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Brand audit   mc donalds Brand audit mc donalds Document Transcript

  • Brand Audit – McDonalds 2012 1 Brand Audit – Objectives, Approach & Scope Assessing and understanding the current status of a corporate identity is an important step to take in determining how that brand will evolve. Bulls-i conducts Brand Audits to take stock of existing brands, including identifying gaps between the vision for the brand and the actual brand, and gaps between audience expectations of the brand and the existing brand. Brand Audit Process We begin by getting to the core of what your brand is and should be by measuring the perceptions of corporate executives and other key stakeholders. Through confidential brand audit surveys, one-on-one interviews and small-group sessions, we will capture the brand goals, perceived brand values, and intended brand experience. Through interviews with outside stakeholders, we will reveal the perceptions that customers, partners and others have about the current brand. This understanding of the actual customer experience with your brand will help to guide the process of brand development. Brand Experience Strategy Brand Audits are important contributors to effective brand experience strategies and can be complemented by stakeholder research, customer personas & scenarios, and a view of the competitive landscape. In addition, we are able to ensure that all visual instances of your corporate identity are conveyed through individuals’ experiences with your product packaging, software user interface, mobile application, websites and portals, service, and others.
  • Brand Audit – McDonalds 2012 2 Background of the Brand : McDonalds A Locally Owned Company: McDonald's is the world's leading food service retailer with more than 33,000 restaurants in 118 countries serving more than 67 million customers each day. In India, McDonald's has two Indian entrepreneurs: Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd, which has been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads McDonald's operations in West & South India, while McDonald's restaurants in North & East India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is still a Joint Venture with McDonald's Corporation. Celebrating over 15 years of leadership in food service retailing in India, McDonald's India now has a network of over 250 restaurants across the country. McDonald's India is a leader in the food retail space, with a presence of more than 250 restaurants serving more than 6.5 lakh customers daily in India. McDonald's India and HRPL in particular has an aggressive expansion plan - including market expansion, new customer outreach formats and menu expansion. With HRPL becoming a Development Licensee in the year 2010, there are strong and robust commitments to investments, expansion and growth. By 2014, HRPL plans to double the number of restaurants it currently has. HRPL is expanding its reach by expanding the portfolio and access points with formats like from kiosks, drive thrus, web-delivery and petrol pumps in addition to the restaurants. In 2012, HRPL plans to open another 35-40 McDonald's restaurants in West and South India. An Employer of Opportunity: McDonald's India is an employer of opportunity, providing quality employment and long- term careers to professionals across the country. The average McDonald's restaurant employs 40- 60 people from crew to restaurant manager. McDonald's invests in its employees, leveraging world class-training inputs to create ambassadors of the brand and creating food service professionals with global outlook. The brand currently has over 10,000 employees in India.
  • Brand Audit – McDonalds 2012 3 Respect for Indian Customs and Culture: McDonald's worldwide is well known for the high degree of respect for the local culture of each market it operates in. In line with this respect for local culture, India is the first country in the world where McDonald's does not offer any beef or pork items. McDonald's has developed a menu especially for India with vegetarian selections to suit the Indian palate, and has also re-engineered its operations to address the special requirements of vegetarians. Special care is taken to ensure that all vegetable products are prepared separately, using dedicated equipment and utensils. This separation of vegetarian and non- vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. So much so that the mayonnaise and soft serves are also 100% vegetarian, and McDonald's uses only vegetable oil as a cooking medium in India. Quality, Service, Cleanliness & Value (QSC&V): McDonald's is driven by the philosophy of Quality, Service, and Cleanliness & Value for Money. This translates into a commitment to provide customers high quality products, served quickly with a smile, in a clean and pleasant environment at an affordable price. This effectively means that the McDonald's menu is priced at a value that the largest segment of the Indian consumers can afford, while at the same time ensuring that quality is not sacrificed for value - rather, McDonald's leverages economies to minimize costs while maximizing value to customers. McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by McDonald's Corporation directly. The remainder is operated by others through a variety of franchise agreements and joint ventures. The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract age, country and location, the Corporation may own or lease the properties on which
  • Brand Audit – McDonalds 2012 4 McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants. The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois. In other countries McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments. As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators. Products McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia and McArabia in Middle-East countries). Advertising McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events from ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy. To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.
