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8/8/2019 McDonald Final Slides1
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McDonald s: Brand Revitalization
Prathibha S
Prerna Goyal
Prayag Sunder
Batch : Spring Summer 09-11
Section: HRMCollege:IIPM, Bangalore
Date : May 13, 2010
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Learn How companies like
McDonald s can re-Energize theirbrands!!!
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Brand Rejuvenation
Brand tries to change its existing marketpositioning
Image to realign itself with target massesChanging brand attributes that communicatethe brand image to the target masses
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Six Rules
Refocus the organizationRestore brand relevance
Reinvent the brand experienceReinforce a Results CultureRebuild brand trust
Realize global alignment
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Big Brand In Trouble
Feb 1996 stock 27 times earningJuly 1997- 2% decline
Dec 2001 -60 % decline over three years2002- stock price down to $17.66 from $45.31
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Big Brand In Trouble (Cont )
End of 2002:Article appeared with title: Hamburger Hell
Analysts Comments:out of date
too large to be turned aroundIts time is passed
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Big Brand In Trouble (Cont )
In 2002Jack GreenBerg ,CEO observed Marketing is
broken at McDonald sSearch for Global Chief Marketing OfficerCharlie Bell new CMO
Brand was showing signs of weaknessThey Believed -Reservoir of goodwill helpthem restore profitable growth
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P roblems
Sales & market share were shrinkingFranchisees were frustrated
Employee morale & customer satisfaction waslow
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Asset
Customers fond memoriesChildren & parents remembered their happy
experience
None of them generated profits
Reason:Majority customers did not have any recentfond experience!!
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The Entry of Arcature LLC
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Introduction
In 1998 McDonald hired Arcature LLCconsulting firm
Objective: Develop a global brand directionFailure: Organizational & cultural roadblock
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Core Values of Brand
Vision: To create a Happy P laceEnvisioned: Convenient, Affordable & pleasant
way of eating quality foodEvery customer feels specialDedication to Q SC
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Core Values of Brand (Cont )
It focused on increasing number of stores
Few facts:
Increased by 50% in ten yearsConsequence of overzealous expansionNot possible to properly staff & train peopleDecline in quality service
Survey report:University of Michigan Last in customer satisfactionIn 2001- Last among fast food brands in food quality
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The Times Are Changing
McD ignored challenging development in themarketing environment
Consumers were well informed, moreskeptical, more demandingEnvironmentally conscious & healthconsciousResisted the changes in the Changing W orld
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McD unveils new dessert center, ad campaign
"W e love to see you smile " ad campaignInvestment $400 million
Initiatives :New training programsFreshly painted restaurants
Newly planted trees and landscapingNew uniforms.
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Brand Revitalization
Four Actions:Explain brand purpose & goals
Charlie s ONEPAGEPL AN (P lan to win)New Growth P riority: Build customer visits toexisting stores
First year goal: How do we get great again?SOLUTION: Being Bigger By Being Better
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Brand Revitalization (Cont )
Brand purpose:
Our customers' favorite place and way to eat &
drink
Charlie invented the McCafe concept:Delivering quality coffee & become beveragedestination
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Favorite
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How could a restaurant like McDonald s be afavorite restaurant? Is this a reasonable goal?
Goal: to become favored brand within theircustomers set of brandsCustomers favored not just frequented
Flaw: Most of them went their because itsconvenient and cheap!
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Valuable brands are preferred not merelyaccept
Re-positioning:Brand that satisfies our customers tastes &delights our customers hearts at a superiorvalue
Solution: Operational excellence & leadershipmarketing
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Example:Take-out was growing & continues
Snacking moreP eople are eating all times of the day
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2004
The sizzle is backEye popping P erformance
Incredible turnaround business caseW orld wide sales gain- 5.8 %Domestic- 8.5%
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So the question is how did they manage this?
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Conclusion
Highly disciplined operationsW ell-organized process
Focused, controlled plan
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Thank You!!!
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