McDonald’s Sales Promotion

A Sales Promotion Campaign by Sheila Murrey for IMC-617

West Virginia University

 Table of Contents

EXECUTIVE SUMMARY 3

SWOT ANALYSIS 4

SALES PROMOTION OBJECTIVES 6

SALES PROMOTION CAMPAIGN THEME 7

POSITIONING STRATEGY 8

SALES PROMOTION TACTICS 11

PROPOSED BUDGET 12

EVALUATION 13

REFERENCES 17

APPENDIX 18
 Executive Summary
McDonald’s generally sets the highest standard for itself, however public perception differs from that of the
company’s. Because McDonald’s has come under such recent public scrutiny and bad press and since the
overall IMC plan engages the use of the slogan “i’m lovin’ it” we knew our focus had to be on giving back to
McDonald’s loyal customer base and strengthening it. Coming up with the sales promotion of “thankin’ you”
seemed to be the obvious choice. Determining the strategies involved proved a bit more challenging.

We realize the movie “Super Size Me” did much to tarnish the McDonald’s brand image. However, loyal Mc-
Donald’s consumers continued to eat at McDonald’s, enjoying the convenience and taste of the food, and the
fact that you can find a McDonald’s in almost every town, sometimes two or three. They also have really liked
the drive-through (remember McDonald’s most recent rival Subway does not offer drive-through service), and
are often able to have their food prepared – hold the catsup for example - exactly the way you order it.

Figure 1. Morgan Spurlock

Since the McDonald’s brand, whether good or bad, has such a strong image we have chosen to offer freebies for
loyalists that our target audience is interested in receiving that McDonald’s has never offered before. And since
the trend is to cut back on the number of stores, but streamlining and cleaning them up we chose this opportuni-
ty to add an area to (company owned) stores, the likes of which, McDonald’s has never seen. The new addition,
much the way adding playgrounds did, will generate some new PR for the chain. This will provide a breath of
fresh air to the brand.

We will offer hats, T-shirts, patches, headbands, hairwraps and pet leashes all with the famous McDonald’s lo-
gos. These will be free premiums, given out after patrons have made multiple purchases over a given timeframe.
We will even offer to customize other apparel and items with the logo if consumers would like to bring them to
a local store. The promotion will place a small gift and prize redemption studio at major McDonald’s locations.
If and when McDonald’s chooses to end the redemption program this area will become a gift shop and organiza-
tion area for local charities to call home base.

We understand the promotional challenges that lie ahead for McDonald’s and applaud the company’s efforts to
work with us as a team on this campaign to ensure its success.

We also understand and value the high ranking the McDonald’s brand name has all over the world.

We want this Sales Promotion Campaign to be all about thanking McDonald’s customer fan base. We’re off to a
running start. Are you ready?

Sheila Murrey Page 3

 SWOT Analysis
SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats). These variables are general in nature with
details to follow. This SWOT can be used specifically related to sales promotion. These were derived via experi-
ence with the food products, and research conducted, without bias.

Internal
Strengths Weaknesses

Great employee benefits Poor public image

Community commitment Nutritional point values
Food safety & cross-selling Inability to keep promises
Loyal & large consumer base Pay employees low wages
Multiple consumable products Demand for food decreasing
Food tastes good (addictive qualities) Inability to gain new consumers
Worldwide consistent fun brand image Continual process improvement
Jobs and opportunities for minorities, mom & pops
First to provide nutrition information on packaging
Provide education and training to employees
External
Opportunities Threats

Loyal consumers Decline in sales

Swell in working population
Development of healthier foods
World population growth overall
Improvement in nutrition of foods offered could
lead the way to improving nutrition for billions
Potential lawsuits
Established competition
Child advocacy anti-fast food campaigns
Image problems: movies that have taken
a stab at health risks associated with living
on McDonald’s as main meals

Figure 2. SWOT Table

Opportunities
Improvements in Food Quality
McDonald’s serves 100% beef, 100% chicken, and Grade A eggs which, comes only from certified suppliers
who are audited and inspected on a regular basis.
Many of the foods McDonald’s serves are from the same trusted brands consumers purchase at the
grocery store to enjoy at home – Dannon, Kraft, Nestlé, Tyson, Dasani, Newman’s Own, Heinz, etc.