  • Brand Audit – McDonalds 2012 5 Problems / Challenges  Health conscious customers – Obesity Issue With the range of unhealthy fast food products, McDonalds is facing a big time issue of unwholesome food. With the changing trend of diet-friendly food, the company seems to be losing out on its market share. Over the years, speculation has grown as to the quality of the food being served at its restaurants around the world. McDonald’s has been criticized for not providing any nutritional value to its meals. However, McDonald’s has tried to combat such accusations by providing a nutrition guide on the front of all its packaged meals. However, critics have slated these facts and figures for being irrelevant and absurd to even think such mass-produced hamburgers and chips are a useful or nutritious part of any diet. On average, a McDonald’s meal is high in fat, sugar, animal-products and sodium, while being low in fibre, vitamins and minerals. Unsurprisingly, a poor nutritional diet, obesity and other heart diseases are often being link with what McDonald’s serves to its consumers on a daily basis.  Wide variety of fast food brands leading to easy switch – Call for Newness Competitors have increased and competition will continue to increase in future. Fast food seems to have become a weakness of this brand. Easy switch to other healthy brands is posing a big big problem for the brand  Better, not just bigger. When you go to any of its outlet you buy not only food but also an unforgettable experience. But how to create this experience, that customer would want over and over again? How to keep customers satisfied and eager every time they enter the door? Expanding is not the only factor left with McDonalds.
  • Brand Audit – McDonalds 2012 6 BRAND INVENTORY Ranked 11th Best Brand (source: www.rankingthebrands.com) How McDonald's evolved its marketing in India When McDonald's India launched in 1996, urban Indians in Mumbai and Delhi typically ate out three to fives times a month, according to AT Kearney, the management consultancy. In the 12 years since then, that average frequency has doubled and analysts forecast that by 2011 the Indian quick service restaurant market will be worth 30,000 crore (about $6.3bn at October 2008 exchange rates). But from their earliest investments in India, multinational company (MNC) owners of restaurant chains have struggled to adapt to the needs of India's many markets. Some pulled out of the country after failed ventures. At the time, consolidation of the hugely fragmented Indian retail sector had also barely begun, and there was scepticism that Indians would prefer burgers and fast food to local food offerings. However, in the intervening decade, McDonald's has continued to open new outlets in the country, evolving its marketing strategy through several phases. Twelve years of McDonald's India McDonald's India was set up as a 50:50 joint-venture between McDonald's at a global level and regional Indian partners such as Hardcastle Restaurants Private Limited in western India, and Connaught Plaza Restaurants Private Limited in northern India. The first Indian McDonald's outlet opened in Mumbai in 1996. Since then, outlets have begun trading in metropolitan and Tier II towns across the country. By September 2008, it had premises in Mumbai, Bangalore, Baroda, Pune, Indore, Nasik, Chennai, Hyderabad, Surat and Ahmedabad. Amit Jatia, Managing Director, McDonalds India, said: "The past decade has witnessed a marked change in Indian consumption patterns, especially in terms of food. Households in
  • Brand Audit – McDonalds 2012 7 middle, upper, and high-income categories now have higher disposable income per member and a propensity to spend more." Phase I: Launching the brand The starting point for McDonald's India was to change Indian consumers' perceptions, which associated it with being 'foreign', 'American', 'not knowing what to expect' and 'discomfort with the new or different'. McDonald's wanted to position itself as 'Indian' and a promoter of 'family values and culture', as well as being 'comfortable and easy'. Simultaneously, the brand wanted to communicate that, operationally, it was committed to maintaining a quality service, cleanliness and offering value for money. Says Arvind Singhal, Head of Marketing at McDonald's India: "From a marketing communications standpoint, we chose to focus on familiarizing the customer with the brand. The brand was built on establishing functional benefits as well as experiential marketing." Until 2000, McDonald's India did not have enough reach to use mass media such as television advertising. Instead, most of its marketing effort focused on outlet design, new store openings and PR about its attempts to tailor a menu to Indian tastes. Amit Jatia said: "Products like McAloo Tikki burger, Veg Pizza McPuff and Chicken McGrill burger were formulated and introduced using spices favored by Indians. The menu development team has been responsible for special sauces which use local spices do not contain beef and pork. Other products do not contain eggs and are 100% vegetarian. The Indianized products have been so well received that we even export McAloo Tikki™ burger and Veg. Pizza McPuff™ to the Middle East." However the company did not escape food criticism in the country. For instance, it hurt the religious sentiments of Indians by using beef flavoring for its "Vegetarian" French Fries.
  • Brand Audit – McDonalds 2012 8 Says Sridhar, National Creative Director, Leo Burnett: "When McDonald's launched we took a conscious call of not introducing any beef or pork in our products. Thus, when controversies around McDonald's products started during the early and growth stages of the Indian business, we reacted quickly. "We educated our customers about the build of our products and did extensive kitchen tours for our customers. We showed them how we use separate vegetarian and non- vegetarian platforms for cooking – a first in any market for McDonald's." II Phase: brand advertising By 2000, McDonald's India was ready to begin TV advertising. Arvind Singhal said: "The first Indian TV commercial, Stage Fright, attempted to establish an emotional connection between the (Indian) family and the brand. Over the years advertising has reinforced this positioning, supported by promotions." The Stage Fright campaign aimed to establish McDonald's as a familiar, comfortable place. It featured a child who suffers stage fright and is unable to recite a poem. On entering McDonald's, he easily recites it in the store's familiar environment. A second campaign featured a child and his family moving into a new place. He misses his previous surroundings – until McDonald's provides something familiar. A still from the Leo Burnett/McDonald's campaign featuring a family moving home These storylines were supported by other initiatives. The company's one-minute service guarantee attempted to reinforce its reputation for fast, friendly and accurate service and it also ran in-store events for mothers and children. Mr Singhal says: "To kids sitting on the Ronald McDonald bench, pumping sauce from the sauce machine became brand rituals." K.V. Sridhar, National Creative Director, Leo Burnett, the company's agency in India, adds: "In the launch phase the communication focused solely on building brand and product relevance. The brand's scores on relevance to families and kids were very high."
