McDonald Final Slides1

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McDonald s: Brand Revitalization

Prathibha S

Prerna Goyal

Prayag Sunder

Batch : Spring Summer 09-11

Section: HRMCollege:IIPM, Bangalore

Date : May 13, 2010


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Learn How companies like

McDonald s can re-Energize theirbrands!!!

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Brand Rejuvenation

Brand tries to change its existing marketpositioning

Image to realign itself with target massesChanging brand attributes that communicatethe brand image to the target masses

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Six Rules

Refocus the organizationRestore brand relevance

Reinvent the brand experienceReinforce a Results CultureRebuild brand trust

Realize global alignment

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Big Brand In Trouble

Feb 1996 stock 27 times earningJuly 1997- 2% decline

Dec 2001 -60 % decline over three years2002- stock price down to $17.66 from $45.31

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Big Brand In Trouble (Cont )

End of 2002:Article appeared with title: Hamburger Hell

Analysts Comments:out of date

too large to be turned aroundIts time is passed

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Big Brand In Trouble (Cont )

In 2002Jack GreenBerg ,CEO observed Marketing is

broken at McDonald sSearch for Global Chief Marketing OfficerCharlie Bell new CMO

Brand was showing signs of weaknessThey Believed -Reservoir of goodwill helpthem restore profitable growth

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P roblems

Sales & market share were shrinkingFranchisees were frustrated

Employee morale & customer satisfaction waslow

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Asset

Customers fond memoriesChildren & parents remembered their happy

experience

None of them generated profits

Reason:Majority customers did not have any recentfond experience!!

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The Entry of Arcature LLC

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Introduction

In 1998 McDonald hired Arcature LLCconsulting firm

Objective: Develop a global brand directionFailure: Organizational & cultural roadblock

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Core Values of Brand

Vision: To create a Happy P laceEnvisioned: Convenient, Affordable & pleasant

way of eating quality foodEvery customer feels specialDedication to Q SC

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Core Values of Brand (Cont )

It focused on increasing number of stores

Few facts:

Increased by 50% in ten yearsConsequence of overzealous expansionNot possible to properly staff & train peopleDecline in quality service

Survey report:University of Michigan Last in customer satisfactionIn 2001- Last among fast food brands in food quality

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The Times Are Changing

McD ignored challenging development in themarketing environment

Consumers were well informed, moreskeptical, more demandingEnvironmentally conscious & healthconsciousResisted the changes in the Changing W orld

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McD unveils new dessert center, ad campaign

"W e love to see you smile " ad campaignInvestment $400 million

Initiatives :New training programsFreshly painted restaurants

Newly planted trees and landscapingNew uniforms.

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Brand Revitalization

Four Actions:Explain brand purpose & goals

Charlie s ONEPAGEPL AN (P lan to win)New Growth P riority: Build customer visits toexisting stores

First year goal: How do we get great again?SOLUTION: Being Bigger By Being Better

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Brand Revitalization (Cont )

Brand purpose:

Our customers' favorite place and way to eat &

drink

Charlie invented the McCafe concept:Delivering quality coffee & become beveragedestination

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Favorite

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How could a restaurant like McDonald s be afavorite restaurant? Is this a reasonable goal?

Goal: to become favored brand within theircustomers set of brandsCustomers favored not just frequented

Flaw: Most of them went their because itsconvenient and cheap!


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Valuable brands are preferred not merelyaccept

Re-positioning:Brand that satisfies our customers tastes &delights our customers hearts at a superiorvalue

Solution: Operational excellence & leadershipmarketing

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Example:Take-out was growing & continues

Snacking moreP eople are eating all times of the day

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2004

The sizzle is backEye popping P erformance

Incredible turnaround business caseW orld wide sales gain- 5.8 %Domestic- 8.5%

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So the question is how did they manage this?


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Conclusion

Highly disciplined operationsW ell-organized process

Focused, controlled plan

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Thank You!!!

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Documents

McDonald Final Slides1