Nutritional Improvements
McDonald’s serves premium salads, chicken, yogurt, bottled water, fruit & more - could cut fat in dressings.
A McDonald’s hamburger is 260 calories and 9 grams of fat, and is the same size as it was when
introduced in 1955 - could reduce fat and calories and offer vegetarian version.
McDonald’s could lead the way in providing excellent nutrition to children and families.
Because of the mass quantities McDonald’s purchases and the buying power they offer value priced meals to
their consumers. With the growth of the worlds population, the swell of the working and baby boomer popu-
lations, McDonald’s has the opportunity to provide food to all nations of the world. They have the awesome
responsibility of feeding billions of people.
McDonald’s could put pressure on other companies such as: Dannon, Kraft, Nestlé, Tyson, Dasani, Newman’s
Own, Heinz, etc. to reduce sugar and fats in their products as well – adding this to other parts of the IMC plan
could result in much good will.
Page 4 West Virginia University IMC-617
Strengths
Food Safety
More than 2,000 safety, quality and inspection checks McDonald’s food from farms to restaurants.
McDonald’s requires that 72 safety protocols are conducted every single day in McDonald’s restaurants.
McDonald’s works closely with independent experts on science, health and food to help McDonald’s
develop the most stringent safety protocols.

Packaging
For 30 years, McDonald’s has provided comprehensive nutrition information this year, nutrition information is
on packaging (first in the industry to do so).

Jobs & Opportunity

20 of top 50 management started in McDonald’s restaurants, including our CEO, Jim Skinner.
67,000 McDonald’s restaurant managers and assistant managers started as restaurant staff.
McDonald’s is the only restaurant organization to receive credit recommendations from the American
Council on Education (ACE).
“Best Place to Work for Minorities” – Fortune Magazine 2005.
Hamburger University® more than 275,000 graduates worldwide & with training, eligible for college credits.
“One out of 5 Best Places to Work in Latin American” – America Economic Magazine 2005.

Community Commitment
McDonald’s local owners are “Moms & Pops” too
Ronald McDonald Houses® are homes away from homes for families with seriously ill children in more
than 259 local communities around the world - could use some improvement here however, as a Ronald Mc-
Donald House charity on the top 10 list of stockpiles of money. (http://www.charitynavigator.org/index.cfm/bay/
topten.detail/listid/9.htm)
Ronald McDonald Care Mobile™ program is a fleet of state-of-the-art vehicles that deliver cost-effective
medical, dental and education services directly to underserved children in their own neighborhoods.

Weaknesses
Public image tarnished after the movie “Super Size Me” was released to the public.
According to Dr. Vartabedian says, “McDonald’s food point values are consistently low.” (Nutripoints, pg 400).
Inability to keep promises such as the McDonald’s pledge to reduce trans fat by a deadline that wasn’t met.
It has been rumored that McDonald’s pay employees low wages.
With the PR problems and low nutritional ratings McDonald’s has seemingly been unable to gain new consum-
ers and meet sales projections.
Process improvement is badly needed at McDonald’s.

Threats
Decline in sales is an overall threat to the company’s livelihood and growth.
Potential lawsuits could impact the overall company’s future.
Child advocacy groups or other child welfare organizations could rise up against the company, i.e. ad campaigns
geared toward children and/or nutritive value of the food.
Established competition continues without evolve and pose risk to McDonald’s future.
Image problems: movies that have taken a stab at health risks associated eating McDonald’s as primary meals.

Unless otherwise noted facts above were derived from McDonald’s Facts Summary (www.mcdonalds.com/corp/
about/factsheets.RowPar.0001.ContentPar.0001.ColumnPar.0002.File1.tmp/Facts%20Summary.pdf)

Sheila Murrey Page 5

 Sales Promotion Objectives
We only have one overall sales promotion objective: Hold on to current McDonald’s customers.

