McDonald’s Corporation | Food and Beverage Brands | Brand Management

For starters, regroup, regroup, regroup. CEO Jim Cantalupo was brought out of retirement to take over the helm of the corporation, and he has publicly announced that he will give himself eighteen months to turn the company’s brand back around.

Is eighteen months a realistic time frame to pull off such a dramatic feat, which includes re-establishing brand identity as well as executing new menu items to satisfy the brand’s fickle but newly-food conscious 18 to 35 market group?

Corresponding by email, brand consultant Martin Lindstrom feels the new management can succeed. “Yes, [Cantalupo] has the talent required to do this, so does Charlie Bell (COO) and Larry Light (CMO), they are a very tight team, good friends, and old timers in the industry, [which is] required to turn around such an enormous company,” writes Lindstrom. “However, they only have one chance left to do this before shareholders lose patience.”

Tony Spaeth of Identity Works, an independent consultant to corporate leaders, feels the strategy will require some time to take hold with consumers. “You can create an effective new brand strategy in eighteen months,” says Spaeth. “But you can’t change the meaning of an established brand any faster than its customers die. McDonald’s is basically [a] three components product, which is menu, distribution (franchise and stores), and brand.” Spaeth’s recommendation? “Keep the distribution, selectively change the product, and rebrand…. [This will be] much faster than trying to change the meaning of ‘McDonald’s.’ ”

As part of the rebrand effort, McDonald’s appears to be seeding key positions with new blood. Executive vice president and global chief marketing officer Larry Light was recently brought in to re-charge the organization. Light’s bio reads like a how-to-get-it-right story of the quintessential corporate marketing executive with high-appointment stints at Bates, BBDO Worldwide, and lecturing background at New York University, Wharton, Indiana’s Kelley School of Businesses, and Northwestern’s Kellogg School of Business.

As expected, Light is throwing himself into the challenge. This past spring, The New York Times reported that he was to preside over a marketing pow-wow made up of advertising, marketing and creative managers. The focus of the meeting was to discuss various ideas for original marketing and advertising campaigns that would jump-start fervor in the brand. Shortly thereafter, the current “I’m lovin’ it” campaign was born.

The new strategy is based on current tastes and trends. “[McDonald’s marketing strategy team] did research in various countries to find the strengths and weaknesses of our brand,” says Light, from McDonald’s corporate headquarters in Oak Brook, Illinois. “The first thing we began to notice was a commonality in five continents. A fun, youthful spirit was at the core of the brand and the most dominant trait. But we wanted to carefully distinguish between ‘youthful spirit’ and children. Our brand is about attitude, not age.”

The US market will see a stream of new TV and print ads featuring a slicker, edgier look that is still synonymous with the McDonald’s brand identity. And the company hired one of the hottest American pop stars of the moment, Justin Timberlake, and hip hop mega producers the Neptunes to create a song for the campaign. The brand also gains access to its prime market by sponsoring Timberlake’s 2003 to 2004 global tour.

The new campaign extends beyond advertising; the “I’m lovin’ it” attitude will be indoctrinated as philosophy in various facets of the company structure across the globe, including customer service and restaurant operations, menu food choices, and new restaurant decors.

“McDonald’s is not only a retail food brand,” says Light. “It is a brand that represents the art of marketing.” That rather grand suggestion is not without merit. Even though the corporation faces major challenges, McDonald’s past brand campaigns have produced acclaimed sales profits in a variety of franchised stores and set the stage for other fast food retail brands. Who can forget: “Two-all-beef-patties-special-sauce-lettuce-cheese-pickles-onions-on-a
-sesame-seed-bun”? Or the simple but compelling: “You Deserve A Break Today”?

As for menu, attempting to recapture the market share of a consumer base that has essentially changed its taste from burgers and fries to neatly packaged store-bought sushi is not going to be an experimentation for McDonald’s; it is now an expectation. Accused of implementing overly aggressive brand strategies by “training” its customers to eat fatty foods, McDonald’s is fighting not only to maintain brand power in the vast pool of competition, but also to dispel notions that its previous brand strategy was improperly planned for the next five to seven years down the road.

Roger Hurni, co-partner in the advertising firm Off Madison Ave, discusses this by email: “Actually, the reason they find themselves in their current situation isn’t because of improper planning of brand strategies, but rather improper planning of a product mix and the inability to adapt [the] brand image of that mix to an evolving marketplace.”

On the anti-globalization front, the question of whether or not McDonald’s is being unfairly targeted because of its global visibility is not one that enters Light’s mind. He is far too busy with the strategic solution to accept social responsibility and make an effort to develop creative ventures to support it.

“I don’t think the question is whether or not it’s fair or unfair,” says Light about the responsibility placed on McDonald’s. “I think the question should be how do we make it an asset? We are a corporation that serves forty million customers a day. Because of that size and scale, we do have responsibilities. But I don’t believe the solution should not be how can we get smaller.”

Although it is obviously possible for a dominant global brand like McDonald’s to take a hit and lose brand edge, the focus now has shifted to restructuring and ultimately, survival. Chances?

“[T]he brand can survive,” concludes Lindstrom. “Just as Microsoft managed to turn its organization 180 degrees when realizing that they [had] lost the Internet boat. Just as adidas turned its organization 180 degrees, and as a result, turned into a serious competitor to Nike. And just as Apple did with [the] return of Steve Jobs. However, common for all the above is a serious change in management, and in fact, this is exactly what has happened at McDonald’s with three new positions: replacing the CEO, the COO, and the CMO in just two years. So I actually believe the organization can change -- not overnight, but over a year or two.”

With a company as old and ingrained in the public’s cultural landscape as McDonald’s, two years is a short bump on the path to smoother times.

[22-Dec-2003]

A.K. Cabell is a freelance writer living in the Washington D.C. area. She is currently writing her first novel.


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