Bachelor Thesis

Effective Brand Building

A Case Study of McDonalds Corporation
Gabriel Lopez
Emilio Aguinaldo College
2014
0
Abstract
The changing world has encouraged big companies to create more personal connection with
customers !n addition" the constant sustaining o# this relationship is re$uired The concept
which is used b% the companies and pro&e to be success#ul is brand building E&en though
companies establish the brand" not all o# them are using it properl% and ma'e a good use o# it
(a)imum utilit% and using all aspects o# the brand is the 'e% to success !n order to do that"
the 'nowledge about the brand is necessar% Thesis will present how to e##ecti&el% build
a strong brand b% ta'ing theoretical and practical perspecti&e At the beginning reader will be
pro&ided with &arious concepts in the #ield o# branding A#ter that" the case o# (c*onald+s
Corporation will be studied Anal%sis o# (c*onald+s brand building process will help
in understanding how this e)traordinar% brand was created
!n the theoretical part there will be #i&e main issues brought up ,irst &arious concepts o# what
a brand is and what are the #unction o# the brand will be described A#ter gaining 'nowledge
what a brand is" di##erent approaches how to build a brand are presented A#ter that the idea
o# brand e$uit% and &aluable #unctions it per#orm o# the brand is e)plained The process
o# creation o# brand e$uit% is possible than's to brand e$uit% dri&ers *i##erent 'ind o# dri&ers
and #unction the% carr% out #or brand e$uit% are described At the end o# this chapter" a#ter
'nowing the basic element o# the brand" all is summarized b% showing &arious models use#ul
in assessing brand and its e$uit% All theories are use#ul in assessing and describing e##ecti&e
brand building process
The second part o# the thesis #ocuses on (c*onald+s Anal%sis starts with brie# presentation
o# some essential to the case #acts A#ter that brand e$uit% dri&ers o# (c*onald+s
are described one b% one" together with the #unction the% per#orm #or brand e$uit% Then the
o&er&iew o# (c*onald+s struggle with the brand is presented in chronological order Both
o# this sections show" that (c*onald+s is a success#ul compan% than's to proper brand
management and constant control o&er its image B% implementing &arious elements
compan% can be sa#e that e&en i# one o# them #ail" there are others to compensate #or it
Last section o# practical use o# branding 'nowledge present (c*onald+s on Brand
Asset -aluator (odel and the #inancial &alue o# the brand E&en though (c*onald+s has
a minor loss o# brand e$uit% &alues it stand #or towards competition" the #inancial result are
man% times better then the ones o# competitors A#ter this summar% the #uture o# (c*onald+s
is speculated
1
Thesis shows it is important #or companies to ha&e a well thought our branding strateg%
and 'nowledge o# brand building processes .nowing role the brand per#orms and the process
o# brand building allow the compan% to control how it is assessed in consumers+ minds
Care#ul stud%ing (c*onald+s brand building process shows that the compan% 'nows how
to deal with its brand and proper brand management is their competiti&e ad&antage
2
Table of Contents
1 !ntroduction4
2 Theoretical bac'ground o# brand building/
21 The Brand/
211 0hat is the brand1
212 2ole o# the brand1
213 E)tend o# branding10
22 Brand building11
221 Brand Building Theories11
222 0hat is brand building #or415
23 Brand E$uit%15
231 0hat is brand e$uit%41/
232 Brand e$uit% theor% 6elements o# brand e$uit% and their #unction711
233 Brand e$uit% dri&ers 6building brand e$uit%720
24 Brand li#e c%cle" e)pansion and position on the mar'et2/
241 8roduct9Brand li#e c%cle2/
242 Brand Growth *irection (atri)2:
243 Brand Asset -aluator31
3 (c*onald+s strateg% #or building a success#ul brand34
31 ;istorical bac'ground o# (c*onald+s Corporation3<
32 (c*onald+s Brand E$uit% dri&ers35
321 (c*onald+s Brand Elements3/
322 (c*onald+s mar'eting acti&ities related to brand building3:
33 ;istorical de&elopments in (c*onald+s brand building44
34 8erspecti&es #or (c*onald+s4/
4 Conclusion<2
Bibliograph%<4
3
1. Introduction.
The world has changed thoroughl% in last #ew decades" especiall% because o# the
impact o# globalization ,re$uent migration o# indi&iduals" the tremendous acceleration
o# in#ormation e)changes as well as the enhanced geographical e)pansion and trade o# goods
and ser&ices" ha&e trans#ormed the economic and social en&ironment in man% wa%s *oing
business is not the same as #ort%" #i#t% %ears ago Companies ha&e to adapt to the changing
world in order to sur&i&e or 'eep the position on the mar'et These changes are especiall%
pro#ound #or #ast=#ood sector Loo'ing at the mar'et leader pro&ides good understanding o#
this process And where should we loo' #or this leader i# not in the >nited ?tates" the mar'et
where #ast=#ood become part o# national culture There are man% outstanding #ast=#ood
pro&iders in the >?A" but one o# them is be%ond the competition" (c*onald+s Corporation
6(c*onald+s7 !t is di##icult to #ind a person who will not 'now basic in#ormation about the
Golden Arches But how it is possible4 0hat happened" that children when hear this magic
word" instantl% 'now what stands behind it4 The interesting problem o# (c*onald+s brand
will be researched at in this thesis
roble! State!ent
The main goals o# the thesis are to e)plain what is a brand" and b% appl%ing this
'nowledge to (c*onald+s Corporation" the answer to the $uestion wh% has (c*onald+s been
a success#ul brand" will ne gi&en The goal is also to describe brand building strateg% in order
to get understanding wh% ha&ing a strong brand is important #or the compan% The paper is
written #rom mar'eting perspecti&e (ar'et o# #ast=#ood is changing together with the world"
and despite man% attac's (c*onald+s was able to come out o# the &arious situations
unharmed This was possible because o# the strong brand it has >sing the case o#
(c*onald+s the thesis describes what a strong brand is 0hat is the role o# the brand4 ;ow
does the process o# brand building loo's li'e4 0hat is brand e$uit% and what are brand e$uit%
elements4 The thesis #ocuses on getting #air &iew o# how to build and 'eep the strong brand
ali&e" and how to create" maintain and de#end its position in consumer minds
4
Content
The thesis is di&ided into two chapters The #irst one contains the theoretical
bac'ground about brand building At the beginning the general idea is presented" and as te)t
proceeds" more details about brand building are introduced The #irst chapter starts b%
e)plaining the idea o# the brand and its role @e)t part in about the process o# building the
brand *i##erent theories are presented in order to show there are man% wa%s o# describing
brand building process A#ter that some theories about brand e$uit%" which di##er in categories
are described Brand e$uit% dri&ers together with their role and how to manage them properl%
is the theme o# another subsection The last part o# the chapter shows di##erent models which
are help#ul in assessing stage the brand is currentl% in" and position it occupies in consumer
minds ?econd chapter is about brand building done b% (c*onald+s ,irst subsection is a brie#
histor% and essential #act which help is #urther anal%sis o# the brand Anal%sis o# the brand
starts with description o# (c*onald+s brand e$uit% dri&ers and #unctions the% per#orm A#ter
that the process o# building (c*onald+s brand is e)plained b% #ocusing on problems the
Golden Arches #aced throughout the %ears o# e)istence Appl%ing 'nowledge gained in
pre&ious sections and comparing it with the models used in describing the brand is the theme
o# ne)t part Current position o# (c*onald+s brand and it+s per#ormance is estimated At the
end o# the practical part o# the thesis #uture o# the brand" (c*onald+s has build throughout the
%ears" is brie#l% assessed
Met"od
Literature about the brand and process o# building it is &er% broad There are man%
theories in this #ield Theories presented in this paper and wa% o# doing anal%sis are belie&ed
to pro&ide a #air &iew on the process o# building success#ul brand The thesis does not use
all possible theories" that is wh% conclusion ma% be concentrated onl% around approaches
presented ;owe&er the aim o# the thesis was to pro&ide theoretical bac'ground #or #urther
studies" which will collecti&el% supplement each other and ma'e up whole entit% Although
there are numerous sources on brand building theor%" the case studies #or speci#ic companies
are rather rare There are not man% articles discussing (c*onald+s as a brand E&en those
articles #ocus mainl% on #inancial aspect o# the brand This situation encouraged more detailed
research related to brand building theor% and its application to (c*onald+s Corporation
<
Deli!itations and Assu!ptions
Theories that are used #or the discussion o# (c*onald+s case are commonl% used and
mentioned in literature when the concept o# the brand is brought up E&en though the% ha&e
some #laws and the% sometimes are criticized" the% pro&ide a good understanding o# how to
build a success#ul brand The thesis will not #ocus on criticizing indi&idual theories" but on
combining them in one entit% in order to obtain a #air method #or description and anal%sis o#
the chosen brand" which in case o# this paper is (c*onald+s Throughout the thesis some
theories are limited b% #ocusing on case rele&ant approach ?ince the mar'eter approach was
chosen in writing the thesis" the #inancial aspect o# the brand is limited to the minimum The
practical part" which is appl%ing the theor% to the case" is limited onl% to the (c*onald+s in
the >nited ?tates !# (c*onald+s international acti&ities were ta'en into consideration the
conclusion might be slightl% di##erent" howe&er since this subAect is too broad" it is limited to
the national mar'et o# the compan% E&en though the general idea o# (c*onald+s brand is the
same throughout the world" brand operations in speci#ic countries di##er according to the
consumers That is wh%" in order to pro&ide a #air understanding o# building a brand" the deep
anal%sis o# national mar'et is done 0hat is more" since building a success#ul brand is more
about de&eloping relationship with customers b% using brand building methods b% the
compan%" the in#luence o# competition on this process is omitted
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#. T"eoretical bac$ground of brand building.
The process o# building a strong brand and gaining competiti&e ad&antage is not
an in&ention" that at some point o# time was made !t was the process that throughout the %ears
was growing in importance and along with the scope o# branding @owada%s brand building is
the process that e&er% compan% has to ta'e into consideration 0hen loo'ing at mar'et
leaders li'e Google" @i'e or Coca=Cola we notice not onl% the name o# the compan% but also
the whole idea behind it This chapter will #ocus on a brand as crucial element o# connecting a
compan% with its customers At the beginning the concept o# the brand will be e)plained"
together with its role and implications Then the idea o# brand building and #unctions it
per#orms will be e)plained together with steps &ital to the creation o# signi#icant brand e$uit%
A#ter that the great #ocus will be placed on brand e$uit% ,irst di##erent theories will be
presented" secondl% three main sets o# dri&ers that help in creating brand e$uit% will be
described and at the end #actors that in#luence those dri&ers The ne)t thing that chapter will
#ocus on is the li#e c%cle o# the brand
#.1.T"e Brand.
