McDonald’s Company Brand Refinement

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Table of Contents

Changes Are Necessary
4 C’s Analysis
Company
Customer
Category
Two Options
Hypothesis

Fast food industry has been considered one of the most popular and financially powerful markets across the world. For decades, the global fast food giants have been gaining fantastic revenues, but recently this tendency shifted. Worldwide fast food brands faced one of the most serious threats a business can come across – the change of the consumers’ preferences and tastes. This paper focused on the exploration of the problems challenging McDonald’s and its brand image, as this fast food brand is known to be losing a lot of income lately. The company is in need of brand refinement and the improvement of reputation. This paper discusses the ways of achieving positive results and making McDonald’s a stronger competitor.

Changes Are Necessary

Ten years ago no one would even imagine that instability could hit such huge and powerful business as McDonald’s. This company used to be considered as one of the most reliable from the perspective of profit; it was ahead of customer demands and introduced a number of innovative products successfully dealing with recession and financial crisis. McDonald’s’ sales in the United States grew from 22 to 36 billion dollars between 2004 and 2012. After that the company faced a noticeable revenue decrease. It started with the retirement of the CEO of McDonald’s Joe Skinner in 2012.

After that retirement, it took the company only several months to experience its first since 2003 global drop of monthly sales and cost several McDonald’s’ leaders their jobs. In 2013 the company struggled through a lot of ups and downs, introduced a number of new products such as Premium McWrap, Fish McBites, Blueberry Pomegranate smoothie, Egg White Delight and a new series of Quarter Pounders. It was obvious that the company tried to return its lost customers and re-gain the profits. Regardless of all the effort, in 2014 the net income of McDonald’s dropped by 30 per cent. This happened because the business’s key group of consumers, millenials, stably preferred fast-casual chains such as Chipotle to McDonald’s. In order to re-gain its status and improve the brand image McDonald’s needs to introduce some brand refinement changes, develop a new approach to its products and the way they are marketed.

4 C’s Analysis

One of the biggest strengths of McDonald’s is the low price of the products. Reduced costs of the ingredients such as processed meat and vegetables, products that can be preserved for long periods of time without getting spoiled or transported without getting damaged improve the company’s revenues due to the low risk of product loss. Besides, the customers of the company mainly favor the Dollar Menu. Regardless of all the innovative meals and foods McDonald’s offers, the consumers keep choosing the Dollar Menu items because being cheap and fast is the basis of a fast food business. Since this strategy seems to be failing, it is possible that McDonald’s could experiment and improve the sustainability of the products.

The improvement of sustainability will definitely help the business attract its key customers – young people interested in tasty and fast meals of good quality. This way, offering more expensive but healthier products might be a good opportunity for McDonald’s to improve its performance.

In order to find out the needs of their customers the company could conduct a research, for example a digital survey, and inquire about the wishes and propositions of the key consumers concerning the improvements of the menu. This way, the company would gain more confidence considering the future transformations. Besides, operating in the era of customization, McDonald’s would not be wrong to add some “create your own product” options.

Finally, convenience is another significant component of the contemporary marketing. The products need to be easy to access, so developing a mobile application, allowing the consumers to choose and build their own meals and order them using their mobile devices would be a good way to reach out to all kinds of clients.

Company

Today, McDonald’s is facing unusual for it changes – the profits are dropping, the clients prefer other brands and the brand reputation has seen better times. The company reacted with a series of digital campaigns called “Our Food, Your Questions”. The campaigns were designed to reveal the secrets of the production of the fast food sold by McDonald’s and to defeat some negative myths impacting the business’s reputation. The company explained various processes happening “behind the scene”, which did not facilitate many changes. Basically, the company openly stated that their food was mainly unhealthy and contained hormones and GMO ingredients, which are known to be some of the scariest words for the contemporary consumer. If the company does not change its approach, it will be likely to lose even more income and experience a serious downfall of reputation as the new trends are gaining power and McDonald’s with its unhealthy meals may quickly become outdated.

Competition

Currently, one of the most serious competitors of McDonald’s is fast-casual food industry which attracts the key groups of customers – the young consumers such as students, travelers, school children, people in their early thirties. One of the most recognizable fast-casual restaurant chains in the United States today is Chipotle. The slogan of this brand is “Food with integrity” which maintains that the business prioritizes the best ingredients produced with respect towards the environment. Chipotle offers fast meals of good quality such as wraps, sandwiches, salads made of healthy and fresh ingredients.

The second prominent competitor is Panera Bread which also emphasizes integrity and serves fast-casual meals freshly made out of sustainable ingredients. Panera Bread maintains the image of a responsible food producer, the items in Panera Bread menus look home-made which creates the atmosphere of genuine care about the consumers and promotes trust. At the same time McDonald’s’ meals are known to have artificial smells and appearances very different from the ones in the advertisements.

Customer

The target consumers of McDonald’s are young individuals – school and university students, people in their 20s and 30s. They are called millenials, and they were raised in the atmosphere of awareness of the environmental pollution, healthy nutrition and negative impacts of mass production. This is why they prefer sustainable food producers using healthy and organic products and promoting respect towards the environment. Millenials are tech-savvy and appreciate quality and speed.

Two Options

The two ways for McDonald’s to improve its performance include the employment of customization of its products and the embracement of connectivity, digital technologies and mobile applications for food delivery. Going for the former option McDonald’s would be offering an ultimate solution to the issues of menu items introduction. Allowing the consumers to create their own hamburgers will utilize the typical for humans desire to experiment which will attract and retain consumers to McDonald’s chains.

Embracing connectivity and developing a mobile application for remote food ordering McDonald’s will be putting itself out to the market and making its products more accessible which will also help to increase the customer base, especially among tech-savvy millenials who like speed and comfort and are ready to pay for it.

Hypothesis

In my opinion, the two positioning options can be mutually integrated; mobile application may be designed to provide the customers with “create your own” function. Yet, choosing between the two solutions I personally believe that “create your own” option is harder to implement since it will require new approach towards the whole system of making McDonald’s products. Going this way would be likely to change the culture, structure of McDonald’s and its basic mission. Using mobile application will increase the sales and attract more consumers, this is the easier option. It should be employed first to facilitate immediate improvement of income. Most importantly, McDonald’s needs to address the quality of its meals, otherwise none of the innovative strategies will work for long.

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McDonald’s Company Brand Refinement

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