BUILDING the right brand—or image or identity or call it what you may, as well as rebranding or modifying a brand as needed—is crucial to the success and continued growth of a company.
Building the brand is often the easier part, especially if a company’s products or services meet the needs or wants of a big and growing market from the very outset. For then the brand practically builds itself, with just the usual use of regular PR tools and techniques to align the brand with the actual positive reality of the company’s being. It precludes the company’s having to institute changes in its facilities, operations and product mix, which can involve maximal expenses that could impact negatively on the company’s equity.
The case of McDonald’s US
A GOOD and au courant subject to analyze in this connection is McDonald’s flagship company, McDonald’s United States. Since its founding in the 1940s, it proved to be an instant hit with the American public. It provided a simple, familiar and flavorful food that could be prepared speedily, and eaten quickly and conveniently to suit people’s busy work and home schedules.
Never mind if some of the ingredients used were laden with fat, sugar, cholesterol and artificial preservatives, which might have actually made their food tastier and longer-lasting. That these food components could cause some subsequent health problems were still largely unknown or not given much attention and concern by the public and even by the health authorities at the time.
With its assembly-line way of preparing and serving its pre-cooked hamburgers, French fries and drinks, and with accompanying marketing, advertising and PR support, McDonald’s quickly became the acknowledged fast-food industry leader in the US. Satisfied regular and loyal customers became familiar with, and fond of, the company’s iconic golden arc symbol and its likeable and friendly clown mascot Ronald McDonald.
Fast-food industry leader
MCDONALD’S distinctive and positive brand helped it become the world’s leading hamburger-chain restaurant with tens of thousands of outlets and millions of customers in over 100 countries around the world. But in recent years, as the US and other countries around the world prospered economically and people became better educated and earned higher incomes, consumers became more discriminating and demanding in their eating habits, and willing and able to pay for better quality and healthier food, even if they cost more.
McDonald’s dominance in the fast-food industry became threatened by competitors, such as Smashburger and Five Guys, which boasted of their supposedly healthier and more varied and superior hamburgers than McDonald’s. The company’s previously constant growth in its sales revenues slowed down and even suffered a decline for the first time in many decades last year.
It became obvious the company had to make drastic changes in its operations and to give its brand a corresponding makeover in order to regain lost ground and maintain its leadership in the market. In March last year it appointed as new President and CEO Steve Easterbrook, formerly McDonald’s chief brand officer. Easterbrook announced his plans to “strip away with layers of management, focus more on listening to customers and act faster to adapt to customers’ changing taste.”
New CEO’s vision
EVER the brand-conscious executive, Easterbrook spelled out his vision—or “destination,” as he put it—for McDonald’s to become a “modern and progressive burger and breakfast restaurant where customization and made-to-order are essential and where executives align our food story around the consumer’s definition of quality and value.”
Subsequently, Easterbrook announced that within the next two years, all the chicken served in its restaurants would be free of antibiotics. This was a major move, because its chicken dishes have become almost as popular as its hamburger and account for a substantial portion of its sales. The new CEO also said the company would remove high-fructose corn syrup from its burger buns, another significant step forward toward achieving his vision.
But even before Easterbrook took over, McDonald’s was already making changes along these lines, with all the attendant publicity and hoopla. These included switching the margarine it has been using for its Egg McMuffins with butter; adding iceberg lettuce, spinach and kale to its salads; removing some items from its menu and replacing them with new, presumably healthier and higher-premium ones; and serving breakfast all day, instead of just in the morning.
And in a bid to gain a foothold in the high-end market, McDonald’s added to its menu a “customizable” burger called “Create Your Own Taste.” It allowed customers to “customize” their burgers with premium toppings like bacon, mushrooms, guacamole and onions. But adding this new, complicated- and time-consuming-to-make foods to the menu not only caused an increase to the price of McDonald’s products but also resulted in long waits both inside the restaurant and the drive-through booths outside its outlets.
Will initial success last?
WHETHER McDonald’s did the right thing in making the major changes it did and in recreating its brand is still open to question. Initial results seem to be promising. Sales of McDonald’s stores in the US have risen by as much as 5 percent in the last few quarters. But how long and how high these increases in sales can be sustained is still open to question.
There are marketing and PR experts who believe that McDonald’s cannot be all things to all people. That at some point, it must decide whether to continue the “journey,” as Easterbrook described it, toward becoming a restaurant chain offering healthier, fresher, higher-quality, albeit less fast and more expensive food. Or whether it is better off to just stick to its core business and branding as a restaurant chain dispensing fast and affordable food, which may not be the healthiest, but which customers will enjoy eating, even on the run, more than healthier and pricier alternatives.
“To be or not to be,” as Hamlet pondered in one of William Shakespeare’s plays. For a more definite answer to this intriguing business and PR question, only time will tell.
PR Matters is a roundtable column by members of the local chapter of the International Public Relations Association, the premier association for senior professionals around the world. Rene Nieva is the chairman and CEO of Perceptions Inc.
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