We have found the “easiest way to keep customers coming back again and again, while essentially locking
out your competition is to implement a continuity program. A continuity program provides incentives for your
customers to keep coming back to do business with you by offering a free or low cost reward. This strategy is
also very simple to implement - but extremely powerful.” When consumers come back you always have the
opportunity to make another sale, upsell or cross-sell. (www.market-your-services.com/ColumnArticles/SPM_
june2003.pdf)

Figure 3. Campaign logo Figure 4. Continuity promotion logo

We will draw from McDonald’s strengths and opportunities as outlined in the SWOT analysis and bear in mind
that a multitude of McDonald’s consumers are children thus we want to remain true and ethical in all of our
IMC planning for McDonald’s.

We want to build trust in McDonald’s again and so does McDonald’s CEO Jim Skinner. “Chairman-CEO Jim
Skinner told delegates the chain can’t sustain its sales growth without that consumer trust and set a plan to make
McDonald’s the most trusted brand in the world, according to attendees.” (http://adage.com/article?article_
id=116573)

Figure 5. Waiter campaign ad

Figure 6. Waiter continuity promotion ad

Page 6 West Virginia University IMC-617

 Sales Promotion Campaign Theme
Our “thankin’ you” promotion will build trust and credibility with loyal McDonald’s consumers. “People
don’t just buy what they need they buy what they WANT.” (www.targetmarketingmag.com/enews/archived-
Month2006.bsp?linkvar=month&linkdata=11) See figures 3-6.

We intend to establish a sales promotion which will enhance McDonald’s image, reward loyal consumers with
a great continuity program, and remind all consumers what a McDonald’s charities have given the world. The
current slogan and theme at McDonald’s is “i’m lovin’ it”. With this in mind, and so as to integrate our planned
continuity promotion within the “i’m lovin’ it” campaign, our sales promotion shall be called “thankin’ you”.

Figure 7. Concepts of updated stores

Select company owned stores would include in their updating plans, gift/redemption center.

Sheila Murrey Page 7

 Positioning Strategy
The Marketing Basics website says about strategies, “There are only three marketing strategies needed to grow
a business: (1) Increase the number of customers (2) Increase the average transaction amount, and (3) Increase
the frequency of repurchase.” It goes on to say that, “Increasing only one factor will produce linear business
growth. Increasing all three factors will produce geometric business growth.”
(www.marketingprinciples.com/marketstrategy/default.asp?cat=117)

Our target market was defined as children and families out for fun. However, we are also positioning McDon-
ald’s to compete against Subway. “Positioning refers to ‘how organizations want their consumers to see their
product’. What message about the product or service is the company trying to put across?” (www.learnmarket-
ing.net/positioning.htm)

Positioning Offers the convenience and taste of food you love, in a fun place, everywhere. We’re thankin’
Statement you for your patronage and support and will work to make our food good for you!
Value Propositions Great Taste Good nutrition Fun rewarding atmosphere

Key Messages Continue offer great tasting food Better our nutrition in all our We are thankful for your business
foods (living up to promises)
Sample Proof Point Our taste is great; billions satis- 100% beef, 100% chicken, We’re giving something back
fied grade A eggs, etc.
Sample Sound Bites We’re thankin’ you thankin’ you for eating with us thankin’ you today

Sample Backing Song Children Are Our Future Feel the Love You deserve a break today

Figure 8. Position Table

McDonald’s closest competition is Burger King and Subway. Burger King represents fun to children and so will
our campaign. However, we are positioning McDonald’s more in line with Subway as the nutrition in our food
improves and in order to focus on the 100% beef, 100% chicken, grade A eggs, etc. that are currently ingredi-
ents in the food.

We’ve learned that, “The pricing strategy must reflect the benefit offered and the promotion strategy must com-
municate this benefit.” (www.learnmarketing.net/positioning.htm) Because of this we place a high value upon
the rewards we are using to give something back as our way of thanking our loyal customer base and remain a
fun place to be.

We are positioning McDonald’s as the thankful partner when it comes to feeding your family because we know
that a “positioning strategy results in the image you want to draw in the mind of your customers, the picture you
want him/her to visualize of you what you offer, in relation to the market situation, and any competition you
may have”. (www.smithfam.com/news/oct00x.html)

Our positioning statement reflects what we need to communicate about McDonald’s to their loyal consumers to
retain their loyal consumers and keep having them feel the love and the fun that first brought them into McDon-
ald’s.