  • Brand Audit – McDonalds 2012 9 Later, McDonald's realized there was untapped potential in the youth audience who considered McDonald's expensive and mainly for children. Sridhar says: "In 2004, we launched the Happy Price Menu with a value message for a younger audience. For the first time McDonald's India saw a surge of younger consumers and people from socio-economic class B walk into our stores. "We had realized that the Indian consumer was price sensitive and even though the organization managed to establish a sense of familiarity, Indian consumers continued to perceive McDonald's as an expensive eating out option." McDonald's "Happy Price" campaign Phase III: Appealing to both ends of the age spectrum In 2008, the latest campaign from the McDonalds-Leo Burnett stable uses father-son duos from the Indian film industry to reiterate the theme of "Yesteryear's Prices". It features Bollywood stars from past decades together with their sons and a message that prices have not risen in line with the passage of time. The Happy Price campaign has also been promoted via virals. Outdoor has also promoted a home delivery option in a country where home delivery is common in urban areas. McDonald's has also been exploring strategic tie-ups with Indian sports properties such as the IPL cricket tournament, where it was one of the event's food providers. Amit Jatia, however, says: "The eating out market in India is very large and has huge potential fuelled by rising disposable incomes. There are many Indian and international players who have entered in the market since the last decade and unbranded food chains have also grown significantly. "The Indian consumer has seen value in what we have to offer at our restaurants which is a testament to our model."
  • Brand Audit – McDonalds 2012 10 Brand Elements The first group presented are brand elements. There are many elements McDonald’s uses and each of them very often performs more then one function. What is more, McDonald’s uses multiple elements for the same function so the influence they have on potential buyers is much more faster. Every one of brand elements provides positive contribution to the brand equity. Brand name is the most important element when designing a brand. The name McDonald’s is famous, recognizable and cannot be mistaken with any other company. From the very first moment it is spotted we know what it stands for. The big yellow name is always easily noticeable and its bright colors attracts our attention instantly. Such a well thought out name allows introduction of new items to the menu very easily, by simply adding “Mc” as a prefix to the product offered. Such an easy operation allows McDonald’s to feel safe, since its products cannot be mistaken by any other product on a market. The logo McDonald’s use is strongly connected to the brand name. The capital “M”, sometimes called Golden Arches, with the distinctive smooth shape looks the same as the one in the name. This kind of smart connotation increases memorability and recognition of the brand. The direct connection between those two leaves no room for a mistake. Easiness on putting it on any product offered or in any form of advertisement invented, is an important brand building element. Having such a simple, and on the other hand, so distinctive in shape and color logo allow legal protection that does not need ant other special effort. Another brand building element which McDonald’s has invented is character Ronald McDonald. A slim clown, with typically big red clown shoes, yellow clothes, red hair and big smile is a character no child, after seeing it once, can forget. Characteristic friendly appearance makes it very easily to like him. Nevertheless it might seem that it is geared towards children, McDonald’s present him as a friend of children and adults. The neutral appearance allows to place him in every restaurant. The smile on his face suggests that after eating at McDonald’s you will feel relaxed and happy. The element of the brand that is difficult to describe is a jingle, which in case of McDonald’s was always used with a slogan. McDonald’s has used many jingles in process of brand building, however it was always one at a time. Since 1975 to 2003 the company has changed it 9 times, what gives average of around 3 years per jingle. The current characteristic for McDonald’s slogan, “I’m lovin it” is unchanged since its introduction in 2003. It is easy to memorize, nice to hear and likable. Using “I”
  • Brand Audit – McDonalds 2012 11 as a subject suggest that it applies to everybody. The word “lovin” concerns the feeling connected to the last part of the slogan “it”. It is not explained what “it” means, is it the food, is it the restaurant, is it the experience, or is it the brand. By using such an universal word, the slogan allows for every consumer to put in his mind a word that suits best for him or her. Slogan which in advertisements is accompanied with five characteristic tones etch in memory so deep that one can recall it instantly. The adaptability of this element is rather low, however changes do not require as high costs as changes in previous brand elements. Another brand element of McDonald’s is packaging. Always with the logo and slogan, specific for different items. When having product in hands it cannot be mistaken with any the product of the competitor. By having packages with colors, logo and brand specific appearance we feel that after making the purchase we are still connected with the restaurant. However the packaging is changing together with brand sponsoring or associations. The elements of the cups are different, so does the cardboards, nonetheless the changes are always minor and product bought at McDonald’s cannot be mistaken with any other. One more brand element that increases remembrance of McDonald’s is signage. Easily noticeable, attracting yellow neon McDonald’s is always easy to notice. The attention is instantly directed on this sign. Situating it on the roof of every McDonald’s restaurant, regardless the geographic location it is always unchanged, and so does the sign itself. Also the logo of McDonald’s, Golden Arches, when placed on substantial height is noticeable from long distances easily, thus function it perform form the brand is exceptional. Together with specific colors and shape of the building there is no chance for a mistake. Even if some element is not memorized entirely, there are other which will make customer aware of the brand. The last brand building element presented are web pages. In the era of internet contact with every company and finding information about it, if it cannot be performed personally, is most likely to happen by using internet. McDonald’s offers very extended website, where all information needed can be found, and if not, there is a place to ask them. McDonald’s website promotes the brand very well. The appearance suggests, that McDonald’s know how to make everything smooth and well connected. The domain mcdonalds.com is easily recalled since it is no different from brand name. Even though making a typo can result in going to different website, McDonald’s is monitoring carefully the web for unauthorized use of their brand.
