"Know Thyself"
—inscribed on the forecourt of the Temple of Apollo at Delphi
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In 1967, in what seemed like a far less-complicated time, a McDonald’s TV commercial, borrowing the tune from “Down by the Riverside,” claimed its burger restaurants were “my kind of place, a hap, hap, happy place, a clean and snappy place.”
Today McDonald’s is a public company, a global behemoth, with nearly 2 million employees serving 68 million customers daily in some 118 countries and territories.
Last year, for the first time in nearly two decades, the company’s quarterly sales fell. That downturn mirrored what has been happening in McDonald’s’ country of origin. U.S. same-store sales at some 14,000 McDonald’s have been mired in a five-year slump.
As a result of the sales downturn, every move this traditional Wall Street darling makes as it attempts to return to glory is scrutinized, picked over by restaurant insiders, not to mention financial analysts and the media, PR News.
Whether it’s simplifying what some believe has become an overly large menu, changing prices, serving breakfast all day or becoming more transparent about its food suppliers, the former hap, hap happy place is becoming a tes, tes, test case. As such, PR pros are anxiously watching how the world’s largest burger chain attempts to reinject gold into its arches and how clearly it communicates those efforts.
The corporation’s biggest move to date had president/CEO Don Thompson, 51, announcing he was stepping down in late January. Steve Easterbrook, a 48-year-old Brit and one of Thompson’s former lieutenants, has replaced him.
In a PR News piece last month that discussed Easterbrook’s first visible moves—closing 350 restaurants—it was argued that changing consumers’ perception of McDonald’s will be critical to a turnaround. Mark Renfree wrote:
"McDonald’s product isn’t the problem; it’s how customers perceive the Golden Arches. The brand has become synonymous with unhealthy eating habits and horrifying factory farms."
One of the great things about watching McDonald’s as a case study is that for every solution proposed, there will be someone who takes the opposite view.
Embracing Fat, Grease and Friendly, Clean Environs
While Don Draper and later Peggy Olson once counseled their clients saying, “If you don’t like what’s being said, change the conversation,” this may prove difficult for McDonald’s, according to Professor Adam Galinksy of Columbia University’s business school. In a book to be published in September, Friend and Foe: When to Cooperate, When to Compete, and How to Succeed at Both (Crown Business/Random House), Galinsky and co-author M. Schweitzer discuss whether brands should fight to change public perception or concede on certain points. Successful brands have done both, they argue. Can McDonald’s win by admitting that the burger chain 'is what it is'?
Several brands have responded to less-than-flattering perceptions by changing their names—the Patagonian toothfish resurfaced as Chilean Sea Bass, Philip Morris morphed into Altria, Kentucky Fried Chicken modified slightly to KFC. McDonald’s is an icon, so a name change would appear to be out of the question, Galinsky says.
McDonald’s is fighting on select fronts and is succeeding. To combat the pasting its food has received on social media, McDonald’s has chosen to go to battle in the arena where the damage was done. McDonald’s has used social media to make a foray into transparency. Its “Our Food. Your Questions” has attracted more than 31 million social media views, outdistancing successes the campaign has enjoyed in other countries.
On the other hand, attempts at changing perception also have hurt McDonald’s. Adding healthier items to its menus, some argue, has damaged one of McDonald’s’ hallmarks, fast service.
This leads to the thought that perhaps part of Easterbrook’s resuscitation plan should include McDonald’s embracing its image. "We’re a hap, hap, happy place offering good-tasting food that perhaps is not the healthiest choice, but who cares? We serve you quickly, inexpensively and in a clean, kid-friendly atmosphere."
For years PR pros have advocated a version of this prescription, even in the volatility of the digital age—have a sense of humor about your brand, own your image. In a situation where your brand is the punch line of jokes on social media, if they constitute a relatively minor threat, you could do worse than to laugh, Ivan Ristic counseled recently.
Healthy Eating or Pass the Coke?
Yet the McDonald’s case may be different. There’s deep, well-documented resentment against McDonald’s on several fronts and healthy eating indeed has risen in the public’s awareness, else Coca-Cola wouldn’t be reeling also.
Still, Americans have a long way to go before we can be said to be healthy eaters. We may be health-conscious, ie, we know we are ingesting too much sodium, fat, sugar and calories and getting too little exercise. For some reason, however, those misgivings recede quickly as we devour a few more of those delicious French fries and slurp an icy, cold Coke.
Another thing to consider, with all the moaning and groaning about lower sales and reduced income for McDonald’s and Coca-Cola, Americans likely will drink more than 100 servings of Coke this year and McDonald’s boasts a consistent average of selling 75 burgers per second worldwide. These brands are not going away soon.
Another point in Easterbrook’s favor: Are the so-called healthier alternatives to McDonald’s like Chipotle or Smashburger healthy? Not according to this piece in The NY Times or these statistics.
Still, it won’t be easy for McDonald’s and Easterbrook to laugh at and accept the perception of the brand as a purveyor of unhealthy fare. As noted above, sales are down. Shareholders and franchisees, owners of 80% of McDonald’s restaurants, are looking to Easterbrook for solutions. Of course this could be a situation for PR and communication pros to come to the fore, crafting a strategy where McDonald’s embraces its unhealthy image, but in a subtle, constructive way that helps boost sales.
Will McDonald’s admit to what it is and own its image, warts and all, or try to revise its public perception as a purveyor of healthy comestibles? It’s clear what Galinski recommends. “Stigmatized companies aren’t better off hiding from their characteristics,” Galinsky says. “They’re better off owning them.”
Most likely Easterbrook’s rescue plans will include elements of both approaches. In any case, McDonald’s will supply plenty of food for thought in the weeks and months ahead. Let the fun begin.
Seth Arenstein is Senior Editorial Advisor to PR News
@brahmsandmahler