McDonald's Former Chief Marketing Officer Larry Light Talks About Brand Revitalization
In 2002, analysts said McDonald's was "out of date," "too large to be turned around" and in "hamburger hell." But in 12 months McDonald's turned around the brand with one of the fastest brand turnarounds in business history. In his new book Six Rules for Brand Revitlization, McDonald's former Chief Marketing Officer Larry Light reveals the six-step blueprint to turn around a brand.
According to your book, McDonald's executed the fastest, most remarkable marketing and brand turnaround in history. What were the challenges McDonald's faced, and what was the number one reason the brand was able to save itself?
In 2002, McDonald’s was faced with some serious challenges. The McDonald’s customer base was shrinking, share was declining, brand reputation was deteriorating, franchisee and employee morale were down and the share price was at an all-time low. While many factors contributed to the turnaround, the number one factor contributing to the brand revitalization was the focused and determined leadership of Jim Cantalupo and Charlie Bell. They were the guiding forces that led to the creation of the McDonald’s "Plan to Win." And they were insistent and persistent in assuring its consistent implementation. The momentum created by their Plan to Win continues today.
You mention that during its darkest years McDonald's failed to improve its brand experience by ignoring three things: renovation, innovation and marketing. How are these ideas important in relation to a brand?
By renovation, we mean the continuous improvement of product and service quality. The choice is clear—continuous improvement or continuous decay. During the years preceding 2002, McDonald’s focused on cost reduction, rather than customer experience improvement. The result was the incremental degradation of product and service quality.
Innovation is also an imperative. But innovation must be based not on marketing trial and error. Under the leadership of Mike Roberts, a disciplined new product pipeline management system was developed. The new product success rate was dramatically improved.
Marketing is also a growth driver. Effective marketing is essential for enduring profitable growth. It is not enough to renovate and innovate. Customers must be kept aware and reminded of the brand promise. And, the brand image needs to be kept up to date. Beginning in 2003, the McDonald’s brand reputation experienced a major rehabilitation and revitalization.
According to CNN.com, McDonald's will open 1,000 new restaurants in 2009. Do you anticipate that there will be a change in menu offerings coming from McDonald's to cater to new demographics?
I am not currently involved in McDonald’s strategic thinking and priorities. But, as part of the Plan to Win, new menu offers were an important part of the McDonald’s brand revitalization. New products give tangible new energy to the brand. I would expect this focus to continue.
What are some of the branding efforts made abroad by McDonald's? What do you attribute to the assimilation of McDonald's into French culture?
The global brand approach of the Plan to Win was based on the concept of "Freedom Within a Framework." We established a global brand framework. But, our purpose was not to limit creativity but to focus it. Local brand relevance is a superior approach to lowest common denominator standardized marketing worldwide. Freedom Within a Framework also recognizes that the world is a wonderful creative resource. Great ideas do not care where they come from. The salads initiative began in California. It was adopted and adapted in Australia. It was further adopted and adapted in Europe.
Australia is one of the best examples of how local marketing can address local issues creating increased brand relevance. McDonald’s in Australia addressed the issue of healthfulness head on. Rather than hiding from the problem, they demonstrated leadership. To be a leader, a brand must act like a leader. The result was that the brand increased in strength and acceptance.
The situation in France is another great example of how to build local market relevance. Over the years, McDonald’s in France is perceived to be a French company with American roots. France has demonstrated real creative leadership. It shows that to build strong brand local brand relevance within a global brand framework works.
Will there be a time where the brand offers the international menus in the U.S.? The McDonald’s core menu is global. But there is room for local market menu flexibility. For example, porridge is served at breakfast in the U.K. Local decisions depend on local relevance and opportunity. As I said earlier, great ideas don’t care where they come from. But, the U.S. makes the ultimate decision as to which ideas will most likely be successful in the U.S.
You write in your book that McDonald's was up-front and honest in the health debate. What effect did the documentary Super Size Me (2004) have on the brand?
Super Size Me did not have much effect on the McDonald’s brand. Consumers found the idea entertaining, but most discounted the film as a stunt. Consumers came away with the idea that if you eat anything every day, every meal for 30 days, you will get sick. The growth strategy led by the Plan to Win continued without change.
When Dunkin’ Donuts tried to take on Starbucks, the campaign failed, but McDonald's did well with its expanded coffee selections. What were the reasons for this?
The McDonald’s coffee initiative began in Australia. It was Charlie Bell’s idea that McDonald’s could and should become a beverage destination. And he felt that McDonald’s should begin with coffee. He recognized that a coffee experience was more than just coffee. But, it all begins with the preparation of a quality coffee beverage. This is where it starts. And as confirmed by Consumer Reports, McDonald’s coffee in the U.S. is superior to Starbucks.
Being able to provide a quality coffee at the convenience and price of McDonald’s is a competitive brand advantage. McDonald’s has a big and growing breakfast business. Quality coffee enhances this experience and contributes to further growth. The "beverage destination" vision that Charlie Bell initiated will be an important part of the continues growth of the McDonald’s brand.
Interview by Blake Landau, publisher