Brand Audit – McDonalds 2012

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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

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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.

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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

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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.

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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.

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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

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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.

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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."

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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."

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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”

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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.

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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.

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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

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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.

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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

McCafe Burgers &

Sandwiches

Salads Snacks &

Sides

Dessert Chicken Breakfast

Menu

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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

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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

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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.

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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.

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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.

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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.”

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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

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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.

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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

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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.

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• 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

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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.

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This graph will show the relationship between brand rating and how hard a brand is working

for the business, for those brands selected.

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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

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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.

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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.