by Jonathan Salem Baskin on 28 July, 2011 - 23:04
Talk about a brand that's got its business right. The stores are consistently clean and efficiently run. The products are good, well-priced, and comparable all over the word, as is the value proposition. It innovates successful new products, like McCafe coffee, but doesn't do much novel marketing or social media experimentation to promote them, or itself (unlike Burger King, for instance). It's most memorable advertising harkens back to the introduction of the Big Mac and Ronald McDonald's younger years.
Rather, McDonald's is happy to stick to the blocking-and-tackling of its business, and spend oodles of cash reminding people how good they are at delivering it. "Lovin' It" is really a pitch for the experiential reality of its offering, not an aspirational dream. Its branding is synonymous with its business.
And it works. Gloriously. The business just delivered a 15% increase in 2Q2011 profits on global same store sales growth of 5.6%, and that came with record-breaking results on a number of measures during the quarter. Its success surprised analysts who were already expecting great results (exceeding their forecasts for EPS by $.07). July already looks like all the positive trends are continuing.
So now McDonald's is going to change things, primarily in response to outside pressure groups: its signature Happy Meal will come with a "produce or a low-fat dairy option" starting next year; they'll replace bad-for-you ingredients with differently bad-for-you chemicals and gee-wiz processes through 2020; and top execs will go on a "listening tour" next month (supported with an online community) so parents can tell the business what they think.
It's hard not to see these moves less as a proactive business strategy that builds on the brand's strengths, and more as a response to circumstances in which the brand feels weak or vulnerable. It amounts to a responsibility tax that it has agreed to pay so that it can keep practicing all those great operational things that keep its employees, vendors, and suppliers employed. Oh, and so it can preserve the things that constitute the real reasons anyone would visit a McDonald's restaurant.
The company's brand isn't about healthy eating any more than Coke, Cheetos, or any other "fast" food; if it was, it wouldn't taste nearly as good. Millions of years of evolution make this a biological fact, not an opinion or a branding choice. Change the menu significantly and it puts McDonald's in a different, far less margin-adoring business. So these latest moves seem somewhat disingenuous, and their interest group aegis suggests that they're being implemented unwillingly...the listening tour being a humiliating hint.
Healthy living is one of those Big Picture issues that the company certainly needs to address, though. So what would you suggest it do while staying true to its fundamental brand premise? Here are three thought-starters:
It's a tough call, to be sure, balancing the changing needs of consumers with the fundamental strengths of business. Ignore them and stick solely to your guns and you risk being passed by; err on the side of too much accommodation and your brand becomes irrelevant only through different means.
There is something odd about trying to make McDonald's into something it isn't. Lobbying for healthier food there is kind of like telling moviemakers to take the scary parts out of a horror movie they're filming. The better answer to better child nutrition is better parental involvement. I wonder if that's another track that may be wrong for McDonald's business, but would help buy it the space to keep doing the things it does right...
(Image credit: so bad they're good)
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