McDonald’s Brand Analysis Danny Houseman

This report includes:

1-An overview of McDonald’s 2-A brand inventory of McDonald’s 3- McCafé’s Brand Identity 4-Consumer brand perception of McCafé

 McDonald’s Description McDonald’s Corporation is a global company that is universally well known. It is often thought that McDonald’s dominates the fast food industry. As you can see below, McDonald’s Corporation has the largest market share of any individual company within the fast food industry at 17%, meaning they have the most influence. It is also important to note, however, that other fast food companies besides the top six make up 55% of the market share. In other words, the fast food industry is primarily made up of many smaller firms. These smaller firms combined have a much greater influence then McDonald’s. Therefore, McDonald’s should be concerned with their competitors merging.

Global Market Share of Fast Food Industry (2018)

 (MCD’s...Market Share, n.d.)  

McDonald’s Corporation is one of the largest companies in the United States, ranking 131 on the Fortune 500 list (McDonalds, n.d.). As you can see in the table below, McDonald’s made nearly $23 billion in revenue in 2017. However, McDonald’s has struggled with their growth over time, having a negative growth rate since 2014. This can mean one of several things, such as consumers’ tastes shifting towards another brand or changes in consumer buying behaviors. Most likely in this case, it is due to consumer’s preference of healthier, more expensive food, with 88% of consumers willing to pay more for more nutritious food (Gagliardi, 2015).  

McDonald’s Annual Revenue from 2012-2017 Year Annual Revenue (in

millions) Growth Rate

2017 $22,820 -7.32% 2016 $24,622 -3.11% 2015 $25,413 -7.39% 2014 $27,441 -2.37% 2013 $28,106 1.96% 2012 $27,567 N/A

(McDonald’s Corporation, 2017, 13).

McDonalds Corporation

17% Chipotle

Mexican Grill Inc 3% Darden

Restaurants Inc 4% Starbucks

Corporation 12%

Wendys Co. 1% Yum Brands

Inc 8%

Other 55%

 

 (The 10 Most...Time, 2017)

• McDonald’s key products (starting with top left, and then moving clockwise): French Fries, Ice Cream, Happy Meals, Big Mac, Chicken McNuggets, Premium Salads

• McCafé key products (starting with top left, and then moving clockwise): Frappe, Cappuccino, Smoothie, Black Coffee, Mocha, Latte

• All  Day  Breakfast  key products (starting with top left, and then moving clockwise): McGriddle, Oatmeal, McMuffin, Breakfast Burrito, Biscuit, Hotcakes  

 McCafé Brand Identity McDonald’s has positioned McCafé as the gourmet coffee option for an affordable price. The affordability aspect is clearly seen in a direct price comparison with the biggest coffee competitor, Starbuck’s.

Type of Coffee Size McDonald’s Starbucks Black coffee 16 ounces $1.19 $2.65 Latte Small $2.39 $2.70

Medium $2.89 $3.25 Large $3.29 $3.55

Mocha Small $2.39 $3.00 Medium $2.89 $3.55 Large $3.39 $3.85

Cappuccino Small $2.39 $2.70 Medium $2.89 $3.25 Large $3.29 $3.55

(Coleman, Gao, & Kim, n.d.)

The perception of McCafé being high quality, gourmet coffee is seen throughout their branding strategy. First, the McCafé logo features smooth, connected lettering and inviting brown colors. This style invokes the feeling of European cafes, which helps the viewer associate the logo with gourmet coffee.

The brand image is also consistent within the advertising of McCafé. The sample ad to the right features coffee beans over a McCafé mug that slowly combine to form the drink in the mug. This ad implies that McCafé utilizes a professional process in making their drinks to result in the highest quality. It is also important to note that the dark colors of the ad give it a sleek, decadent feel.

Finally, McCafé’s brand is seen on their social media. They utilize superb photographs featuring their products to communicate the superiority of the brand. The voice of the posts is typically fun, often using hashtags and emojis. They chose this voice because it speaks to their target market. The example post to the left was taken from McCafé Canada’s Instagram account and reads, “Today’s outfit inspired by the Caramel Pumpkin Spice Latte. Only $2 plus tax for a small until Oct 7!”

 

 

 Perceptual Map: (Estrada, 2014).

Ratings: (McDonald’s McCafé...Reviews, 2018). Social Mentions: (McCafe...search, n.d.).

Overall Brand Perception As seen in the perceptual map above, McCafé almost lies exactly between high and low price and functional and emotional benefits, with a slight leaning towards functional benefits and high prices. This indicates that the consumer does not know exactly how to feel about McCafé. A possible explanation for this could be the fact that the McCafé brand differs so greatly from the overarching McDonald’s brand. The consumers could be combining the two brands in their heads resulting in a moderate perception. Brand Awareness McCafé has fairly good brand awareness. This was measured in the likelihood people would see McCafé mentioned on their social media. McCafé has a strength of 30%, which means there is a 30% chance that it will be mentioned on Twitter in the next 24 hours. This week alone, McCafé was mentioned 1,969 times. Of those mentions, 40% were from unique authors. This means that 40% of the posts were reaching completely separate audiences. Brand Loyalty There are a large number of customers that are very loyal to McCafé. The sheer number of people talking about McCafé on social media demonstrates this loyalty. For example, over 6,000 people shared a McCafé ad over a variety of social media channels (Content...BuzzSumo, n.d.). In addition, 10% of people on Twitter are so passionate about the brand that they have posted multiple times about McCafé. Brand Quality McCafé has a high-perceived quality by their consumers. For example, 76% of reviews for their Iced Coffee were positive. Also, McCafé has a social mention ratio of 7 positive mentions for every 1 negative mention.

 

 Work Cited

Content Analyzer on BuzzSumo. (n.d.). Retrieved November 18, 2018, from https://app.buzzsumo.com/research/content?type=articles&result_type=total&num_days=365&general_article&infographic&video&how_to_article&list&what_post&why_post&q=mccafe&page=1

Estrada, A. (2014, September 11). Case Study: Starbucks. Retrieved November 18, 2018, from

https://www.slideshare.net/angeloestrada10/starbucks-report-38955273 Gagliardi, N. (2015, February 20). Consumers Want Healthy Foods--And Will Pay More For

Them. Retrieved November 18, 2018, from https://www.forbes.com/sites/nancygagliardi/2015/02/18/consumers-want-healthy-foods-and-will-pay-more-for-them/#26c0694b75c5

McCafe - Page 1 - Social Mention search. (n.d.). Retrieved November 18, 2018, from

http://socialmention.com/search?q=mccafe&t=all&btnG=Search McDonalds. (n.d.). Retrieved November 18, 2018, from

http://fortune.com/fortune500/mcdonalds/ McDonald’s Corporation. (2017). 2017 Annual Report. Retrieved from

https://corporate.mcdonalds.com/content/dam/gwscorp/investor-relations-content/annual-reports/McDonald%27s%202017%20Annual%20Report.pdf

McDonald's McCafe Iced Coffee Reviews. (2018, April 09). Retrieved November 18, 2018,

from https://www.influenster.com/reviews/mcdonalds-mccafe-iced-coffee MCD's Competition by Segment and its Market Share. (n.d.). Retrieved November 18, 2018,

from https://csimarket.com/stocks/competitionSEG2.php?code=MCD The 10 Most Popular McDonalds Menu Items of All Time. (2017, September 11). Retrieved

November 18, 2018, from https://spoonuniversity.com/lifestyle/mcdonalds-most-popular-items