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McDonald's CEO Reveals The Brand's 4 Biggest ProblemsMcDonald's is struggling to get back on top.The fast food giant has lost market share to fast-casual brands like Chipotle and better-burger restaurants like Five Guys.In a recent call with investors and analysts, CEO Don Thompson revealed the four biggest issues facing the brand and how he planned to fix them.1. Offering the best value. McDonald's spent several years experimenting with high-end items like Angus beef burgers and Chicken Selects. By focusing on this, McDonald's ignored one of its biggest strengths. "Value is one of our grand pillars," Thompson said. "So we must continue to fortify our position within this key consumer attribute."The brand is luring back cash-strapped customers with offerings like the low-priced Jalapeno McDouble and Buffalo Ranch McChicken.2. Customer service. McDonald's drive-thru wait times have gotten worse over the years, in-part because of an increasingly complex menu. Thompson acknowledged this problem and said that the company was sending corporate representatives in for a "service reset." This could include adding more workers and assigning new tasks to existing ones. The company is also remodeling European kitchens for faster food assembly. 3. Marketing. Thompson is aware that many view McDonald's as unhealthy junk food. This problem has been exacerbated by a food factory scandal in China. To improve public perception of the company, McDonald's is doing a global audit of the marketing department. Thompson said he planned to make new internal hires."We are also strengthening our creative messages by placing greater emphasis on the quality of our food and again re-establishing the emotional connection that our customers associate with the McDonalds experience," Thompson said.4. Simplifying the menu. McDonald's menu has grown 70% since 2007. The new menu items are a burden on employees and have helped contribute to long wait times. Franchisees are also angry about the overloaded menu, saying that the extra ingredients and equipment were costing them money.Thompson stressed that the restaurant was going back-to-basics."We are streamlining our merchandising menu board and product offerings and in addition to making it easier for customer to order their favorite products, this will reduce complexity in our restaurants which in turn should enhance accuracy and speed of service," he said.http://www.businessinsider.com/mcdonalds-ceo-on-company-strategy-2014-8?IR=T