There are man% de#initions o# what a brand is There are as well man% origins o# the
word brand But when did it get the meaning it has now4 Briginall% brand was Ca mar'
burned on the hide o# an animal to identi#% its owner" or on the person o# a con&icted criminal
to warn the public o# theirs characterD6Blac' 2003E 317 (ar' 2itson writes that Cthe origin o#
the term brand comes #rom brandr" the @orse word #or #ire !t means to burn the mar' o# the
producer onto the product that the% madeD 62itson 2005E 1/7 !t is not the time to discuss
which meaning was the #irst and wonder which one is more important The #act is that both
interpretations are rele&ant E&en these da%s" in the era o# globalization" there are di##erent
de#initions o# a brand E&er%thing depends on the perspecti&e we are loo'ing #rom !n the past
the owners o# animals used the word brand which meant #or them claiming their propert% and
in case o# the#t" eas% identi#ication ,or producers o# tools the same word meant mar'ing the
products with logo o# the producer so i# there was a need to complain" repair or suggest
bu%ing the product to third part% the manu#acturer could be easil% traced ,or the Audiciar%
branch word brand meant to mar' a criminal and in#orm societ% o# his past and what
beha&iour could be e)pected There were man% #unctions which brand had in the past" and so
it is nowada%s The #irst chapter includes a brie# discussion o# brand building theor% A#ter
e)planation o# the idea o# the brand" theories o# brand e$uit% and brand e$uit% dri&ers are
/
introduced The chapter includes also an assessment o# the position o# the brand in consumer
minds and li#e c%cle the brand #ollows
#.1.1. %"at is t"e brand
The de#inition o# what a brand is depends on how deep and #rom what perspecti&e it is
described The B)#ord *ictionar% o# Economics describes brand as Ca name used to identi#%
the ma'er or distributor o# a goodD ,or the economists this simpli#ied e)planation is enough
to understand what a brand is and it is su##icient #or the perspecti&e the% loo' at a compan%
The American (ar'eting Association de#ines brand as Ca name" term" sign" s%mbol" or design"
or a combination o# them" intended to identi#% the goods or ser&ices o# one seller or group o#
sellers and to di##erentiate them #rom those o# competitorsD6.otler 2005E 2/57 ,rom the
mar'eting perspecti&e brand consists o# some speci#ic elements and carries out some #unction
,rom the perspecti&e o# the branding consultanc% = !nterbrand F brand is Ca mi)ture o#
tangible and intangible attributes s%mbolised in a trademar'" which" i# properl% managed"
creates in#luence and generates &alueD 6!nterbrand 200/E 47 As it could be e)pected"
consultanc% #irm is #ocused more on output" when e)plaining what a brand is
A brand is thus a dimension that di##erentiates products or ser&ices #rom products and
ser&ices o# the competition which are designed to satis#% the same needs This dimension ma%
contain di##erences that communicate what brand represents or ma% be related to the product
or ser&ice per#ormance This is the de#inition that will be used in the thesis
#.1.#. &ole of t"e brand
!n the past the idea o# branding was used mostl% in terms o# mar'ing propert%
or people The #unction was to in#orm about the ownership" assign wor'manship to the
producer or signal the reputation o# the indi&idual !n toda%+s world man% di&ersi#ied products
or ser&ices are branded But wh% do companies decide to brand them4 !s it because o# the
pressure the competitors put on branding and because e&er%bod% do it4 0hat is the reason o#
branding and what is the purpose4 0e simpl% ma% sa% because there are &aluable #unctions
which brand per#orms #or a compan% as well as #or customers This chapter will e)plain main
#unctions o# branding b% di&iding it into two destination groups ,or contractors the three
important roles will be presented" and a#ter that the implications #or the consumers and
bene#its o# branding will be e)plained
1
The brand pla%s signi#icant role in a per#ormance o# a compan% ,rom the mar'eter
perspecti&e the main ad&antages o# branding are legal protection" identit% and lo%alt%
The #irst role is legal protection ;a&ing a brand helps in protecting the uni$ue
#eatures or $ualit% o# the product" process or an% other aspect o# the compan% .otler
and .eller e)plain how each t%pe o# intellectual propert% rights can be used" b% distinguishing
into parts" Cthe brand name can be protected through registered trademar'sG manu#acturing
process can be protected through patentsG and pac'aging can be protected through cop%rights
and proprietar% designsD6.otler 2005E 2//7 Legal protection has man% implications
!t ensures that no one beside the compan% will ha&e the bene#its and it guarantees that mone%
can be sa#el% in&ested in brand building process Large amounts o# mone% spend on
ad&ertising campaigns pro&e a success onl% i# the compan% can reap bene#its #rom them
!dentit% is the second &ital role the indi&idual brand per#orms #or a compan% The important
#eature o# ha&ing a brand is being identi#ied b% consumers ;a&ing identit% allows customers
to di##erentiate the compan% #rom the competition !t helps them assign past e)periences" li'e
the conse$uences o# using the product" to speci#ic manu#acturer or distributor 0hat is more"
b% using brand building the consumer e&aluation process o# identical items ma% be
in#luenced b% brand awareness ,or a compan% ha&ing identit% means ha&ing image which
can be managed E&en though once it is established it is di##icult to change" it is worth an
e##ort since consumers o#ten percei&e image as representation o# $ualit% and per#ormance
!mage together with reputation are important issue in brand building process
Another #unction that brand per#orms is lo%alt% Brands signal a certain le&el o# $ualit% so that
satis#ied bu%ers can easil% choose the product again6Erdem 1::17 The certain le&el
o# satis#action that is signalled b% a brand li'e $ualit% has maAor impact on lo%alt% 2epeatable
choosing o# the same product has ad&antages #or both a seller and a bu%er Brand lo%alt%
assures also Cthe tendenc% #or consumers to pre#er #amiliar namesD6Blac' 2003E 317 ;a&ing
certain number o# customers helps sellers to plan the in&estment and de&elopment o# the
compan% !t is a predisposition that e&er% mar'eter wishes to achie&e !n other words ha&ing
lo%al customers results in better earnings" which allow to in&est mone% in brand building and
in result ha&ing a strong brand and better product behind it
Bn the other hand brand per#orms &aluable #unctions also #or consumers According to
.ap#erer there are eight #unctions that create &alue in the e%es o# consumers 6Table 17
:
These eight #unctions could be di&ided into three groupsE recognition" reduction o# the
percei&ed ris' and the pleasure side o# the brand !denti#ication and practicalit%
are mechanical and concern the essence o# the brand According to .ap#erer their role
is Cto #unction as a recognised s%mbol in order to #acilitate choice and to gain
&alueD6.ap#erer" 1::/7 Guarantee" optimisation and badge are responsible #or reducing
percei&ed ris' ,inding the same $ualit% e&er% time when ma'ing purchase" being sure
o# bu%ing the best product in its categor% and 'nowledge about the image the product presents
pla% an important role in the decision ma'ing process Continuit%" hedonistic and ethical
#unctions ha&e Ca more pleasurable sideD6.ap#erer" 1::/7 Continuous satis#action with the
brand which ma% lead e&en to enchantment is the goal o# e&er% mar'eter @owada%s more and
more emphasis is placed on the ethical #unction o# the brand since customers #eel more
connected to the brand and e)pect responsible beha&iour in e)change o# ma'ing the purchase
;owe&er" all these #unctions are not achie&ed automaticall%" and not e&er% compan% per#orms
all this #unctions
#.1.'. E(tend of branding.
E&er% compan% stri&es to establish a brand as strong as possible" since it ma'es doing
business easier and smoother ,or customers brand o##ers easiness o# product choice There
is no need to test" challenge or classi#% to a great depth because o# #amiliar brand" which
i# properl% managed" lea&es the hints what this brand stands #or and what could be e)pected
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62eisenbec'" 200/7 The good e)ample is Apple brand !t is possible due to success#ul
branding which is Cendowing products and ser&ices with the power o# a brandD 6.otler" 2005E
2/17 !t is the mar'eters role to teach consumers about the product" what it does and wh%
consumers should care b% creating Cmental structures that help consumers organize their
'nowledge about products and ser&ices in a wa% that clari#ies their decision ma'ing processD
6.otler" 2005E 2/17 Crucial role o# the brand is to con&ince customers there are signi#icant
di##erences among brands o##ering the product But how to create a brand that will per#orm
such #unctions4 !t could be done through brand building
#.#.Brand building.
!n order to build a success#ul brand a lot o# e##ort has to be de&oted to brand building
process There are man% models and each o# them #ocuses on di##erent aspects o# the brand
There will be presented #our di##erent theories B2A@*H and Brand 2esonance (odel
consider brand building as a series o# steps" whether Brand Brientation and Brand Leadership
are #ocused on building interconnected models
#.#.1. Brand Building T"eories.
(illward Brown" the mar'eting research consultant" is the one who de&eloped the
model o# brand strength called B2A@*H The main idea is the Brand*%namics p%ramid
presented in ,igure 1 which argues that brand building is the process
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As .otler captures it Cbrand building #ollows a se$uential series o# steps" each
contingent upon success#ull% accomplishing the preceding oneD 6.otler 2005E 2137 The main
point is the distribution o# the consumers The most consumers could be #ound on lower le&els
and it is the Aob #or mar'eters to increase the number o# programs and acti&ities that will help
consumers mo&e to higher le&els

There is assigned en$uir% to each le&el o# the p%ramid The wea'est relationship and
low share o# categor% e)penditure is at 8resence le&el C*o ! 'now about it4D At 2ele&ance
le&el consumer is aware o# the product and answers $uestion C*oes it o##er me something4D
The ne)t le&el is 8er#ormace" CCan it deli&er4D A#ter that is the Ad&antage le&el which
considers reaction to the $uestion C*oes it o##er something better then others4D The last le&el
at which is the strongest relationship and the highest share o# categor% e)penditure is
Bonding !t is the best and the most awaited le&el o# bond with the consumer The% ma'e a
choice to bu% the pre#erred brand automaticall% without considering products o# competitors
Another theor% which ponder the brand building process as a series o# steps is Brand
2esonance (odel .otler had distinguished si) Cbrand building bloc'sD which together #orm
a #our steps p%ramid presented in ,igure 2 ;e di##erentiated two sides o# the p%ramidE
rational and emotional .otler argues that in order to create signi#icant brand it re$uires
Creaching the top or pinnacle o# the brand p%ramid" which occurs onl% i# the right building
bloc's are put into placeD6.otler" 2005E 21<7
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The #irst step" Brand ?alience" considers how o#ten and how easil% do customers thin' o#
the brand under &arious situations li'e purchase or consumption The obAecti&e o# this step
is to ensure that brand and its associations are identi#ied in consumers+ minds with a speci#ic
product class o# customer need The second step consists o# two bloc'sE Brand 8er#ormance
which considers i# the customers+ #unctional needs are met b% the product or ser&ice and
Brand !mager% which describes the properties" including the wa%s in which customers+
ps%chological and social needs are attempted to met b% the brand The purpose o# the second
step is to Cestablish the brand meaning in the minds o# customers b% strategicall% lin'ing
a host o# tangible and intangible brand associationsD6.otler" 20057 The role o# ad&ertising
is crucial at this step since it shapes the image o# the brand Cra#ting association with the
brand that are strong" uni$ue and #a&ourable are necessar% to 'eep brand competiti&e ,or the
third tier o# the p%ramid .otler proposes two bloc'sE Brand Iudgements and Brand ,eelings
Iudgements emerge #rom 8er#ormance and !mager% associations and are #ocused on personal
opinions and e&aluations li'e percei&ed $ualit% o# the brand" credibilit%" consideration and
superiorit% ,eelings" on the other hand" are the emotional responses and reactions to the brand
li'e social appro&al" sel#=respect" e)citement" #un !t is important to obtain a proper positi&e
response in the consumer mind in terms o# Audgement and #eelings The last bloc' o# the
p%ramid is Brand 2esonance which re#ers to nature o# the relationship and ps%chological bond
that customers ha&e with the brand and their le&el o# engagement
The other wa% o# building a brand is through building an interconnected structure
Brand building model presented b% >rde is Brand Brientation CBrand Brientation is
an approach in which the process o# the organization re&ol&e around the criterion"
de&elopment and protection o# the brand identit% in an ongoing interaction with target
customers with the aim o# achie&ing lasting competiti&e ad&antages in the #orm o#
brandsD6>rde" 1:::7 Basicall% the model #ocuses on the brand b% considering it as strategic
resources >rde argues that when building the brand one should C#irst create a clear
understanding o# the internal brand identit% The brand becomes strategic plat#orm that
pro&ides the #ramewor' #or the satis#action o# customers+ wants and needsD6>rde" 1:::7
The de&elopment o# the brand #ocuses on more deliberate and acti&e manner" starting with the
strategic plat#orm which core point is brand identit% (oreo&er the response o# customers
is what partiall% dri&es and directs the de&elopment C0hat is demanded b% customers at an%
gi&en moment is not necessaril% the same as that which will strengthen the brand as
a strategic resourceD" Cthe wants and needs o# customers are not ignored" but the% are not
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allowed unilaterall% steer the de&elopment o# the brand and determine its identit%D6>rde"
1:::7 ,igure 3 presents the theoretical illustration o# the model
,igure 3 Brand ;e)agon 6?ourceE >rde 1:::7
!t can be clearl% seen that integration and interconnection o# the #actors ha&e important role
in this model The core process o# creating brand meaning" which consists o# positioning the
core &alues lies at the central point o# the model The emotional #unctions 6Corporate name
and Brand name7 are re#lected in the le#t side o# the model The rational &iew 68roduct
Categor% and 8roduct7 is presented at the right side o# the model The wa% in which target
consumers interpret the brand 6Target Audience7 is at the upper side" while intensions o# the
brand 6-ision and (ission7 are situated at the lower part o# the model
