McDonald’s new long-term strategy includes lots of purpose-driven marketing
McDonald’s new strategic plan includes everything from purpose-focused ads to opening restaurants without dining rooms, as the world’s largest restaurant company looks to extend its dominance.
The “Accelerating the Arches” approach, unveiled Monday, is broken into three sections that begin with M, C, and D, which are, of course, the first three letters in the company’s name and the letters in its ticker symbol.
“Maximize our Marketing” includes ads featuring feel-good stories showcased on a national scale along with localized buys, plus updated colorful packaging set to be used globally.
“Commit to the Core” is a confirmation that the chain will stick with its core menu items. McDonald’s also confirmed it will bring out a new crispy chicken sandwich in the U.S. in 2021, something customers and competitors have been waiting for.
And “Double Down on the 3 D’s (Digital, Delivery and Drive Thru)” is a declaration by McDonald’s to improve upon its digital tools, including a pilot test of a new loyalty program. Plus, it’s focusing more on delivery and drive-thru, which have taken on added importance during the coronavirus pandemic.
The strategic plan was introduced on the heels of solid third-quarter results. With the ever-changing impact of COVID-19 in mind, McDonald’s forecasts system-wide sales growth in the mid-single digits for 2021 and 2022, with next year’s growth pegged as a comparison to 2019, rather than 2020.
“In countries around the world, we have seen customer behaviors change at an unprecedented pace over the last several months,” President and CEO Chris Kempczinski said in a statement. “We believe this presents an opportunity to do something special as we write the next great chapter of McDonald’s.
The investor presentation, given virtually on Monday morning by Kempczinski and others, comes just over a year after his predecessor, Steve Easterbrook, was fired when the company found out about a relationship he was having with an employee.
While McDonald’s is laying out its strategic framework during a successful run for the chain, it faces issues including protests by restaurant workers who say the chain didn’t do enough to protect them from COVID-19, discrimination lawsuits, and a prolonged organized effort pushing for higher wages across the fast-food industry. McDonald’s is often called out by critics as an example of a company that could do more for its own employees, suppliers and others with connections to the chain, such as employees at franchised locations.
More on marketing
Earlier this year, McDonald's announced that it had a “sizable marketing war chest” of $200 million to spend in the second half of 2020. And it's using those funds in a few different ways.
McDonald’s plans to continue the “Famous Orders” promotion it has been running in the U.S., which so far has featured favorite meals of Travis Scott and J Balvin. It hasn’t yet said which celebrities will follow.
Its newest campaign is a series of purpose-driven ads from Wieden+Kennedy New York called “Serving Here,” introduced Monday, which will be accompanied by full-page letter ads from Kempczinski and local franchisees in more than 110 U.S. newspapers.
“Customers today want to know the brands they love share their values and serve as a force for good in the world,” Alistair Macrow, McDonald’s global chief marketing officer, said in a statement. “Earning their trust is about acting first, and then communicating. We’re raising our marketing ambition by telling clearer, more effective stories that articulate the impact we have in the communities we serve, and more broadly what we stand for as a brand.”
That feel-good feeling is also meant to boost visits to its restaurants. McDonald’s aim, Macrow said, is “to move beyond brand engagement to brand advocacy—when people feel so good about visiting McDonald’s, they invite others to join them.”
New packaging rolling out globally by 2022 playfully hints at the items tucked inside, such as imagery suggesting bubbles on the side of a cold drink cup or melting cheese dripping on a Quarter Pounder with Cheese box. It comes after the company updated its visual identity in work done with Turner Duckworth.
Chicken is core
Core menu items, such as the Big Mac, Quarter Pounder, Chicken McNuggets and fries, are responsible for about 70% of food sales across McDonald’s top markets, so it knows that focusing on those types of items makes financial sense. In burgers, McDonald’s plans include new toasted buns and an updated grilling technique.
And the home of the Big Mac acknowledges chicken is growing faster than beef. A new crispy chicken sandwich is set to debut in the U.S. in 2021. Meanwhile, rivals are already selling plenty of fried chicken sandwiches. Chick-fil-A continues to grow rapidly as does Popeyes, following the 2019 introduction of its hit sandwich. Rivals such as Wendy’s updated their chicken sandwiches before McDonald’s. The Golden Arches has been trying to stand out with other products like the spicy McNuggets it offered earlier this year, and chicken breakfast sandwiches.
After trimming an average of 30 seconds off of drive-thru service times in its largest markets over the past two years, McDonald’s has tests in place to make the drive-thru an even faster process. It’s working on automated order taking, an express lane for digital order pickup and a restaurant that offers only drive-thru, delivery and carryout, eliminating the dining room space (which is basically how thousands of U.S. restaurants have been operating for months due to the pandemic). In the U.S., nearly 95% of the roughly 14,000 restaurants have a drive-thru, which has been a key differentiator for all operators during COVID-19.
The “Serving Here” campaign includes four national TV spots, online video, radio and streaming audio spots, print, out-of-home ads, custom content and paid social. The 60-second anthem spot “Here” shows shots of everyday life and at first feels as though it could be anything from a politician’s ad for unity to an ad for an idealistically planned community. More than 20 seconds go by before it’s clear that the spot is one from McDonald’s.
“Everything Changes” shows the story of a family in which one son has cancer, and how his family, including his brother, get support from Ronald McDonald House Charities.
“Doors” focuses on farming. “As America grows and grows, the number of farmers shrinks and shrinks,” a voiceover says, as potato farmer Josh Bunger is shown going about his routine.
And “Good Neighbors,” as its title suggests, shows neighborly acts including when McDonald’s provides food to first responders. While it does not mention the pandemic, the people serving food to firefighters “in times of need” are shown wearing face coverings.