McDonald's Has a Millennial ProblemCountry's Biggest Fast Feeder Doesn't Rank in Top 10 Fave Restaurants Among This Huge and Influential DemoBy Maureen Morrison. Published on March 25, 2013. 21 McDonald's may be the country's No. 1 fast-food chain and one of its most-beloved brands, but when it comes to millennials, the Golden Arches says it doesn't even rank among the demographic's top 10 restaurant chains. It's enough of a concern that McDonald's is launching its biggest product of the year, McWrap, to court a huge and influential cohort that values choice and customization. According to NPD Group, there are 59 million people ages 23 to 36 in the U.S. -- the range it defines as millennials. McDonald's isn't the only major marketer trying to reach millennials. Everyone from Coke and Gatorade to brewers and media companies are struggling to understand this group. There's even confusion about just who millennials are in terms of age range (restaurant consultant Technomic counts them as 19-to-34-year-olds; McDonald's, in an internal memo obtained by Advertising Age, classifies them as ages 18 to 32). Size estimates for this demographic group range anywhere from 59 million to 80 million. But on one thing most marketers agree: "They're 80 million [people] but they're influencing the next 80 million, both younger and older," said Gary Stibel, CEO at New England Consulting Group. How to solve the millennial problem? McDonald's hopes a sandwich item is the key. "McWrap offers us the perfect food offering to address the needs of this very important customer to McDonald's," says the fast feeder's memo, which notes that "McDonald's is currently not in the top 10 of millennials' (customers primarily ages 18-32) favorite restaurants." Referred to in the memo as a "Subway buster," the McWrap "affords us the platform for customization and variety that our millennial customer is expecting of us." The McWrap comes grilled or crispy in three varieties -- sweet chili chicken, chicken and bacon, and chicken and ranch -- and will range from 360 to 600 calories, depending in part on the type of chicken. Said the memo: "Our customers are consistently telling us, particularly millennials, they expect variety, more choices, customization and their ability to be able to personalize their food experience." The importance of this ability is clear in the McDonald's memo. "In fact, they have told us that if we did not offer McWrap, 22% of these incremental customers would have gone to Subway." When asked to comment on the memo, the company said only that "millennials have and will continue to be an important audience for us at McDonald's." Millennials are indeed going to burger chains, but they are going less often. The hamburger category, which includes McDonald's, Wendy's and Burger King, still receives 29% of all millennials' quick-service visits, according to NPD, more than any other restaurant category. Fast casual, which includes chains like Chipotle, gets 6% of millennial quick-service traffic. But hamburger chains have seen a 16% decline in traffic from millennials since 2007, NPD said. In the year ended November 2012, millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007. There was a 12% decline in quick-service restaurant visits by millennials in the same time period. The means of reaching millennials might be higher-quality products and lots of choice. The group has caused fits for big beer marketers in recent years as it changes drinking habits in search of variety rather than remaining loyal to certain brands or styles as previous generations had. Brewers have responded with new brands and line extensions, such as Bud Light Platinum, which has shown early success in nighttime drinking occasions. Mr. Stibel notes that when his firm researches beer trends, "we don't research the average user; we research bartenders near college campuses, because we learn what's happening today from studying younger beer drinkers." He said: "It's like a python swallowing a mouse -- you watch that trend reverberate through the population." Mr. Stibel said there are three reasons reaching young adults is important, two of which are not new: Marketers want to reach young consumers as they start earning more money and forming families, and younger generations have been the source for trends in fashion and food. But the third reason -- the new one -- is that older consumers are increasingly learning from their children, such as how to use apps on smartphones. Media companies, too, are catering to millennials. Participant Media, the company behind films like "Lincoln" and "The Help," is launching a cable network targeting the demographic this summer positioned as a vehicle for content that inspires social change. Participant believes the generation has the strong desire and capacity to help change the world. Technomic research seems to agree; it finds millennials place a high value on attributes like social responsibility, sustainability, local, organic, grass-fed and hormone-free offerings when it comes to dining out. Aside from being socially conscious, Participant Media said the millennial demographic is the one that pay-TV providers are most at risk of losing, and it believes the network could provide a new way to watch TV. Participant acquired the Documentary Channel in December and has agreed to buy the distribution assets of Halogen TV from Inspiration Networks. Participant will combine and rebrand the services as a new channel, which will be available to about 40 million subscribers. When it comes to using media to reach millennials, marketers are revamping their strategies; the tried-and-true tactic of saturating the big broadcast networks with beer ads just doesn't cut it. MillerCoors, for instance, has struck a deal with Turner Broadcasting that makes the marketer's brands the only beers featured in product placements on TNT and TBS, from cans and barware to tap-handles and even trucks, Ad Age reported last week. "They grew up with DVRs. They grew up being marketed to through video games. We have to be more relevant than 10 years ago," said Stevie Benjamin, the brewer's media director. Coke and Gatorade are two marketers doing something right to reach millennials: More than half of consumers ages 13 to 34 are drinking those beverages at least once a month, according to Consumer Edge Research. Gatorade outperforms with people under 24, with 57% grabbing the sports drink at least once a month. And Coke is more popular with those older than 25, with 55% drinking the soda at least once a month. Coke has been aggressive in targeting youth, especially in recent years. It has focused on music as a conduit to the cohort and has been cultivating