“The end of positioning as we know it,” is a quote from McDonald’s CMO, Larry Light at an AdWatch confer-
ence in New York City. He stated that, “McDonald’s was abandoning the universal message concept.” He advo-
cated that marketers utilize a “brand journalism approach,” rather than one main message to the masses.

Page 8 West Virginia University IMC-617

However, here is the definition of Positioning, according to Al Ries: “Positioning is not what you do to the prod-
uct; it’s what you do to the mind of the prospect. It’s how you differentiate your brand in the mind. Positioning
compensates for our overcommunicated society by using an oversimplified message to cut through the clutter
and get into the mind. Positioning focuses on the perceptions of the prospect not on the reality of the brand.”
(http://ries.typepad.com/ries_blog/positioning_debate/index.html)

We know and believe that “McDonald’s equals kids, Ronald McDonald, happy meals, playgrounds, hamburg-
ers, cheeseburgers and French fries. “I’m lovin’ it” is McDonald’s theme and the core of Larry Light’s brand
journalism strategy. I’m lovin’ it? What does that mean? In fact most customers have not been lovin’ McDon-
ald’s for quite some time.. Sure, sales are up this year, but they have been stagnant for years.” (http://ries.type-
pad.com/ries_blog/positioning_debate/index.html)

We know that we need to focus on McDonald’s hamburgers and the children who love them. We have learned
that a brand perception is a brand’s reality. Management at McDonald’s is currently and has been cleaning up
stores and simplifying the menu - we believe also striving to improve the nutritional value of many of the food
choices. Now our aim is to sell the brand position.

McDonald’s is fun and we need to bring the fun back. We think that using a campaign of giving back, of thank-
fullness can achieve this goal. Parents and children really do “deserve a break today.” (http://ries.typepad.com/
ries_blog/positioning_debate/index.html)

Sheila Murrey Page 9

 Sales Promotion Tactics
Strategies

Have McDonald’s researchers and dieticians share their knowledge, as experts, about how they are working
to improve the nutrition of their food via written (writing journals and forums, adding information to product
packaging) and audio messages for radio sound bytes and audio/video messages for television ad spots.

Have these same researchers and dieticians participate in radio health talk shows and television programs. The
researchers and dieticians may also participate in television infomercials where changing the fast food industry
is the primary focus.

Their talking points are:

Offers the convenience and taste of food you love, in a fun place, everywhere. We’re thankin’ you for your pa-
tronage and support and will work to make our food good for you!

Great taste – even with all the nutritional changes the food still retains its great and well known flavor.

Good nutrition – everyday strides are made to increase the nutrition in the food.

Fun rewarding atmosphere – the clean up and revamp of the company stores engages a new generation; the
sales continuity program rewards our loyal customers with products they can use, not just toys.

Provide company representatives called “McTasters” to hand out free tastes of the new and improved food stuff
and loyalty cards at rallies, fairs and other public events.

Put a sign up form on the McDonald’s websites where charities and nonprofit groups can register to have a “Mc-
Taster” show up to hand out food treats and the loyalty cards.

The loyalty cards will offer to children age 18 and under the chance to not only be rewarded based on food
purchase history but also on grades – the grade section will not be mandatory but if utilized will result in a
next level higher gift. On the card the kids have a place to write in their most recent test score or grade. They
can bring in their test result or grade report and if the grade is a B or above (80%) they will achieve one next
higher gift level. There will be a range of gifts, based upon number of food purchases. The loyalty cards will be
stamped with a special ink stamp that when placed under a blue light at the redemption center, the award level
will appear. The tie in for kids will be they can receive better gifts if they do well in school.

