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1. Level 4 Brands and Branding for Business Management & Marketing
1
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Brands and Branding

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Company background - McDonald’s
McDonald’s is one of the world’s largest fast food companies. The company owns more than 33,000
restaurants in over 119 countries serving around 64 million people every day. Over 80% of McDonald’s
restaurants operate through international franchising. McDonald’s has become a symbol of globalisation,
promoting the American way of life worldwide.
Mission and values
The brand mission is “to be our customers' favourite place and way to eat”. The values of the company
include:
 We place the customer experience at the core of all we do
 We are committed to our people
 We believe in the McDonald’s system
 We operate our business ethically
 We give back to our communities
 We grow our business profitably
 We strive continually to improve.
History
The company was founded in 1940 with a restaurant opened by two brothers, Richard and Maurice
McDonald in California. A man with a chef's hat on top of a hamburger shaped head (whose name was
"Speedee”) was the original mascot of McDonald's. This was eventually replaced with Ronald McDonald.
Products and services
The main products of McDonald’s include hamburgers, cheeseburgers, chicken, french fries, breakfast
items, soft drinks, shakes and desserts.
By identifying the changing needs of customers, the company has expanded its menus to other food
items such as salads, wraps, smoothies and fruits.
Both counter services and drive-through services, with indoor and sometimes outdoor seating are
provided by most McDonald's restaurants. Indoor or outdoor playground facilities are provided by some
McDonald’s.
Workforce

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McDonald’s has employed currently 1.7 million people in 119 countries to work for the McDonald’s brand,
and for more than 50 years they have been providing valued jobs to the communities they serve. The
goal of McDonald’s is to have people working and living to reach their full potential in the organisation.
They believe that leaders hold themselves accountable for learning about valuing and respecting
individuals on both sides of the counter. At McDonald’s, diversity and inclusion is a part of their culture –
from the crew room to the board room. They are working to achieve this goal every day by creating an
environment for everyone to contribute their best. (1)
Case Study
McDonald’s Brand
The McDonald’s brand was designed 50 years ago and the Golden Arches logo has become one of the
most recognisable icons in the world. It has remained as the single most valuable brand assets of the
company. The vibrant yellow and red colours make the brand more prominent to the world and their
brand is based on the concept of “I’m loving it”. McDonald’s also operates under a brand spirit of “Forever
Young”. This was born in the first generation of “I’m loving it” and the company hopes it will continue to
last in the next generations to come as well. McDonald’s considers this as a part of its brand DNA.
“Forever young” illustrates how the company portrays its brand and how it wants the brand to be
perceived by the customers in their hearts as well in their brand experience. McDonald’s considers this to
be the brand aspiration for the company as they intend to deliver a forever young experience every single
day for every single customer at every single time. (2)
McDonalds has currently expanded into international markets and is facing increasing regulations in the
United States and domestic market infiltration. McDonalds initially entered into the international market by
leveraging standardised product offerings, clean and bright environments, and an American brand equity.
However, in recent years, McDonald’s is adapting to local regions by changing the product line to appeal
to local tastes, while remodelling its retail space (for example, it introduced the Maha Raja burger in India
and the Mc Rice in Sri Lanka). Although the strategy has become successful in the short run where
McDonald’s realised that they must adapt to each country they enter using their tactics of both catering to
local tastes and changing and maintaining the restaurant’s design and appeal, it is diluting its brand
equity. Analysts have speculated that this could have disastrous consequences in the long term.
The Golden Arches of McDonalds which is the trade mark of the company have become synonymous
with not just fast food but also the American culture in foreign countries. Currently, it is assumed that

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McDonald’s is risking its connection with the American culture by adapting the food offerings to local
tastes.
Business week states:
“If you don’t fancy a Big Mac in the branch at the Piazza di Spanga in Rome, you can order pasta freshly
cooked to order. In France, McDonald’s serves wine and runs an annual promotion called Le Saga du
Fromage, where instead of the usual cheddar, burgers are topped with beloved French cheeses such as
Reblochon”.(3)
The above scenario has reduced the appeal that McDonald’s had leveraged when it initially entered the
market. In foreign countries, customers have a number of choices for local foods while McDonald’s is
among the few places to have American fast food. Therefore, McDonald’s may be able to cater to local
tastes as long as it focuses on its core competency of fast food.
Today, it is visible that McDonald’s is moving away from its fast food roots, especially in Europe. We can
see that in an effort to compete with coffee shops like Starbucks, McDonald’s is turning the restaurant
space more upscale and comfortable while offering healthier and more locally palatable foods even with
facilities such as Wi-Fi and rental iPods. This strategy has not only diluted the brand equity by adapting to
local tastes but has also moved McDonald’s even further away from its core competency of “fast food”.
Europeans no longer expect American food from Mc Donald’s, nor can they expect a fast food
environment. This may be profitable to regain lost market share in the short run, but it is a dangerous
strategy in the long run.
We can observe that Mc Donald’s is actually moving away from the development of a truly global brand
by tailoring the restaurant space and product offerings locally. By adopting new tactics, McDonald’s has
diluted its brand equity and is moving away from its core competencies. As the company continues t o
expand, it will have difficulties in creating a global brand because the McDonald’s dining experience will
be radically different from country to country. If they continue this strategy, they will have a hard time
remaining with a globally meaningful and recognisable brand.
Question
Distinguish between brands and branding and explain the importance of managing brand
elements to remain successful in the global market in relation with the above case study.

