MCDONALD’S CORPORATION

Posted on by Chief Marketer Staff

David Baney and R.J. Milano haven’t had an actual boss since April, yet they’ve managed to steer McDonald’s marketing through an important turnaround year after a disastrous ’97. VP-marketing Baney and assistant vp-marketing Milano took charge of McDonald’s promotion calendar when exec vp-marketing Brad Ball left last spring. Their success has many in the industry wondering why McD is still searching for Ball’s replacement.

McDonald’s righted its marketing ship this year after foundering in ’97 with Campaign 55, a Teeny Beanie Babies shortage, and the failed introduction of Arch Deluxe. Late in ’97, McDonald’s broke its U.S. business into six regions and revamped marketing to form a team with input from field reps and franchisees. The team sets six national promotions for the year, and then regions fill in six to eight more. Lead times are an enviable 18 months.

The regional system proved seaworthy in ’98, with national hits like Teeny Beanie Babies, Get Back with Big Mac, and Mulan, and regional home runs like the Colorado promo that gave away lottery tickets with Big Macs. Plus, franchisees like having more input.

“The most exciting thing about ’98 – besides having a process in place that’s definitely working – is the momentum we have going internally and from customers. That will dovetail in ’99,” says Milano, who reports to Baney. (Baney reports to Alan Feldman, president of McDonald’s U.S.)

Baney credits McD’s execution success in ’98 to “dedicated people and lead time. It gives you a luxury McDonald’s hadn’t been enjoying. Everybody at our agencies and suppliers feel there’s a much more stable approach to our execution, and it’s showing in the restaurants.”

Franchisees liked the ’99 plans they saw this fall, the first time McD sold in a 12-month plan. “There’s been a complete shift in overall attitude that’s come from top management on down through the entire system,” Milano says.

When the national calendar is set early, regions can better plan their own promos. “We’re more focused on determining the role of national programs and local programs,” Milano explains.

“Franchisees are happier than they were a year ago. They’re feeling better about marketing because there have been fewer problems,” says Dick Adams, president of Franchise Equity Group, San Diego, and spokesman for The Consortium, an independent association of McDonald’s franchisees. “But morale is severely diminished from what it was five years ago.”

The Disney partnership has anchored McD, and now “we continue to focus more on having strategic partners as opposed to promotion partners,” Milano says. “That lets us take a total business approach, rather than just a tactical approach.” Execution is tighter because “everyone [at headquarters, agencies and suppliers] has a defined role, and can recognize their contributions,” Milano says.

Baney stands guard as brand steward, while Milano presides over execution. “R.J. is the Disney-and-Beanie Babies guy,” a colleague says. “Dave is the brand guy who asks, ‘Does it feel like a restaurant or a Disney attraction?’ “

Milano has been described as an “alpha dog,” a linear thinker with a keen eye for detail. Colleagues call Baney a true team player who’s especially sensitive to consumer loyalty to the brand.

“We have an incredible compatibility in style, attitude and approach,” says Baney, who sees Milano as “one part alter-ego, one part conscience, and 100 percent energy and enthusiasm.”

Milano says they have complementary perspectives. “Most of my career has been spent inside McDonald’s. Dave comes from outside, which brings a different perspective. He’s been a definite catalyst for change,” Milano says. “Dave’s also not a micro-manager. He defines your role, then gives you the room to do what you need.”

Baney joined McDonald’s in March ’97 after 21-plus years at Burger King. “The only similarity is they both sell burgers,” he says. “McDonald’s has an attitude of growing the business every day.” Baney spent five months making burgers in Florida; then Ball brought him up to Oak Brook.

Milano grew up at McD, working on co-op business two years at Stoltz Advertising (now Glennon), St. Louis, right out of college. He spent seven years on McD’s field force, based out of Kansas City and California, and has been at Oak Brook for eight years. His field experience “is one of the strengths I brought to help us reformulate national marketing. Owner/operators taught me McDonald’s in the field, and I was able to transfer that to a national basis.”

With or without an exec vp, McDonald’s should do well in ’99. “When your system has confidence in itself and in the direction it’s headed, there are no limitations to what you can do. We’re challenging each other to see how much more we can do,” Baney says.

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