Sales Promotion Timeline

Tactic Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec
Newspaper ads $$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$

Billboard $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Television spots $$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$

Meet and greet events Per Occurance

Signage As Needed

Figure 9. Promotion Timeline

Sheila Murrey Page 11
 Proposed Budget
We have learned that “advertising dollars are spent on four distinct media outlets--television, print, radio, and
outdoor (e.g., billboards). These advertising expenditures are not spread evenly across all outlets; rather, televi-
sion receives more advertising dollars per quarter than the other media outlets combined. The reason for the bias
toward television has to do with consumer response. Some media outlets engage the consumer more quickly
and the advertising message may be retained longer. This is true for television relative to other media outlets,
which is why it receives so much of the advertising budget.” (http://commodity.aem.cornell.edu/nicpre/newslet/
vol3no2/index.htm)

For our sales promotion “thankin’ you” we have opted to mix the advertising as follows:

Television advertisements - 64 percent of the advertising budget

Outdoor signage/billboards -13 percent

Print Media - 8 percent

Radio messages and ad spots - 6 percent

Internet - 5 percent

Promotional gifts - 4 percent

After the dot.com bubble burst McDonald’s began to run internet ads “on nick.com, disney.com, and foxkids.
com to promote McDonald’s Happy Meal toys. Now, the burger giant could end up spending as much as 5 per-
cent of its ad budget online this year.” (http://www.usnews.com/usnews/culture/articles/031006/6ads.htm) We
have made note of this and plan to incorporate the internet into the “thankin’ you” sales promotion.

See figures 3-6 for examples as to what we will use within the ads.

Since the budget for the stores redesign has already been allocated funds earmarked in that will be moved to
pay for the gift/redemption areas so the sales promotion budget of $20 million dollars will remain untouched for
those updated stores.

A portion of the sales promotion budget however will be used for the various gifts that the promotion will give
away (as shown above).

Page 12 West Virginia University IMC-617

 Evaluation Methods
Establish the Purpose and Scope of the Data Analysis

A) Discuss with the company store owner/manager the objective of the data analysis.

B) Analyze all data previous collected from McDonald’s customers, those people who currently buy the prod-
ucts to determine market share/penetration of the products. Study customer loyalty trends.

C) Review previous data, if available, to determine evaluations/results and recommendations.

D) Review applicable compliance or guidance documents and establish anticipated, expectations and targets.

E) Sample ten company stores: observe the area, process, workstations, and specific task(s). Take notes of all
facts related to customer interaction with staff.

F) Develop measurement and assessment strategy and task description.

1. Provide information obtained from preliminary investigation and research to owner for review.
2. Discuss findings and develop sampling strategy with the owner.
3. Determine the sampling strategy or strategies based on objectives and review findings.

Conducting the analysis

A) Follow guidance/template from any existing business documents, used in former surveys, as appropriate.

B) Receive and review all loyalty cards upon redemption.

C) Ask for customer’s participation upon exiting the store/other location of taste trials or interviews.

D) Determine market share by checking business and government sources that would compile industry fiscal
information.

E) Record any observations made during the interviewing processes that may influence data.

Sheila Murrey Page 13

Field Sheet To Include

Ratings of Excellent, Good, Fair, and Poor or Yes/No answers with room for comments on the survey.

Outdoor signage evaluation

Any McDonald’s outdoor billboards? If so, how would you rate them - bright, bold, easy to spot?

Television/Radio advertising evaluation

Have you seen any McDonald’s TV ads? If so, how would you rate them - fun, informative, creative?
Have you heard any McDonald’s radio ads? If so, how would you rate them - fun, informative, creative?

Website advertising content – amount of detail and extent of coverage - Do they entice you?

Newspaper advertising content – amount of detail and extent of coverage - Do they entice you?

Charity event sponsorship

Is it important to you that McDonald’s is involved/sponsors charitable events?
Have you known or been touched in some way by a Ronald McDonald house?

Effectiveness of product packaging

Does the packaging provide helpful/important information?
Do you learn anything about the McDonald’s company from the messages on the packaging?

When thinking of today’s purchase, do you feel you obtained a good value?

How often do you purchase McDonald’s food products?

Circle one, weekly, monthly, twice a month, once a year.

Overall evaluation

Interpreting the Results

A) Using the data and task information provided on the field sheets, compare results to identified target levels.
Refer to the appropriate signage and licensing regulation and other documents.

B) Compare sample results with applicable standards or target levels and previous applicable surveys, and
discuss survey results with the owner to determine the need for further sampling. The use of data from previous
surveys will be included as appropriate to the purpose and objectives.

