Ailing McDonald’s to Slash Costs, Target Kids

08 April 2003

Jim Cantalupo, McDonald’s recently appointed chairman/ceo, on Monday published his menu for recovery at the fast food behemoth, claiming a “new approach” to spice up sales, marketing and brand loyalty.

Invoking the much paraphrased axiom of seventh century Emperor Lothar I, Cantalupo told disgruntled 21st century investors: “The world has changed. Our customers have changed. We have to change, too.”

In a conference call to stockholders and analysts, he unveiled the burger chain’s tangy new recipe for investor bliss: “The new McDonald's is focused on building sales at existing restaurants rather than on adding new restaurants.”

This will see the group’s capital expenditure in the current year dive to a paltry $1.2 billion (€1.12bn; £0.77bn) – $800 million less than 2002 and $700m below its earlier budget.

Cue president/coo Charlie Bell who outlined the group’s marketing plans for the eighteen months ahead. These train the crosswires on young adults and families with children. “Children are McDonald's enthusiasts,” Bell said. “They think McDonald's is a destination.” And young adults? “This is the age where an effective brand can make customers for life.”

Warming to his theme, Bell continued to toll. Marketing would “refocus on an exceptional brand experience, rather than a transaction,” he said. “We will no longer distinguish between brand-building communications and those that do not build our brand [sic]. Making our brand successful does not mean cheapening and not discounting.”

Previous efforts had “cost us brand loyalty,” Bell admitted. “There will be a renewed focus on spokescharacter Ronald [McDonald, a clown]. We’re not allowing him to be the great communicator that he is. This will change, and it already has.

“We know that brand management is not an academic exercise,” Bell conceded. Then, seemingly by way of afterthought: “The company will measure performance.”

Data sourced from:; additional content by WARC staff