BAM- 106

Case Study:

McDonald’s Branding Equity

Submitted by:

Muñoz, Andrea Dominique H.

Trinidad, Katrina Marie T.

Submitted to:

Ms. Katrina Antonio

 1. What are McDonald’s core brand values? Have these changed over the years?

The importance of providing high quality offerings, fast service, cleanliness, and price value

are McDonald’s core brand values. McDonald’s lost its way in the 80s and 90s due to

aggressive expansion and this led them to have poor customer service and dirtier restaurants

because of hiring new employees that weren’t trained well. Despite the failure, McDonald’s

continued to look for improvements instead of settling for their current status by

incorporating their values into strategies for the betterment of the brand. They chose to live

by their core values through the years which can be seen through their expansions.

During its humble beginnings, McDonald’s offered simple food priced at an affordable price

and eventually expanded to the Big Mac, Quarter Pounder, Happy Meal, Fillet-o-Fish, and

other additional breakfast menus. Since McDonald’s has branches in 119 countries, they’ve

learned to adapt to the countries’ cultures. Here in the Philippines, McDonald’s offers

chicken with rice, regular sized hamburger, as well as spaghetti which doesn’t exist in other

countries. McDonald’s adjusted to what the market wants in each countries.

No matter how successful the brand is, McDonald’s would always go back to its root values

which led it to where it is today. These values reflect the importance of customer satisfaction

to the brand. High quality offerings, fast service, cleanliness, and price value once neglected

would make customers feel like the brand is already complacent and isn’t giving significance

to how the customers feel. Which is why even though McDonald’s has reached so much

success globally, they choose to stick to what brought them to their achievements which is

their actions rooted in their core values.

2. How has McDonald’s grown its brand equity over the years? Has McDonald’s changed

in different economic times or in different parts of the world? Explain.

During the 1960s to the 1980s, McDonald’s did product extension by expanding beyond

hamburgers. McDonald’s was introduced through advertisements featuring Ronald

McDonald that targeted children and families. The debut of mascots was also initiated to

entice children to eat at the fast food chain. To further express their social responsibility, they

began a charitable cause to help children suffering from leukemia through the Ronald

McDonald House Charities. Then they added branches in other locations across Europe, Asia,

Philippines, and Malaysia.

Yes, McDonald’s has changed in different economic times and countries which is seen every

time they introduced additional products such as pizza and sandwiches because of the change

in customers’ tastes and eating trends in the 2000s which failed. They tried to adjust to the

trend, but unfortunately wasn’t successful. It meant that they had to refocus on offering a

better, high quality customer experience rather than a quick and cheap fast food option.

However, through rigid product planning, they were able to keep up with the times and

became successful. Overall, McDonald’s focused on their Plan to Win which manifested a

favorable outcome seen in the revenue and share price increase during 2003-2006.

Currently, they have been expanding their brand by adding McCafe to gain market share

from top cafe brands. Having a wide array of marketing strategies helped McDonald’s grow

its brand equity. One example of this is their “I’m Lovin’ it” campaign which increased their

customer base. McDonald’s changed its product line and adjusted to each countries’ culture

and local taste preferences.

3. What risks do you think McDonald’s will face in the future?

Rising of competition in the market - no matter how successful McDonald’s is there will

always be times when the top competitor does better than them. Especially in the Philippines,

where the leading brand is Jollibee. McDonald’s has to maintain their strategies and further

develop courses of action that will help in maintaining and improving their position in the

country.

Change in customers’ taste preferences and eating habits - generally, this is a threat to the

food industry. McDonald’s has a fixed menu that features additional menu items that are only

available for a limited time. This is a wise move because it makes customers anticipate the

return of the product instead of feeling fed up of the same thing over and over again.

Consistency in food quality and customer service - with the multiple McDonald’s branches

there might be a time wherein the franchisee isn’t as competitive as the other franchisers.

There might be inconsistencies when it comes to food quality and customer service which

will affect the image of the brand as a whole. All McDonald’s branches nationwide and

worldwide must follow the same management style to show their consistency.

Cleanliness - another risk from having too many branches is maintaining cleanliness.

Customers are very observant and would quickly notice once the place isn’t kept neat. Day to

day they serve hundreds of customers who dine in and out, it would require proper training of

the crew to make sure that the place is cleaned properly.

4. Question no. 2 says McDonald’s has grown its brand equity over the years, what was its

brand equity when they started? What brought about the change?

McDonald’s is the largest hamburger fast food chain in the world; with its presence in 119

countries who serve 68 million people daily and is included in the World’s most valuable fast

food brands. The importance of factors such as food quality, fast service, food safety and

cleanliness, and value for money are what makes McDonald’s suitable for the their target

market - children and families. Back then, McDonald’s only served the same menu to its

customers, but due to the change in consumers’ eating trends and taste preferences, they

decided to have a product line extension which did not connect with their consumers. The

company was also linked to obesity which gave them the chance to put healthier options for

moms which charged premium prices. McDonald’s introduced the $1 menu for its lower

income market, and improved their services that resulted to increased revenues of 33%. Their

brand equity before was mostly related to their food offerings and characters/mascots.

Today, McDonald’s has extended their brand by introducing McCafe because of the boom of

the coffee industry in the country. McDonald’s did adapt to the culture of each country by

adding up and innovating menu that would suit the taste of the locals.

McDonald’s brand elements such as their logo, characters, and slogan “I’m Lovin’ It, made

their brand memorable and likeable. Providing dinner and breakfast menus, 24-hours with

Drive-Thru service, and “happy meal” combo, the brand image of McDonald’s has been very

strong over the years as they impress customers through creativity, observation and consistent

improvement.
5. What is the brand equity of the product in your marketing plan? Has it changed?

Throughout the years, the brand of our product has maintained the following elements: the

main brand element that can be attributed immediately to Lemon Square is its logo showing

the brand colors which are yellow, green, and orange. The brand also has a pastry chef

included beside the brand name on the logo as a character.

For all of the brand’s products, they promote “real goodness” by emphasizing the freshness

of the ingredients used in baking the pastries offered. In relation to our product under this

brand which is Lava Cake, all of the promotions for it highlight the brand’s equity.

Consumers remain aware of the name Lava Cake under the brand Lemon Square before and

even today. Most of the associations to the brand is because of the commercials shown on

television which convey positive elements that easily reminds the audience of the product.

Lava Cake commercials mostly use jingles and well-known artists to have an image for the

product. Lava Cake is widely available from sari-sari and convenience stores to supermarket

and groceries.