“Werde, der du bist” (“Become who you are”)
– Friedrich Nietzsche
Last week, McDonald’s – a company worth more than $100 billion, with real estate under the Eiffel Tower and at Guantanamo Bay – came to a startling conclusion about its brand identity.
According to the Wall Street Journal, after a year of research, the fast food giant has decided to focus future brand activity and cultivate an identity around a singular theme: burgers.
Not clowns. Not convenience. Not choice. Burgers.
Having no doubt spent millions commissioning market research into consumers’ perceptions of their brand, McDonald’s have arrived at a conclusion that is as common sense as it is nonsensical. Customers know and seek McDonald’s for their burgers.
It’s easy to scoff, but easy sarcasm aside, heritage brands would do well to pay attention to McDonald’s candour. Becoming who you are, as Nietzsche put it, is essential for staying relevant and respected in competitive markets. Just ask Coca-Cola, Cup Noodles and Lego.
McDonald’s shock finding comes after a decade of soul-searching and slow sales. With competition from the likes of Five Guys, increased consumer focus on healthy eating and the pressure of making good on their aggressive expansion into Eastern markets, profits at the firm dropped 15% in 2013, with its home market hit especially hard. Efforts to redress the slump by offering all-day breakfast, artisanal burgers and complex custom menu options met with mixed success at best – alienating many managers within the business.
The brand’s new focus on burgers is the latest in a series of major changes following CEO Steve Easterbrook’s accession in 2015. By refocusing its brand identity on the products and consumer experiences that powered their growth and longevity in the first place, McDonald’s should begin to reap the benefits of its heritage status once more. Going back to basics has proved a strong move for other big players in food-bev, and beyond.
The popularity of Coca-Cola Life was, by all accounts, short-lived. After a strong initial showing in 2014 when the line generated £28.9 million, sales halved in the first two quarters of 2016.
Since then, Life and Coca-Cola’s other variants have been gathered under a new ‘Masterbrand’ strategy – an effort to encourage consumers to try alternate products by focussing all promotional activity on the Coca-Cola brand, and not the respective variants. In addition to new ‘Taste The Feeling’ campaign messaging, ‘One Brand’ sees the business having redesigned product packaging for a homogenous look – one that puts particular emphasis on the business’ iconic red and white livery. These changes have proved successful enough for global roll-out.
On a smaller scale, going back to basics has paid dividends for Cup Noodles. Once at pains to deny the unhealthy, salt-filled nature of their products, the company has since re-centred its marketing activity to appeal to cash-strapped students most likely to buy microwave meals. The brand expects an uptick in sales as a result.
Perhaps the most striking recent example of a brand ‘finding itself’ is Lego – the Danish toymaker which today ranks second for toy market leadership behind Mattel – a company with a much wider product range and established brand equities including Barbie and Hot Wheels.
This week, Lego posted record profits of £4.4 billion, up 6% on last year. Since 2013 performance has been stellar, with product resale value outstripping gold bullion in 2015.
The picture hasn’t always been so rosy. At the turn of the Millennium the company lacked focus in its product strategy, with poor leadership driving haphazard innovation. Sales plummeted: after Christmas 2002 US retailers reported 40% of their Lego stock unsold.
Cue a management clearout and stripped-back innovation planning. Limiting the number of new product lines available and suspending under-performing lines, the brand rediscovered its brand essence. Sales have leapt as a result – because consumers now know what the brand stands for and means.
Brand innovation remains integral to Lego’s success. In the past year, the toymaker has released products straddling the boundaries between digital and physical play. Coca-Cola continues to push Coca-Cola Life and other new variants. Cup Noodles have pulled their advertising into uncharted EDM territory.
But this innovation exists at the edges of all three brands. At Rare Design, we call this innovation investment, soft power: changes in brand, presentation and expression – for example, typography, tone of voice or packaging design – that leave the essence intact. Meanwhile, hard power innovation investment requires changing well-loved product formulas – New Coke, anyone? – in the pursuit of major gains. Too often, this proves expensive, risky and short on results.
Soft power change has already worked well for McDonald’s, where the business tweaked a limited number of elements within their brand presentation, but kept the essence intact. The architectural innovation on show at their restaurant in Riverside, California is a prime example – prompting sales that far outstripped company expectations.
By becoming what they are and refocusing their brand around burgers, McDonald’s look set to reap rich rewards.
What would a back-to-basics approach do for your brand?