communities across social-media platforms. Gatorade keeps tabs on social conversation through its "Mission Control" monitoring center; it also connects with athletes one-on-one through camps, as well as locker-room and sidelines programs. By the time marketers finally have millennials figured out, it may be time to move on. According to U.S. Census data, 46% of households headed by a millennial adult ages 20 to 34 in the U.S. have kids, which means marketers will be -- or should be, anyway -- focusing on marketing to millennials as parents. How to Make More McMillennialsGeneralizing for a group of people who are sometimes upwards of 15 to 20 years apart can be a dangerous move. Some demographers would even separate millennials into a few distinct subgroups. But there are some common themes and values held dear among all millennials. Fresh and organic food: Millennials place an emphasis on the importance of organic and fresh food. Fast-casual chains do well with the demo because many of them promote a fresh or organic message. Variety and customizable products: In the food world, millennials appreciate the ability to build their meals from an array of choices. Chains like Chipotle and Subway do well in this regard because each item is made to order. Social change: Millennials care about social issues and tend to support companies that are actively helping address problems across the globe. Sustainability: Particularly with food, millennials value companies that are proactive with sustainable farming practices and are environmentally conscious. Social-savvy brands: Brands that have active Facebook and Twitter pages and engage in conversations with customers tend to have more long-term support from millennials. http://adage.com/article/news/mcdonald-s-1-rank-millennials/240497/ Long Live the KingAfter years of struggling, Burger King seems to finally have turned things around.Having kicked the Burger King (the mascot) to the curb, Burger King (the chain) has enlisted several A-list celebrities, from the very beautiful (Salma Hayek, David Beckham, Sofia Vergara) to the very Steven Tyler, to push a new message in its commercials in the hopes of bringing about a brighter future for the embattled burger chain.Showcasing Burger Kings various new menu items, which include smoothies, salads, and specialty coffee drinks, the commercials strike a humorous tone, more silly and fun than the odd irreverencecreepiness, some might sayof its previous advertising campaign starring its former mascot.In contrast to the levity of the star-studded campaign is Burger Kings new tag line, which is not a silly joke but an upbeat declaration: Exciting things are happening at Burger King. It comes after several years during which exciting things were not happening at Burger King. In fact, quite the opposite.Formerly McDonalds strongest competitor, Burger King has lost a lot of ground over the last decade. According to Advertising Age, McDonalds was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double its lead from 10 years earlier.While McDonalds is far ahead of the entire quick-service packat more than $34 billion, the chainsdomestic system-wide sales were triple its closest competitor, Subway, in 2011its recent triumphs stand in sharp contrast to Burger Kings struggles.Burger Kings downturn started in the early 2000s, when major franchisees publicly aired grievances with the company. Since then, the chain has passed into different ownership several times and jumped on and off the public markets every few years. (The company recently announced plans to list its shares on the New York Stock Exchange through a merger with a London-based investment company.)During that period, McDonalds expanded its menu through the McCafan extensive line of specialty drinks, including various coffee drinks, fruit smoothies, and ice cream shakesand a line of salads and wraps designed to attract health-conscious consumers. Burger King, on the other hand, doubled down on its core customer (young males with an appetite for burgers) and effectively forfeited a lucrative new consumer base to McDonalds.The mistake in this strategy became painfully apparent when the Great Recession hit in 2008, says Steve Wiborg, president of the corporations North America branch. As other quick serves managed to mitigate their losses by drawing in consumers accustomed to eating at pricier restaurants, Burger King struggled to capitalize on the trade-down phenomenon.I dont think Burger King got its fair share of trade down when that all happened because we were speaking to a very focused individual, Wiborg says.To make matters worse for Burger King, the field of burger-centric chains was growing ever more crowded, with new concepts like Five Guys and Smashburger coming on strong and growing fast.Everyone is scrambling to keep their distinction in the [burger] market, says Kathy Hayden, a foodservice analyst with market research firm Mintel. Every day theres some sort of new element of competition.All of these developments led Burger King to a crucial moment in the Miami-based chains nearly 60-year history. So, following its acquisition by 3G Capital at the end of 2010, Burger King brought in a new management team, including Wiborg, and got to work crafting a strategy to jumpstart the brand.We needed to take a hard look at [ourselves], Wiborg says, because over the last 10 years, we had definitely fallen behind our competition.The intensive brainstorming sessions (roughly nine months worth, Wiborg says) yielded a four-pillar, $750 million strategy that Burger King announced in April. The first pillar of the strategy is the menu expansion. From mango and strawberry-banana smoothies, Garden Fresh salads, chicken wraps, and crispy chicken strips to mocha and caramel frappes, the expanded menu takes cues from both McDonalds and Starbucks in an attempt to broaden Burger Kings consumer base beyond young males to include women, families, and the health-conscious.I think it is important to make sure you have a menu that applies to not just one segment of consumers, Wiborg says. Especially when you consider that half the population is female and half is male, and then when you really dial that into a 1834-year-old target, youre now really limiting yourself. So [the menu expansion] is really about opening the target and making sure the menu is there.After Burger King announced its new menu items, some analysts jumped on the chain for merely copying its competitors.They should be focusing on themselves, says Jeff Davis, president of Sandelman & Associates, a foodservice consumer research firm. People dont need another McDonalds.As a counter, Wiborg says: It wasnt about doing things first for us, it