Executive Summary
McDonald’s stands out as one of the biggest global fast food retailer offering fasts foods in more than119 customers all over the globe. McDonald’s restaurants and franchises, which stand at about 33, 500, continue to grow as the organization penetrates new markets in Asia.
This immense success of McDonald’s is attributed to several factors among them being an incredible emphasis on the engagement of consumers, appropriate leadership that fits well the business of the organization, and the exceptional investments of the organizational resources in brand management.
The franchise business model of the company has managed to ensure that the products and services offered at the franchises are consistent with the services offered at the company-owned restaurants.
McDonald’s brand inventories highlight the brand essentials of the corporation, which drive the picture that clients have in their wits about the corporation’s products and services. The company also conducts brand exploratory to determine how customers perceive its products.
New products are innovated and designed to meet the emerging needs of consumers based on the information derived from brand exploratory studies.
This paper recommends the innovation of new products as a major tool for driving the economic advantage for McDonald’s and hence its brand equity.
Introduction
McDonald’s pays incredible attention to protect its brand image by responding to negative critics of the company’s products, particularly with criticisms that fast foods are closely associated with obesity and obesity-associated ailments.
Consequently, the company has incorporated several healthy menus. As part of brand management strategy, the company also focuses on “repositioning itself to appeal to a broader audience, particularly by redesigning its outlets and making them more modern, comfortable, and upscale” (Wilhelm Para. 2).
In this extent, brand management and brand protection are among the strategies used by McDonald’s to enhance its success in a competitive and dynamic fast food business environment.
The aim of this paper is to dig deeper into the approaches of brand management used by McDonald’s with a particular focus on its brand exploratory and brand inventory strategies.
Brand Inventory
Brand inventories are aimed at availing inclusive sketch of how goods coupled with services of a given organization are tagged and distributed.
About Hill and Ettenson, profiling a product or a service “requires marketers to catalog in both visual and written form product or service sold, the names, logos, symbols, characters, packaging, slogans, or other trademarks used” (86).
The result of any product profile requires being precise, understandable, and reflective of the status of a merchandise or overhaul make for a given organization.
Brand inventory constitutes some of the essential elements of brand audits that permit examination of the origin of brand equities of an organization. Brand inventories serve principle purposes of helping to profile branding approaches deployed by an organization for its goods and services.
Brand inventories need to display the brand elements utilized to build brand loyalty, how this goal is accomplished, and how it is reflected in any necessary marketing program.
At McDonald’s, competitive brand profiling is done to unveil the probable points of difference coupled with points of parity. In this extent, brand inventory is valuable at McDonald’s since “it helps to suggest that consumers’ current perceptions may be based on” (Wilhelm Para.7).
Indeed, the association of consumers with various brands of an organization is deeply seated in the meaning they attach to various brand elements.
Arguably, brand inventory is incredible in the provision of vital information that can be deployed in the interpretation of various follow-up researches among them being brand exploratory.
For McDonald’s, brand inventory is utilized in supplying crucial information for analysis coupled with conducting initial insights in the manner in which brand equities can be best managed for a company’s products to receive positive reception by both existing and potential consumers.
This strategy is perhaps significant because, the more positively a brand is received, the more likely an organization would make higher sales and hence higher profitability.
Current Brand Profile for McDonald’s
McDonald’s products have come under sharp criticism over the likelihood of foods to cause health challenges associated with taking foods with high calories.
In the effort to ensure that customers of McDonald’s continue to be loyal to the brand of the company, McDonald’s has developed healthy meals, which are provided in the menus, as an effort to ensure that the company’s brand profile continues to have a competitive advantage.
As customers’ tastes and preferences change because of intensive campaigns on the needs for healthy foods, they will always have alternative products on offer.
The emerging cultural differences affect the performance of certain products that constitute the overall brand of McDonald’s especially as it continues to seek larger markets. For instance, the organization established that Chinese people prefer chicken to beef.
Consequently, the company has designed hamburgers made from the chicken as opposed to beef. This current strategy ensures a high profile for the McDonald’s brand across all markets.
The positioning of McDonald’s Brand
Brand positioning refers to how an organization wants its customers to think about its products or services. McDonald’s stands out as one of the most successful brands across the globe. This success is replicated wherever the company establishes a franchise or its internally operated store.
To position itself, McDonald’s pays incredible attention to listening and communicating with its customers in a consistent manner assuring them of quality and hygiene for its products amid criticisms and competitive forces from other fast-food dealers seeking to cut down on the market share of the company.