  • Brand Audit – McDonalds 2012 12 All brand elements presented are useful in brand building and help in creating McDonald’s brand equity. Each of them plays specific role in establishing and supporting the brand. Because McDonald’s uses all possible elements, the brand recognition and awareness level are so high. The elements used by McDonald’s are not different from other contemporary brand building strategies. This diversity of brand elements and synergies between them are typical for companies which have established a strong brand. The cohesion of strategy and form of communication, together with lengthy duration is McDonald’s key to success. Supporting Marketing Programs The McDonald’s Corporation has created the Ronald McDonald House Charities (RMHC) in a bid to create an organisation that will serve to help sick children and children in need McDonald’s has accepted and cherished that the majority of its customers are families with young children. The organisation that has been built is to acknowledge all the children around the world and to demonstrate how special each and every child is to its corporation. Annually, McDonald’s brings the top high school basketball talents in the nation together to raise money for this particular charity. With global warming becoming an ever-increasing threat to our environment and planet, the McDonald’s Corporation has taken responsibility to ensure each of its workplaces will become more ‘green’ In 2008, in their efforts to provide eco-friendly workplaces and restaurants, McDonald’s opened its first corporate- owned pilot green restaurant. Such ‘green’ attributes for instance included energy- efficiency equipment and lighting. The option for a healthier alternative has now become a reality for the McDonald’s Corporation. In recent years, McDonald’s has actively strived to promote positive effects on the world and how we as consumers are drawn to fast-food restaurants for their convenience and simplicity Healthy eating is a very big part of society today, and, as a result, the McDonald’s Corporation has taken responsibility in providing healthier choices on its menu. With the introduction of organic ingredients found in their coffee, milkshakes and ice-cream, as well as salads and a selection of sandwiches instead of the typical burger and chips meal, McDonald’s has recognised the need to redesign its menu to benefit the health of the people who consume it.
  • Brand Audit – McDonalds 2012 13 Points-of-Parity and Points-of-Difference The most important steps in developing a positioning strategy is to establish the pod and pop. These should be done by establishing the competitive frames of reference by defining the customer target markets and the nature of competition associated with each target, they can define the appropriate points-of-difference and points-of-parity associations for positioning. POINTS-OF-DIFFERENCE Points-of-difference (PODs) are attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand. For McDonald the strongest set of association would be the friendly environment and the value for money proposition of the company. These associations that make up points-of-difference are based on virtually any type of attribute or benefit. Creating brand associations that are strong, favorable, and unique that can become points-of-difference is a real challenge, but essential in terms of competitive positioning. McDonalds has truly differentiated it from the competitors in ters of prices and has made the pricing its USP, it has understood that Indians are highly price sensitive and considering that established a pod which by far is one of the only food joint talking about its low prices. The reason y McDonalds pod are successful is coz: • These are desirable to consumer. The brand association in case of McDonalds are seen as personally relevant to consumers as well as believable and Deliverable by the company. • Differentiating from competitors. Finally, the brand association McDonalds focuses on are unique, are seen by consumers as distinctive and superior compared to relevant competitors. Any attribute or benefit associated with a product or service can function as a point-of- difference for a brand as long as it is sufficiently desirable, deliverable, and differentiating. POINTS-OF-PARITY (POPs), on the other hand, are associations that are not necessarily unique to the brand but may in fact be shared with other brands. These associations come
  • Brand Audit – McDonalds 2012 14 in two basic forms: category and competitive. Category points-of-parity are associations that consumers view as essential to a legitimate and credible offering within a certain product or service category. which in case of McDonalds are the food variety, the comfortable dining/sitting area etc - but these are not sufficient - conditions for brand choice. Consumers might not consider going to McDonalds based on only the basic fact that it provides food unless quality, service etc are associated to it. Category points-of-parity may change over time due to technological advances, legal developments, or consumer trends, but they are the "greens fees" to play the marketing game. MC.D might change its category point of parity based on competition eg, if there is a trend of offering complimentary drinks in the food joints then Mc.D doing the same is not a pod bt. A pop instead. Competitive points-of-parity are associations designed to negate competitors' points-of- difference. If, in the eyes of consumers, a brand can "break even" in those areas where the competitors are trying to find an advantage and achieve advantages in other areas, egg subway focuses on freshness of its produce, the ingredients , MC.D can make this point a pop by stating "freshness has to be there no matter what, but what we offer is more than just freshness, we offer taste" preposition. Brand Architecture The brand architecture of McDonalds is very simple. For all the products (food and beverages) there exists an umbrella brand name as the corporate brand is highlighted and used all the items i.e.mc float, mc grill, mc veggie, mc aloo tikki, mc nuggets etc.. The corporate name visibility is maximum in all the products which clearly signify the corporate dominance. The product portfolio is simple with major prominence of burgers and the beverages. The portfolio can be enhance and is under a great need of revamping the existing portfolio. This can be done by adding up of more product lines and proper extensions.