was about doing things right.In crafting the new menu, Wiborg says the new management team looked at the fine details. It wasnt OK to get the lettuce and tomatoes pre-cut from a commissary, he says. We wanted that done in house because freshness was a big focus. The goal, ultimately, is to differentiate Burger Kings food from a wide spectrum of perceived competitors.Anyone that sells food, even a grocery store, is a competitor to us, Wiborg says. Even though you might look at our new products and say, Hey, those arent new I can get those somewhere else, we believe that they are differentiating, that theyre best in class.The second pillar of the strategy is Burger Kings new marketing campaign. The previous campaign, featuring the now-retired King, was in some ways a fitting symbol of the chains recent history: Aggressively geared toward young males, the mascot wore the forced smile of a restaurant owner who is watching another dissatisfied customer leave his restaurant in favor of a competitor.The new marketing campaign couldnt be more different. The masked mascot is gone, replaced by a slate of celebrities with instantly recognizable faces (in addition to the aforementioned celebs, Mary J. Blige and Jay Leno are also now on the Burger King payroll). Gone, too, is the odd humor, replaced by a brand of comedy with much broader appeal.In our consumer research, we learned that people are very passionate about this brand, but [for some of them] it had been a while since theyd been back and Burger King was not talking to them, Wiborg says. That was the case with a lot of the females we talked to. The past advertising didnt click.Still, if the new commercials do a better job of communicating with women by focusing on the chains new, healthier menu items, they dont altogether forget about its core customersyoung males who probably dont mind seeing Colombian beauty Vergara seductively feed her coworker by hand.The third pillar, improving operations at Burger King restaurants, is the most important part of the overall strategy, Wiborg says. One common complaint over the last several years has been inconsistency from one Burger King to another, an issue that can spell disaster for a quick-service chain. To address the problem, Wiborg says, Burger King had to change how we did things as a franchisor.First off, that meant settling a long-standing legal dispute between Burger King and the National Franchise Association (NFA), which filed a lawsuit on behalf of Burger King franchisees after the chain priced its double cheeseburger at $1 on its Value Menu.[The franchisees and Burger King] were almost like two brands, and it was really important to me and this management team that we move together as one brand, Wiborg says. The NFA ultimately dropped the lawsuit after Burger King promised franchisees more input on Value Menu pricing and the length of limited-time offers.Another major change in the way Burger King did things as a franchisor came in personnel: Burger King added 110 franchisor-franchisee liaisons to its roster, going from 50 people in the field to 160. The new management team also went on a 58-city tour of Burger King locations across the country to introduce themselves and their new vision for the chain to franchisees. Furthermore, Burger King created three committeesa restaurant council, a marketing council, and a people councilthat are made up of franchisees and Burger King corporate employees to facilitate cooperation between the two camps.After years of being on rocky terms with its franchisees, the new approach is the result of hard-earned wisdom.Its a lot easier to sell something to our system if you have the franchisees as part of the plan, Wiborg says. Thats something we believe in whole-heartedly in running this brand. In a 90-plus-percent franchise system, its about execution. We can have the best plans in the world and if its not being executed well and our franchisees dont believe in it and theyre not living it, it has no chance of winning.The last pillar of the four-part strategy is location renovations. Again, Burger King is following in the category leaders footsteps (McDonalds is in the middle of a billion-dollar makeover of the majority of its stores) but the adage better late than never nonetheless applies to Burger King.So does now or never, says one analyst.It has less to do with following McDonalds and trying to compete and more to do with, If we dont do it, were not going to be around in five years, says Darren Tristano, executive vice president at Chicago-based consulting firm Technomic, about Burger Kings overall strategy.Perhaps with that in mind, Burger King is promising an improved restaurant experience with enhancements at every one of its more than 7,200 locations, including digital menuboards to replace the traditional slat-and-slide boards, new employee uniforms, and new packaging. As for the pace of the updates, Wiborg says more than 1,400 locations are already signed up for reimaging and that 40 percent of all stores will have undergone the limited renovation within three years.Burger King only had 300 franchisees coming up for mandatory remodeling, so it offered royalty reductions and discounts on fees to encourage franchisees to renovate their stores early. The chain also created a $250 million lending facility to give those franchisees easy access to funding for the reimaging and to pay for the $31,000 worth of equipment needed to prepare the new menu items.Its been a real partnership, Wiborg says.Having set its $750 million reinvestment into motion, Burger King now must carry out all four pillars of its new strategy to maintain its place in the increasingly competitive burger market, let alone to start climbing the ranks in the quick-service sector. Much of the onus, Wiborg says, is on the chains franchisees.Without them executing our plan, we dont have a chance, he says.But after leading what amounted to a corporate soul search, Wiborg is confident in Burger Kings future, even if he understands that the path ahead will not be easy.We have some catch-up to play, he says. The industry changes and what consumers want from your brand [changes], and your brand has to change with the times. And Burger King didnt, in my view, for a number of years.Eager to make up for that lost time, Wiborg is quick to make it clear that, despite all the exciting things happening at Burger King, some things will never change.How we communicate and our menu may be a little different from what its been over the last 10 years as business has changed, Wiborg says, but were the home of the Whopper.Somewhere in his retirement, the Burger King must be smiling.http://www.qsrmagazine.com/reports/long-live-king

