McDonald’s loses importance
Tom Dougherty, CEO – Stealing Share
29 January 2015
How respected brands like McDonald’s lose importance
The news is not good for Mattel, worse for Radio Shack and mixed on McDonald’s (as this Blog was posted, McDonald’s announce the departure of its CEO. You can read about that here.) All of these are legacy brands that once dominated their categories. (Although it should be noted that McDonald’s still leads the fast food category, just precariously.) What happened to them is worth a look because the tribulations they face are consistent with the issues that all brands face at one time or another.
I have written about Radio Shack many times (see the links at the bottom of this post), but in light of the brand’s demise, it is worth another quick look.
The problem with Radio Shack was its toxic mixture of sacred cows (like its name) and a confusion of the business of its business and the business of its brand. The business of its business was selling electronics and electronic parts. That was the easy part. But the business of its brand was never quite understood.
Consumers choose brands they believe fit in with their sense of self. They look at a brand as if it is a suit of clothes that they themselves wear because, when they choose to identify with that brand, they emotionally wear the brand themselves.
The Radio Shack brand was so awkward and goofy that only the electronic geeks felt at home there. However, I bet that even the electronic geek saw Radio Shack as less than authentic when, in an effort to upgrade the business of their business, they featured kids’ toys and low-end appliances. Radio Shack failed because it never rebranded. Oh, it tried to update the logo and silly tagline but that is not rebranding. That’s tweaking corporate identity. It went to one of our competitors (a list of other branding companies can be found here) and it got back a series of meaningless identity changes that felt as awkward as the brand itself. Shopping at the “Shack” was never a valued choice.
Mattel is interesting because the brand has some value to baby boomers such as myself. It represented games and toys from my youth. Mattel had every TV game show from those days as board games. Most also know that Mattel owns the Barbie franchise. But “The Future of Play,” its new promise, is so badly wrong that I don’t know where to start.
Play is never a promise of the future (that is the business of the business). It is always in the present. Mattel has no brand beyond its business and no one favors anything it makes because of a strong brand association. This lack of brand equity cost the CEO his job earlier this week and, unless the brand wakes up and truly rebrands, there will be a fire sale very soon.
McDonald’s is a more complicated story. It was America’s drive-thru for many years and its sandwiches and Golden Arches are as close to mom’s apple pie as you can get. The problem is that McDonald’s is not purely an American brand anymore. It is global and the brand has gotten lazy and complacent because of its dominance.
But even that position is starting to fracture. There is now tons of competition in every day part. Even more competition from the fast casual market has eroded more and more of McDonald’s position. The brand has moved over the years from a young adult fast food joint to a children-directed restaurant and back again to a more mainstream feeder with its McCafe market move. McDonald’s even sells its McCafe coffee K-cups in supermarkets.
The problem is that McDonald’s brand is still fuzzy in our minds. We are not yet sure if the suit of clothing we wear when we choose them is just convenience, familiarity, obesity, indulgence or completely thoughtless.
The business itself has become lazy. Maybe even complacent. McDonald’s used to lead the category in innovation and store design, but it has yet to embrace the digital age with an app or mobile purchasing system. And it has never tried to capitalize on its market share with any affinity program. Instead, it falls back to games and co-promotions with the latest sci-fi or animated movie.
I think McDonald’s needs to rethink its brand because the innovations I spoke of do not make a brand. They arise from an existing brand. A brand that understands that the customer owns the brand and the business of its business only manages it and makes sure it is real.
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