The last brand building theor% presented is Brand Leadership model This model
di##ers #rom traditional branding models b% emphasizing not onl% strateg% but also tactics
Aa'er and Ioachimsthaler understood that building the brand is one o# crucial #unctions
o# doing business and argued that brand manager should Cbe higher in the organization with
a longer=term Aob horizonD6Aa'er" 2000E 3<07 The% e)pect the brand manager to be the top
mar'eting pro#essional in the organization CThe brand manager in the brand leadership
paradigm is strategic and &isionar% rather than tactical and reacti&e ;e or she ta'es control o#
the brand strategicall%" setting #orth what it should stand #or in the e%es o# the customer and
others rele&ant parties and communicating that identit% consistentl%" e##icientl% and
e##ecti&el%D6Aa'er" 2000E 3<07 Brand leadership model+s main concept is that the brand
strateg% should be in#luenced b% the business strateg% and should re#lect the same strategic
14
&ision and corporate culture Brganizational challenge considers the creation o# brand
building organization The second challenge is the de&elopment o# brand architecture that will
be pro&iding compan% with strategic direction The third challenge is the de&elopment
o# brand strateg% that di##erentiates the brand including moti&ating brand identit% and
recognition among consumers The last challenge #or compan% is re#ining brand building
programs to be e##icient and e##ecti&e so customer perceptions" attitudes and lo%alt% could be
shaped !n order to achie&e brand leadership there are #our challenges presented in ,igure 4
,igure 4 Brand Leadership Tas's 6?ourceE Adapted #rom Aa'er 2000E 3<07
The #irst challenge compan% encounters is the creation o# organizational structure and
processes o# compan% that will lead to strong brands Authors claim that brands should not be
Cat the merc% o# ad hoc decisions made b% those with no long=term &ested interest in the
brandD6Aaa'er" 20007 Additionall%" there should be a brand leader #or e&er% product" mar'et
or countr% There should be brand=nurturing structure" tools and culture which will allow the
communication and management process to share e)perience" in#ormation" insights and
initiati&es
Another challenge o# Brand Leadership approach concerns brand architecture !t is about
identi#ication o# the brands" sub=brands that will be supported" their relationships and
respecti&e roles !# managed properl%" the e##ect will include clarit% o# customer o##erings"
s%nergies in communication programs and abilit% to le&erage brand assets Another 'e%
#unction o# brand architecture are decisions about e)tending brandsE should compan% use sub=
brand" endorse brand or create a new one CThe relati&e role o# each brand in the port#olio
1<
should be determinedD6Aa'er 20007 in order to ma'e proper decision about assigning
ade$uate resources
Bne more challenge" the compan% #aces" is brand identit% and position Brand position helps
in prioritizing and #ocusing the brand identit% b% setting communicating obAecti&es The brand
identit% F Ca &ision o# how that brand should be percei&ed b% its target audienceD6Aa'er"
20007 is the 'e% element in brand leadership model !t guides and inspires the brand=building
program ;owe&er i# there is ambiguit% and con#usion in brand identit%" the chances o#
e##ecti&e brand building are strongl% reduced
The last challenge compan% #aces are brand building programmes and communication
acti&ities which are necessar% to de&elop the brand identit% The% are use#ul not onl% in the
implementation o# brand identit% but also in brand de#ining process Accessing multiple media
helps being noticed and remembered" helps in changing customer perceptions" rein#orcing
attitudes and creating lo%alt%
#.#.#. %"at is brand building for)
E&en though the #our models o# brand building" presented in pre&ious section" di##er in
approach" the% all ha&e the same goalE lead the brand to a point where omnipotence and
recognisabilit% allow becoming the leader o# the mar'et and reaping all possible bene#its #rom
it Building the brand is not simple and there are man% di##erent aspects that has to be ta'en
into consideration Building success#ul brand re$uires putting a lot o# e##ort into this process
and constant monitoring o# the situation !# the brand building process is without super&ision
and le#t on their own there is little chance it will create desired lo%alt%" associations and
attitudes toward compan% and its products But what e)actl% are those di##erences created in
consumers+ minds that brand building tries to achie&e4 @e)t section will #ocus on #inding out
what are the di##erentiators o# a brand in the same product or ser&ice categor%
#.'.Brand E*uity
The main role o# branding is to create di##erences in minds o# consumers But what
in#luences the wa% the product or ser&ice is percei&ed4 0hat processes can be in#luenced and
endowed with the brand4 This section will #ocus on brand e$uit% theor% ,irst" de#inition
o# brand e$uit% and approaches o# measuring it will be presented A#ter that di##erent theories
15
about #rom which elements o# brand e$uit% will be described Then the discussion will #ocus
on components creating brand e$uit%" called brand e$uit% dri&ers The #inal part o# the chapter
will #ocus on choosing and designing brand e$uit% dri&ers
#.'.1. %"at is brand e*uity)
The concept o# brand e$uit% is widel% accepted ;owe&er depending on perspecti&e
there are di##erent de#initions o# brand e$uit% .nowles in his article -ar%ing Perspectives on
Brand Equity distinguished three de#initionsE #inancial" accounting and mar'eting approach
!n the #inancial concept the brand e$uit% means Cthe incremental cash #low that accrues to the
compan% as a result o# owing a brandD6.nowles 2001E 237 ?uch a de#inition resulted #rom
the #inancial attitude towards e$uit% There is also accounting concept" which as author writes
would use the term Ctrademar' and associated goodwillD6.nowles 2001E 237 This de#inition
results #rom the perspecti&e that accountants percei&e assets The mar'eting concept" on the
other hand does not describe brand e$uit% in terms o# mone% .nowles+ de#inition o# a brand
e$uit% #rom mar'eting perspecti&e is similar to .otler+s which describes it as Cthe added &alue
endowed on products and ser&icesD6.otler 2005E 2107" since that is the Aob o# mar'eters But
what are those &alues and where are the% added4 0hat aspect o# compan% are in#luenced b%
the brand building4
?tud%ing and measuring the brand e$uit% can also be done b% using three perspecti&es
The #irm or managerial le&el approach assesses the brand as #inancial asset The intangible
&alue o# the brand is calculated 0illiam @eal and 2on ?trauss620017 wrote A Framework for
Measuring and Managing Brand Equity which e)plains the wa% o# measuring it The goal
o# their paper is helping in a better #ramewor' de&elopment #or addressing brand e$uit%
(easurement o# brand e$uit% can also be conducted on product le&el At this le&el the e$uit%
is calculated b% comparing the price o# a generic product to the price o# the e$ui&alent
branded product The remainder is due to the perception o# the brand in the mar'etplace
The last measurement method is not about calculating the #inancial &alue o# e$uit% !t is about
#inding what are the associations in consumer mind connected to the brand The mar'eting
de#inition o# the brand e$uit% and customer=based brand e$uit% measurement method will
be used in the thesis
1/
#.'.#. Brand e*uity t"eory +ele!ents of brand e*uity and t"eir
function,
This section will use consumer=based brand e$uit% approach" since it will pro&ide the
best insight into the process o# brand building There are man% researches and man% models"
which conclude that &arious dimensions o# brand e$uit% are reliable The% will be brie#l%
e)plained together with included parameters
The #irst and most commonl% cited author is .e&in Lane .eller ;e de#ines customer=
based brand as Cdi##erential e##ect that brand 'nowledge has on consumer response to the
mar'eting o# that brand A brand is said to ha&e positi&e customer=based brand e$uit% when
consumers react more #a&ourabl% to a product and the wa% it is mar'eted when the brand
is identi#ied than when it is not identi#iedD6.eller 2004E 507 .eller identi#ies three 'e%
ingredients that constitute brand e$uit%E
= brand 'nowledgeE consists o# all the thoughts" #eelings" images" attributes" awareness"
e)periences" belie#s" attitudes and bene#its that become associated with the
brand6.eller 2004E 507 Brands should create associations with customers which will
be strong" #a&ourable and uni$ueG
= consumer response to ad&ertisingE i# there is no di##erence" the brand name product is
a commodit% and competition will probabl% be based on priceG
= di##erential e##ectE the perception" pre#erences and beha&iour related to all aspects
o# the mar'eting o# the brand
The second author" *a&id Aa'er" initiall% grouped brand e$uit% measures into #i&e
dimensions ;is original idea o# brand e$uit% consisted o# #our dimensions which were based
on the customer perceptions o# the brand ;e decided to add #i#th dimension which Cincludes
two sets o# mar'et beha&ior measures that represent in#ormation obtained #rom mar'et=based
in#ormation rather than directl% #rom customersD Each dimension de#ined b% Aa'er consists
o# measures and there are ten measures totall% which are grouped into categoriesE lo%alt%
measures" percei&ed $ualit%" associations" awareness" mar'et beha&iour The Brand E$uit%
Ten 6Aa'er 1::5E 10<7 includeE
= lo%alt% measuresE
price premium F Cthe amount a customer will pa% #or the brand in comparison with
another brandD6Aa'er 1::5E 1057" willingness to pa% price that is di##erent #rom
comparable product "
11
satis#action9lo%alt% F a direct indication o# customer satis#action applied to customers
who used the product or ser&ice within a certain time #rame" usage o# the product
or &iew customers holds create product e)perience"
= percei&ed $ualit%E
percei&ed $ualit% F comparison o# percei&ed $ualit% to alternati&e brands"
leadership F consists o# three dimensionsE
no 1 s%ndrome6i# enough customers are bu%ing into a brand concept it must
ha&e merit7"
leadership taps inno&ation6is brand mo&ing ahead technologicall%7"
leadership taps the d%namics o# customer acceptance
= associationsE 6how brand can be di##erentiated #rom competitors7
percei&ed &alue F brand as &alue proposition" indicates the belie&es o# customers
whether &alue recei&ed #or the mone% is good when comparing to competing brands"
brand personalit% F brands emotional and sel#=e)pressi&e bene#its" assessment o# the
brand as a human being b% associating human characteristics"
organizational associations F brand as the corporate entit% consisting o# people" &alues
and programs that lies behind the brand
= awarenessE
brand awareness F salience o# the brand in the consumer mind" le&els o# awarenessE
recognition" recall" top o# mind" brand dominance" brand 'nowledge" brand opinion
= mar'et beha&iourE
mar'et share F per#ormance measured b% mar'et share and the position compan% has
on the mar'et 6leader" #ollower" nicher" challenger7
price and distribution indices = relati&e mar'et price at which the brand is being sold
and distribution co&erage
The third model o# brand e$uit% is one o# the most recent ones Atilgan" A'inci" A'so%
and .a%na' studied global brands in culturall% dissimilar countries ,rom the empirical
e&idence the% deducted that CThe brand e$uit% #or global brands can be measured under #our
basic dimensionsE percei&ed $ualit%" brand lo%alt%" brand associations" and brand
trustD6Atilgan" 200:E 11<7D The new dimension disco&ered 6trust7 seems to suit &er% well
when tal'ing about the brand in the present time" especiall% when &er% little about the
per#ormance o# the brand could be hidden #rom the media
1:
8ercei&ed $ualit% 8roduct $ualit% dimensions 6per#ormance and #eatures7" ser&ice $ualit%
dimensions 6reliabilit%" responsi&eness and tangibles7
Brand lo%alt% Beha&ioral lo%alt% 6repeat purchases" how o#ten and how much7"
attitudinal lo%alt% 6attitude towards the brand compared to other
brands o##ering similar bene#its7
Brand associations An%thing lin'ed in memor% to a brand6product attributes" brand name"
bene#its and attitudes associated with brand7
Brand trust Consistenc% and credibilit% o# the brand
Table 2 Elements o# brand e$uit% according to Atilgan model
The authors decided to ta'e this dimension into consideration since as the% sa%" Cthere are
strong re#erences made" implicitl% and e)plicitl%" to the e)istence and importance o# trust not
onl% in the brand e$uit% literature but also in global branding and global consumption
studiesD6Atilgan" 200:E 12/7 The #inancial crisis #orced strong brands or big companies
to ma'e tough decisions considering wa% o# doing business !t encouraged the customers to
start thin'ing about e)pertise and trustworthiness when deli&ering what has been promised b%
the compan%
The theories o# brand e$uit% presented in this section di##er in parameter mi) which
the% consist o# and groups the% are assigned to ;owe&er" there are similarities between them
and issues the% co&er o&erlap in man% conte)ts
#.'.'. Brand e*uity drivers +building brand e*uity,.
!n order to create brand e$uit% mar'eters ha&e to build Cthe right brand 'nowledge
structures with the right consumersD6.otler 2005E 2<17 This process is possible onl% i# there
are dri&ers which would initiate this process .otler in his boo' Marketing Management
distinguishes brand e$uit% dri&ers into three main groupsE brand elements" mar'eting
acti&ities and indirect associations Each group o# brand e$uit% dri&ers consist o# &arious
elements which re$uire specialist techni$ues in order to be success#ul
The #irst group are brand elements" Cthose trademar'able de&ices that identi#% and
di##erentiate the brandD6.otler 2005E 2157 !t is worth mentioning that multiple brand
elements contribute to the de&elopment o# strong brand much #aster then the same elements
20
indi&iduall% .otler describes them as Cthe initial choices #or the brand elements or identities
ma'ing up the brand 6brand names" >2Ls" logos" s%mbols" characters" spo'espeople" slogans"
Aingles" pac'ages" and signage7D Each element can pla% a number o# brand=building roles"
howe&er it is important to understand that each single element pro&ides a positi&e contribution
to brand e$uit% .otler argues that wa% to do it is Cthe test o# the brand=building abilit% o#
these elements is what consumers would thin' or #eel about the product i# the brand element
were all the% 'newD Basicall%" brand elements should be eas% to recognize and recall"
li'eable" persuasi&e and as descripti&e as possible The% should also" i# it is possible" capture
intangible characteristics This can be done in man% wa%s" #or e)ample b% adapting s%mbols
or in&enting slogans which would help consumers" as .otler phrase it" Cgrasp what the brand
is and what ma'es it special" summarizing and translating the intent o# a mar'eting programD
.otler distinguishes si) main criteria #or choosing brand elementsE
(emorabilit% F How easily is the brand element recalled and recognied!
