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The Rise and Fall of an Iconic Brand: Case Study

The Rise and Fall of an Iconic Brand: Case Study

The Fall

The customers’ perception of businesses has changed, and so has everything around us. Any business that wants to remain relevant and a float, will have to follow the leader – consumers; in making the necessary changes.

The McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. But come 2003, it was about to make history, but for all the wrong reasons.

As reported by the telegraph newspaper, McDonald’s reported its first ever quarterly loss in Britain, in January 2003. With more than 1,200 restaurants in Britain alone, it made a pre-tax deficit of £198.6 million and an operating loss of £125.6 million in the last three months of 2002. It made a net loss of £212 million over the period but still managed a turnover of £2.4 billion.

The same historical reports were echoed in America, recording its first quarterly loss since going public in 1965. Comparable store sales in America were stagnant for the past decade, and had been falling for 12 months. Mr. Cantalupo, a 28-year McDonald’s veteran was pulled from retirement in January to replace Jack Greenberg, and insisted he would bring changes in just a period of 12-18 months.


 Unhappy Meal

Despite the optimism of a comeback shown by McDonald’s chairman, to others, this losses indicated a change in attitude towards McDonald’s. Research revealed the brand was seen as childish; service was slipping – it was slow and unsatisfactory; the restaurants looked outdated.

McDonald’s, once a good example for good service, was ranked the worst company for customer satisfaction in America for nearly a decade, below banks and health insurers. Their share price plummeted from more than $48 in 1999, to hover around a ten-year low of $12. The fast-food market had also become increasingly competitive as rivals such as Burger King, Wendy’s and Taco Bell fought to maintain their market share.

The consumers did not see what value McDonald’s as a brand added to their lives. They could not rely on them for cheaper, faster or healthier food and services. The happy meal had turned into the unhappy meal; hence McDonald’s with all its open branches and franchises all over the world were stumbling down. Drastic measures had to be taken. This was no 5 year plan; this was a rebranding campaign that was well over due; if it was to have any chance in remaining relevant to consumers and stay afloat.


 Meaningful Branding

Mr. Cantalupo worked alongside Larry Light; the global chief marketing officer. Mr. Light acknowledged their need for immediate change and said, “We lost relevance, the world changed, but we didn’t.”

Mr. Light emerged with a new branding strategy and in the campaign, he came up with the slogan, “I’m loving it.” McDonald’s introduced a new healthier menu with items such as: salads; yoghurts; sliced fruit and grilled chicken; after intense criticism that its traditional products were too high in fats, salt and sugar a diet linked to obesity. A new Adult Happy Meal was also introduced in the US that included a pedometer to encourage people to walk more.

This was in efforts to show its consumers why they should choose them over their competitors. Finally McDonald’s was involved in meaningful branding; and this proved to be a change in the right direction because it in turn saw recovery in revenues as it posted its highest sales gain in 30 years. Consumers could now see that McDonald’s cared about their health and cared about providing better services at better prices – with the introduction of the dollar menu.


 Lightning strikes Twice

This success from great leadership would be short-lived though, as Mr. Cantalupo dies on April 19, 2004 from a heart attack; he was attending a restaurant franchise of owners meeting in Orlando, Florida, when he fell ill.

This saw McDonald’s shares fall by 80 cents or 2.9% to $26.66 after Monday trading started on Wall Street following the announcement of his death.

“The worries are that perhaps there may not be a strong number two, since he was known as the one with the strong vision,” said Art Hogan, chief market analyst for investment adviser Jefferies & Co.

Despite McDonald’s going through this difficult time; the past 12 months were considered one of the fastest marketing and brand turnarounds in the business history.

Fast forward to the present, October 21st 2014; after a decade of doing well and changing hands in leadership, McDonald’s are once again in trouble. It turns in its biggest drop in quarterly profits, and CEO Don Thompson has acknowledged the calamity and the dire need for much needed change.


 Challenges being Faced

One could argue that McDonald’s has been facing significant short term and unrelated factors in posting a 30% drop in quarterly profits and 5% decline in revenue, which is worse than expected. It also faces international challenges: In China a meat supplier scandals continues; in Europe the economy is declining again; and in Russia authorities interfered with their operations in the last quarter.

Obviously all these are factors that are affecting McDonald’s ability to make any revenue and profit. But its biggest problem is that America and the global consumers alike no longer perceive clear meaningful reasons as to why they should choose McDonald’s over any other place to grab a bite. Consumers do not believe the food provides a satisfactory combination of great customer service; fast; convenient and healthy enough menu choices anymore.

“If we do not learn from the mistakes of history, we are doomed to repeat them. George Santayana.” This is something that is too familiar with McDonald’s.

McDonald’s also has been losing its influence and brand standing with its franchisees, who are forced to rely on Monopoly and McRib to see them through and with its traditional customer bases. Teenagers and young adults used to fill up McDonald’s because of the affordable prices, and it had a certain cool factor as a hangout; those days are long gone. And rivals such as Chick-fil-A have seized McDonald’s once-indisputable place at the top of preferred fast food restaurant for families.


