McDonald’s is an American fast food restaurant giant. This restaurant chain has simultaneously been able to grow worldwide and land itself a spot in history’s timeline of the traditional, successful, capitalistic American dream. Dick and Marc McDonald opened a barbecue restaurant in the 1940’s on fourteenth and E streets in San Bernardino, California. The first location included a large menu and featured car hop service. In 1948 the brother’s revamped their restaurant and reopened in December with an updated menu that was simplified to 9 items including, hamburger, cheeseburger, soft drinks, milk, coffee, potato chips, and pie by the slice. One year after revamping the menu, the McDonald’s brothers replaced potato chips with French fries and introduced the triple thick milkshake. 1954 the brothers met venture capitalist Ray Kroc who eventually lead to the expansion of McDonald’s, opening a second location in 1955. 1958 McDonald’s sells their 100 millionth hamburger, and by 1959 the company opened their 100th restaurant. Finally in 1975 McDonald’s introduces breakfast to the menu, the Egg McMuffin is born. Twenty-six years after launch and McDonald’s decides to expand internationally opening restaurants in Spain and the Philippines. The most current landmark in McDonald’s historical timeline is in 2011 the fast food giant now operates in 119 countries.
McDonald’s is a franchised company, most locations are owned by individuals. The target market for McDonald’s historically was parents with young children, but in more recent years their target market has shifted slightly, including teenagers and young adults. Unlike most companies McDonald’s tends to shift their target market often from potential franchise owners, parents, and young adults. Throughout their marketing history McDonald’s has, and remains to be a successful company. Around 2008 McDonald’s started to fall into a growth slump that stuck with them ever since. An article in Forbes, published in 2013, journalist Panos Mourdoukoutas states, “Judging from the company’s sales in recent years, consumers do not seem to express that love by heading to McDonald’s and Wall Street has taken notice, with the company’s stock lagging behind major equity indexes.” Mourdoukoutas continues to write that McDonald’s developed the right business model at the right time, riding two emerging trends, baby-boomers, and globalization. However, in 1990’s and early 2000’s McDonald’s was struggling to conquer the challenges they were facing with the multitudes of different consumer groups and this reflected in sales growth and equity.
These downward trends were met with one of McDonald’s most famous marketing campaigns “Fast and Convenient”. Just as Dick and Marc revamped in 1948 Corporate McDonald’s decided to try it again. They updated dining areas to make a more natural and organic eating environment as well as changed the menu to feature more emphasis on the healthy choice items. These changes attempted to boost the business growth again. However, these changes opened a door to new challenges. Now McDonald’s began to enter the realm of Starbucks and coffee house market’s. McDonald’s continually is changing their marketing campaigns in order to reach new customers and maintain the customers they have. This leads them to constantly battling with unforeseen complications, like entering Starbucks market. Most recently #AllDayBreakfast was launched in order to gain more customers in the workforce looking for breakfast meals whenever they needed them, and to compete with competitors already offering breakfast all day.
Goals and the Marketing Campaign
(Picture from Instagram)
#AllDayBreakfast is a long time coming and many of McDonald’s customers have been asking for more availability for the breakfast menu. McDonald’s usually switches the menu at 10:30 am, and if you’re a couple minutes late then you are out of luck. In April of 2015 McDonald’s beta tested the all day breakfast at a San Diego location and in September McDonald’s went public and announced on October 6th all location would be serving limited breakfast all day. Market research had shown that fast food breakfast sales had been on the rise at an average rate of 4.8 percent in 2007 through 2012. By continuing the breakfast menu to all day availability this would allow people in the work force to ability to grab breakfast no matter when they are going to work. Since the recession fast food breakfast has been on the rise. This is due to the majority of people in the work force with low paying jobs and their ability to afford breakfast items on the way to work.
#AllDayBreakfast was promoted through a series of two television commercials and twitter posts. The commercials feature a wide variety of members of the workforce and teenagers tweeting about their frustration that they can’t get McDonald’s breakfast or “bfast” after 10:30 am. Each character takes turns reading aloud what they are tweeting and even go to the extent of saying, like, retweet, etc. The second commercial is a praising commercial where different members of the workforce and teenagers read aloud their tweets of praise, thanking McDonald’s for having breakfast available all day. The purpose of the commercial is to show a huge variety of diverse people that will benefit from having breakfast available all day. As previously stated, McDonald’s has successfully worked their way into a variety of consumers life’s. This is visible in the promotional commercials. Almost every culture is represented. Asian teenager, young white male and females, African American nurse, white men in suits, etc.
