Live from ANA: McDonald’s Changes Approach from Marketing to Entertaining
Several years ago McDonald’s Corp. faced up to some tough facts. The company had lost its way. It had taken its eye off the customer and people looked at the brand as old-fashioned and out of date.
Big Mac faced a huge challenge: making the McDonald brand relevant to consumers with busy lives while fending off ever more competitors. It recognized that it’s definition of promotion had been wrong and challenged itself to define a whole new approach to marketing, Dean M. Barrett, the senior-VP global marketing for McDonald’s said yesterday.
“We recognized that advertising and promotion are operational partners,” he said. “That all marketing activities are promotion. They all promote the brand.”
By January 2003, the company had a new mission: for customers to frequent its restaurants because they favored the brand. It analyzed every aspect of the brand and how it was promoted. By February of that year, McDonald’s had aligned itself around a call for action termed “A Plan to Win,” with revitalization focused on the restaurant experience, a difficult task for a decentralized company operating in 119 countries.
The company focused on understanding and acting on customers wants and needs, Barrett said. It changed its approach to marketing and no longer asked for stand-alone events, tie-ins or licensing characters. It geared up for a totally integrated approach that capitalized on non-traditional media featuring a fun and youthful approach.
Efforts centered on entertaining the customer; McD focused on four core areas: music, sports, fashion and entertainment. It quickly secured partners in many of those areas.
An early result was the “I’m lovin’ it” campaign; six months after its launch, the company had an 84% global awareness (96% brand awareness in Hong Kong, where it is now the No. 1 most famous brand), he said.
“Music is a powerful language that transcends cultures and boarders,” Barrett said.
Last year, McDonald’s sponsored Justin Timberlake and his “I’m lovin’ it” tour. Most recently it signed a deal to sponsor recording stars Destiny’s Child. And, the company is sponsoring other artists around the globe to create its “I’m lovin’ it” music.
“Who would have thought two years ago that McDonald’s would be sponsoring Destiny’s Child and Justin Timberlake,” he said.
Last summer, McDonald’s and Sony begun a worldwide promotion to provide customers with the latest in digital music.
On the sports front, for example, the company is an Olympic sponsor and has extended its partnership through the 2012 Games. And last year, McDonald’s Corp. signed a multi-year global partnership with NBA star Yao Ming who has played a key role in the “I’m lovin’ it” global marketing platform, with emphasis on physical fitness and activity and Olympics initiatives.
As for fashion, watch for Ronald McDonald to appear in a whole new wardrobe that includes everything from the looks of a snowboard dude to a business executive (still wearing those big red shoes, of course). Along with his new duds, Ronald got a new title: CHO or “chief happiness officer.” There are new uniforms in Germany, Denmark and the U.K., and well as other apparel like hats and T-shirt designed around the “I’m lovin’ it” theme. A new line of branded-active wear will debut next year.
In the entertainment arena, integration into online gaming and movies top the list. Watch for McDonald’s to make “big news” in the gaming space in the next few months, Barrett said without offering details.
“We are no longer in the business of marketing entertainment,” Barrett said. “We now say, we are in the business of entertaining our customers in the four layers—music, sports, fashion, entertainment—that span the globe.”
