McDonald’s is undoubtedly at the apex of the “fast-food chain”. With its strong focus on customer service, response to competition, and use of genius marketing techniques early on in its development, McDonald’s has cemented its place in the hall of fame of the Fast Food Industry.
Ray Kroc, a traveling salesman who made McDonald’s what it is today, developed his vision for the brand around a simple and effective consumer-driven premise: quality, service, cleanliness, and value. These principles still remain the cornerstone of the brand. Today, McDonald’s has become a trustworthy brand that places the consumer at the center of its world.
Things To Consider
- McDonald’s is the largest franchised food service organization WORLDWIDE.
- By the year 2000, McDonald’s had already opened its 1000th restaurant in the UK.
- Every day McDonald’s provides food and beverages to nearly 43 million people around the globe.
- Today, McDonald’s food is available in locations such as a Swiss airplane, a ski-thru in Sweden, and Liverpool’s Anfield football ground.
History of McDonald’s
The story of McDonald’s began in 1954 in San Bernadino, California. A traveling salesman called Ray Kroc was trying to sell milkshake multi-mixers to a drive-in restaurant run by two brothers – Mac and Dick McDonald.
Kroc calculated that the restaurant – which served 15 cent hamburgers with fries and a shake every fifteen seconds – must be selling over 2,000 milkshakes a month. Kroc saw the massive potential of the brothers’ thriving business and decided to get involved.
Kroc became the McDonald brothers’ first franchisee when he opened his own McDonald’s in Chicago on 15 April 1955. Business was booming. McDonald’s served more than 100 million hamburgers within its first three years. In 1959, the 100th McDonald’s restaurant was opened. In 1961, Kroc bought out the McDonald’s brothers’ interest with $2.7 million.
The billionth McDonald’s hamburger was served live on prime television in 1963.
The brand was just as popular outside UK and US. McDonald’s had successfully established themselves in Canada, Australia, Japan, and Germany by the time the iconic Golden Arches made their debut appearance in 1974 in the UK. By 1988, worldwide sales had topped $16 billion.
Today, McDonald’s is represented on all five continents from Beijing to the Arctic Circle.
Although McDonald’s has evolved into a multi-billion-dollar quick-service restaurant industry, hamburgers and fries have remained the mainstay of its business. But even more central to the brand’s success is a menu that constantly evolves to meet the expectations of changing customer lifestyle and eating habits.
A prime example of this is the Filet-O-Fish, which was created by Lou Groen. Lou Groen was a Cincinnati-based franchisee whose restaurant was situated in a predominantly Catholic area. When Lou noticed the trade was slow on Fridays, he concluded that Friday is a day of abstention from red meat for many Catholics. Hence, he started to work on a fish-based product to meet the needs of the local community.
In 1963, Filet-O-Fish was launched and it has since become a mainstay on quite a few McDonald’s menus.
The Big Mac, the best known and most successful McDonald’s menu item ever, was created in a similar fashion in 1968 by Jim Deligatti from Pittsburgh. In 1977, Jim even developed the breakfast menu of McDonald’s.
This move would change the breakfast habits of millions of Americans in the years that followed.
These flashes of innovation have played an important role in the growth of the company. Even today, McDonald’s continuously seeks to improve the quality and convenience of the McDonald’s experience.
McDonald’s is always committed to providing its consumers with food of the highest quality. Their menu is continually reviewed and adjusted that it meets and exceeds customer expectations.
Do you know the story behind the Drive-thru?
The idea for a drive-thru restaurant sprang from the need to solve a local sales problem. When soldiers from a nearby army base in Arizona were forbidden to leave their cars in military fatigues, the first McDonald’s drive-thru was born. The idea was an instant hit. Today, drive-thru accounts for more than half of McDonald’s business in many of its international markets.
McDonald’s first entered the market in the UK in the mid-1970s, the path for fast-service restaurants was already well established with fish and chip restaurant chains.
The fast-food restaurant market has seen consistent dynamic growth since then. The market has also become highly competitive with international chains such as Burger King, KFC, and Pizza Hut.
Despite the increase in competition, McDonald’s continues to grow with its iconic Golden Arches.
Marketing & Branding Strategies
McDonald’s has always been aware of the key role of marketing and branding in the brand-building process. McDonald’s and advertising are inseparable.
“There’s something just as basic to our success as the hamburger. That something is marketing McDonald’s style. It’s bigger than any person or product bearing the McDonald’s name.”
Even today, a fixed proportion of profits is reinvested into advertising and sales promotion in every market in which McDonald’s exists.
The fundamental warmth and humanity in McDonald’s communication are simply unmatched by its competitors. But the strongest relationships that McDonald’s has managed to build in the United Kingdom has been through the nation’s favorite sport – football. Through sponsoring high-profile professional events, McDonald’s has linked the brand with the sport in a way none of the competition can rival.
Through its association with such prestigious global events, McDonald’s reinforces its international brand status.
Think Like A Brand
McDonald’s has consistently acted as a retailer while thinking like a brand; delivering sales for the present while building and sustaining its long-term brand reputation.
McDonald’s successfully demonstrated this strategy by offering a series of themed new menu items, based on foods from around the world, such as Italian, Indian and Chinese. In the year 2000, McDonald’s launched the McFlurry in the UK.
This kind of innovation in its regular menu ensures incremental sales for McDonald’s.
In addition to national and international advertising and promotional campaigns, McDonald’s is heavily committed to the marketing for its local restaurants. This commitment is a testimony to Ray Krock who believed that McDonald’s should contribute to the communities it serves.
In 1989, Ronald McDonald Children’s Charities was established in the United Kingdom, This charity has raised more than £10 million to date and it benefits children with special needs. It also provides support to the families of sick children.
Achievements So Far
McDonald’s has skyrocketed to be the world’s largest and fastest-growing fast-food service organization. It has more than 31,000 restaurants in 119 countries.
“Nothing compares with McDonald’s for the power of a branding idea, the skill of its execution, and the longevity and width of its appeal.”
- Interbrand, a publication that rated McDonald’s as the world’s greatest brand in 1996.
In 1999, McDonald’s was voted – Advertiser of the Year by Campaign magazine. This award recognized the consistent quality of the advertisements McDonald’s was putting out in the UK.
Here’s one of them presenting their Indian Menu items: Click to watch
In 1999, the brand’s popularity among its UK customers shot up dramatically because of the Two-For-One Big Mac offer. The offer was timed to celebrate the company’s 25th year in the UK. At its peak, eight times the usual number of Big Macs were sold due to the massive public demand.
The two most successful innovations from McDonald’s have been the Extra Value Meals and its Happy Meals.
The Extra Value Meals offer the consumers a hamburger, drink, and fries sold at a fixed money-saving cost. Similarly, the McDonald’s Happy Meal Boxes offer parents a simple but appealing proposition: a smaller portioned mean served in a fun box with a toy.
It is innovations like these that have been instrumental in building the McDonald’s brand and brand value in the eyes of the consumer. These little innovations have made McDonald’s the leader of the fast-food restaurant industry.