The campaign was also promoted through Instagram and Vine. Twitter dominated the origination content. Vine was second to twitter. This was a sort of new approach as vine is sort of a dying type of social media. Vine is usually used by a handful of popular users to entertain people with quirky six second videos of current pop culture trends for example, Drake songs, celerity parodies, and video magic tricks. Almost all of the content I was able to find on Vine with #AllDayBreakfast originated from members of the Vine community making videos for laughs.The most influential person involved with the #AllDayBreakfast was Riley Steele, a famous porn star who’s twitter contents are definitely not appropriate for class. McDonald’s was actually the 9th most influential person on twitter talking about their own campaign.
After conducting a SWOT analysis of the campaign this is what I found.
Strengths- The ability to offer breakfast to customers at all times. Relevance in commercial advertising, meaning in the commercials for the campaign all demographics are covered from busy business men, teenagers, and police officers. Cultural diversity is also a strength in the campaign.
Weaknesses- Overcoming the challenge of maintaining a brand and keeping franchisees on the same page. Limited items available from the breakfast menu. The kitchen equipment is not prepared to handle both menus at all times so most locations, depending on demographic research may serve either McMuffin sandwiches or biscuit sandwiches and each location may or may not serve hash browns.
Opportunities, ability to earn back customers for breakfast items, and gain a lot of new customers who wouldn’t have considered breakfast a choice at McDonald’s at all hours of the day. If successful, bring a full menu to the all day breakfast. Most importantly, market growth. McDonald’s is extremely trendy in growing then hitting a plateau. With all day breakfast there is an opportunity to reach the next level in terms of growth.
Threats- Customer complaints about food availability, store to store all day breakfast consistency and the potential of getting eggs on someone’s hamburger. The main threat in this new strategy is in the kitchen. McDonald’s kitchens currently cannot handle a full breakfast menu while offering lunch and dinner items.
After taking a sample from Keyhole software, I was able to find that from November 10th to November 14th #AllDayBreakfast had reached 5,815,649 users, mainly using Twitter. Twitter had by far the most users buzzing about the breakfast trend. 38.8 percent of the content was from original posts while 33.6% were replies. The remaining 27.6% were RT’s. Geographically, it wasn’t surprising to see that 83% of the tweeted content came from users in the United States. Of all the content associated with #AllDayBreakfast 67% of posts were from males. The main source of tweets were from IPhones, and desktop computers. Android users only contributed 10% of the content. So what does this mean in terms of success of the campaign? We are able to see that over a month after the launch there are still plenty of people talking. The content was mixed, people were trolling and people were also praising and promoting the campaign. How does this translate into a successful or failed marketing strategy?
The twitter campaign took McDonald’s a second to start handling in a fresh new way. For the first couple weeks of the campaign it seemed as if they had a twitter bot sending replies to everyone’s tweets. The message was almost always the same to peoples posts, changing only the name of the person McDonald’s was addressing. The message was ” @(username) The #AllDayBreakfast Menu is just the beginning. Who knows what the future holds? We’re listening to your feedback.” After checking McDonald’s twitter more recently I haven’t been able to find the generic automated response, but there are personalized responses to almost every tweet now. Now we are in November the #AllDayBreakfast buzz has fizzled out, McDonald’s is now promoting #GameTimeGold.
Early Twitter Response’s
McDonald’s is currently in a pickle. 350 stores are closed in the first three months of 2015, and it is estimated that there will be a total of 700 stores closed by then end of 2015. In an article published on Fortune.com, Phil Wahba reported some surprising financial facts about the company’s first quarter performance. 700 seems minuscule when referring to the 32,500 restaurants worldwide. However, McDonald’s reported an 11% decrease in revenue and a 30% drop in profit for the first quarter of 2015. “A continuation of its troubles in the last two years as it has struggled to compete with new U.S. competitors, a tough economy in Europe and a food safety scare in Asia.” Steve Easterbrook is quoted in the article attempting to restore confidence in the brand. “I often describe McDonald’s as possibly the most democratic -with a small ‘d’ – brand in the world, and what customers love over the world, none more so than here in the U.S., is how they can buy into aspiration quality products, but at a McDonald’s price.” Easterbrook is up against a lot trying to save the brand. McDonald’s was ranked 111th by Nation’s Restaurant News. They judge restaurants on 10 attributes the most heavily weighed is food quality. McDonald’s at 111th put them right above Chuck E Cheese’s. #AllDayBreakfast is the marketing strategy Easterbrook hopes turns these trends around. Other small changes are being made to the menu to encourage customers to spend more as well. The dollar menu items have shrank and the third pound burgers are dropping to five dollars.
