One of the biggest global brands and corporates, McDonald's, is under serious pressure as it
announced on Friday (23rd Jan 2015) more declining results for the
fourth quarter and year that President and Chief Executive Officer Don
Thompson called "challenging” for McDonald's around the world.
Notwithstanding the global giant still being the
largest fast food brand with substantially greater sales than the #2 Starbucks,
there are grave issues that would appear to be some way off from being
redressed:-
Product
Schizophrenia?
An important aspect of any brand is the brand
promise, that once set, is met. Uniformity
was key to McDonalds’ promise as consumers could go into any outlet anywhere in
the world and know exactly what to expect.
But the asset that is the McDonald’s menu has wavered as the
organisation has been trialled and altered its original menu that has grown
some 70% since 2007.
The “Create Your Taste” burgers for example, which
is planned to be rolled out this year, allows customers to use touch screens to
create their bespoke burger from a menu of 20 premium ingredients and then to a
sit and wait on average 7 minutes before a server brings it to the table. At almost
every level this sits in stark contrast to the original fast food offering.
Also the “Dollar Menu”, which was to bring
customers in on the cheap and upsell once there, is an acknowledged failure by
executives. Healthy options, café
culture and a certain amount of localisation have arguably further distorted the
McDonald’s offering and consequently its loyal consumer base’s expectations.
The problem with consumer expectations in the
current dynamic marketplace, is that their fragility leads to promiscuity where
disappointed consumers have any number of other options from which to choose
when a brand lets them down.
Food integrity
As the sales indicate there is clearly still an
appetite for fast food (and McDonald’s).
But fast food that is fresh and
value for money - as indicated by Nielsen data “natural” and “fresh” are the top desirable attributes,
three quarters of consumers believe they “are what they eat” and 43% stated
food with natural ingredients to be very important.
Food integrity and
provenance are clearly fast becoming hygiene factors in the food marketplace. And food
organisations from product to supply chain to retail have recognised the need
to re-evaluate their product offering in these terms. The growth of Subway’s brand value - more
than 7,000 per cent since 2006 outperforming the next highest growth brands AT&T and Amazon - is at least in part
down to the brand speaking to this consumer need with its “Eat Fresh”
message. McDonald's it would appear, has
been slower to acknowledge these elements – despite PR crises such as the story
about a 14-year-old McDonald’s burger that had not rotted received huge
coverage in 2013, and a local meat supplier in China found guilty of using
expired and contaminated chicken and beef.
Consumer thinking has also evolved, and being more knowledgeable
and cautious than previously, consumers are open to, and often actively seeking
out relevant product information, that they then apply to their purchasing
decisions. Younger consumers especially
– an important swathe of McDonald’s clientele – have large corporations’
activities on their radar, and are quick to sit in judgement of what they deem
to be non-transparent or unethical practices.
According to some analysts, McDonald's just isn’t resonating with this
consumer group, and this is likely to be a contributing factor.
The brand took “decisive action to change fundamentally
the way we approach our business,” according to spokeswoman Heidi Barker, and initiated
“Experience of the Future” that includes smartphone app and trialling
mobile-payment systems such as Apple Pay, Softcard and Google Wallet. Clearly the brand with these and its other
Facebook plans, is making efforts to better engage with consumers. This should open up consumer communications,
but these are still predominantly channel strategies so the fundamental issues
around the product still remain.
The challenge to McDonald’s is to continue doing
what it does well, only better, and in keeping with a
It is ironic when you consider that the term McDonaldization describes society adapting to
the McDonald’s ‘way’ ie fast, efficient, standardized etc. The term’s creator, American sociologist
George Ritzer, attributes McDonald’s success to be about creating a want or
need and then satisfying it as opposed to listening to consumers and meeting the
needs that they articulate.
Paradoxically though, in today’s consumer climate, listening to
consumers is a critical contributor to brand success, so the McDonald’s brand
needs to reconcile this.
McDonald’s has faced many negative and problematic
issues in the last 12 months, earning the title of “whipping boy” by one
journalist. So declining sales is not
entirely surprising. Its stature and size means that it will always be heavily
scrutinised by the consuming public and stakeholders, and that there is an
expectation that it behaves in a scrupulously responsible manner and ‘gives
back’ rather than just ‘taking’ ie selling.
The "Choosin Lovin" strapline's intent is to re-capture and ignite brand love in consumers, but it'll take more than words to really connect with today's consumers. It's the sentiment behind the words that the brand will have to bring to life.
http://www.nielseninsights.eu/articles/almost-two-thirds-of-irish-consumers-would-buy-more-private-label
No comments:
Post a Comment