The intrinsic nature o# names" s%mbols" etc might gain more attention and ma'e
it easier to recall or recognize when ma'ing purchase decision or consumption
(eaning#ulness = "s the brand element credible and suggestive of the
corresponding category! !t could suggest the t%pe o# person who might use the
brand or something about product ingredient Basicall% it ta'es on di##erent
meanings which &ar% in persuasi&e and descripti&e content
Li'able F How aesthetically appealing is the brand element! 2ichness in &isuals"
&erbal imager% or ma%be some other wa% in which element is inherentl% li'eable
Trans#erabilit% F #an the brand element be used to introduce new products in the
same or different categories! $oes it add to brand equity across geographic
boundaries and market segments! !t is the use#ulness o# brand element not onl%
in product or line e)tensions but also in mar'et e)pansion
Adaptabilit% F How adaptable and updateable is the brand element! ?ince there
are changes in consumers opinions and &alues sometimes there is a need #or brand
elements to be #le)ible and eas% updateable" so consumers will still see it rele&ant
8rotectabilit% F How legally protectable is the brand element! !t is important
to remember about the #uture o# the brand" so the element should be able to be
legall% registered and protected internationall%
The criteria presented b% .otler could be distinguished into two #unctions the% pro&ide The
#irst three criteriaE memorabilit%" meaning#ulness and li'eabilit% characterize and describe
21
choice o# well thought out elements when building the brand e$uit% ;owe&er" the nature
o# the latter three is more de#ensi&e and concern brand element together with brand e$uit%
it creates and which could be preser&ed and le&eraged when #acing di##erent constraints and
opportunities
The second group o# brand e$uit% dri&ers are Cproduct and ser&ice and all
accompan%ing mar'eting acti&ities and supporting mar'eting programsD6.otler 2005E 21<7
.otler+s &iew on these dri&ers is rather holistic ;e e)plains the general ideas behind them"
rather than e)plaining speci#ic mar'eting acti&ities This approach suits the purpose o# this
paper since mar'eting is a broad concept" and customers disco&er the brand though the range
o# brand contacts" Can% in#ormation bearing e)perience" whether positi&e or negati&e" a
customer or prospect has with the brand" the product categor%" or the mar'et that relates to the
mar'eter+s product or ser&iceD6?chultz 20037 The contacts and touch points li'eE pa%ment
transaction" telephone or online e)perience" word o# mouth" interaction with personnel or
simpl% personal use and obser&ations show that strateg% and tactics behind mar'eting are no
longer as simple as the% were in the past The stud% o# interconnection and interdependence o#
&arious #actors emphasize there are three important themes when designing mar'eting
programs o# brand building The three ideas areE personalization" integration and
internalization
C8ersonalizing mar'eting is about ma'ing sure the brand and its mar'eting are
as rele&ant to as man% customers as possibleD6.otler 2005E 2117 !n the world where e&er%
customer is treated indi&iduall% customers desire more attention !n order to adapt to this
re$uirement mar'eters ha&e embraced di##erent methodsE e)periential mar'eting" one=to=one
mar'eting and permission mar'eting
E)periential mar'eting was the concept de&eloped b% ?chmitt in 1::: The main idea was
that Ci# %ou want to win and 'eep customers" %ou must o##er them an e)perience that is tied to
the purchase o# %our goods and ser&icesD6.inni 1:::E 1327 ?chmitt in his model used #i&e
strategic e)periential modelsE sense" #eel" thin'" act and relate as a strategic basis
o# mar'eting ;e argues that it is necessar% to engage as man% senses as possible !n his boo'
E%periential Marketing How to &et #ustomers to 'ense( Feel( )hink( Act and *elate to +our
#ompany and Brands ?chmitt writes CTraditional mar'eting was de&eloped in response to the
industrial age" not the in#ormation" branding and communications re&olution we are #acing
toda%J6?chmitt 1:::E 127 The engagement and interaction with the brand" products and
ser&ices create e)periences which dri&e sales" create image and awareness o# the brand
22
The aim o# personalized mar'eting is to establish the connection with the consumer which
will be not onl% rational but also emotional
The second idea is" one=to=one mar'eting which is e)plained as Cbeing willing and able
to change %our beha&ior toward an indi&idual customer based on what the customer tells %ou
and what else %ou 'now about that customerD68eppers 1:::E 1<17 8eppers and 2ogers
outlined a #our=step #ramewor' that can be used in one=to=one mar'etingE
,- "dentify you prospects and customers
.- $ifferentiate customers in terms of /,- their needs and /.- their value to your company
0- "nteract with individual customers to improve your knowledge about their individual
needs and to build stronger relationships
1- #ustomie products( services( and messages to each customer
This concept" howe&er" re$uires a lot o# in&estments in in#ormation collection process" and
pro&es to be success#ul onl% #or companies that collect plent% o# in#ormation about indi&idual
customers
The third method mar'eters use is permission mar'eting This concept is about mar'eting
to consumers onl% a#ter getting permission to do it !n this t%pe o# mar'eting it is the
customer" who decides whether he or she wants to recei&e or not mar'eting in#ormation and
under which #orm As Godin wrote in his boo' Cmar'eters can de&elop stronger consumer
relationships b% respecting consumers+ wishes and sending messages onl% when the% e)press
willingness to become more in&ol&ed in a brandD6Godin 1:::7 Lea&ing decision to the
potential customer ma'es the decision more personal and ma'es him or her #eel more rele&ant
thus creating deeper and stronger relationship with the brand
The second main theme in designing mar'eting programs is integration mar'eting
.otler e)plains it sa%ing it is Cabout mi)ing and matching mar'eting acti&ities to ma)imize
their indi&idual and collecti&e e##ectsD !n order to achie&e it" &ariet% o# di&erse mar'eting
acti&ities is needed that will rein#orce the brand promise This 'ind o# approach comes #rom
the holistic &iew on mar'eting which assumes that" C(ar'eting programs should be put
together so that the whole is grater than sum o# the partsD6.otler 2005E 21:7 ?um o# the
indi&idual mar'eting acti&ities in not e$ual to the total outcome o# mar'eting program All
integrated mar'eting actions can be e&aluated b% loo'ing at their e##ecti&eness" e##icienc%" and
e##ect the% ha&e on brand awareness or creating and maintaining brand image The two
important mar'eting concepts in integrated mar'eting are brand identit% and brand image
The% are closel% related to each other According to .otler620057 C!dentit% is the wa% a
compan% aims to identi#% or position itsel# or its productD The aim o# brand identit% strateg%
23
is creation o# a Cset o# processes that include the coordinated e##orts o# the brand strategists in
617 de&eloping" e&aluating" and maintaining the brand identit%9identities" and 627
communicating the brand identit%9identities to all indi&iduals and groups responsible #or the
#irmKs mar'eting communicationsD 6(adha&aram 200<7 !t is important to remember that
identi#ication should be done properl%" so it is clear what brand stands #or and what it is about
C!mage is the wa% the public actuall% percei&es themD writes .otler The main issue about
brand image is to con&e% properl% with customers" so the% will not con#use what brand stands
#or The right establishment in consumer minds re$uires #rom mar'eters to communicate
through all a&ailable channels The message sent must be e)pressed in s%mbols" colors"
slogans" e&ents" atmosphere" emplo%ee beha&ior" pac'aging and ad&ertisements (ar'eting
acti&ities ma% &ar% in strength and can accomplish di##erent obAecti&es The complementarit%
and enhancement o# the e##ects o# possible mar'eting acti&ities should be care#ull% studied !n
order to build and maintain e)ceptional brand e$uit%" the engagement in a mi)ture o#
integrated mar'eting acti&ities is needed
The last important concept applied to the second group o# brand e$uit% dri&ers is
internalization" also called internal branding de#ined as Cacti&ities and processes that help to
in#orm and inspire empl%eesD6.otler" 20057 This issue is especiall% crucial #or ser&ice
companies and retailers Emplo%ees need an up=to=date in#ormation about brand promise and
deep understanding o# it The Aob o# mar'eters is to Cadopt internal perspecti&e to be sure
emplo%ees and mar'eting partners appreciate and understand basic branding notions and how
the% can help F or hurt F brand e$uit%D6*unn" 20037 (oti&ation to wor' harder" #aster and
better comes #rom belie&ing in a brand success" promise and attitude That is how lo%alt%
among personnel is created Colin (itchell 620027 in his article 'elling the Brand "nside
distinguishes three principles o# internal mar'etingE
1 Choose Lour (oment F 0hen compan% is implementing changes" such a turning
points are ideal opportunities #or an internal branding campaigns" Cemplo%ees are
see'ing direction and are relati&el% recepti&e to these changesD6(itchell 20027" that+s
wh% it is the uni$ue occasion to capture their attention and imagination
2 Lin' internal and e)ternal mar'eting F The messages sent internall% and e)ternall%
must match CEmplo%ees need to hear the same message that %ou send out to the
mar'etplaceD6(itchell 20027 The obser&ation that di##erent message is being sent
to the public and di##erent instructions are recei&ed #rom the management is con#using
and ma'es emplo%ees #eel insecure
24
3 Bring the Brand Ali&e #or Emplo%ees F !t is about impro&ing morale The goal is
Cto create an emotional connection to %our compan% that transcends an% one particular
e)perienceD6(itchell 20027 The energizing and in#ormati&e communication should
#ill emplo%ees+ minds with brand &ision and ma'e them #eel that e&er% decision the%
made is supporting the brand Compan% should gi&e emplo%ees the reason to care
All three concepts applied to the second group o# dri&ers and supporting mar'eting
acti&ities accompan%ing them are crucial #or building brand e$uit% (anaging brand e$uit%
is more e##ecti&e and e##icient i# necessar% mar'eting operations are implemented !n addition
to that" b% ma'ing dri&ers and supporting mar'eting acti&ities interdependent and
interconnected the outcome in man% cases is astonishing
The last group o# brand e$uit% dri&ers are indirect associations" also called
Csecondar%D associations This idea is about creating Cbrand e$uit% b% lin'ing the brand
to other in#ormation in memor% that con&e%s meaning to consumersD6.otler 2005E 2:07
(a'ing consumers associate the brand with the entit% in direct or indirect wa% a##ects brand
'nowledge !# the similarities between the entit% and the brand are substantial" consumers
would trans#er the 'nowledge o# entit% bac' to the brand more #re$uentl% The Aob o# the
secondar% association is" as .eller e)plains" Cto a##ect consumers+ e&aluations o# a product
when the% lac' the moti&ation or abilit% to Audge it on a deeper le&el 0hen consumers don+t
care about choosing a particular brand or the% #eel that the% don+t possess the 'nowledge to
choose the appropriate brand" the% ma'e decisions based on secondar% considerationsD
6.eller" 200<7 ?uch an approach seems to be a &er% topical issue Consumers are bombarded
with in#ormation and &er% little o# it is remembered .eller identi#ied three #actors which
a##ect secondar% associationsE
#onsumers2 knowledge of the entity F #amiliarit% with the entit% ?trong"
#a&ourable" and uni$ue Audgements and #eelings about the entit% are desired
Meaningfulness of consumers2 knowledge of the entity F rele&anc% o# the
'nowledge o# the identit% to the brand ?ome associations ha&e little connection
while on the other hand" other seem &aluable #or the brand
)ransferability of consumers2 knowledge of the entity F e)tent to which consumers
lin' the 'nowledge to the brand Creating eas% trans#erable brand associations
is desired
2<
Brand associations could be lin'ed to the brand b% #our di##erent entities presented in ,igure
<
E&en though there are man% possibilities o# le&eraging secondar% associations o# the brand"
this techni$ue has also downsides Gi&ing up control o# the brand image to some other entit%
is ris'% The trans#er process ma% be di##icult to manage since irrele&ant secondar%
associations to the brand could be made" and rele&ant associations ma% not be ta'en into
consideration Beside that" the 'nowledge which customers obtained and lin'ed in their
memor% ma% change o&er time The combination o# connections between entit% and the brand
ma% alter i# the new 'nowledge gained about entit% is un#a&ourable" thus being
disad&antageous to the brand Because o# that choosing secondar% associations has to be well
thought out decision
All three 'inds o# brand e$uit% dri&ers pla% important role in enhancing brand e$uit%
Creation o# ad&antageous brand 'nowledge structures is not an eas% tas' CAs mar'eters tr%
to s$ueeze more &alue out o# #ewer dollars in their budgets" the% must closel% e)amine their
acti&ities and programs #or e##ecti&eness and e##icienc%D6.eller 200<7 (ar'eters ha&e
to choose care#ull% brand elements" mar'eting strategies and brand associations in order to get
the highest bene#it possible !t is their tas' to #ind a proper mi) o# attributes and techni$ues
that will ma)imize the brand e$uit% o# the brand" and ma'e brand building process more
smooth The optimization o# results and getting as much pro#its as possible #rom appropriate
selection o# brand e$uit% dri&ers ma'e brand stronger" helps achie&e #a&ourable mar'et
25
position and leads to the growth and e)pansion o# the brand But how can this be measured4
At which state is the brand currentl%" what position on the mar'et it has4 @e)t section will
#ocus on answering these $uestions
#.-. Brand life cycle. e(pansion and position on t"e !ar$et.
0ith the time e&er% brand is #acing some changes Techni$ues presented in pre&ious
sections help compan% in achie&ing goals and #ollowing speci#ic strategies the% ha&e
E&er% one o# them pro&e to be use#ul at some point o# time But how e)actl% loo's
the de&elopment o# the brand4 *oes it #ollow some c%cle4 0hat are the strategies brands are
#ollowing4 ;ow can the e$uit% o# the brand be measured and how it is percei&ed b% the
potential customers4 The answer to these $uestions will be gi&en in this section ,irst li#e
c%cle o# the brand will be presented @e)t section will #ocus on brand e)pansion strategies
and implications to brand li#e c%cle A#ter that Brand Asset -aluator model will be presented
which #ocuses on measuring brand e$uit% and assessing brand position on the mar'et in e%es
o# consumers All models presented will help the reader in understanding how brands e&ol&e
#.-.1. roduct/Brand life cycle
(odel that will be presented as the #irst one is 8roduct Li#e C%cle All products that
are an obAect o# e)change sta% on a mar'et #or some time which is di##icult to estimate This
time is di&ided into #ew phases" which together ma'e up product li#e c%cle According to
.otler li#e c%cle model can be also used Cto anal%ze a product categor%" a product #orm" a
product" or a brandD6.otler 2005E 3117 This paper will present onl% a bell=shaped pattern o#
the brand Brands" in a comparable manner to people are born" capture the mar'et" li&e
and die
;owe&er brand li#e c%cle acts di##erent #rom human li#e" since brand+s li#e seems
to shorten together with technological progress" economic and ci&ilization de&elopment
Economic ageing o# brand results #rom de&elopment o# science and technolog%" international
e)change" societ%+s wealth and increased in#ormation #low Brand li#e c%cle #or maAorit%
o# the products consist o# #our stagesE
!ntroduction
2/
Growth
(aturit%
*ecline
The introduction phase o# brand li#e c%cle is &er% important This phase &er% o#ten ta'es
a lot o# time and is &er% e)pensi&e !t co&ers the period #rom the moment o# ha&ing an idea
o# the brand to the moment o# its realization The most important thing #or introduction o#
new brand is the positi&e assessment o# utilit% b% the consumers
The phase o# growth characterises $uic' increase in turno&er The number o# bu%ers
increase" the pro#its are rising and at the same time the number o# additional bene#its #rom
brand promotion are rising while spending less on it The compan% should aim at prolonging
this li#e c%cle phase" since it is the period o# gaining high bene#its !t is important to impro&e
brand b% implementing new" additional #eatures or new &ersions o# the product to mobilize
successi&el% ne)t mar'et segments in#luencing #urther growth o# sales
!n the phase o# brand maturit%" the scale o# sales reaches culmination point a#ter which
there is negati&e growth" what causes decrease in pro#it ;igh brand awareness encourages the
compan% to e)tend this still bene#icial phase The strategies use#ul in ma'ing modi#ications
ma% include both modi#ication o# the mar'et and product !n modi#ication o# the mar'et the
compan% should aspire to increase $uantit% o# items sold !n order to increase this $uantit%"
the number o# mar'eting acti&ities must be increased !n modi#ication o# the product the aim
is to increase the number o# bu%ers There are di##erent strategies in&ol&ed 0ith the
increasing e)penditure on promotion" the changes o# $ualit% which were introduced are
signalled to the customers
At stage o# decline rapid decline in sales and pro#its ta'es place The brand ends its
li#e c%cle on the mar'et along with pro#its #or the compan% !n this phase man% companies
withdraw #rom the mar'et Those ones that remain on the mar'et could limit their o##er"
reduce distribution channels" lower mar'eting budget and withdraw #rom some segments o#
the mar'et There are man% #actors that cause decline and ultimatel% CdeathD o# the product
The% ma% include the conse$uences o# technological progress and switches in technolog%"
intensi#ication o# international competition and changes in consumer tastes
All stages o# brand li#e c%cle generate problems" which ma% occur during introduction
#ollowed b% growth o# sales and maturit%" ending with decline The problems encountered at
each stage re$uire &arious methods and tools that will help in #inding solution The phase" in
21
which actuall% brand is can be determined b% #ollowing through sales and pro#it d%namics and
structure o# the competitors
#.-.#. Brand 0ro1t" Direction Matri(.
