When I suggested that McDonald’s should change its name in a previous piece here, I was half-joking. But with sales and earnings continuing to slide, and with a product that is less appetizing to younger consumers than competing brands like Chipotle, Panera Bread, and Five Guys, it may not be a bad idea.
In fact, McDonald’s is already dropping both brand symbols in its new sandwich and salad stores in Australia, according to New York Times Stephanie Strom.
Still, dropping the name of a successful global brand is a speculative proposition. Besides, the problem isn’t McDonald’s name per se, but the growing diversity of markets it serves.
On one side, there is McDonald’s traditional fast food market, where customers want fast convenient and affordable food. Never mind the calories and cholesterol in the meal. Some people can afford it, or want to trade the cholesterol and the calories for lower price.
In Vietnam, for instance, McDonald’s cannot sell French fries fast enough. In Eastern Europe, dining in a McDonalds is considered a luxury. That’s a market where McDonald’s brand is still popular. So why do away with it?
On the other side, there is an emerging market where customers want more than fast and convenient food. They want low-calorie, low-cholesterol food made from organic ingredients. And they’re willing to pay the higher prices associated with an organic menu.
That’s the market where McDonald’s name isn’t popular.
That’s why the company should launch separate venture and called McOrganics, the same way the company successfully launched McCafes a few years ago. In fact the company can take a free ride on Whole-Foods—opening new restaurants in the neighborhoods where Whole Foods already has an established presence.
That’s where consumers with an appetite for organic food and the deep pockets to afford it are concentrated!
The bottom line: To revive sales and earnings again, McDonald’s needs a new business model that addresses both the needs of its traditional markets and the needs of the emerging markets, even if that means that the company drops the Golden Arches and Ronald McDonald in later markets.
Written by: Panos Mourdoukoutas Source: www.Forbes.com
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THE MARK CONSULTING & MARKETING