McDonald's varies menu, promos

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McDonald's Corp. is emphasizing ongoing variety over quickie promotions in its 2001 marketing plan to spice up dull sales.

At the heart of the plan is the burger chain's New Tastes Menu, a permanent menu fixture featuring 40 food items that franchisees within the same co-op may choose to rotate for various periods.

The new menu, launched Jan. 21, is backed by an estimated $60 million ad campaign by adult market agency DDB Worldwide, Chicago, an Omnicom Group unit.

Three national brand spots use lifestyle vignettes with elements of surprise. In one spot, a man with long hair is sitting on a stool and-presto!-in the next sequence, he sports a shaved head. Another spot features a man hitting golf balls-from the fourth floor of a building under construction. The lyrics of the music track encourage "change your face, change your place," sung to the "We love to see you smile" melody. The end line to bridge the earlier campaign explains, "Variety is the smile of life," followed by the "We love to see you smile" tagline.

At the same time, McDonald's has increased its reliance on Disney for its promotions, according to the 2001 marketing calendar, Enhanced Brand Plan, obtained by Advertising Age.

Damon Brundage, analyst with Raymond James & Associates, said he believes the sluggish economy may be driving the stronger dependence on Disney for promotions. "You need to be certain the promotions you run will be good ones," he said. "Disney [promotions are] the lowest-risk promotions you can run, period."

Promotions have had mixed results in recent years for the Golden Arches as well as for other fast feeders. "The calendar group is getting a lot of pressure now," said an agency executive. "There's been little delivery on the calendar side. Nothing's blowing people through the doors."

The No. 1 fast-feeder has been vexed by sagging customer counts despite a flurry of high-profile toy and film-related promotions, including Beanie Babies and Disney's "Dinosaur" and "102 Dalmatians."

"They were way too focused on things like short-term promotions and incentives and less focused on [quality, service and cleanliness] and food," said a McDonald's insider, who promised surprising changes in the coming year.

In fact, McDonald's confirmed last week it would stop reporting monthly sales figures and focus instead on longer-term quarterly updates, citing changes in the regulatory environment.

Giving people more options is a credible strategy for getting customers to try more options and building sales, said Mr. Brundage. "We're at a point in the economic cycle where consumers are pulling back," he said. "You can't indefinitely sustain positive [same-store sales] if fewer people are coming into your stores." He also said people may balk at paying more for an item, which could keep customers from "trading up" to higher-priced items.

Abandoning promotions altogether is still a long way off, though. Four large-scale national promotions are planned to drive kids and adults to stores.

All the kids movie events are Disney tie-ins, including Miramax's "Spy Kids," "Atlantis" and "Monsters;" the first major event will be a tie-in with ABC's "Who Wants to be a Millionaire?" game show in mid-April. While most of these promotions will feature core menu items, the New Tastes Menu will be featured with "Atlantis" and "Monsters."

"They are doing their full complement of promotions-movie, TVs, home video and theme park," said Brett Dicker, senior VP-worldwide promotion for Buena Vista Pictures Marketing. "McDonald's is doing the first big `Millionaire' promotion, and their first promotion with Miramax for

`Spy Kids.' "

Among the new Happy Meal promotions planned are Poo-Chi, made by Tiger Electronics, a Hasbro unit; and Mattel's Diva Starz to fill out returning Disney and Mattel properties. And McDonald's finally seems to have exhausted its interest in Beanie Babies. Only one promotion will include the beanbag plush toys, and it's yet to be determined. McDonald's ran three promotions with Beanie Babies last year.

Larry Zwain, McDonald's senior VP-marketing, would not comment on the details of the calendar that haven't been announced.

Contributing: Wayne Friedman

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