Another model presented #ocuses on e)pansion o# the brand" which should rather
be used to describe situation o# the brand *o%le in his article criticises product li#e c%cle
approach and appl%ing it to the brand li#e c%cle ;e argues that CThere is no reason wh%
a brand cannot adapt to new technologies and mo&e #rom mature into new growth
mar'etsD6*o%le" 1::07 !nstead he proposes matri) which presents the main growth
opportunities a&ailable 6,igure 57
,igure 5 Brand Growth *irection (atri) 6?ourceE Adapted #rom *o%le 1::07
According to *o%le brand share is the initial strategic #ocus 8lent% o# companies that were
success#ul in this area changed their strateg% b% incorporating new technologies ;owe&er
there were also companies that decided to mo&e into new mar'et segments There is no
distinction what should be done #irst The last growth direction is shi#ting to global brands
According to *o%le" this is rather the wa% o# presenting brand+s li#e
Another e)pansion related model is presented b% 8and%a ;e di##erentiates #our
branding strategies that companies can choose when thin'ing about e)pansion o# the brand
6,igure /7
2:

,igure / ,our Branding ?trategies 6?ourceE 8and%a 200:E 37
This model" #ocuses rather on mar'et and technolog% #or de&eloping strateg% o# the brand"
concentrates on product and brand categories The #irst strateg% proposed is Line E)tension
The main idea o# it is enhancing e)isting product categories with new #ormulas" repac'aging
them" and using alread% established brand reputation #or promotion Brand E)tension in&ol&es
e)tension o# the e)isting brand with the new product categories The strateg% o# (ulti=
branding attracts new customers b% relaunching e)isting products under new names The last
strateg% is applied when the e)isting brand is no longer suitable #or the introduction o# the
new product categor% !t is howe&er important to mention" that e)pansion o# the brand could
be done simultaneousl% in di##erent directions
0hate&er the perspecti&e o# describing brand li#e c%cle or e)pansion o# the brand
used" there will be disagreements between e)perts" since e&er% theor% considers di##erent
rele&ant #actors The model that best summarizes the similarities between these three models
is impro&ed brand li#e c%cle model presented on Graph 1
30
Graph 1 Brand Li#e C%cle 6?ourceE Adapted #rom ?apna 2010E :7
(odel presented here shows the approach" which incorporates product li#e c%cle and brand
e)pansion strateg% The &alue o# the brand rises with the time but at some point it will start
declining Because products ha&e theoreticall% $uic'er time#rame then the brand" and their
li#etime is more ob&ious since it is easier to obser&e" brand li#ec%cle is presented as the sum
o# di##erent product li#ec%cles B% using e)pansion techni$ues" the products do not disappear
#rom the mar'et" but the% are rather e)panded to new mar'ets" impro&ed" or e)tended
This 'ind o# continuation ma'es sense" since at some point there would be nothing that could
be done to 'eep product ali&e and &alue o# the brand will start #alling i# none o# the techni$ues
are incorporated to sa&e it
#.-.'. Brand Asset 2aluator.
The last model presented #ocuses on how the compan% is percei&ed b% the customers"
and then assign mar'et position to these data Brand Asset -aluator model was de&eloped
b% Loung and 2ubicam 6LM27 b% in&esting" since 1::3" Co&er N130 million in collecting and
interpreting data on consumers+ perceptions o# some 44"000 product and ser&ice brands
in o&er <0 countriesD6Gerzema" 200:7 The comparati&e measures o# the brand e$uit%
identi#ied #our pillars assessing #our distincti&e componentsE
Energized *i##erentiation"
2ele&ance"
31
Esteem"
.nowledge
Energized *i##erentiation composes o# #i&e brand attributesE uni$ueness" o##ering"
pricing power" inno&ation and d%namism !t measures the le&el o# di##erentiation #rom others
6?ometimes this dimension is di&ided into Energ% and *i##erentiation" howe&er strong
correlation between them induced the creators o# the model to combine it into one
2ele&ance used in Brand Asset -aluator is strongl% related to mar'et penetration" since
it captures the appropriateness o# a brand to consumers and breadth o# the appeal Esteem is
an e&aluation using reliabilit%" percei&ed $ualit% and measures o# respect !t measures the
prere$uisite #or building lo%alt%.nowledge pla%s important role in BA- model as it re#lects
depth o# e)perience consumers ha&e with the brand (easures le&el o# #amiliarit% and
intimac% with it
,irst two components co&er the aspects combined into one categor%" called Brand ?trength !t
is the assessment o# brand+s #uture &alue The latter two pillars determine second categor%"
Brand ?tature This categor% is about the recent per#ormance o# the brand Two categories
combined together #orm 8ower Grid *i##erent arrangements o# the pillars depict di##erent
stages o# brand de&elopment shown in Graph 2
Graph 2 Brand Asset -aluator 8ower Grid 6?ourceE Adapter #rom Gerzema 20107
;igh le&el o# onl% Energized *i##erentiation characterizes strong new brands with the
de&elopment potential Leaders score high on all pillars *eclining brands score &er% high on
32
.nowledge and Esteem" while substantiall% lower on the other two Compan%+s brand e$uit%
#ollow the c%cle b% going through respecti&e stages one a#ter another
All models presented in this section are use#ul in understanding the position o# the
brand" and possibilities #or the #uture Brand li#e c%cle shows" that in order to 'eep the
position on the mar'et and in consumers minds" compan% has to emplo% branding strategies"
which are ade$uate to the current stage o# brand li#e c%cle The growth o# the brand can be
#ocused either on new mar'ets" new technolog% or both The direction o# e)pansion o# the
brand can be towards not onl% e)isting and new product categories" but also e)isting and new
brand categories 0hen compan% is ha&ing hard time doing business" the brand representing it
will mostl% ha&e the same problem" since there is a strong connection between them
;owe&er these di##iculties ha&e smaller impact on the brand" since it consists o# man%
elements The temporar% problems with one o# them not necessaril% mean serious problems
with how the brand is percei&ed Brand Asset -aluator model is use#ul in assessing mar'et
position o# the brand since it #ocuses on how customers percei&e it This 'ind o# 'nowledge
helps in understanding how the brand is di##erent #rom competitors and what could be
impro&ed All models are use#ul in choosing speci#ic brand strategies and determine goals
As could be seen in the chapter" building a brand is a comple) acti&it% E&en though
the process is laborious" it gi&es man% bene#its 2ole the brand pla%s #or both compan% and
customers is undeniable Easier identi#ication" increased practicalit% and lo%alt% are #ew #rom
man% #unctions which help in creating signi#icant di##erences between brands !n order
to achie&e that compan% has to #ocus on brand building process E&en though there are man%
models to #ollow" the bene#its at the end are the same Leading the brand to omnipresence and
high recognisabilit% is what will create di##erences in consumer minds These di##erences are
#orming brand e$uit% There is also di&ergence in the theories" howe&er the end results are
similar !n order to create brand e$uit% it is necessar% to ha&e dri&ers which will ta'e part
in identi#%ing" gi&ing the meaning" creating positi&e response and establishing relationship
with the brand The% ma% be di&ided into #ew groups" depending on their nature Each o#
them ha&e group speci#ic strategies which help in creating brand 'nowledge structures >sing
all elements is not necessar%" howe&er to be success#ul man% o# them ha&e to be ta'en into
consideration Last part o# the chapter sums up the results o# brand building b% presenting
models concerning stage the brand is currentl% in and position the brand has compared
to other companies
33
'. McDonalds strategy for building a successful brand.
The #ast #ood mar'et has been with the >nited ?tates #or good and #or worse and was
growing in power together with the >? !t is a dream o# e&er% #ast #ood pro&ider in the >nites
?tates to become a part o# national culture li'e big corporations But ha&ing dreams and
ma'ing them come true are two di##erent things !n order to ma'e them real we ha&e to loo' at
the compan%" which operations are outstanding !n the >? ,ast ,ood mar'et" when %ou thin'
about the leader" %ou alwa%s thin' o# (c*onald+s The compan% that started in 1:40 with Aust
one restaurant in ?an Bernardino" Cali#ornia hase now o&er 13:10 restaurants ser&ing the
same burgers" #ries and o##ering the same e)perience in the whole >nited ?tates E&en though
the menu in (c*onald+s ha&e been changing" there are items li'e ,ilet=B=,ish introduced in
1:53" Big (ac61:517" ;app% (eal61:/:7" (cChic'en61:107" Chic'en (c@uggets61:107 that
are still sold" and are the core o# the menu *espite the #act that recipes ha&e been changing
with time" the names still remained ;ow it is possible to sell the same products #or 40=<0
%ears and still 'eep customers e)cited about eating and coming to (c*onald+s outlet4 !t is
done b% success#ul brand building (c*onald+s #rom the &er% beginning had a clear idea how
the% want to e)pand their business to other locationsE uni#orm restaurants" with uni#ied menu
But ha&ing similar restaurants was not enough to become a leader 2a% .roc" the owner o#
(c*onald+s" had to thin' o# something that will di##erentiate his restaurants #rom the
restaurants o# competitors ;e had to put the name o# his compan% in the hearts and minds o#
millions The onl% wa% to achie&e that was through success#ul brand building @ineteen %ears
a#ter the opening o# the #irst restaurant" (c*onald+s started #irst billboard ad&ertising
campaign The period #rom 1:50 to 1:53 was the intensi#ied brand building period ?tarting
national campaign and introducing logo that remains to this da% are onl% #ew #rom man% other
brand building techni$ues used b% (c*onald+s
B% anal%zing the brand building process o# (c*onald+s Corporation" an important
lesson about doing business can be learnt 0hen %ou go to an% o# its outlet %ou bu% not onl%
#ood but also an un#orgettable e)perience But how to create this e)perience" that customer
would want o&er and o&er again4 ;ow to 'eep customers satis#ied and eager e&er% time
the% enter the door4 Loo'ing at the brand e$uit% dri&ers" anal%zing its brand e$uit% and
34
positioning on the mar'et will help to understand the phenomenon o# the Golden Arches
!s success#ul brand building a 'e% to success in toda%+s world4 ,irst #ew #acts and histor%
o# (c*onald+s will be presented A#ter that (c*onald+s brand e$uit% together with brand
e$uit% dri&ers will be described to great depth The ne)t thing done will be presenting current
situation o# (c*onald+s brand b% appl%ing di##erent models At the end o# the chapter #uture
issues concerning the brand will be discussed
'.1. 3istorical bac$ground of McDonalds Corporation.
To #ull% understand the comple)it% o# (c*onald+s corporation histor%some basic #acts
need to be presented (c*onald+s Corporation was #ounded in 1:<< b% 2a% .roc" who
throughout the %ears made compan% #lourish ;owe&er" the original idea dates bac' to 1:40
That is when two brothers 2ichard and (aurice (c*onald opened (c*onald+s Bar=B=Oue
restaurant o##ering 2< items E&en though maAorit% o# the items were barbecue" most o# the
pro#its came #rom selling hamburgers !n 1:41 (c*onald brothers decide to rearrange their
business 0hat the% then o##ered was a sel#=ser&ice dri&e=in restaurant B% introducing
C?peedee ?er&ice ?%stemD and reduced menu to onl% : items the% soon started to #ranchise
their restaurant !n 1:<4 2a% .roc &isited (c*onald+s and be became #ascinated with the idea
o# streamlined assembl% line #or burgers ?ince brothers were loo'ing #or nationwide
#ranchising agent" a %ear later the three men made an agreement ,rom that moment the
compan% started its e)pansion on a grand scale and b% 1:5< there were o&er /00 (c*onald+s
restaurants in >nited ?tates !n the meantime 2a% .roc bought the rights #rom (c*onald
brother #or N2"/ million and became the onl% owner o# (c*onald+s Corporation ;e had
a great &ision o# the compan% and he 'new that ad&ertising would pla% a 'e% role
in compan%+s de&elopment (c*onald+s began ad&ertising and started building a brand
.roc+s decision was to ad&ertise (c*onald+s products to #amilies and children Ad&ertising
started #rom billboards in 1:<:" national magazines61:527" introduction o# Golden Arches
logo61:527" mascot 2onald (c*onald61:537" national tele&ision61:557 and since that time
the compan% has been 'nown #rom the catch% ad&ertisements and slogans But (c*onald+s
was not success#ul onl% because it ad&ertised a lot The motto" introduced b% 2a% .roc"
O?CM- 6Oualit%" ?er&ice" Cleanliness and -alue7 has accompanied the compan% almost #rom
the &er% beginning Long be#ore training centres started to be regular parts o# big
corporations" (c*onald+s alread% had it The aim o# ;amburger >ni&ersit%" created in 1:51"
3<
was Cto train (c*onald+s #ranchiseesD but with the time it became" Aust li'e compan%
Ca global phenomenon" now training restaurants managers" middle managers and e)ecuti&esD
E&er%thing what (c*onald+s did led to success and position o# the leader in national #ast #ood
mar'et At the earl% stage o# e)pansion (c*onald+s was #ranchising and building own
restaurants all o&er the >nited ?tates The aim o# e)pansion was to co&er as man% locations as
possible E&er% %ear new restaurants were being opened" but nowada%s" e&er% location is
being care#ull% studied pa%ing special attention to proAected sales" compatibilit% with other
(c*onald+s restaurants and competition E&er% #ew %ears (c*onald+s had to accommodate
tactics to the mar'et ,or e)ample in 1:10s the competition between Burger .ing" 0end%+s
and (c*onald+s started intensi#%ing The earl% 1:10s became 'nown as CBurger 0arsD
because o# #ierce battle #or mar'et share which included price slashing and aggressi&e
ad&ertising campaigns ;owe&er (c*onald+s sales were still growing mostl% due to
ad&ertising campaigns that were implemented earlier But mar'et o# #ast #ood is changing all
the time" and competition is not sleeping !n order to 'eep up with the rising e)pectations
#rom the customers (c*onald+s had to e&ol&e 0ith the time" the menu grew #rom : items to
o&er :0 positions di&ided in speci#ic sections li'e sandwiches" brea'#ast or salads But
changing menu is not enough #or a #ast changing world E&en though (c*onald+s has man%
customers" the% constantl% need to adAust !n 200: (c*onald+s introduced the concept o#
(cCa#e" the e)tension o# co##ees o##ered and in 2010 #ree 0i=,i was made a&ailable in
selected restaurants !n order to sta% competiti&e and co&er new niches (c*onald+s has
alwa%s loo'ed into the #uture ;ow mar'et can change and what needs will ha&e customers
disco&ered Aust in time" so customers #elt that compan% understood their needs 0ith such a
good bond with customers and proper understanding o# their need (c*onald+s re&enue in
200: was around N/":< 6N4"3 billion #ranchised re&enues and N3"5< billion compan% acti&it%7
As the %ears are passing b%" (c*onald+s strateg% is changing and adAusting to the customers
!t is not an eas% wa% to become a national leader #rom the local grill bar !n order to do so"
brand e$uit% dri&ers that will allow doing it are needed @e)t section will present these dri&ers
and their emplo%ment b% (c*onald+s
'.#.McDonalds Brand E*uity drivers.