  • Brand Audit – McDonalds 2012 15 To decide upon what has to be killed or sold off, it’s important the company understands it has to add and remove its products a little more quickly than it does (e.g. Shake shake fries are introduced and discontinued more frequently) likewise adding and removing other category of products is important. Market coverage is a big plus point for the company as McDonald’s is available in every nock and corner of almost every city and available in every vicinity of big cities. There exists a great degree of commonality between the products i.e. spicy range has all spicy products and the classic range had mild flavors in fact the portfolio is filled only with the products which are too similar and have very less difference, which for now is fine but if this is how McDonald keeps going it will soon face a problem of product overlapping. Has a majority of flanker brands i.e. within same category mild changes and even the new products launched are flanker. They should try coming up with high level entry brands to compete with higher segment as well to widen its scope. Lastly the company very strongly sticks to the line brand strategy, which is good but in the long run addition and introduction of new products is required. Brand Identity McDonald’s brand identity is more than just one offer. It is the set of offerings which make the brand desired by the customers. McDonald’s brand mission is "be our customers' favorite place and way to eat". The enhancement of customer experience is a crucial element used by the company in building brand equity. In the mission statement quality or the taste of the food is not mentioned. McDonald’s McDonalds McCafeBurgers & Sandwiches Salads Snacks & Sides DessertChickenBreakfast Menu
  • Brand Audit – McDonalds 2012 16 aims to be the favorite place, no matter where exactly and at what time. It is the place of not only eating but also meeting. The “way to eat” presents the ideas that eating is more than just biting and chewing food. It is the unforgettable experience involving more than one sense. Let’s have a look at the brand id prism: Core Identity Value offering: McDonald’s provides value as defined by the product, special offers, & buying experience given the price Food quality: consistently hot, good-tasting at any McDonald’s in the world Service: fast, accurate, friendly, & hassle free Cleanliness: operations are always spotless on both sides of the counter User: families & kids are a focus, but serves a wide clientele Extended Identity Convenience: most convenient, quick-service restaurant – located close to where people live, work, & gather; features efficient, time-saving service; & serves easy-to-eat food Product scope: fast food, hamburgers, children’s entertainment Sub-brands: Big Mac, Egg McMuffin, Happy Meals, Extra Value Meals, … Corporate citizenship: Ronald McDonald children’s Charities, Ronald McDonald House Brand personality: family oriented, all-American, genuine, wholesome, cheerful, fun Relationship: family/fun associations are inclusive, McDonald’s is part of the good times Ronald McDonald’s Children’s Charities engender respect, liking, & admiration Logo: Golden Arches Characters: Ronald McDonald; McDonald’s dolls & toys
  • Brand Audit – McDonalds 2012 17 Value Proposition Functional benefits: good-tasting hamburgers, fries, & drinks that provide value, extras such as play grounds, prizes, premiums, & games Emotional benefits: Kids – fun via excitement of birthday parties, relationship with Ronald McDonald & other characters, & feeling of special family times Adults – warmth via link to family events & experiences reinforced by the McDonald’s emotional advertising  Physical features – M shaped arch logo, Ronald etc  Personality – Friendly, adaptable, fun & warmth  Culture - American Culture, wholesome & quick service.  Relationship – Family/fun associations  Reflection – Cheap, all demography, quick service.  Self projection – quick service & good quality food. Brand Image Brand image is one of the most crucial elements for McDonald’s. Throughout the years image of the brand have changed many times. It is not something unexpected, since the world is changing, influencing and causing changes on many fields. The important for McDonald’s was to identify these changes on time, adjust performance of the company, and communicate what was done. All new products, special offers, extensions or changes in doing business are communicated in various media in order to keep customers well informed. The proper understanding of what brand stands for is a key to successful brand building. However McDonald’s had also problems with its brand image. The company was criticized for high-calorie, high-saturated-fat menu. Items like milk shake or Big Mac, the icons, were disapproved by some customers. Brand Positioning Positioning is a process of creating an image in the mind of consumers by which consumers can understand the uniqueness about your product when compared to competitor’s product. In India positioning of McDonalds has been directed as a Family restaurant. Then they started positioning according to the kids as well by introducing new advertising of toys with their products such as “Happy Meal”. In the start they made certain special efforts to not allow it to convert into a teenage