31 July 2013 - 8:10pm | posted by Jennifer FaullMcDonalds stock plummets but its brand perception hits a high in key markets McDonalds stock plummets but its brand perception hits a high in key markets McDonalds reported disappointing results for the second financial quarter, with sales 0.5 per cent lower than expected. This resulted in a drop in share price and the company warning investors it had another tough year ahead. On a more positive note, across four key markets its brand perception is up, according to YouGovs Brand Index. Looking at McDonalds Index score (first graph pictured) - which is a composite of six key measures of brand health - in the UK, US, France and Germany, consumers perception of the brand was better at the end of the quarter than it had been at the beginning. In France and Germany, two of its more challenging markets, the brands Index score increased the most (up by around four-points in both countries).Turning to McDonalds Buzz score (second graph pictured), which calculates a net score based on the percentage of consumers who have heard something positive vs something negative about the brand, we see that with the exception of the UK people are hearing considerably more good than bad about McDonalds.http://m.thedrum.com/news/2013/07/31/mcdonalds-stock-plummets-its-brand-perception-hits-high-key-markets Perceptions of McDonald's, Wendy's decline; Burger King on the riseAug. 25, 2014 Recent research reveals that customers' perceptions of McDonald's continues to plummet, while Burger King brand perception is on the rise. Wendy's perception is also in decline.YouGov BrandIndex surveyed 18,000 fast food eaters, asking them if they had heard anything positive or negative -- about the brand in the last two weeks, through advertising, news or word of mouth. Scores range from 100 to -100 and are compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback. Margin of error was +/- 3.5 percent.While perception of the big three burger chains has been moving recently in different directions, driven by news, menu items and other factors, one thing still remains relatively unimpacted:Heres how each of the chains has seen their perception directions changing lately:Burger King went from a 9 at the beginning of August to a current 13 score. Burger King reached its 2014 high among recent (last 90 days) fast food eaters at 30% on August 11th.McDonalds saw its fast food eater perception levels fall from 13 in mid-May to its current 2 score, their lowest levels in four years. Documented problems include falling out of favor with millennials, complaints about customer service, as well as highly-publicized protests over labor conditions and wages.Despite negative customer perceptions, more than 50% of recent fast food eaters say they have patronized the brand in the last 30 days, beating Burger King or Wendys scores by a wide margin.Wendys Buzz score has dropped from 21 to 15 over the past two weeks.http://www.qsrweb.com/news/perceptions-of-mcdonalds-wendys-decline-burger-king-on-the-rise/