Establishing a brand is not an eas% tas' that can be done o&ernight A lot o# thought
into designing the attributes is necessar% to ma'e sure that the #uture growth and e)pansion
35
are painless At this section the dri&ers" that help (c*onald+s achie&e the position it has now"
will be presented The% will be presented in three groupsE brand elements" mar'eting acti&ities
and indirect associations
'.#.1. McDonalds Brand Ele!ents.
The #irst group presented are brand elements There are man% elements (c*onald+s
uses and each o# them &er% o#ten per#orms more then one #unction 0hat is more"
(c*onald+s uses multiple elements #or the same #unction so the in#luence the% ha&e on
potential bu%ers is much more #aster E&er% one o# brand elements pro&ides positi&e
contribution to the brand e$uit%
Brand name is the most important element when designing a brand The name
(c*onald+s is #amous" recognizable and cannot be mista'en with an% other compan% ,rom
the &er% #irst moment it is spotted we 'now what it stands #or The big %ellow name is alwa%s
easil% noticeable and its bright colors attracts our attention instantl% ?uch a well thought out
name allows introduction o# new items to the menu &er% easil%" b% simpl% adding C(cD as a
pre#i) to the product o##ered ?uch an eas% operation allows (c*onald+s to #eel sa#e" since its
products cannot be mista'en b% an% other product on a mar'et
The logo (c*onald+s use is strongl% connected to the brand name The capital C(D"
sometimes called Golden Arches" with the distincti&e smooth shape loo's the same as the one
in the name This 'ind o# smart connotation increases memorabilit% and recognition o# the
brand The direct connection between those two lea&es no room #or a mista'e Easiness
on putting it on an% product o##ered or in an% #orm o# ad&ertisement in&ented" is an important
brand building element ;a&ing such a simple" and on the other hand" so distincti&e in shape
and color logo allow legal protection that does not need ant other special e##ort
Another brand building element which (c*onald+s has in&ented is character 2onald
(c*onald A slim clown" with t%picall% big red clown shoes" %ellow clothes" red hair and big
smile is a character no child" a#ter seeing it once" can #orget Characteristic #riendl%
appearance ma'es it &er% easil% to li'e him @e&ertheless it might seem that it is geared
towards children" (c*onald+s present him as a #riend o# children and adults The neutral
appearance allows to place him in e&er% restaurant The smile on his #ace suggests that a#ter
eating at (c*onald+s %ou will #eel rela)ed and happ%
3/
The element o# the brand that is di##icult to describe is a Aingle" which in case
o# (c*onald+s was alwa%s used with a slogan (c*onald+s has used man% Aingles in process
o# brand building" howe&er it was alwa%s one at a time ?ince 1:/< to 2003 the compan% has
changed it : times" what gi&es a&erage o# around 3 %ears per Aingle The current characteristic
#or (c*onald+s slogan" C!+m lo&in itD is unchanged since its introduction in 2003 !t is eas% to
memorize" nice to hear and li'able >sing C!D as a subAect suggest that it applies to e&er%bod%
The word Clo&inD concerns the #eeling connected to the last part o# the slogan CitD !t is not
e)plained what CitD means" is it the #ood" is it the restaurant" is it the e)perience" or is it the
brand B% using such an uni&ersal word" the slogan allows #or e&er% consumer to put in his
mind a word that suits best #or him or her ?logan which in ad&ertisements is accompanied
with #i&e characteristic tones etch in memor% so deep that one can recall it instantl% The
adaptabilit% o# this element is rather low" howe&er changes do not re$uire as high costs as
changes in pre&ious brand elements
Another brand element o# (c*onald+s is pac'aging Alwa%s with the logo and slogan"
speci#ic #or di##erent items 0hen ha&ing product in hands it cannot be mista'en with an% the
product o# the competitor B% ha&ing pac'ages with colors" logo and brand speci#ic
appearance we #eel that a#ter ma'ing the purchase we are still connected with the restaurant
;owe&er the pac'aging is changing together with brand sponsoring or associations The
elements o# the cups are di##erent" so does the cardboards" nonetheless the changes are alwa%s
minor and product bought at (c*onald+s cannot be mista'en with an% other
Bne more brand element that increases remembrance o# (c*onald+s is signage Easil%
noticeable" attracting %ellow neon (c*onald+s is alwa%s eas% to notice The attention is
instantl% directed on this sign ?ituating it on the roo# o# e&er% (c*onald+s restaurant"
regardless the geographic location it is alwa%s unchanged" and so does the sign itsel# Also the
logo o# (c*onald+s" Golden Arches" when placed on substantial height is noticeable #rom
long distances easil%" thus #unction it per#orm #orm the brand is e)ceptional Together with
speci#ic colors and shape o# the building there is no chance #or a mista'e E&en i# some
element is not memorized entirel%" there are other which will ma'e customer aware o# the
brand
The last brand building element presented are web pages !n the era o# internet contact
with e&er% compan% and #inding in#ormation about it" i# it cannot be per#ormed personall%"
is most li'el% to happen b% using internet (c*onald+s o##ers &er% e)tended website" where
all in#ormation needed can be #ound" and i# not" there is a place to as' them (c*onald+s
website promotes the brand &er% well The appearance suggests" that (c*onald+s 'now how
31
to ma'e e&er%thing smooth and well connected The domain mcdonaldscom is easil% recalled
since it is no di##erent #rom brand name E&en though ma'ing a t%po can result in going
to di##erent website" (c*onald+s is monitoring care#ull% the web #or unauthorized use o# their
brand
All brand elements presented are use#ul in brand building and help in creating
(c*onald+s brand e$uit% Each o# them pla%s speci#ic role in establishing and supporting the
brand Because (c*onald+s uses all possible elements" the brand recognition and awareness
le&el are so high The elements used b% (c*onald+s are not di##erent #rom other
contemporar% brand building strategies This di&ersit% o# brand elements and s%nergies
between them are t%pical #or companies which ha&e established a strong brand The cohesion
o# strateg% and #orm o# communication" together with length% duration is (c*onald+s 'e% to
success
'.#.#. McDonalds !ar$eting activities related to brand building.
(ar'eting acti&ities o# (c*onald+s are those that probabl% in#luence the most how the
brand is percei&ed !n this section di##erent acti&ities and strategies will be presented The
anal%sis will #ocus on personalization method 6onl% e)periential mar'eting7" integration and
internalization
Bne o# the methods that (c*onald+s uses is e)periential mar'eting which is part
o# personalization o# the brand (c*onald+s is #amous o# o##ering not onl% #ood" but also
e)perience and #eelings attached to the whole purchase process *ue to the changing mar'et
(c*onald+s had to adapt these e)periences in order to maintain its position The #irst
e)perience is ?ense (c*onald+s de#initel% 'nows how to a##ect these sensual and tangible
aspects 0hen entering the restaurant one notices nice loo'ing interior with smiling
emplo%ees standing behind the counter The scent o# the #ood is in the air encouraging
customers to ma'e a purchase 0hile eating delicious #ood one can seat in a nice loo'ing
restaurant Another e)perience (c*onald+s is good at is creation o# moods and emotions"
called ,eel B% inducing a##ect Golden Arches create brand associations and brand awareness
@ice colors" #riendl% atmosphere and multitude o# ad&ertisements sending positi&e emotions
ma'e the customer #eel that (c*onald+s is a reliable #ood pro&ider !t is the place the% should
go to i# the% want to ha&e uni$ue e)perience The introduction o# the recent slogan C!+m lo&in+
itD is an e)ample o# Thin' mar'eting strateg% This simple statement ha&e an e)traordinar%
3:
e##ect on how the brand is percei&ed !t encourages customers to engage in elaborating and
thin'ing about the brand The positi&e e&aluation o# the brand helps in maintaining the
percei&ed $ualit% and 'eeps customer satis#ied with the brand (c*onald+s uses also Act
mar'eting There were man% mar'eting programs which o##ered uni$ue e)perience a#ter
CusingD (c*onald+s Customers were encouraged to choose (c*onald+s b% slogans li'e C*o
%ou belie&e in magic4D" C0e lo&e to see %our smileD or C!t+s what ! eat and what ! doD The
compan% suggests" that a#ter pic'ing this brand" customer will not be the same as be#ore ;is
li#e will change and it will be better a#ter this incredible e)perience Besides that (c*onald+s
also shows it cares about the happiness o# customers Another option (c*onald+s use is relate
mar'eting" howe&er there weren+t an% intense mar'eting actions on big scale !t is rather
connected to mar'eting associations and promotion o# the brand This ma% be caused b% the
problems with brand image" which #rom time to time is attac'ed b% opponents o# unhealth%
#ood (c*onald+s clearl% 'nows how to use e)periential mar'eting when building a brand !t
uses sense mar'eting to attract attention and moti&ate to #urther action Creation o# a##ecti&e
bonds and ma'ing the e)perience personall% rele&ant is done b% #eel mar'eting Thin'
mar'eting is responsible #or adding permanent interest and passion to learn about the brand
The lo%alt% and commitment #or the #uture is induced b% act mar'eting 2elate mar'eting is
ma'ing brand meaning#ul in a broader social and cultural conte)t (c*onald+s could use
relate mar'eting to more e)tent Bn the other hand there are constant attac's on #ast=#ood
restaurant ser&ing unhealth% #ood" what could strengthen the opposition to (c*onald+s
!ntegration o# the brand pla%s crucial role #or (c*onald+s The brand identit%
mar'eters tr% to create and build brand image throughout the %ears ,irst brand identit% o#
(c*onald+s will be described together with strategies which help de&eloping and maintaining
it A#ter that the discussion how the compan% is percei&ed b% public will be presented
(c*onald+s brand identit% is more then Aust one o##er !t is the set o# o##erings which
ma'e the brand desired b% the customers (c*onald+s brand mission is Jbe our customersK
#a&orite place and wa% to eatJ The enhancement o# customer e)perience is a crucial element
used b% the compan% in building brand e$uit% !n the mission statement $ualit% or the taste
o# the #ood is not mentioned (c*onald+s aims to be the #a&orite place" no matter where
e)actl% and at what time !t is the place o# not onl% eating but also meeting The Cwa% to eatD
presents the ideas that eating is more then Aust biting and chewing #ood !t is the un#orgettable
e)perience in&ol&ing more than one sense (c*onald+s also positions itsel# as a compan%
pro&iding taste#ul #ood and con&enient place to eat ;igh $ualit% #ood at di##erent time o# a
da% #or e&er%bod% ma'es brand identi#ied as a restaurant where e&er%one will #ind something
40
attracti&e (c*onald+s also identi#ies itsel# as a compan% that is aware o# their %oungest
customers The #riendl% atmosphere o# restaurant" and constantl% 'eeping the trac' o#
C#ashionsD in children interest allow (c*onald+s to be a restaurant e&er% child wants to go to
All strategies used b% the compan% are aimed at in#luencing as man% customers as possible
to as great depth as possible (ar'eting acti&ities are not onl% in#orming the mass mar'et
about the e)istence o# (c*onald+s The% ma'e consumers eager to disco&er what new is
happening at the restaurant" what 'ind o# new items are o##ered" what are the latest
promotions The curiosit% (c*onald+s created around its brand is e)traordinar% This was all
possible than's to good strateg% o# de&eloping" maintaining and communicating brand
identit%
?ince (c*onald+s is on the mar'et #or such a long time it had time to in#luence
generations The omnipresence in media" and ad&ertisements being care#ull% aimed
at attracting" ma'ing the selection o# this particular #ast=#ood restaurant spontaneous and
almost subconscious The e)pectations about what 'ind and $ualit% o# #ood ser&ed are alwa%s
met" so positi&e associations in consumer minds are made" what encourages #uture decisions
(c*onald+s attracts not onl% consumers that ha&e purchasing power" mostl% adults" but also
ones that do not ha&e it %et or ha&e little to sa% when ma'ing the decision where to eat The
choice o# speci#ic brand elements attracts especiall% the %oungest group" children Bright
colors" #amous characters" special o##ers and to%s added to bundles whene&er the% came
in direct contact with the restaurant ma'e them #eel" the% want to come bac' as soon
as possible to e)perience it one more time ?uch an atmosphere will be unchanged" waiting
#or them" repeatedl% creating the same image and wor'ing on the same senses ?pecial
acti&ities #or children" who come to (c*onald+s not onl% to eat e)tremel% taste#ul #ood" but
also to pla% are ma'ing &isits to (c*onald+s an uni$ue chance to e)perience something what
can not be #ound elsewhere The #eelings the% create in children" b% ta'ing them seriousl%" and
treating li'e adults shapes how the% percei&e the brand #rom the &er% #irst contact ;a&ing
mini=pla%grounds ne)t to the restaurants" special room #or children with smaller tables and
seats" all in bright colors ma'es children #eel (c*onald+s is the compan% that 'nows what are
their needs There is e&en the possibilit% to host a birthda% part% or celebrate an% occasion in a
special room #or children The ;app% (eal" a bundle that is reduced in size with special to%
inside" with special pac'aging is an item e&er% child desires to ha&e Adding to%s o# #amous
characters and ma'ing sets o# #ew items to e&er% theme that is on the top in#luences how
children" the #uture customers o# the brand" percei&e the brand Alwa%s actual" alwa%s 'nows
what are their interest and alwa%s o##ering the same great e)perience
41
(c*onald+s is also good at branding its #ood D(c*onald+s has emplo%ed branding o#
the Big (ac to deli&er competiti&e ad&antage that is sustainableD6L%nch" 200:7
The e)perience attached to eating each single item ma'es positi&e brand e&aluation There are
items li'e ,ilet=B=,ish" Big (ac" ;app% (eal" (cChic'en or Chic'en (c@uggets that were
able to sta% on a mar'et #or decades This could be done onl% b% success#ul branding and
proper strateg% 8roducts recipes are re#ined all the time" in order to match consumers+ taste
AdAusting it to changing mar'et" and adapting the whole o##er to the changing world b%
adding items li'e health% #ood 6salads and apples7" o##ering the brea'#ast menu" or simpl%
adding new items are strategies that help in 'eeping customers acti&e and interested in
a brand The 'nowledge that (c*onald+s is a modern compan% which does not hesitate to
ma'e changes sta%s in our consciousness The e)pansions made in the past li'e (c*ri&e
o##ering ta'e=awa% without getting out o# the car" or more recent" li'e e)panding co##ee o##er
