2014 Brandcameo Product Placement Awards

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McDonald's Struggles to Woo Millennials

Posted by Sheila Shayon on March 25, 2013 05:38 PM

McDonald's has a problem. While the fast-food brand remains No. 1, it doesn’t even rank in the top 10 for the increasingly sought-out cohort of the 59 to 80 million people ages 23 to 36 in the U.S., widely known as millennials. 

McDonald's is concerned enough to be specifically targeting this group, identified as highly valuing customization and choice with a major new product launch, McWrap. "They're 80 million [people] but they're influencing the next 80 million, both younger and older," said Gary Stibel, CEO at New England Consulting Group. 

The McWrap, a.k.a. "Subway buster," comes in three varieties: sweet chili chicken, chicken and bacon and chicken and ranch, grilled or crispy—and depending on the chicken parts, ranges from 360 to 600 calories. According to an internal McDonald’s memo, it "affords us the platform for customization and variety that our millennial customer is expecting of us. Our customers are consistently telling us, particularly millennials, they expect variety, more choices, customization and their ability to be able to personalize their food experience."

"In fact,” continues the memo, “they have told us that if we did not offer McWrap, 22 percent of these incremental customers would have gone to Subway."

Millennials are eschewing burger chains in general, including Wendy's and Burger King, with a decline in consumption amounting to 16 percent since 2007, according to NPD Group.

According to a report from P.R. firm Edelman, the group has spending power of over $2.5 trillion and projected earnings that will outpace those of baby boomers by 2018.

“Millennials see themselves as alpha influencers who shape the behavior of their larger social circles… [and] almost half of the millennials surveyed indicated that they prefer face-to-face conversations with friends and family before choosing whether or not to buy a product.” Furthermore, says the report, “Marketers tend to neglect the value millennials place on face-to-face conversations.”

Other industries are also feeling the millennial pinch. Brewers are creating new brands and line extensions such as Bud Light Platinum while Miller Coors has partnered with Turner Broadcasting to have only its beers featured in product placements on TNT and TBS.

Participant Media, (“Lincoln,” “The Help,”) with its recent acquisition of the Documentary Channel in December and plans to buy distribution assets of Halogen TV from Inspiration Networks, is launching a cable network targeting the demo and is poised to reach 40 million subscribers.

“Millennials are unquestionably the most covetous but difficult to reach consumers in the market," comments mediaispower.com. “For marketers to effectively tap into this demographic, they must learn to engage with them offline as well as online. These digital natives value face-to-face conversations with their peers and brand experiences. Marketers should recognize this in order to reach this ever important demographic.”

A separate study, CultureQ, from brand consultancy Onesixthyfourth “finds that Millennials have been incorrectly portrayed as pampered and lazy, and that many respondents not only want academic success, they want it to the highest degree possible… and they are concerned about the impact of the global economy, with its economic instability and high debt levels, on their own lives and chances for success.”

Anne Bahr Thompson, Founding Partner of Onesixtyfourth, suggests five strategies for marketers to include in their brand offerings to woo millennials:

Inspire confidence in the future 

Be goal oriented 

Deliver consistently 

Give over control

Be bigger than your product

That’s a lot of pressure on McWrap, which McDonald’s hopes will keep millennials gracing the golden arches.

Time is of the essence however, as AdAge opines, “By the time marketers finally have millennials figured out, it may be time to move on. According to U.S. Census data, 46 percent of households headed by a millennial adult ages 20 to 34 in the U.S. have kids, which means marketers will be—or should be, anyway—focusing on marketing to millennials as parents.”

Comments

Comment United States says:

Excellent piece except that a person who is 32 to 36 years old today is a Gen Xer (not Millennial) according to William Strauss and Neil Howe who coined the term "Millennial".

March 28, 2013 01:58 PM #

Comments are closed

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