Brand Extensions the McDonald's Way

1. Brand Extensions the
McDonald’s way

2. How it all began
Established in 1940 by Richard and
Maurice McDonald’s
They invented what we today know
as ‘Fast Food Restaurants’ with the
introduction of ‘Speedee Service
System’
Today world’s largest chain of fast food restaurants serving
more than 64 million customers daily

3. Over the Last Decade has been facing
Challenging environment owing to -
Market
Saturation
Global Health
Concerns
Slumping
Economy

4. Mcdonald’s tackled these
challenges by using various
growth strategies as
categorized by Ansoff’s Growth
Matrix and using brand
extensions

5. Market
Penetration
Strategy
Product
Development
Strategy
Market
Development
Strategy
Diversification
Strategy
New
Markets
Current
Markets
Current Products New Products
ANSOFF’S GROWTH MATRIX

6. Shifts from market development strategy to
market penetration strategy
‘Better Not Bigger’
Generate Greater
Returns
Upgrading existing
Facilities and
Operations

7. Market
Penetration
Strategy
Product
Development
Strategy
Market
Development
Strategy
Diversification
Strategy
New
Markets
Current
Markets
Current Products New Products
ANSOFF’S GROWTH MATRIX

8. AdaptingitsMenutodifferent
culturalpreferences

9. Market
Penetration
Strategy
Product
Development
Strategy
Market
Development
Strategy
Diversification
Strategy
New
Markets
Current
Markets
Current Products New Products
ANSOFF’S GROWTH MATRIX

10. Role of Fast food in obesity problem
highlighted through various
mediums…..McDonalds reports first
quarterly loss
Menu Overhaul

11. Other
Initiatives
* Premium Coffee ->
Cheaper than competitors
* New line of hamburgers
* Chicken McNuggets

12. Market
Penetration
Strategy
Product
Development
Strategy
Market
Development
Strategy
Diversification
Strategy
New
Markets
Current
Markets
Current Products New Products
ANSOFF’S GROWTH MATRIX

13. Hotels
Café
Wedding Packages

14. Brand Extensions
Line Extensions

15. Brand Extensions
Category extensions

16. McDonalds Promotion (Then and Now) – Brand
resonance model

17. Initial communication was
targeted towards the
needs satisfied. The
TVC’s focused on the
speedy delivery of quality
foods
Subsequent
communication focuses
on the characteristics of
the products. Quotes like
McDonald’s Cheese
burgers are so delicious
that you have to smile.

18. Ads show kids having a
‘happy’ time with the
happy meal toys. Initial
promotion targets were
kids, gradually they
shifted towards the
whole family
The brand promises
consistent quality across
different outlets. Also
the service and the
ambience also add to the
standard service
available throughout

19. Latest TVC’s shows family
having a meal together and
moms trusting Mcdonald’s
for the nutrition of her child
Toys and delicious food =
Feelings of warmth, fun and
happiness

20. Summary
Challenging
Environment
Tackles by
getting into
new markets
and new
products
Shifts focus
from tasty and
delicious to
healthy
Increases
breadth and
depth of
awareness by
introducing
new product
Shifts target
from consumer
(Kids) to the
customer
(parents)

21. Sources
• http://www.slideshare.net/102brandstrategy/ponds-men-brand-extension-abhinav-anand-
pgp30297brand-management-51977029 slide 2
• http://www.intrahealth.org/files/images/the-top-10-global-health-issues-to-watch-in-2013/10-to-
watch-12.png slide 3
• https://consumermediallc.files.wordpress.com/2016/03/mcdonalds-full-breakfast-menu-all-
day.jpg?w=680 slide 5
• https://upload.wikimedia.org/wikipedia/en/thumb/9/9e/Flag_of_Japan.svg/1280px-
Flag_of_Japan.svg.png slide 7,8
• http://assets.nydailynews.com/polopoly_fs/1.2519956.1454598507!/img/httpImage/image.jpg_gen/deri
vatives/article_635/kale5f-4-web.jpg slide 9
• http://cdn.foodbeast.com/content/uploads/2014/04/new-ronald-mcdonald.jpg slide 10
• https://www.youtube.com/watch?v=etmC6tPaHSo slide 16
• Prof Sameer Mathur Notes – Slides 17,18,19

22. These slides were prepared during the PGP brand
management at IIM Lucknow, under the guidance
of Professor Sameer Mathur
Sanjay Gupta
PGP Student
Indian Institute of Management, Lucknow