Is McDonald's Losing That Lovin' Feeling?Sales Are Soaring, but Its Brand Perception Isn't Keeping PaceBy Maureen Morrison. Published on February 20, 2012. 6 Most marketers would love to be McDonald's. It's the world's largest fast feeder by sales. Global same-store sales rose 5.6% last year over 2010 -- its eighth consecutive year of positive same-store sales. It's rated the world's No. 6 brand by Interbrand, with a value of $35.6 billion. It's the 26th-largest advertiser in the country, with a budget of nearly $888 million for U.S. measured media, according to Kantar Media. Indeed, the GoldenArches are a global beacon of success, and the company's 33,000-plus locations in 119 countries serve 68 million people a day.

Design But something strange is happening on McDonald's soaring arches: Its brand perception isn't keeping pace with sales. According to people close to the company, its internal tracking system finds that McDonald's consistently ranks near the bottom in quality perception when compared with rivals. The company is working to close the gap, these people said, by addressing issues related to perceptions about its food's quality, sourcing and nutritional value; sustainability practices, including suppliers' treatment of animals; service; and condition of stores. "The future is going to be so transparent that major corporations should wear underwear that fits," said Scott Bedbury, CEO at Brandstream, who praised McDonald's move. "For any company to ignore what consumers are saying and instead take comfort in their revenue numbers is ill-advised." Heather Oldani, McDonald's director-U.S. communications, said that though concerned is too strong a word, the company recognizes that "there is an opportunity for us to answer some of the questions that customers may have, that influencers may have, about our menu, our commitments to the community and in the areas of sustainability -- things that frankly we haven't been as vocal about ... in the past. "We're actually going out there and having a dialogue ... about areas that we are making strides in, and [we] also hear feedback," Ms. Oldani said, citing the "Listening Tour" last summer and outreach to key constituencies such as moms. Make no mistake: McDonald's does not have a bad brand image. It consistently ranks high on convenience and price in numerous studies. According to Millward Brown, it's the fourth-most-valuable brand on the planet, with an estimated brand value of $81 billion in 2011, up 23% from 2010. Harris Interactive, which just released its 2012 Reputation Quotient study, gave McDonald's a 71.77, or "good," score. Jeff Davis, president of Sandelman & Associates, a market-research firm specializing in food-service businesses, said that McDonald's rates high in variety, indulgence, affordability, kid appeal and convenience. But the flip side to those results is that the chain rates weak on taste, quality, healthfulness and friendliness. A recent Sandelman study gets to the heart of the matter. It found that what works for McDonald's is a massive system that motivates not only "highly satisfied" customers but many who are highly satisfied with only one aspect, such as breakfast, drive-thru, or value. In other words, even those who aren't "lovin' it" visit McDonald's for one reason or another, such as kid appeal or grab-and-go options. The challenge is to get them to like it for a wider range of things. Since staging a turnaround early last decade, McDonald's has been ambitiously expanding its menu offerings beyond its traditional staples of burgers, fries and shakes. Innovations include the massive McCaf rollout, updated salads, oatmeal, smoothies and frapps, and a modified Happy Meal with fruit. Industry experts credit McDonald's for recognizing an opportunity in offering healthful fare, as well as being savvy about owning every part of the day with items such as snack wraps. Even so, one executive close to the business said that McDonald's is primarily seen as a burger-and-fries chain. "Until they can [change that view], they're going to have a hard time exponentially growing," the executive said. McDonald's has also been plugging away with U.S. store remodels, which have a more contemporary look and feel. Many locations are installing TVs and lounge areas to bring more customers inside; drive-thru is estimated at more than two-thirds of the chain's U.S. business. Some have also expanded hours to capture the late-night crowd. "For a market leader, they've been really aggressive in a pretty fundamental way, but at the same time not losing the core of who McDonald's is ," said Kevin Lane Keller, professor of marketing at the Tuck School of Business at Dartmouth College. Some of its recent marketing and PR initiatives make it clear that McDonald's is trying to improve perceptions on key fronts -- such as the origins and quality of the food it serves, that a "McJob" puts a worker on a dead-end track or that Happy Meals are bad for kids. In April, the company sought to add 50,000 employees to its already 600,000-strong U.S. workforce on what it called National Hiring Day. The event was created by Citizen2, an agency whose "approach is based on strategy that is oriented to managing and shaping public opinion," according to its website. And in July, responding to groups concerned about childhood obesity, McDonald's announced a revamp of the Happy Meal, with fewer