Brand Management - Mcdonald
Former CEO Jack Greenberg acknowledged the problem and stated, ‘There’s only so much these kids who work for us can do in the restaurant. The more complicated you make it for them, the tougher service is going to be and the slower it’s going to be? He addresses a fundamental problem that McDonalds is yet to solve.
Analysts are quick to point out that McDonalds?competition is stiffening as Burger King, Wendy's and Taco Bell fight to maintain their market share. Shares of McDonald’s fell 14% in the fourth quarter of 2002 while the Dow Jones Index gained 5% . All of these problems can be distilled into one observation; McDonald’s is not living up to its brands promise and is suffering as a result.
The McDonalds brand is in need of repair
Despite a tarnished brand image, the company has done well in establishing brand equity. McDonald’s is an American institution that has touched the lives of many people. The golden arches are firmly entrenched in the American psyche and this gives McDonald’s a certain amount of slack when they fail to live up to the customer’s expectation. McDonald’s has delivered in the past and the brand is powerful enough to weather the current storm. However, the public will not continue to forgive and forget indefinitely. The Company is not oblivious to its problems and has recently assembled marketing and advertising agencies to deliver a new brand direction. The McDonald’s corporate press release stated that the result of this conference was a new theme line, ‘I’m lovin?it?. No other details were released but one has to hope that this tag line is accompanied by some more relevant changes. The fundamental problems are not going to be fixed by a clever line or a shiny new advertising campaign. McDonald’s must focus on its core identity and make the repairs from the top down. This would involve a renewed focus on the Company’s QSC standards (quality, service and cleanliness). Intensified training and sufficient janitorial staff would help improve service and cleanliness. The quality of the food remains a matter of personal preference and it would be difficult to elevate people’s perceptions of the food quality. All that McDonald’s can continue to do here is offer the consistency which it has become synonymous with.
Why a Brand Extension?
McDonald’s still possesses a powerful brand. Interbrand, a leading brand strategy and design firm ranked McDonald’s as possessing the top brand in 1997 (based largely on the valuing of the brand’s ability to be extended) . However, the problems identified suggest that the brand would benefit from rejuvenation. The brands status may be enhanced if a successful extension is implemented. Furthermore, the extension strategy is simplified by the leveraging of an already recognizable brand. The existing brand recognition is likely to lower costs of building customer awareness and increase the speed [next page]