown on the next slide emphasises this fact.
None of the ads have Ronald McDonald or focus on the parent brand overtly.
McCafe Advertisement
Summary
A little about McDonald’s
Challenges
Ansoff Matrix
Market Penetration
DiversificationProduct Development
Market Development
Disclaimer
Created by Mansi Sanghani, PGP2 Student at IIM Lucknow during Brand Management Course taught by Prof. Sameer Mathur.