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McDonald's leverages marketing layers

News, 27 January 2015

OAK BROOK, IL: McDonald's, the quick-service restaurant chain, intends to overhaul its marketing approach in order to help turn around disappointing financial results.

Speaking on a fourth quarter earnings call, Mike Andres, president of McDonald's USA, said that no single initiative was going to drive improvements as he outlined the multilayered strategy the business is developing to create a better customer experience and differentiate the brand from other QSRs.

"You'll see disruptive value. You'll see new product news. You'll see service initiatives," he stated. "And then our regional management in our new structure is empowered to commit the resources to make these plans come to life."

He explained that in addition to the ongoing national messaging to build the brand, there would be a greater focus on co-op marketing and customised local activations.

Owner-operators are at the hub of their local communities, he said, and are "very important to our turnaround plan", as they devised ways to tackle their immediate competitors.

Local-co-ops form a third layer of marketing and here Andres was looking for an approach "that better coordinates the specific roles and deliverables of our co-op marketing plans using more sophisticated analytics and data".

Another major step, previously announced, is the simplification of what had become a sprawling menu and which, Andres reported, was leading to faster order times in test markets.

At the same time, however, it is offering greater personalisation through the Create Your Taste platform being rolled out in the US and Australia. CEO Don Thompson felt this "has the potential to lift sales of core classics, by bringing more customers into our restaurants".

The possibility this could lead to longer waiting times should be offset by "multiple order point strategies", as McDonald's introduces self-order kiosks and table service as well as mobile order and payments.

Create Your Taste, Thompson declared, "is a much broader piece than simply about the food itself. It is about the overall experience."

McDonald's is placing great importance on this last aspect: it is redirecting $800m of capital investment away from new restaurant openings into the McDonald's 'Experience of The Future' as it addresses the challenge of rivals such as Chipotle and Nando's.

Data sourced from Seeking Alpha; additional content by Warc staff