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Answer
Brands can be defined as a name, a term, design, symbol or any other feature that identifies one seller’s
goods or services distinctively from those of other sellers while branding is the process of marketing the
company’s brand in the society so that people will recognise and identify the product or service
distinctively from the other companies that are offering the same product or service to the market.
The main difference between the concept of brand and branding is that brands are a set of artifacts and
branding is the process used in marketing the artifacts of the brand. Brands are a collection of features
such as logos names and marks that give an idea about what a company represents, while branding is
the strategically defined methodology of building a brand image. For example, McDonald’s golden arches
and the concept of “I’m loving it” is the brand, while the process of taking these elements to the society is
branding.
Brand elements are a vital part of a brand and the success of the brand mostly depends on how strong
these brand elements are and how successfully it is positioned in the society. Therefore, it is important to
manage the brand elements constantly so that a company can remain successful in the long term
especially with brands which are operating in the global market. This can be further explained by the
McDonald’s case study. The brand elements of McDonald’s and how they should be managed to build
brand equity can be discussed as follows.
 Name and Logo - This is the most prominent part of a brand and when it comes to McDonald’s.
The logo includes the golden arches and the name of the company goes as “McDonald’s”. Today,
the global consumer would recognise the golden arches as the logo of McDonald’s and they will
know it at once even from far. These show that McDonald’s has been extremely successful in
positioning its logo and name around the world and it has enabled them to have competitive
advantage over many other fast food companies across the world in terms of brand recognition.
 Unique Colour Packaging – Every brand should have a unique colour combination and packaging
that could tell its customer what it is all about, just as McDonald’s uses its colour combination of
red and yellow. When talking about packaging, most of the McDonald’s products are wrapped in
an easily disposable paper giving the sense of fast food and positioning their brand as a fast food
company in the world. So, it is essential that McDonald’s maintains this same packaging
technique across the world to keep that concept in the mindset of consumers.
 Association - This is the idea which comes to the mind of the consumers with regards to the
interaction with the brand. As for McDonald’s the brand association would be fun, Big Mac, happy

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meal, quality and Ronald. Therefore, when managing the brand equity, it is essential that the
company maintains these associations in all outlets around the world to give the same idea to
everyone who comes across the brand. If McDonald’s fails to do so, it will result in a brand equity
reduction eventually.
 Benefits – One of the key elements associated with the brand is benefits. A brand should be able
to communicate the benefits to its consumers. The main benefit communicated from the
McDonald’s brand is the providing fast food. But as the case study describes, with McDonald’s
trying to adapt to local tastes, it is drifting away from its fast food concept. This is to the benefits
communicated from the brand and this has resulted in bringing down the brand equity because
consumers expect a brand to give the benefits which are communicated to them. Therefore, it is
essential for Mc Donald’s to keep on delivering fast foods which the consumers look for in the Mc
Donald’s restaurants.
 Values – Values are the core concept at the heart of the company’s activities and at McDonald’s,
they believe that the values are based on the concept of “Forever young”. Therefore, in order to
be successful in the global market, it is essential that the company promotes this concept
throughout all its branding activities so that they give a fresh experience to consumers promoting
the “Forever young” concept to enhance brand equity.
 Culture – Brands should also represent the culture of its founders. Similarly, McDonald’s
represent the American culture. With McDonald’s going global, the initial concept was to promote
American culture together with the brand around the world. But presently, with the strategy of
adapting to individual cultures, McDonald’s is failing to promote the American culture through its
brand. This has confused the minds of the consumer regarding the culture which the brand is
promoting and this has eventually come as a barrier in increasing and maintaining brand equity
for the future. Therefore, it is essential that as a brand, it promotes its unique culture in every
country it operates to enhance its brand equity.
It is clear that for a brand to be successful in the global or any other market, it must position each and
every brand element of the brand with a strategic plan. This will ensure the enhancement of the brand
equity and will also keep the brand alive for a longer period than the product life cycle.
References:
1. McDonald’s [homepage on the Internet]. No Date [updated 24.04.2012]. Available from:
http://www.aboutmcdonalds.com/mcd.html

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2. Sundaraganapthy;Mc Donald’sInternationalStrategy:SquanderBrandEquity?(Internet.Home
Page) 20.04.2009(cited on 05/05/2012) Available from:
http://www.sundarganapathy.com/blog/2009/04/20/mcdonalds-international-strategy-
squander-brand-equity/
3. McDonald’sBrand Centre (Homepage on the internet) No Date ( cited on 05.05.2012) Available
from : http://www.brandcenter.mcdonalds.com/ourbrandspirit.htm