McDonald’s learned a couple things from offering all day breakfast. Bloomberg Business’s article, wrote by Leslie Patton goes into some depth about the stress put on franchisees from offering 24 hour breakfast. After interviewing franchisees she reported four problems they experienced. Firstly was the difficulty of vat space while trying to make hash browns and fries at the same time. “Some owners are investing $5,000 for new equipment to keep up with the demands of serving eggs beyond the morning hours. Nearly 90 percent of locations are now selling hash browns all day.” Secondly, the introduction of all day breakfast happened too fast. Franchisees said “The quick introduction didn’t give restaurants and staff a chance to work out the kinks.” Thirdly, and most importantly, egg sandwiches sell for less than burgers. Egg McMuffin’s sell at $3.29, Big Mac’s at $4.39, and grilled chicken is $4.79, hash browns are nineteen cents. “We are trading customers down from regular menu to lower-priced breakfast items.”
McDonald’s has reported on Restaurant News’s website that by 2018 they plan to re-franchise 4,000 stores and achieve the goal of being 95 percent franchised. The plan is to, “make some dramatic cuts in cost through re-franchising, corporate streaming and efficiencies in the company’s Global Business Efforts.” McDonald’s was also reporting they are going to increase the amount of dividends this quarter to 89 cents per share.
Overall I would determine this social media campaign to be a learning experience. It is too early to deem this a success or a failure. The brand is getting talked about and there was a spark of publicity, mostly complaints, and trolling, but the campaign had 5,815,649 people engaged in social media activity and had 249,836,196 impressions. McDonald’s isn’t in a strong position, but with time we will see the effects of all day breakfast. The aired commercials were only aired for a month, there could have been more influence from continuing to put out commercials updating the public with information such as “90 percent of stores now serving hash browns.” or something to that extent. There were some updates to changes through GIF’s published on McDonald’s Twitter. The campaign was implemented extremely fast and this caused a lot of problems promoting the positive things all day breakfast offered and consequently resulted in a negative buzz around online communities. Regardless, McDonald’s now is and will continue to serve breakfast all day and we will see the financial effects of these changes in the next quarter’s reports.
Daym Drops- 548,316 YouTube subscribers.
In a super unprofessional way, these two videos represent most of the frustrations customers brought up in the replies on twitter.
“Hashtag Tracker for Twitter, Instagram, Facebook.” Keyhole. N.p., n.d. Web. 16 Nov. 2015. <http://keyhole.co/>.
Maze, Johnathan. “McDonald’s Plans More Cost Cuts, Refranchising.” Quick- service Chain. Nation’s Restaurant News, 10 Nov. 2015. Web. 16 Nov. 2015. <http://nrn.com/corporate- news/mcdonald-s-plans-more-cost-cuts-refranchising>.
Mourdoukoutas, Panos. “McDonald’s All-Day Breakfast Is A Good Idea.” Forbes. Forbes Magazine, 22 July 2015. Web. 16 Nov. 2015. <http://www.forbes.com/sites/panosmourdoukoutas/2015/07/22/mcdonalds-all-day-breakfast- is-a-good-idea-who-will-serve-it-at-minimum-wage/>.
Patton, Leslie. “Four Reasons McDonald’s All-Day Breakfast Is A Headache for Franchisees.” Bloomberg.com. Bloomberg, 19 Oct. 2015. Web. 16 Nov. 2015. <http://www.bloomberg.com/news/articles/2015-10-19/four-reasons-mcdonald-s-all-day-breakfast-is-misery-for-franchisees>.
Wahba, Phil. “McDonald’s Is Closing Hundreds of Stores This Year.” Fortune McDonalds Is Closing Hundreds of Stores This Year Comments. Fortune, 22 Apr. 2015. Web. 16 Nov. 2015. <http://fortune.com/2015/04/22/mcdonalds-restaurants-closing/>.