  • Brand Audit – McDonalds 2012 18 and adults (20 to 24 years of age) hangout place. Now youngster and adults has became so use to fast foods that McDonalds should also target them and try to position McDonalds as a place for all. They should target adults also because they can pay for quality and variety of products. This will help McDonalds to be most recognizable brand in India for people of all ages. Or we can say that they should follow concept of undifferentiated marketing in which they should offer same marketing mix to mass audiences. This is due to the fact that in India has second largest population in the world and if they adopt this approach and try to do positioning according to this approach then they will be benefitted and their sales and revenue will surely increase. Brand Mantra McDonald’s brand philosophy of “Food, Folks, and Fun” captures their brand essence and core brand promise. Brand mantras must economically communicate what the brand is and what the brand is not. Brand Extension The most recent McDonald’s brand extension is into the gourmet coffee outlet industry through its McCafé concept in particular countries as of now. It was already into beverages but now altogether it has its own extension of beverages. Lets understand its brand extension perimeters in detail. A. Core/ Kernel Focusing on the core/ kernel of McDonald’s is a fun based, family oriented fast food chain. B. Spontaneous Association Cheap priced & quick service restaurants is what comes instantly in our minds when we talk about McDonald’s. C. Latent Association The Hidden associations of McDonalds can be quality, image, experience and variety.
  • Brand Audit – McDonalds 2012 19 D. No Go Areas The core brand attributes of McDonalds make it easy to understand/logical in the eyes of consumers for McDonalds to extend its brand into another restaurant concept, however not easy to understand/ logical the eyes of consumers for McDonalds to open a chain of grocery stores, weddings, water parks etc. Hong Kong’s Mcdonald’s is the first city to start actual wedding packages for couples who want to save some money, or perhaps just love McDonald’s. As some of you (McDonald’s fans out there) may have dreamt of, your perfect wedding would consist of saying your vows under the Golden “M”, having a baked apple pie wedding cake stacked up 10 feet tall, and of course you can’t forget your beautiful wedding dress made of colorful balloons. Is McDonald’s Brand extension going a little too far now? THE STAGES MCDONALDS SHOULD GO THROUGH WHILE PLANNING AN EXTENSION Understanding the level of consumer knowledge both desired. The level of knowledge that people have about the company is close to the desired level as people are aware of its origin, its ingredients and hygiene etc. o Determining the level of awareness: McDonalds has an awareness level of 98% in urban and sub urban areas. o The recall and recognition is high with 93% people able to recall the brand and recognise it. o The major attitudes associated with McDonalds are those of preference and positive outlook towards the brand. o The benefits associated: there is an absolute value benefit relationship between people and McDonalds. o User association and symbols associated: Ronald and M logo are greatest association McDonald possesses and the user profile varies from students to families of income up to middle group.
  • Brand Audit – McDonalds 2012 20 o Brand philosophy: which lie with McDonalds whole idea of providing with people a whole meal and making people take time out of their lives and enjoy with family and also providing them food that doesn’t cost much Brand Strengths & Weaknesses: 1. Strengths: a. Outstanding IT capabilities and utilization, efficient supply chain management. b. Offer consumer product value, convince and huge selection. c. Expertise in Fast Food industry. d. Brand Equity worldwide. e. Consistency of food. 2. Weaknesses: a. Some people consider McDonalds is not a good place for healthy diet, that serve nothing but deep fried garbage. b. Contributes to obesity.
  • Brand Audit – McDonalds 2012 21 BRAND EXPLORATORY Brand Associations Understanding brand equity involves identifying the network of strong, favorable, and unique brand associations in memory. This association network constitutes a brand’s image, identifies the brand’s uniqueness and value to consumers, and suggests ways that the brand’s equity can be leveraged in the marketplace. This map not only identifies important brand associations but also conveys how these associations are connected to the brand and to one another. First, the map pinpoints several associations that are connected directly to the McDonald’s brand, such as “service” and “value,” and therefore are more closely tied to the brand’s meaning. Second, the map shows how other associations are connected to these close brand associations. For example, “hassle-free,” “convenient and “fast” are connected to the “service” association. Third, the map shows additional linkages between associations. For example, several core associations—“meals,” “value,” and “service”— are connected to one another but are not connected to other core associations, such as “social involvement.”
