McDonald’s has gone through its share of ups and downs over the decades, but in 2008, it was only one of two companies on the Dow Jones average to enjoy a share price increase. The other company was Walmart, which indicates that these two companies may be recession resistant. Whether they are depression proof remains to be seen.
McDonald’s was founded on the mission of offering quality, service, cleanliness, and value. When the fast food environment became more competitive, McDonald’s introduced many new products and changes to existing products, some of which failed miserably—recall the pizza, the toasted deli sandwiches, the Arch Deluxe, and the 14 changes to the Big Mac sauce over time. The company grew aggressively in the 1970s and 1980s, averaging 2,000 new store openings per year, which caused some declines in customer service, cleanliness, and employee training. In the 1990s and earlier in this decade, McDonald’s suffered criticisms for its contribution to the nation’s obesity epidemic. At the time, the company offered “super sized” French fry and sodas, as well as toy gifts for kids who purchased Happy meals. A best-selling book, Fast Food Nation, and the documentary Super Size Me represented forms of retaliation against the company.
The company then came up with a “Plan to Win” strategy. It took up one sheet of paper, and it described success in terms of people, products, place, prices, and promotion. It focused on the customer’s experience at McDonald’s. The stores then opened for extended breakfast hours, late nights, and, for 34 percent of restaurants, 24 hours a day. The launch of the “I’m Loving It” campaign communicated the restaurant’s positive changes and perceptions. It also started offering healthier food options, such as salads. Its Chicken McNuggets went to white meat to counter the long-running “mystery meat” jokes. This year, McDonald’s upgraded its coffee and opened McCafes, offering higher-quality coffee beans and cream.
As consumer tastes have changed, McDonald’s has evolved its product mix and tried to make the experience more enjoyable for customers. It is not enough to be convenient anymore, so today its stores feature flat-screen televisions, video games for children, trendy furnishings, and Wi-Fi connections. The company appears to have been successful in its efforts to change the perceptions of McDonald’s as “the fat food chain.”
- What has McDonald’s done to change consumer perceptions about the company?
Andrew Martin, “At McDonald’s, the Happiest Meal Is Hot Profits,” New York Times, January 11, 2009.