Preparation of the Survey Report

A) Based on the sampling results obtained and the related results from previous surveys - actions required?

B) Consolidate field sheets and prepare a compilation of survey data to the owner, as well as incorporating the
data into future Marketing Plans.

Page 14 West Virginia University IMC-617

 Sample News Release
May 5, 2007

McDonald’s as a brand and as a company needs no introduction. Charitable causes, good fast food, a changing
company dynamic and wishing to thank loyal McDonald’s customers are the main driving forces of a new day at
McDonald’s.

McDonald’s understands there is some misperception of its brand out there and wants to be responsible for
and take care of their loyal patrons, people who know that McDonald’s works by high ethical standards. It’s time
McDonald’s thanked their fan base of customers and therefore will embark on a new campaign to add a gift
redemption center in all of its company owned stores, initially for the sole purpose of rewarding their customers.
“i’m lovin’ it” and we’re “thankin’ you” are both solid promotions which, will work together to provide our
customers with the knowledge that McDonald’s is out to truly commit to changes in their ingredients and thank our
customers for being a part of this revolution.

We have a vision. McDonald’s wants to be a positive contributor in all communities to give back and to give thanks.

On June 15, 2007 McDonald’s will launch the new gift promotion kicking it off with their involvement and spon-
sorship of the (X) event in New York City.

Our goal is that our loyal customers will learn about our new “thankin’ you” campaign.

Sheila Murrey Page 15

 Sample Pitch Letter
Sheila Murrey
IMC Consultant for McDonald’s
Titusville, FL 32780

Dear Anthony of WXYZ radio, New York, NY:

McDonald’s as a brand and as a company needs no introduction. Charitable causes, good fast food, a changing
company dynamic and wishing to thank loyal McDonald’s customers are the main driving forces of a new day at
McDonald’s.

McDonald’s understands there is some misperception of its brand out there and wants to be responsible for
and take care of their loyal patrons, people who know that McDonald’s works by high ethical standards. It’s time
McDonald’s thanked their fan base of customers and therefore will embark on a new campaign to add a gift
redemption center in all of its company owned stores, initially for the sole purpose of rewarding their customers.
“i’m lovin’ it” and we’re “thankin’ you” are both solid promotions which, will work together to provide our
customers with the knowledge that McDonald’s is out to truly commit to changes in their ingredients and thank our
customers for being a part of this revolution.

We have a vision. McDonald’s wants to be a positive contributor to an upcoming charity event that people in your
listening audience may want to know about.

On June 15, 2007 McDonald’s will launch a media campaign and sponsor the (X) event to be held in New York’s
Central Park.

We hope you’ll share our news release (included) with your listeners. Our goal is that people will hear about this
event, give to the charity and gain some insight into our new “thankin’ you” campaign.

One of our representatives will be calling you in the next day or two to learn of your time slot decision for our
news release. If you would be so kind to afford your listeners the information we can offer.

Thank you for taking time out of your busy schedule.

If you have questions or need additional information, please call me at 1-321-555-9191.

Sincerely,

Page 16 West Virginia University IMC-617

 References
BBC News. (2004) Entertainment. Director dismisses McDonald’s ads. Retrieved May 4, 2007, from
http://news.bbc.co.uk/1/low/entertainment/film/3589916.stm

BBC News. (2004) Business. McDonald’s: The Journey to Health. Retrieved May 4, 2007, from
http://news.bbc.co.uk/2/low/business/3641603.stm

Duncan, Ph.D., Tom. (2005). Principles of Advertising & IMC. (Second Edition).
New York: McGraw-Hill/Irwin

Google Image Search. “McDonald’s Interior”. Retrieved May 5, 2007, from

http://bigumigu.com/bigu/haber.asp?hid=1072

Komperda, Jack. (2003) U.S. News & World Report. Buying Time Online. “Internet advertising is back, but
this time name companies are paving the way”. Retrieved May 8, 2007, from
http://www.usnews.com/usnews/culture/articles/031006/6ads.htm