  • Brand Audit – McDonalds 2012 22 CBBE Model a. Salience i. When consumers think of fast food, they think of McDonald's. ii. The numerous stores also satisfy consumers on convenience. iii. TV Commercials iv. Home Delivery, Take-away & Drive through b. Performance In 2010, The McDonald’s Corporation started their year determined to build momentum and focused on its main goal; to strengthen the McDonald’s brand on a global scale. The results were more than satisfying with global competitive sales increasing by 5% and their operating income growing by 9%. The McDonald’s Corporation recorded a total revenue of $24,075 million in the financial year 2010 (FY2011) an increase of $1.33 million compared to the financial year (FY2010). In addition to these results, the McDonald’s Corporation returned $5.1 billion to its shareholders through share repurchases and dividends paid, and further provided a 27% return to investors for the year. Moreover, McDonald’s achieved a net income of $4,946 million in FY2011 compared to $4,551 in FY2010. The operating income increased by $632 million to $7,473 million in FY2010. In 2011, the total brand value of McDonald’s increased by $4,019 million to $24,211 million. McDonald’s has further improved its brand rating from AAA- in 2010 to AAA in 2011 and increased in its brand ranking from 18 to 17 within The BrandFinance® Global 500 2011. c. Imagery A family with children A treat to children , a fun place to be for the children Urban customer on the move Great taste, quick service without affecting the work schedule Teenager Hangout with friends but keep it affordable Location Global-presence Brand Personality Family friendly, low cost fast food business & eco-friendly
  • Brand Audit – McDonalds 2012 23 d. Judgement i. Value offering: McDonald’s provides value as defined by the product, special offers, & buying ii. experience given the price iii. Food quality: consistently hot, good-tasting at any McDonald’s in the world iv. Service: fast, accurate, friendly, & hassle free v. Cleanliness: operations are always spotless on both sides of the counter vi. They strive to be cost leaders and offer food at prices that cannot be matched by their competitors e. Feelings i. Kids – fun via excitement of birthday parties, relationship with Ronald McDonald & other characters, & feeling of special family times ii. Adults – warmth via link to family events & experiences reinforced by the McDonald’s emotional advertising f. Resonance i. Behavioral loyalty – Cheap, quick service & tasty ii. Attitudinal attachment – I’m lovin it! Consumer perception analysis  As people are very health conscious these days, they want to know the nutritional benefits of the food items they consume. Therefore, Mcdonalds should take action to become the first in the world to make extensive nutritional information and comprehensive ingredient listingsand other food facts available to the customer.  Mcdonalds has a strategy to provide the nutritional information on food wrappers, tray placemats, their official website etc.  People usually have an unhealthy perception about Mcdonalds.
  • Brand Audit – McDonalds 2012 24  The strategy to provide nutritional facts will increase the turnover of customers as well as create a healthy lifestyle.  Mcdonalds outlets often provided information on tray liners and food wrapper. This information was available to them after they had ordered the meal.  Customers ability to interpret nutrition information on nutritional labels are limited.  Mcdonalds faces a negative perception for serving unhealthy food, limited menu and limited service.  Mcdonalds is now facing changes due to consumers new tastes and health concerns. Thus they are expanding their product range.  The core problem is that consumers still buy fast foods even they have a negative perception about mcdonalds as regards to unhealthy food.  Mcdonalds has to overcome this issue by firstly changing its image from junk food restaurant to a healthy food restaurant as this will attract health conscious customers and enlarge the market scope. Secondly , by changing the behavior of the existing customers by persuading them to buy balanced meal with mcdonalds new healthy foods.  Mcdonalds did not want to replicate the existing packaged foods format whereas customers are expecting more innovation in this field.  But it came up with new nutritional labels by including visual icons that represent key nutrients.  As compared to different fast foods chains, mcdonalds has taken active steps to create an awareness of nutritional labels through different channels. Mcdonalds can encourage the public to make informed food choices before purchases. By knowing how to interpret the labels, people can manage their diet effectively based on a healthy diet. The labels should be attractive. The company should also do road shows or trade fairs to create awareness on the importance of practicing the nutritional labels. Mcdonalds can change its image of being unhealthy to healthy by promoting healthy food
  • Brand Audit – McDonalds 2012 25 SWOT Analysis STRENGTHS • Affordable menu options. • Very socially responsible. • Global operations all over the world. • Cultural diversity in the foods that are provided based on location of the restaurant. • Excellent locations in theme parks, airports, Wal-Mart stores, and along most well traveled roads. • Food safety guidelines are strictly adhered to. WEAKNESSES • Strong competition from similar businesses. • Training costs are elevated due to high turnover. • Very minimal concentration on providing organic foods. • Quality concerns due to franchised operations. • Focus on burgers and grease fried foods thus aggravating the problem of obesity. OPPORTUNITIES • Opening more joint ventures with several different retailers. • Being more responsive to the social changes to healthier options • .Advertising the capabilities of Wifi internet services in the branches. • Creating more play places for the children in more of the restaurants. • Continue to venture into more enticing beverage choices. THREATS • Their marketing strategies that entice people from small children all the way to adults and the criticism that they take because of it. • Lawsuits for offering unhealthy foods that have alleged addictive additives.