b% introducing (cCa#e or introduction o# wireless internet in e&er% restaurant is what 'eeps
satis#action and lo%alt% on high le&els ?uch a state o# brand awareness is what is necessar%
to build strong brand
The uni$ue e)perience o##ered in (c*onald+s is created also b% pac'aging E&er% item with
brand elements on it reminds us constantl% what is the compan% that satis#ies our needs
The attitude is created not onl% b% eating but also through the process o# unwrapping and
cleaning a#ter onesel# what gi&es a semblance o# home atmosphere 0hat brand o##ers" does
not include the home atmosphere" howe&er the possibilit% to clean a#ter onesel# in#luences
customers minds" b% ma'ing them #eel that the% ha&e some in#luence on the compan%
(c*onald+s is building it+s brand b% constant e&aluation on current trends in tastes" health
and #ood trends" customer interests and technologies 0hat is more" the motto introduced
b% 2a% .roc in the earl% %ears o# (c*onald+s business acti&it% can be seen as an important
part o# the compan% nowada%s The &ision o# (c*onald+s is Cto be the worldKs best $uic'
ser&ice restaurant e)perience Being the best means pro&iding outstanding $ualit%" ser&ice"
cleanliness" and &alue" so that we ma'e e&er% customer in e&er% restaurant smileJ ?uch
constanc% regarding wa% o# doing business and ser&ing customers is wor'ing well on how the
brand is percei&ed ;a&ing in mind that all #our #actors are constant" whene&er and where&er
we go to one o# (c*onald+s restaurants" 'eeps satis#action on high le&el !# customer is not
aware that $ualit%" ser&ice" cleanliness and &alues are the core concept o# the compan% he
does not notice them or e&en i# he notices it does not ma'e him #eel positi&e about it
;owe&er i# customer e)pects them" and the e)pectations are met" he belie&es that the &alue
recei&ed #or the mone% is ma'ing him #eel he made a good choice
42
Brand image is one o# the most crucial elements #or (c*onald+s Throughout the
%ears image o# the brand ha&e changed man% times !t is not something une)pected" since the
world is changing" in#luencing and causing changes on man% #ields The important #or
(c*onald+s was to identi#% these changes on time" adAust per#ormance o# the compan%" and
communicate what was done All new products" special o##ers" e)tensions or changes in doing
business are communicated in &arious media in order to 'eep customers well in#ormed The
proper understanding o# what brand stands #or is a 'e% to success#ul brand building ;owe&er
(c*onald+s had also problems with its brand image The compan% was criticized #or high=
calorie" high=saturated=#at menu !tems li'e mil' sha'e or Big (ac" the icons" were
disappro&ed b% some customers There weren+t man% o# them" but the% in#luenced the o&erall
brand image (c*onald+s started loo'ing #or solution 0hen people started being more
interested in health% #ood" (c*onald+s in order to get ahead o# competition" used this
in#ormation C!n the %ears 2002=04 (c*onald+s responded b% launching new salad main
meals and #ruit ranges to all it storesD6L%nch" 200:7 ;ea&% promotion aimed at health=
conscious target group wor'ed and compan% in no longer percei&ed as ser&ing unhealth%
#ood
The last acti&it% that in#luences brand e$uit% o# Golden Arches is internal branding
(c*onald+s #rom the &er% beginning understood how important internal brand management
was" and recognized the competiti&e ad&antages it o##ered !n 1:51 ;amburger >ni&ersit%
was created which aimed at training #ranchisees ;owe&er as (c*onald+s started seeing the
rising opportunities it started training o# restaurant managers" middle managers and
e)ecuti&es 8eople who attended to ;amburger >ni&ersit% were thought about man% aspects
that concern (c*onald+s" and one o# them was brand and the importance o# communication it
to emplo%ees (c*onald+s is not onl% per#orming consumer researches" positioning"
identi#ication o# the brand and ma'ing mar'eting campaigns" but also it also ma'es sure the%
catch emplo%ees attention and imagination Golden Arches #inds it e)tremel% important #or
emplo%ees to 'now what is the brand (c*onald+s" what are the core &alues it presents This is
connected to the #act that CB% 2000" one out o# eight Americans had" at some time in their li#e"
wor'ed #or this compan%D6Botterill" 200/7 Bne aspect o# such a great number o# people been
emplo%ed in (c*onald+s is" that the% ha&e to con&ince them" that all the changes in brand
image are bene#icial not onl% #or the organization" but also #or them (c*onald+s helps them
in understanding what is their role in the compan% and the uni$ue #unction the% per#orm
Than's to this clients are treated well" customers trust in what the% sa% The sa%ings C0ould
43
%ou li'e #ries with that4D and C0ould %ou li'e to ?upersize that4D are seen b% customers as an
act o# caring about them (c*onald+s want emplo%ees to understand how good it is to wor'
#or (c*onald+s and how important are the% #or building brand image The aim o# this is to
'eep them in a compan% #or a long time This approach resulted #rom wa% (c*onald+s used
to ha&e in the past The term (cIob" which is used instead o# a low=pa%ing" low=prestige"
non=challenging with minimal bene#its and opportunities #or promotion Aob" is reall% harm#ul
#or the brand image ;owe&er (c*onald+s #ound a solution to that problem !t started
campaign !t+s @ot A (cIob" !t+s A (cCalling The aim o# it was to show the prospects o#
wor'ing #or Golden Arches Together with term (c8rospects compan% encouraged the
positi&e e&aluation o# wor'ing #or (c*onald+s The compan% clearl% understands the
bene#its rising #rom internal branding and 'nows how to use it To show e&en greater concern
about its emplo%ees and their needs" (c*onald+s ha&e started a blog called ?tation ( !t is
used Ce)clusi&el% #or the restaurants to communicate with each otherD6?mith 200:7 !t can be
seen that compan% wants the emplo%ees to #eel special !t is understandable wh% the% started
using such a techni$ues to build morale and thus create positi&e brand associations ?ince one
out o# eight Americans had wor'ed #or (c*onald+s" it is necessar% to 'eep them satis#ied
The possibilit% to 'eep them lo%al and #eel connected to the brand is the crucial issue #or
internal mar'eting (a'ing brand promise to not onl% customers but also emplo%ees is one o#
man% techni$ues which allowed (c*onald+s to be such a success#ul compan%
The strategies (c*onald+s uses are well thought and adapted to the situation
The acti&ities which concern the brand suit and per#ectl% complete the mission it is supposed
to do ,ocusing on ma'ing positi&e brand associations and increasing customer lo%alt% is
a wa% in which (c*onald+s earned the position o# mar'et leader
'.'. 3istorical develop!ents in McDonalds brand building.
0hen business is going well the compan% is e)panding to new locations" pro#its are
growing and customers are satis#ied and there is little need to change branding strateg%
;owe&er i# there are problems with one on these #actors" the changes are needed 0e will
loo' at (c*onald+s b% identi#%ing methods that were used to pre&ent the loss o# &alue o# the
brand Throughout the %ears Golden Arches had di##erent problems concerning how the brand
is percei&ed
44
0hen compan% was #ounded" the idea o# doing business was to deli&er swi#tl% and
cheapl% The mar'eting strateg% was to communicate this &alues" and the most important role
o# the brand was identi#ication 0hen compan% started #ranchising and the e)pansion was
going slowl%" these obAecti&es did not change Ad&ertisements were supposed to ma'e
customers aware o# the brand *eep brand awareness was the goal o# branding ;owe&er with
the time" as compan% started more rapid geographical e)pansion to the whole >nited ?tates
"the #irst problem occurred !n 1:/0s one o# two big problems (c*onald+s was #acing were
the local owners o# #ast=#ood restaurants B% 1:5< there were /00 (c*onald+s restaurants
which main strateg% was the cleanliness" good &alue #or mone%" #riendl% ser&ice !t was the
2a% .roc motto o# O?CM- which was introduced when he bought the rights to (c*onald+s
!n order to ma'e ser&ing burgers e&en more e##icient the ?t%ro#oam was introduced
to pac'aging 0ith the ad&antages it o##ered the compan% was gaining mar'et share"
e)panding to new locations and ma'ing pro#it The brand was built successi&el% and
awareness was so deep that (c*onald+s became mar'et leader in #ast=#ood sector The #irst
attac's on the brand were at the end o# the 1:10s" the beginning o# the 1::0s ,irstl% there
?t%ro#oam pac'aging was attac'ed" what made (c*onald+s to return to the original 6paper
and cardboard7 pac'aging which was more ecological A#ter one crisis o# brand image was
pre&ented" another emerged There were man% studies done" which concerned health%
li#est%les" and #ast=#ood was attac'ed because o# manu#acturing strategies and how unhealth%
the #ood is" and pro&en it causes #atal illness li'e heart disease or cancer Bne o# this
companies was (c*onald+s The compan% smoothl% agreed on introducing 100P &egetable
oil" low #at mil'" #ibre rich brea'#asts options and new salads !n addition to that the compan%
had to start labelling the ingredients and nutrition content B% the time these changes were
necessar% (c*onald+s had made #a&ourable and uni$ue brand associations in consumer
minds which were strong enough to o&ercome this maAor public criticism o# #ast=#ood
industr% The #ast=#ood culture was growing" ma'ing more and more Americans eat at these
'ind o# restaurants ?ince (c*onald+s was able to establish strong brand association be#ore
the crisis" a#ter it was ta'en care o## it could start a##ecting #eelings and Audgement o# the
customers The positi&e reactions on the brand were the main issue o# mar'eters
The compan% conducted new campaigns to gain more customers and to increase pro#its
;owe&er in 2000s another crisis concerning how the brand is percei&ed emerged ?ales were
declining" mar'et share was shrin'ing" customer satis#action and emplo%ee morale was low
and #ranchisees were #rustrated !n 2000 there were man% protest against globalization and
since (c*onald+s was one o# the companies which success#ull% e)panded to other countries
4<
there were acts o# &andalism concerning (c*onald+s restaurants ,ew %ears later 0orld
;ealth Brganization criticised #ast=#ood culture !n order to recapture image (c*onald+s had
to introduce e&en more health% menu Bne more time more health% salad meals and #ruit
ranges had to be added to the menu The CEB o# (c*onald+s" Iames Cantalupo" used phrase
C0e too' our e%es o## the #riesD6L%nch" 200:7 to emphasize it was the important moment #or
the compan% The changing tastes and li#est%les began impacting the Golden Arches and
causing the rebranding Another issue that also had pla%ed important role when ma'ing
decision to rebrand was the mar'et situation CThe traditional burger and #ries mar'et was
mature in @orth America in terms o# growth and there was strong competitionD6L%nch" 200:7
The co&ering o# the >nited ?tates with the (c*onald+s restaurant was prett% much done" and
it was time #or other strategies which would produce more growth and strengthen the brand
The biggest change was the change o# association with unhealth% 'ids (c*onald+s started
targeting teens rather then children The popularit% o# (c*onald+s was so great" that e&en
a documentar% was made about it" but in a bad conte)t (organ ?purloc' in his documentar%
C?uper ?ize (eD ate #or one month onl% at (c*onald+s A#ter the month he was e)amined
and tested and the conclusion was his health went worse because o# eating at (c*onald+s
E&en though" it can be argued how reliable was the test" there are still e&idence eating #ast=
#ood is unhealth% The #ilm was aired in 2004" what causes the percei&es o# brand to be e&en
more negati&e (c*onald+s was still ma'ing pro#its" howe&er there was the change in growth
!n order to ta'e care o# this problem the Golden Arches decided to introduce new design
There was a need to upgrade the brand and distinguish it #rom the competitors to the greater
depth" since the audience has grown older The image was threatened b% strategies which were
no longer success#ul and could create the opposite o# what was desired !n 2005 (c*onald+s
decided on e&olution" which allowed mo&ing #orward b% building a brand upon old design
#eatures which pro&ed to be doing well The design was changed b% using less plastic" more
bric' and wood" the green tone was introduced to the dQcor These change were necessar%"
since childish bright #lash% colors pre&iousl% used did not #it the new brand strateg% The
natural colors communicated a more adult #riendl% approach This change pro&ed to be
success#ul" since the compan% 'ept brand recognition and customers did not get con#used
B% o##ering #ast=#ood in less hectic and more rela)ed en&ironment (c*onald+s was able
to maintain lo%alt% #or which it wor'ed so hard This change made compan% more
sophisticated and loo' li'e it was more aware o# the issues concerning en&ironment Another
big step which (c*onald+s too' in changing its brand was introduction o# (cCa#e This
concept" which was started in 1::3 and originall% was used onl% in pea' hours was de&eloped
45
and adopted to the whole compan% in 2001 C(c*onald+s e)ecuti&es recognised (cCa#e had
de&eloped its own brand e$uit% discretel% #rom the (c*onald+s master brandD60right
200/E4427 The establishment o# separate identities" which had some similar attributes" but
were #ocused on discrete customer segments was the original idea" that (c*onald+s needed
This #orm o# co=branding resulted in ad&antages in man% #ields li'e attracting customers and
creating competiti&e ad&antage The #re$uenc% o# di##erent t%pes o# customers being
interested in a brand resulted in more intense and acti&e brand lo%alt% (cCa#e pro&ided
di##erent attributes to the customers" li'e mo&ing #rom processed to #resh #ood while
maintaining the original attributes li'e price and con&enience The rein&igoration o# brand
e$uit% The changes #rom 2005 made the brand loo' more sophisticated" while changes #rom
2001 made in more e)tended" thus ma'ing more associations and increasing alread% high
awareness The most recent idea concerns o##ering #ree 0i=,i internet in restaurants The
technological e)pansion o# the brand was necessar% not onl% due to the popularit% and
omnipresence o# the internet" but also to 'eep up with the competition (c*onald+s in order
to be more connected with teenage customers too' care o# its brand image b% implementing
new strateg%
!t is not the #irst time" and not the last one" when (c*onald+s is re&italizing and
impro&ing its brand As it is shown the compan% is able to ta'e care o# the brand when there is
a need The unnecessar% changes are not made when the% are not needed" but once the% are
done the% are care#ull% thought out The brand image is sa#e since (c*onald+s pro&es to
be compan% that 'nows how to ta'e care o# its #uture
'.-. erspectives for McDonalds.