fries and more fruit, among other changes. McDonald's has long been in the hot seat about kids, pressured to stop marketing to them and even to jettison Ronald McDonald. (Publicis Groupe 's Leo Burnett handles Happy Meal marketing.) The chain has repeatedly stood by its clown. At the annual shareholder meeting last year, CEO Jim Skinner said that the mascot was "an ambassador for good," referring to the Ronald McDonald House Charities. In January, it started a national campaign created by Omnicom's DDB, Chicago, highlighting suppliers. The ads feature potato, lettuce and beef producers to show consumers some of McDonald's food sources. "We acknowledge that there are questions about where our food comes from," Neil Golden, McDonald's U.S. chief marketing officer, told Ad Age at the time. "I believe we've got an opportunity to accentuate that part of the story." "This is a journey," said Ms. Oldani. "I would equate the suppliers' story as maybe the first chapter of that story, and we know that there are other chapters to come [that we] need to continue to share and get feedback on." McDonald's also said last week that it was working with suppliers to phase out the use of gestation crates, roughly 2-by -7-foot crates that house pregnant sows. This came after the chain confirmed several weeks ago that it had discontinued using so-called pink slime -- beef scraps treated with ammonium hydroxide and put in burger patties. Late last year, McDonald's dumped one of its suppliers, Sparboe Farms, after reports of unsanitary conditions and animal cruelty. Ms. Oldani said that while some of its moves have been characterized as reactionary, the company has had relationships with nongovernmental organizations -- including the World Wildlife Fund, Japan Ministry of Environment and the Sustainable Agriculture Initiative -- for 20 years. Larry Light, president-CEO at Arcature, former McDonald's global CMO and the brain behind the "I'm Lovin' It" campaign, said all companies have "many drivers of trust," including whether the consumer experience has been consistent and whether the brand has met expectations. Integrity is important with any company, and how it treats customers, employees, animals and the environment is a part of that equation, he added. McDonald's has come a long way back from a low point in the "90s, when it struggled with operational problems, from food quality to store cleanliness. Industry experts say that it was overly focused on expanding its footprint quickly and that employees were not properly trained. It had also lost its marketing message. The chain slashed jobs and closed underperforming locations. McDonald's brought in Jim Cantalupo and Charlie Bell to lead a turnaround. Mr. Light led the marketing revamp and is widely credited with transforming the way the company goes to market. After two years of overhaul, McDonald's was named Ad Age 's Marketer of the Year for 2004. The stock hit an all-time high of $102 in January, up from $12 in March 2003. But as long as it sits on top of the category, McDonald's carries the burden of leadership. "I don't care whether your name is Walmart Stores or McDonald's, the bigger targets attract the attention," said Gary Stibel, founder-CEO of New England Consulting Group. McDonald's has improved its image from "five or six years ago," in part because of menu revisions and value price points, he said. But some of the negative attention was deserved, he added, such as that surrounding supersizing. Morgan Spurlock's documentary "Super Size Me," in which he ate nothing but McDonald's for a month, won an award at the 2004 Sundance Film Festival a month before the company ditched the option. It said at the time that removing the menu had nothing to do with the film. Marketing and behavioral experts argue that McDonald's has a problem in that liking it carries a stigma in some social circles. One executive close to the business said that customers' opinion about the chain doesn't always correlate with what they do. "People won't articulate their love of McDonald's, [even though they] really like it -- it serves their needs," the executive said. "What you observe is a dissonance between people's stated evaluations and their behavior, which is indeed an unstable situation," said Ayelet Fishbach, professor of behavioral science and marketing at the University of Chicago's Booth School of Business. "Either evaluation or behavior will change," Ms. Fishbach said. "We often observe that changing attitudes is easier than changing behavior, and so McDonald's might decide not to worry too much about attitudes, assuming they'll follow behavior." McDonald's philanthropic efforts could help its overall image, she added. Though the executive close to McDonald's predicted that attitudes would catch up with behavior eventually, there could be a tipping point at which it goes the other way. "That's the big fear. Which one wins, people's stated dislike of McDonald's or their unstated love of McDonald's?" http://adage.com/article/news/mcdonald-s-losing-lovin-feeling/232821/ Burger King's Satisfries boosts brand among health-focused consumersOct 8, 2013 Mark Brandau What is in this article?: Burger King's Satisfries boosts brand among health-focused consumers Burger King builds buzz Something to talk aboutA recent study suggests the rollout had a bigger impact than the latest health initiative from McDonalds.

