Salad days at McDonald's

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It all started with lettuce. While critics are still debating what drove McDonald's Corp.'s turnaround, one indisputable factor is the role premium salads played in fostering its image as a purveyor of fast-and healthful-food.

Premium salads spurred traffic and sales with a quality image blast, contends Wendy Cook, VP-U.S. menu innovation and marketing. She says they started the momentum for McDonald's menu overhaul.

"The image piece ... was people were more open to McDonald's doing something unexpected, like the premium salads," she says. "But close on the heels [of that rollout] we launched McGriddles to unprecedented levels of breakfast sales. ... That was very unusual."

Next was the change to all-white-meat McNuggets, which sparked Happy Meal orders with nuggets to grow by 15%. Later, Chicken Selects, whole breast filets, popped onto the menu. "We are sustaining McNuggets greatly more than what we expected to to this day. That was a change in our overall baseline," Ms. Cook says.

In the spring, McDonald's launched its Happy Meal choice program offering substitutes of apples and milk for fries and soda; it also surpassed projected sales. "We outperformed our higher expectations," she says.

Salad share continues to grow, Ms. Cook says. Originally McDonald's salad sales were one-seventh of Wendy's salad sales. But by August, McDonald's salads eclipsed Wendy's International on a same-store sales basis. "That is a huge move in something like 18 months," she says. From April 2003 to September 2004, McDonald's has sold 300 million premium salads.

Still, while salads got consumers to rethink McDonald's, all the new products are boosting baseline sales and momentum, Ms. Cook says. Product quality wasn't the only fix to the menu. How McDonald's marketed its new products also changed, and their success is attributable, in a large extent, to the integration of the menu team into marketing, says Ms. Cook.

"When I took over the marketing [and menu] responsibility, I was able to closely link the product development side and customer insights there with how we market our products on an ongoing basis," she says. "We went to consumer insights that fueled our marketing. It went from cradle to launch on development of product and then marketing."

For example, the menu developers talked to women about what they wanted in salads. They learned that women notice details, like the fact that the salads had all-natural dressing with low-fat options and 16 different kinds of lettuce.

The team took advantage of the idea that women like to draw their own conclusions, so advertising used a "girl talk" approach. "Women like discovery of finding a great sale, then having a variety of options," she says.

"We wouldn't have gotten there if we hadn't had this integrated approach to set up how we thought about marketing," Ms. Cook says, estimating that she alone spent 300 hours watching how consumers interact with products, something she believes the marketing team hadn't done much of before.

"You get a different perspective when people are interacting and experiencing the food vs. when they are remembering past experiences," she says.

Equally important to quality and insight in the marketing strategy was value. McDonald's Dollar Menu launched in 2002 with certain sandwiches, drinks and sides priced for a dollar. While the menu was controversial with franchisees because it eats into profits, it gave the chain an everyday value platform that got people in the door and helped it compete with Wendy's, which pioneered the under-a-buck menu. "The Dollar Menu became almost a trial device for people coming into the store," says Ms. Cook.

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