  • Brand Audit – McDonalds 2012 26 • The vast amount of eat in fast food restaurants that are open as competition. • Social changes to a more balanced meal including fruits and vegetables in servings of five per day. • Focus on healthier dieting by consumers. • Down turn in economy. Brand Evaluation On the basis of convenience, the brand attribute approach has been used to evaluate the brand. With the help of the attribute oriented approach we took a survey for McDonald’s by a 100 people on a random basis in which we basically told them to give ranks to these 4 brands on the basis of the attributes given, and as we can see from the above result that in the case of HEALTHYNESS McDonalds’ rank given by majority of the people is low, which easily states that one of McDonalds major concern in today’s market is health conscious customers. McDonalds' Subway Subway Wimpy TASTE 8 8 7 4 FRESHNESS 9 9 7 7 QUALITY 9 8 7 5 HEALTHINESS 5 9 5 5 DESIRABILITY 9 9 6 6 40 43 32 27
  • Brand Audit – McDonalds 2012 27 Competitor Analysis (source: www.brandirectory.com) This graph shows a comparison of brand values and enterprise values, allowing the user to compare, for his/her selection of brands, absolute brand value, and the proportion of business value represented by each brand.
  • Brand Audit – McDonalds 2012 28 This graph will show the relationship between brand rating and how hard a brand is working for the business, for those brands selected.
  • Brand Audit – McDonalds 2012 29 Recommendations  Renovating the casual chain restaurant to increase foot traffic.  Rebuilding the lost trust, by introducing healthy food menu. Eg revamping of maybe happy meal with fewer fries & more fruits.  Avoid customer confusion. ‘McDonald’s is not cognitive, it is reflexive’ . ‘We treasure not having to think about it. It just “is”.’ By extending its range with McDonald is creating a need to think Managing the brand is not an easy task. However there are certain models which are helpful and provide good background for assessment of the brand. It cannot be denied, that brand is minor part of doing business. It influences identification, practicality, loyalty and many other operations which create differences between brands. Building a strong brand requires not only strategy, but also tactics of how to implement it. Focusing on thorough evaluation and creation of brand building process leads to success. And success is achieved, when customers knowledge of the brand is inconvertible. The concepts presented are about getting consumers or employees more involved with the brand. Proper development and integration of brand elements is necessary to achieve this goal. Brand elements are integral part of brand equity. Only the best companies, like McDonald’s can use them to create the magic moment which will stay with consumers for a long time. The creation of brand equity is a main target of branding. The models which apply theoretical knowledge with consumer surveys are the best valuator of brand equity. Choosing brand building strategy should be done by carefully studying the current position of the brand. Looking at the history of the leader in fast food business, analyzing it’s brand equity and positioning on the market, helps understand the phenomenon of the Golden Arches. A successful brand building proved to be a key to McDonald’s success in today’s world. When competition is stiff, information flow unstoppable and consumer have more possibilities then ever, getting attention is the crucial part of doing business. The role of McDonald’s brand is to keep customers engaged in the brand. Once they experience and understand the
  • Brand Audit – McDonalds 2012 30 complexity of brand values, their memories will lead them back to the company. Tying product to the brand experience is as important as tying a feeling to the brand. It allows consumers to discover the brand. McDonald’s was successful in bringing brand personality to life. McDonald’s was also able to shape the entire generations what created a devoted audience of potential customers. By selling not only features and benefits but also experience, the specific lifestyle was promoted. Using relevant ways to reach customer is a key to success of McDonald’s. Keeping customer excited every time when making purchase made consumers engaged with the brand. Every function is useful if it is managed properly and applied to current needs. World is changing, and so is McDonald’s. Even though there were attacks on McDonald’s brand image, wise usage of branding strategies allowed to get away in one piece. Future of the Golden Arches may not be easy, but it definitely is promising among other because of careful brand building.
  • Brand Audit – McDonalds 2012 31 Conclusion McDonald’s, the leading global foodservice retailer, stands out because of its exceptional brand management, significant global presence, leadership in sustainable practices and admirable approach to consumer engagement. McDonald’s has more than 33,500 restaurants in 119 countries and the Golden Arches continue to expand, most notably in Asia. The company deftly manages its franchise model, delivering a remarkably consistent customer experience while still allowing for locally relevant menu and service variations (such as home delivery in India and China). The company is also working to respond to critics by increasing the number of healthy menu options and effectively communicating its sustainability efforts to both customers and employees, building energy saving and waste reduction into staff incentives. Demonstrating its commitment to brand development, McDonald’s is repositioning itself to appeal to a broader audience, particularly by redesigning its outlets and making them more modern, comfortable, and upscale. The McCafé experience is another example of McDonald’s flexibility and its efforts to appeal to a broader group of customers. On the digital front, McDonald’s “Make Your Own Burger” campaign in Germany and the Netherlands used crowdsourcing to generate new recipes and promotions. The campaign created significant digital buzz and positioned the brand as a digital innovator, helping to further build the brand’s strength.