 Back to the Drawing Board

It’s time for McDonald’s to go back to their drawing board. The same purposeful and meaningful branding it carried out a decade ago is the only way forward. It needs to reassure it’s consumers it can be a consistent brand. Providing what they promise in their branding campaigns and following through. Consumers need a reason to go to McDonald’s as opposed to any other restaurant.

This is a challenge it will tackle head on if they are to remain relevant and functional in consumers’ lives. Consumers and competitors alike will be watching to see how it approaches and solves the underlying problems and it will be interesting to see what path it chooses. This will mean the difference between being a successful brand or a failed brand.

Will McDonald’s choose to make a stance to be a meaningful brand, with a clear purpose that makes an honest attempt to better the lives of its consumers and bring on the change that people want to see, or will it continue selling features and benefits of the burgers and remain irrelevant and die off? The consumers have spoken; the ball is in their court



Brands Realize Being Meaningful is the New Black | Whirlpool Case Study

Brands Realize Being Meaningful is the New Black | Whirlpool Case Study

Whether you agree or disagree, I think it’s pretty obvious that most brands have realized that being meaningful is no longer an option. We have always know that customer is king, so how do you talk to the king? Actually, you will be surprised to find out that it is quite simple. You achieve that by speaking in a language that the king understands.

Right now, consumers want brands that carry a deeper meaning beyond their core product or service offering. They want brands that support the causes they believe in, they want meaningful brands.


A study conducted by Havas Media (who by the way coined the phrase “Meaningful Brands”) revealed some shocking statistics…

Most people worldwide would not care if more than 73% of brands disappeared tomorrow.

That’s insane!

Think about all the money spent globally on marketing, communication and public relations. Then think that for more than 73% of the companies who are spending it, their brands wouldn’t be missed if they disappeared entirely.

Only 20% of brands worldwide make a significant, positive effect on people’s well-being.

 With these shocking statistics, it’s no surprise that brands are doing their best to adapt or die. Read industry news and you will see all sorts of desperate efforts to be meaningful. From publicizing how your company supports the local cancer awareness foundation, to sponsoring kids from developing nations, to others rethinking their entire approach to Marketing via full-blown campaigns.

Major brands are adapting

A few days ago, I came across such a campaign by the veteran brand Whirlpool. The mega corporation markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht  and other major brand names. So when they make such a move, you know it is something worth looking into.

While I might sound angered by these attempts of what others would call “fake” or “rigged” ways to buy into what your customers (kings) want, I personally think that any attempt whether forced or genuine is a move towards the right direction. This specific 103-year old brand is making steps towards the right direction and adapting to change.

PROOF: The Whirlpool Case Study


The above is the headline in a press release for Whirlpool’s new campaign “Every day, care™”. The veteran brand aims to transform cold machine mentality into acts of love. Emotional branding is a powerful thing, our friends at Emotive Brand know this best.

Watching videos from this campaign and monitoring Whirlpool’s social media interaction, you can tell they are making a shift to be a meaningful brand.

Whirlpool has shifted from trying to sell features and benefits to reminding people that each act performed with one of their appliances is an act of caring. This in itself is a meaningful stance. By taking this position and positioning their brand as one that promotes care, people can relate to them at a deeper level. I was surprised the other day as I strolled around my local Lowe’s store Whirlpool appliances caught my eye, even though I had never paid attention to the brand much prior to this. As I mentioned earlier, judging from their social media, engagement, the brand is making waves and people are responding positively.

everyday-care campaign whirlpool

Still, I find it fascinating that brands are just now seeing the need to be meaningful.

So, how does your brand take a meaningful stance and position itself as a meaningful brand? Is it possible? Is it too late? Let’s take a look at how we did it. Hopefully this will shed some light into how you can tap into your own unique purpose

STANCE: The Meaningful Branding Agency

When I founded STANCE, I didn’t look at industry trends, or what’s “hot” in the market right now. I looked within and asked myself one questions: “What kind of company will I look back at the end of my life and be proud to have built?”, the answer- a company that truly positively impacted people’s lives. Later came to realized they had a term for it, “meaningful brand”, hence the meaningful branding agency was born.

This is not just something we say to be cool, we truly believe that great brands stand for something and that brands that commit to a meaningful STANCE—and those who engage with them—win.

That is why our purpose is to be advocates for all meaningful brands. We envision a world where brands genuinely exist to positively impact the lives of those they serve. This is reflected on our purpose which is to elevate meaningful brands so they can elevate the lives of those they serve.


A Reflection on your brand…

[inlinetweet prefix=”” tweeter=”” suffix=”#MeaningfulBrands”]How is your brand impacting the lives of those you serve? [/inlinetweet]Have you taken a meaningful stance? What kind of legacy will you leave for your children and grandchildren? Is your brand meaningful? Only you can answer those questions honestly.