In this context, Holt and Quelch reckon that McDonald’s uses “marketing communication methods such as advertising and promotions to create colors, designs, and images, which give the brand its familiar logo” (69).
This strategy means that, whenever customers see the golden arches for the McDonald’s logo, an image that comes into mind is the products and services offered by the company. Such an image is useful in constructing customer loyalty to a given brand.
Brand Elements
The brand is used to identify and distinguish an organization from other organizations even when two or more organizations offer similar products or services. Organizations do not only sell products or charge for just their services. They also sell their brands.
Brands are identified by several elements including the brand name, logo sounds, tagline, tastes, and scents among others. McDonald’s endeavors to protect its worldwide brand name consisting of Ma and Mac.
Any attempt to use a brand name possessing these two prefixes amounts to a legal challenge by the organization. Holt and Quelch amplify this argument by asserting, “several cases have evoked McDonald’s to sue many traders who have used these two words in their trading names” (71).
The company uses a logo made up of golden arches. As part of brand elements, McDonald’s has used several strap lines that take the form of slogans, which have been changing over time.
One of such slogans is the ‘I am in love with it,’ which is meant to solicit for happy thoughts among customers whenever they experience the organization’s products and services.
Profile of Competitive Brand Elements
Once an organization has developed and profiled several brand elements, which while effort is made to position the brand, a substantial clientele would be anticipated to be won, it becomes necessary to profile the most competitive brand elements.
This strategy ensures that marketing efforts are channeled proportionately to the relative significance of a particular brand element’s capacity to produce more returns in terms of future sale levels.
For McDonald’s, the company’s logo and strapline slogans are profiled as some of the most effective brand elements in yielding the success of the company. For this purpose, all franchises do their business through the company’s logo.
Indeed, the logo of the company is used at all outlets where McDonald’s products are sold whether the outlets are company-owned or not. Slogans such as ‘I am in love with it’ and ‘happy meal’ are also unique to the company. They are essential in the McDonald’s brand success.
In the words of Wilhelm, the slogans act as “a personal salute to everything McDonald’s stands for and serves to achieve for its customers and the brand itself” (Para.3). Such slogans are meant to echo the preference of McDonald’s foods across the globe.
How McDonald Brand is supported
For the success of any brand, a means of supporting it to ensure that its preferences among customers do not fall when new competitors in the same industry emerge must be created. For McDonald’s, brand promotion is a central component for supporting its brand.
Promotion is done through various ways such as sponsorships. The main aim of sponsoring sports such as Fifa world cup and Olympics is to create a global image for the existence of McDonald’s brand.
Indeed, in 1968, “McDonald’s first got involved with the Olympics by airlifting hamburgers to athletes in Grenoble, France” (Holt and Quelch 71). During the Olympics held in Montreal in 1976, McDonald’s became an official sponsor of the games.
In 1994, the company also sponsored the world cup tournaments that were then held in the U.S.
As Wilhelm notes, McDonald’s also “recently renewed its long-term deal with Fifa until 2014, with global rights to the recent 2010 World Cup South Africa and the 2014 World Cup in South America” (Para.10).
In all these deals, the company is entitled to special rights for advertisements during the tournaments apart from supplying its foods to spectators. Since such tournaments bring together people from the global fronts, the company can support its brand on global perspectives.
How Brand Equity for McDonald’s can be improved
Ensuring that customers are connected and maintained requires the creation of a dialogue that is sensible with the customers. “The importance of brand in a business strategy affirms a paradigm of calculating its economic value called brand equity” (Holt and Quelch 73).
Brand equity encompasses a long-term investment that an organization has to manage effectively since it is the measure of economic value for the organization. Without effective management of the brand equity of an organization, it is practically impossible to gain optimal profitability.
Consequently, it is important for McDonald’s to consider a myriad of ways to improve its brand equity. Further, personal opinions on these aspects are considered in the recommendation.
Brand Exploratory
Brand exploratory refers to any research that is conducted by an organization to garner information, which upon analysis, helps to indicate how customers feel and or think about a given product or service and their associated classes of brand equity sources.
Conducting brand exploratory requires several preliminary activities to be conducted. They include conducting an interview with an organization’s personnel to “gain an understanding of their beliefs about customer perceptions” (Hill and Ettenson 87).
Opinions accruing from such interviews are normally diverse since they serve several functions in the determination of how consumers of given products or services may be feeling or thinking about them.
Such functions include the generation of vital and informing ideas about products from an organization’s perspective and providing likelihoods for understanding any preconceived internal misconceptions and inconsistencies on the way people internally perceive the products and services of an organization.