Learn Marketing. Retrieved May 6, 2007, from

www.learnmarketing.net/positioning.htm

MacArthur, Kate. (2007) Advertising Age. McDonald’s Unveils Global ‘Shrek’ Movie Promotion. ‘Milk-and-
Apples’ Effort to Also Hype Burger Chain’s Healthful-Eating Choices. Retrieved May 8, 2007, from
http://adage.com/article?article_id=116573

Marketing Basics. (2007) Retrieved May 5, 2007, from

http://www.marketingprinciples.com/marketstrategy/default.asp?cat=117

McDonald’s Facts Summary (2006) Retrieved May 5, 2007, from

http://www.mcdonalds.com/corp/about/factsheets.RowPar.0001.ContentPar.0001.ColumnPar.0002.File1.tmp/
Facts%20Summary.pdf

Pritchett, James G., Liu, Donald J., and Kaiser, Harry M. NICPRE QUARTERLY. “A Bigger Bang for the Milk
Advertising Buck?” Retrieved May 8, 2007, from
http://commodity.aem.cornell.edu/nicpre/newslet/vol3no2/index.htm

Ries, Laura. (2004) The Origin of Brands Blog. Retrieved May 7, 2007, from
http://ries.typepad.com/ries_blog/positioning_debate/index.html

Schultz, D, Robinson, W., & Petrison, L. (1998). Sales Promotion Essentials: The 10 Basic Sales Promotion
Techniques...and How to Use Them. Chicago, Ill: NTC Business Books.

Smithfam.com. (1996-2007) Internet Marketing Support. Retrieved May 6, 2007, from

www.smithfam.com/news/oct00x.html

Vartabedian, Dr. Roy, & Mathews, Kathy (2005). Nutripoints Healthy Eating Made Simple! (5th ed.). Carlsbad,
CA: Designs for Wellness Press.

Sheila Murrey Page 17

 Appendix
History
Founder Ray Kroc, 1940 San Bernardino CA Jim Skinner CEO
Revenue 20.460 billion dollars US (2005)
447,000 employees
(http://en.wikipedia.org/wiki/McDonald’s)

McDonald’s announced in 2002 that it would make changes to reduce trans fatty acids and saturated fats in its
fries while increasing the percentage of so-called good fats. In February 2003, just before the changes were
supposed to be in place, the company announced an indefinite delay. In September 2004, a nonprofit food safety
and nutrition watchdog group ran a full-page ad in The New York Times criticizing the company (click here to
see the ad).

More importantly, the overall sales outlook for McDonald’s is not positive. The company reported an increase
in sales and profits in 2003 and 2004, but this was primarily due to strong sales in Europe and better-than-ex-
pected sales performance of the salad menu in several markets (see chart below). Given the social climate, there
is no guarantee that McDonald’s will maintain this trend in 2005. Capitalizing on the diet craze, Subway has
become a formidable threat to McDonald’s. Specifically, Subway now has more franchisees than McDonald’s
and provides a healthier menu list, which has been the focus of their advertising and promotions. Further, sales
for Boston Market and Chipotle (which are both owned by McDonald’s) have been continually declining, which
will have a negative impact on the consolidated balance sheet.

In 2006, McDonald’s introduced its “Forever Young” brand by redesigning all of their restaurants, the first
major redesign since the 1970s. The new design will include the traditional McDonald’s yellow and red colors,
but the red will be muted to terra cotta, the yellow will turn golden for a more “sunny” look, and olive and sage
green will be added. To warm up their look, the restaurants will have less plastic and more brick and wood,
with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on
the walls. The exterior will have golden awnings and a “swish brow” instead of the traditional double-slanted
mansard roof.

The new restaurants will feature areas:

The “linger” zone will offer armchairs, sofas, and Wi-Fi connections, a concept introduced by Starbucks.
The “grab and go” zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will
offer them news and weather reports.
The “flexible” zone will be targeted toward families and will have booths featuring fabric cushions with colorful
patterns and flexible seating.
Different music will be targeted to each zone.
(http://en.wikipedia.org/wiki/McDonald’s)

Additional Reading:

http://www.diet-blog.com/archives/2007/02/07/mcdonalds_nuggets_get_the_heart_healthy_tick.php

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