http://www.business2.com/articles/web/0,1653,44912,FF.html MARKETING FOCUS McDonald’s Marketing Makeover By: Thomas Mucha Date: October 31, 2002
The struggling fast-food icon is hoping to regain its luster with a splashy new ad campaign. Don’t count on it. The problems run deep at America’s leading burger empire. McDonald’s (MCD) just announced its seventh earnings decline in eight quarters. The stock price is hovering near a seven-year low, and the CEO is warning of layoffs. It’s not just the weak economy. Toss in rising anti-American sentiment around the world and a recent report highlighting America’s child-obesity problems, and it does indeed seem like the worst of times for the Golden Arches.
The company’s response: Bring in the great persuaders. Under pressure from Wall Street, McDonald’s has retooled its top marketing team, hired some celebrity pitchers, and launched an aggressive new U.S. advertising campaign.
The McMarketers are certainly experienced. Larry Light, named chief global marketing officer last month, has logged nearly four decades in the business, including key posts at Bates Advertising and BBDO Worldwide. Longtime McDonald’s insider Bill Lamar took over U.S. marketing duties in August. And just last week, the company brought in Kay Napier, a 20-year marketing veteran from Procter & Gamble (PG). For additional consulting help, the company has even coaxed Happy Meal inventor and marketing legend Hal “You Deserve a Break Today” Schrage out of retirement.
So what’s coming out of this bunch? A reported $40 million advertising campaign touting McDonald’s new value menu. Produced by DDB Worldwide in Chicago, the “Got a Buck, You’re in Luck” theme is reportedly fronted by, among others, a real estate tycoon (Donald Trump), two tennis stars (Venus and Serena Williams), and a loudmouth lawyer (Johnnie Cochran). It also features the return of two McDonaldland characters (Grimace and the Hamburglar).
According to McDonald’s spokesman Bill Whitman, the campaign is about good food and great value. “We’re conveying that message with celebrities people know and with characters they feel good about,” he says. Little more than two weeks into the campaign, McDonald’s claims that sales have risen 2 percent. The new marketing push is the public face of a turnaround plan, announced in September, that includes a $1 billion budget to remodel stores during the next two years.
Yet while McDonald’s is certainly focused on its new message (Whitman repeated the phrase “great value” nine times during a brief chat with Business 2.0), the strategy seems misguided. With its sudden conversion to lower prices, McDonald’s is playing a desperate game of catch-up. Wendy’s, for one, has had a national value menu in place for more than a dozen years, and Burger King announced its own “99 cent” menu last month. So no points here for innovation.
But even more confounding is the choice of spokespeople. Does anyone associate Donald Trump with value? Or Johnnie Cochran? Are we to believe that either of the über-athletic Williams sisters regularly eats a Big N’ Tasty burger, at any price? And how does pairing any of these folks with mysterious fuzzy characters help get the word out?
It all feels like another desperate experiment in a long line of desperate experiments (McCafes, a McKids clothing line, a McDonald’s ketchup brand, the Golden Arch Hotel in Switzerland, the Chipotle Mexican Grill and Donatos Pizzeria, and on and on).
McDonald’s difficulties — market oversaturation, increasing competition, menu problems, disgruntled franchise owners, and more — are too big for a quick marketing fix, no matter who, or what, is doing the persuading.
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