This information is necessary since customers think about the products that they consume depending on how the communications personnel within an organization portray the products.
However, even though it is important to unveil an organization’s internal inconsistencies and misconceptions about products, such an endeavor is not adequate to develop brand explorations.
Additional research is necessary to be conducted on customers with the intentions of determining how their own experiences with the products or services of an organization shape their thoughts and feelings about the products as the central concerns of brand exploratory at McDonald’s.
In today’s global economy, people are becoming too busy to have adequate time to prepare meals during lunch hours and even breakfasts because of increasing job demands.
Consequently, they opt to have their meals at fast food eat outs where they can eat while at restaurants, or have meals packed up for them to eat while at their workstations. However, it is important to note that consumers do not just buy any fast food.
Customers have tastes and preferences. This case implies that they develop brand loyalties to specific products that best meet their needs. McDonald’s focuses on making sure that it delivers values that are desired by the customers for them to have repeated sales to them
Increasing an organization’s market share is impossible without attracting new potential customers.
While an effort of attracting perceived potential customers is necessary through marketing, studying the sources of motives to eat-outs at fast food coupled with the service and products anticipated at the fast food stores is necessary.
The sales and communications personnel would handle the clients in a manner that would satisfy these anticipations.
For this reason, McDonald’s considers its customers and employees as the most crucial elements for the success of its brand in the highly competitive fast food industry.
This strategy is done by ensuring that customers having first time experience with the organization’s products perceive the products as the most favorable products in comparison to a range of similar products offered in the market.
In fact, “getting and keeping customers who are loyal to a particular brand is most useful when they are both gross users of the products” (Hill and Ettenson 87).
For McDonald’s, depending on various perceptions of brand loyalties for its products, the company employs valid strategies to enhance uniqueness, favorability, and awareness of its products and services.
In this context, Holt and Quelch reckon, “when the profitable segment is loyal with the rate of using, the focus is on changing loyalty in favor of McDonald’s brand” (74).
When the company realizes that there is an immense use of a single product on offer, the organization resorts to the deployment of the brand name of the organization to develop new and innovative relative competitive advantages.
From my survey of the consumers of McDonald’s, it is evident that the company has to respond to the needs of valid groups of people in terms of demographic factors such as age, cultural, and religion among others. These customers have different dietary needs.
The company has responded appropriately to ensure it is appealing to all people amid their demographic attributes, which include happy meals for children and special meals for old people comprising high-fiber vegetables.
The fact that McDonald’s can respond to different market dynamics and emerging needs of consumers means that the brand equity of the company will remain ever high.
This argument perhaps will match with the strategic aim of McDonald’s to remain a global leader in the fast food industry.
Recommendations and Conclusion
Research on customer perceptions and associations with certain brands reveal that most people tend to associate themselves with global brands because they believe that global products have better qualities.
Consequently, it is recommended that McDonald’s can improve its brand equity by continuing with its efforts to establish a global presence in all continents.
Since different people have different cultural affiliations, increasing brand equity for the company this way will also call for designing of new products to meet various cultural contexts with the intention of ensuring that McDonald’s would appeal to all people irrespective of religious or any other cultural affiliations across the globe.
Brand equity for an organization is often threatened by the emergence of new concerns in disfavor of an organization’s products and services. Concerns on healthy eating have not spared the customer’s perceptions about McDonald’s brand.
This case has not impaired substantively the brand equity of McDonald’s since the company has responded to these concerns by designing healthy meals, which are incorporated in the menus.
It is recommended for the company to conduct a thorough analysis of the information spreading to the existing and potential customers about foods that should be considered unhealthy.
Armed with this information, the company can develop more products, which fit the definition of healthy foods as offered by health professionals.
This strategy is an attempt to design and deliver products and services based on customer demand, which is an incredible plan for driving improvement and success of brand equity.
In conclusion, McDonald’s remains a global leader in the fast food industry. In the paper, this advantage was attributed to the innovative strategies of the company in shaping and protecting its brand name and equity.
While juggling with the question on how the McDonald’s has managed to ensure that its brand is not out powered by other competitors, the paper paid incredible attention to discuss approaches of brand management used by McDonald’s with emphasis on brand exploratory and brand inventory.
Works Cited
Hill, Stephen, and Tyson Ettenson. “Achieving the Ideal Brand Portfolio.” Sloan Management Review 2.1(2005): 85-90. Print.
Holt, Anthony, and Taylor Quelch. “How Global Brands Compete.” Harvard Business Review 7.3(2004): 68-75. Print.
Wilhelm, Remold. McDonald Formal Business Structure, 2011. Web.