Current situation o# (c*onald+s brand seems relati&el% strong !n order to better
understand in what stage o# de&elopment (c*onald+s is" and how its brand e$uit% has built"
#ew studies ha&e to be compared The best model which will depict present situation is Brand
Asset -aluator ?tudies o# Loung and 2ubicam" Iohn Gerzema" and 8hilip .otler will be used
to #ind out at what le&el are indi&idual pillars #or (c*onald+s B% loo'ing at the relationship
among the #our pillars it will be possible to do the assessment o# health and stage (c*onald+s
is nowada%s !n stud%ing (c*onald+s" #irst the relationship between pillars constituting Brand
?trength and Brand ?tature will be e)amined and then the o&erall association o# #our le&els
4/
*uring studies o# ad&ertising agenc% Loung and 2ubicam" relationship between #irst
two pillars" *i##erentiation and 2ele&ance was described !n their paper #rom 2003 the%
classi#ied (c*onald+s in the group whose 2ele&ance is signi#icantl% greater than
*i##erentiation This group is characterised b% price" which is the primar% reason to bu% what
ma'es the brand commoditized
The le&el o# last two pillars" brand stature" is described in a boo' )he Brand Bubble
!n 2001 author o# the boo' characterised (c*onald+s in a group o# companies" which score
high on both Esteem and .nowledge This means that Cthe brand has success#ull% established
itsel# in the hearts and minds o# consumersD6Gerzema" 20017 ?uch a le&el can onl%
be achie&ed through success#ul brand management Gerzema in his boo' uses also Energ%
!nde) 6assesses le&el o# Brand ?trength7 on a scale #rom 0 to 100 (c*onald+s le&el o# energ%
is in a group o# .inetic brands" which score between 50 and /4 .inetic brands Cha&e alread%
come a long wa% 8erhaps now is the time to thin' be%ond the con#ines o# the mar'et" and the
#unctionalit% o# the product" and consider how to gi&e the brand a wider social
rele&anceD6Gerzema" 20017 8otential o# creating a brand &alue is still high #or (c*onald+s"
howe&er it has to start thin'ing about new methods o# building brand e$uit%
The #our pillars o# BA- combined suggest that (c*onald+s is situated in the (ass
(ar'et position" sometimes also called Established Leadership or *eclining Leaders
(c*onald+s is still the leader in its categor%" howe&er it is slowl% loosing pricing power and
#uture growth potential The results o# stud%ing literature seem to con#irm this result .otler
and .eller in their current boo' Marketing Management made similar conclusions
(c*onald+s is clearl% a mar'et leader and it will not gi&e that position that easil%
The generalized idea o# (c*onald+s position is not enough to assess how e)actl% is the
compan% per#orming To understand it better precise and up to date data o# (c*onald+s and
it+s competitors are needed
Iohn Gerzema on his website o##ers the current data and comparison o# di##erent
brands which are presented on a BA- model The incorporation o# (c*onald+s and it+s two
main competitors" ?ubwa% and .,C ga&e the result shown in #igure 10
41
,igure 10 BA- (apping o# the stages o# Consumer Attraction #or (c*onald+s &ersus
?ubwa% and .,C 6?ourceE wwwAohngerzemacom9inde)php9brand=asset=&aluator7
,rom the graph we can see" that (c*onald+s in not the onl% compan% in #ast #ood ser&ice"
which has the strong brand !t is worth mentioning that the e&aluation o# brand e$uit% o#
competitors shows that the% score higher in the >ni$ueness dimension while being &er% close
to (c*onald+s in the other three 8illars ;owe&er" how the compan% is percei&ed and what is
the #inancial &alue o# the brand shows the discrepanc% between (c*onald+s and its
competitors The data o# how much each brand is worth can be ta'en #rom BrandH stud%
published b% (illward Brown Bptimor !nter&iewing consumers and pro#essional" and as'ing
them to e&aluate brand in a competiti&e conte)t" pro&ide &aluable in#ormation which helps in
assessing the intangible &alue gained b% (c*onald+s compan% The results are plotted in a
graph 3
4:
Graph 3 ,inancial comparison o# the brands
There are strong e&idence showing (c*onald+s brand is a strong leader E&en though
competitors brand e$uit% is percei&ed better b% the consumers" the &alue o# (c*onald+s brand
is estimated to be a lot higher Continuous inno&ation" incorporation o# new mar'eting
strategies allow (c*onald+s to be the most &alued #ast=#ood restaurant
!t will ta'e long time #or e)isting competitors to earn as much as (c*onald+s The%
are ma%be able to ma'e their brands be percei&ed better" but (c*onald+s is uni$ue with its
histor% Becoming power#ul brand at the same time >?A growth in power ma'e customers
#eel connected with the brand !t is a dream o# e&er% #ast=#ood pro&ider to be as success#ul
as the Golden Arches E&en though there are problems with brand image #rom time to time"
(c*onald+s brand holds its strong position
(c*onald+s #aced man% problems in its histor% concerning the brand" howe&er it was
alwa%s able to get itsel# out o# trouble thorough wise brand management !t sur&i&ed the test
o# time b% care#ul selection o# branding strategies @owada%s (c*onald+s is restoring its
brand image b% ma'ing changes in dQcor" menu and appl%ing new technologies !t seems that
(c*onald+s is bac' on trac'" and &alue o# the brand will reach higher increase soon
The Golden Arches can e)pect" that there still will be attac's on image and protest against the
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ethics" but as time showed" (c*onald+s is able to adapt its branding strateg% to the changing
national mar'et E&en though" #rom time to time there are minor slips in how the brand
is percei&ed the o&erall e&aluation o# the brand in the >nited ?tates is positi&e The rising
number o# en&ironmentalist and opponents o# #ast=#ood suggests that (c*onald+s will ha&e to
#ace issues concerning brand image in the #uture ;owe&er it will be di##icult to a##ect brand
associations that consumers ha&e in their minds right now The Americans+ #orce o# habit and
speci#ic culture will allow compan% to prosper in the >nited ?tates #or man% long %ears
There#ore the #uture will not be about sur&i&al on the mar'et !t will rather be about
de&elopment and growth The limited geographical spread and sti## competition will #orce
(c*onald+s to impro&e the brand (c*onald+s had de#initel% build a strong brand" but it will
be the challenge to 'eep it li'e that in the #uture
(c*onald+s is a compan% that started operating in the middle o# 20
th
centur%
Throughout the %ears new products were introduced and new mar'eting campaigns were used
to get customers+ attention The identit% o# the brand was built through adding di##erent brand
elements The e)pansion to new locations and hea&% ad&ertisements in >? media created deep
and broad brand awareness (c*onald+s understood that success#ul brand building would
help compan% in the #uture B% implementing di##erent branding strategies the Golden Arches
were able to create uni$ue brand associations The compan% communicated the meaning o#
the brand in order to create strong and #a&ourable image o# the brand in consumers+ minds
(c*onald+s 'new that ha&ing a strong brand could be ta'en step #urther and a##ect Audgement
and #eelings in order to create positi&e reaction to the brand e&er% time To get the positi&e
response (c*onald+s promoted (c*onald+s li#est%le Brand e$uit% dri&ers li'e mar'eting
acti&ities and internal branding helped in this process (c*onald+s has 'nown #rom the &er%
beginning" that the goal o# a strong brand is to ma'e customers lo%al The creation o# intense
and acti&e relationship was the 'e% to (c*onald+s success 8ro#its were growing" mar'et
share rising and the brand became part o# the national culture ,rom this moment (c*onald+s
became the strongest brand in the >? #ast=#ood mar'et !t reaped the bene#its #rom this
position" howe&er it was not eas% ?ince (c*onald+s was the strongest brand" it was attac'ed
#or what it represented" as people belie&ed" all #ast=#ood restaurants The attac's on pac'aging"
unhealth% #ood and e)cessi&e ad&ertising to children #ocused critics on (c*onald+s since the
#irst thing that came to people mind+s" when thin'ing about compan% that is connected with
children" was (c*onald+s The Golden Arches accompanied #ew generations" so the
'nowledge about it+s branding strateg% was more then enough to attac' it ;owe&er
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(c*onald+s was able to withstand all these attac's" and b% implementing and e&ol&ing the
brand became e&en stronger (ore green and health% pro#ile o# the compan% allowed the
brand to sur&i&e the attac's !n order to change image e&en #urther (c*onald+s was loo'ing
#or new e)tensions Changing the strateg% towards teenagers is an operation which allowed
the #urther growth o# signi#icance o# the brand on the mar'et ,irst the idea o# (cCa#e and
then #ree 0i=,i helped in ma'ing the brand loo's up=to=date and aware o# consumer needs
All changes (c*onald+s made in its operations were connected with an idea o# increasing
&alue o# the brand" and there#ore gaining lo%al customers E&en though (c*onald+s
comparing to its competitors is not percei&ed as the best one on the mar'et" the pro#its show
that positi&e brand e&aluation is onl% one on man% aspect in ma'ing customers lo%al The
#uture is bright #or the Golden Arches" since (c*onald+s clearl% 'now how to manage its
brand success#ull%
-. Conclusion
(anaging the brand is not an eas% tas' ;owe&er there are certain models which are help#ul
and pro&ide good bac'ground #or assessment o# the brand The aim o# the #irst chapter was to
pro&ide theories and models o# brand building which ma% be applied to an% compan%
Bene#its #rom ha&ing a brand are o&erwhelming" and as the case o# (c*onald+s showed" the%
help in hard times !t cannot be denied" that brand is minor part o# doing business !t
in#luences identi#ication" practicalit%" lo%alt% and man% other operations which create
di##erences between brands Building a strong brand re$uires not onl% strateg%" but also tactics
o# how to implement it ,ocusing on thorough e&aluation and creation o# brand building
process leads to success And success is achie&ed" when customers 'nowledge o# the brand is
incon&ertible The concepts presented are about getting consumers or emplo%ees more
in&ol&ed with the brand 8roper de&elopment and integration o# brand elements is necessar%
to achie&e this goal Brand elements are integral part o# brand e$uit% Bnl% the best
companies" li'e (c*onald+s can use them to create the magic moment which will sta% with
consumers #or a long time The creation o# brand e$uit% is a main target o# branding The
models which appl% theoretical 'nowledge with consumer sur&e%s are the best &aluator o#
brand e$uit% Choosing brand building strateg% should be done b% care#ull% stud%ing the
current position o# the brand
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Loo'ing at the histor% o# the leader in #ast #ood business" anal%zing it+s brand e$uit% and
positioning on the mar'et" helps understand the phenomenon o# the Golden Arches A
success#ul brand building pro&ed to be a 'e% to (c*onald+s success in toda%+s world 0hen
competition is sti##" in#ormation #low unstoppable and consumer ha&e more possibilities then
e&er" getting attention is the crucial part o# doing business The role o# (c*onald+s brand is to
'eep customers engaged in the brand Bnce the% e)perience and understand the comple)it% o#
brand &alues" their memories will lead them bac' to the compan% T%ing product to the brand
e)perience is as important as t%ing a #eeling to the brand !t allows consumers to disco&er the
brand (c*onald+s was success#ul in bringing brand personalit% to li#e (c*onald+s was also
able to shape the entire generations what created a de&oted audience o# potential customers
B% selling not onl% #eatures and bene#its but also e)perience" the speci#ic li#est%le was
promoted >sing rele&ant wa%s to reach customer is a 'e% to success o# (c*onald+s
.eeping customer e)cited e&er% time when ma'ing purchase made consumers engaged with
the brand E&er% #unction is use#ul i# it is managed properl% and applied to current needs
0orld is changing" and so is (c*onald+s E&en though there were attac's on
(c*onald+s brand image" wise usage o# branding strategies allowed to get awa% in one piece
,uture o# the Golden Arches ma% not be eas%" but it de#initel% is promising among other
because o# care#ul brand building
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