Satisfries have fewer calories than Burger King's standard French fries.AdvertisementBurger Kings latest efforts to improve its perception among health-focused consumers has been successful so far and could have more staying power than similar efforts from McDonalds, according to industry watchers.

On Sept. 24, Burger King introduced Satisfries, a lower-calorie version of its French fries, and followed the rollout just two days before McDonalds pledged to offer more salads, fruits and vegetables during the annual meeting of the Clinton Global Initiative.

Burger King also followed up the rollout of the new fries with a PR stunt on Oct. 2 in which it changed the brands website and signage in a few markets to read, Fries King, formerly Burger King.

RELATED Burger King introduces lower-calorie fries McDonald's to serve more fruits, vegetables More restaurant marketing news

One industry observer, New England Consulting Group chief executive Gary Stibel, called the low-calorie fries and corresponding marketing campaign an intelligent move for Miami-based Burger King. What theyre doing is very smart. What theyre saying isnt that they have low-calorie fries, but that they have great-tasting fries with fewer calories, Stibel said.

He also praised McDonalds recent announcement, calling it yet another incremental move on top of what theyve done for healthfulness, which is a lot.However, Stibel noted, Burger Kings announcement is even more powerful because while McDonalds says, We have all these other good things for you, Burger King is quietly saying that it is making what consumers already want better for them. Burger King is also toying with the consumer with that name change to Fries King and making a bigger deal out of this.

Yet he thought the development of Satisfries was a more significant change for Burger King, allowing the brand to compete by altering a standard menu item in a way that would let more people eat it or eat more of it, similar to the development of light beer.

Brewers said, We know you, and we know that you like beer, so this allows you to drink more of what you like to drink, Stibel said. Burger King is moving in that direction, saying, We know you love your French fries, so well make them less caloric.Burger King builds buzz(Continued from page 1)

A new survey supports Stibels notion that Burger King helped its perceptions among consumers with the introduction of Satisfries, perhaps even more than McDonalds did with its announcement that it would let customers substitute side salads for French fries in its meals.

According to consumer perception research service YouGov BrandIndex, since the Satisfries launch, Burger King improved its measurements of buzz and word-of-mouth promotion among two key constituencies: parents and adults who consider themselves to be in good or excellent health. While McDonalds also improved those metrics with the same consumer groups, the data showed Burger Kings gains to have slightly more staying power.

BrandIndex calculates its buzz score by surveying thousands of consumers every day about different brands, asking, If youve heard anything about this brand in the last two weeks, was it positive or negative? Negative responses are subtracted from positive ones, and each day a moving average is calculated between negative 100 and positive 100, with a zero rating denoting neutral buzz.

Burger Kings buzz score among health-focused respondents rose from 14.9 to 16.1 the day Satisfries rolled out on Sept. 24, peaking at 19.3 for three consecutive days the next week and settling at 15.5 on Oct. 3.

Among parents, that score for Burger King was 23.7 on Sept. 24 and peaked at 28.4 three days later. Burger Kings buzz score among parents had been as low as 1.4, its score 10 days before the Satisfries launch. By Oct. 3, the brands buzz score settled at 17 with parents.

By contrast, McDonalds buzz score among consumers rating themselves in good shape rose from 6.8 the day before to 8.8 on Sept. 26, the day the Oak Brook, Ill.-based chain announced changes to its menu that would allow for more fruits and vegetables to be sold to adults and in kids meals. That score peaked at 15.3 two days later and ended at 13.2 on Oct. 3.

Parents rating of McDonalds buzz rose from 28.3 to 32.4 on Sept. 26, rising as high as 35.9 the next day, before falling sharply and ending at 7.1 on Oct. 3.

In other words, Burger Kings buzz score ended the period higher than McDonalds, for both health-focused respondents and parents.Something to talk about(Continued from page 2)

BrandIndex also found in its research that Burger Kings and McDonalds health-focused announcements drove greater word-of-mouth promotion, which the firm calculates by asking its survey respondents which brands theyve discussed with friends and family over the preceding two weeks.

Among health-focused consumers, Burger Kings word-of-mouth score rose from 13 to 14.9 the day Satisfries rolled out, rising to a peak of 16.2 six days later and settling at 13.2 on Oct. 3. For parents, the brands word-of-mouth score was 23.7 on Sept. 24, when the new fries launched, and reached a peak of 28.4 three days later before falling steadily to 16.2 on Oct. 3.

McDonalds word-of-mouth score among health-focused consumers rose to 24.8 the day it announced its fruit-and-vegetable initiative, compared with 23.4 the day before. It reached a peak of 26.7 two days later and also fell steadily to 18.7 on Oct. 3.

Parents word-of-mouth score for McDonalds which ranged widely from a low of negative 10 on Sept. 14 to 32.4 on Sept. 26, when the brand made its announcement peaked at 35.9 the day after the chain said it would sell more fruits and vegetables. That word-of-mouth score withered the most, to 7.1 on Oct. 3.

Ted Marzilli, chief executive of New York-based BrandIndex, surmised that the word-of-mouth score did not increase as much for McDonalds as it did for Burger King after their respective announcements, perhaps because McDonalds scale and advertising strength give it a much higher base of awareness already.

I think this is due to McDonalds being part of the conversation about the QSR space to a much greater degree than Burger King, Marzilli said. McDonalds does have a higher percentage of consumers seeing and hearing things about it, so its announcement is more likely to get lost in the sea of other things that people are seeing and hearing about the brand.http://nrn.com/marketing/burger-kings-satisfries-boosts-brand-among-health-focused-consumers?page=1