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How to fix a Broken Brand (McDonalds Case Study 2015)

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It's not all sunshine and rainbows in marketing.

What happens when your brand is broken?

What happens when you have one of the most globally recognized brands but your sales are flat even though you're spending $1.5 billion on advertising?

What happens when you're losing the youth market and competitors like Starbucks, Chipotle and Shake Shack are eating away at your market share?

Forget brand makeovers, rebrands and a better ad campaign. What McDonalds needs to stay relevant is something far more radical.

In this case study presentation I look at McDonalds. What is the root cause of the McDonalds brand marketing strategy? Why is more "branding" and more of the old ad agency model going to create more of the same problem? And how can McDonalds fix its brand through building a powerful Frontline Brand Experience?

In this presentation, I look at the shift from Branding to Brand Experience and the 3 areas McDonalds needs to focus on to fix its broken brand.

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How to fix a Broken Brand (McDonalds Case Study 2015)

  1. GRAHAMDBROWN.COM McDonalds: How to Fix a Broken Brand Case Study
 Inside
  2. Build a Brand Worth Talking About GRAHAMDBROWN
  3. GRAHAMDBROWN.COM In  this  presentation,   we’ll  look  at  what   McDonald’s  needs  to  do   to  revitalize  its  brand   based  on  where  it  is   right  now  and  where  it   needs  to  be
  4. GRAHAMDBROWN.COM4 McDonald’s Brand Now McDonald’s Goal
  5. GRAHAMDBROWN.COM5 Globally recognized brand with unparalleled awareness History of innovation and industry leadership Extensive portfolio of prime real estate and touchpoints with customers What’s Good About McD’s?
  6. GRAHAMDBROWN.COM If you want to get access to my FREE marketing strategy guide for McDonald’s click the link on the next slide
  7. GRAHAMDBROWN.COM CLICK HERE to ACCESS this FREE case study giving you background insights and analysis for this presentation
  8. GRAHAMDBROWN.COM “And what customers love the world over…is how they can buy into aspirational quality products” - Steve Easterbrook CEO
  9. GRAHAMDBROWN.COM But, forget the official line for a minute, we want to know… what do people really talk about when they talk about McDonald’s?
  10. GRAHAMDBROWN.COM Try this Buzz Sumo challenge BuzzSumo  is  a  cool   tool  to  track  what   people  share  the   most www.BuzzSumo.com
  11. GRAHAMDBROWN.COM first, the results (according to CEO)
  12. GRAHAMDBROWN.COM12 What people really think? “Aspiration” “Quality” “Love”
  13. GRAHAMDBROWN.COM Is the CEO right?
  14. GRAHAMDBROWN.COM nope…
  15. GRAHAMDBROWN.COM Here’s what they 
 really talk about…
  16. GRAHAMDBROWN.COM Buzzsumo results…
  17. GRAHAMDBROWN.COM Share the love don’t forget to 
 hit the LIKE button so other Slideshare users can discover this too
  18. GRAHAMDBROWN.COM18 “Aspiration” “Quality” “Love” “Semen” “Never eat” etc…
  19. GRAHAMDBROWN.COM19 McDonald’s Customer Perception McDonald’s Management Perception disconnect
  20. GRAHAMDBROWN.COM There is a BIG DISCONNECT between what McDonald’s and what customers see in the brand
  21. GRAHAMDBROWN.COM problem, bro?
  22. GRAHAMDBROWN.COM which leads to…
  23. GRAHAMDBROWN.COM
  24. GRAHAMDBROWN.COM
  25. GRAHAMDBROWN.COM Sales  are   flatlining,  or   falling  
  26. GRAHAMDBROWN.COM McDonald’s is losing its next generation of consumers…
  27. GRAHAMDBROWN.COM McD’s  is  losing  the   critical  battle  for   young  customers
  28. GRAHAMDBROWN.COM
  29. GRAHAMDBROWN.COM
  30. GRAHAMDBROWN.COM Competitors are eating McDonalds for lunch…
  31. GRAHAMDBROWN.COM Chipotle,   Starbucks,  Shake   Shack  etc.  etc
  32. GRAHAMDBROWN.COM32 “Aspiration” “Quality” “Love”
  33. GRAHAMDBROWN.COM
  34. GRAHAMDBROWN.COM Q: So, how do you fix it?
  35. GRAHAMDBROWN.COM A: Not with a brand makeover
  36. GRAHAMDBROWN.COM36 Where Branding is taking McDonald’s Where McDonald’s needs to go
  37. GRAHAMDBROWN.COM You see the problem with McDonald’s Branding is…
  38. GRAHAMDBROWN.COM BRANDING
  39. GRAHAMDBROWN.COM Yes, Branding is the root of the McDonald’s problem
  40. GRAHAMDBROWN.COM Here’s why…
  41. GRAHAMDBROWN.COM You  see,  McD’s  is   a  “branding   success”  
  42. GRAHAMDBROWN.COM McDonald’s business 
 = stalling
 McDonald’s agencies = success
  43. GRAHAMDBROWN.COM
  44. GRAHAMDBROWN.COM44 McDonald’s Branding Strategy Ad agency wins awards “Creative marketer of year” Sales slump Major image issue with younger consumers disconnect
  45. GRAHAMDBROWN.COM Despite seeing one of the worst declines in recent history McDonald’s ad agencies continue to win awards…
  46. GRAHAMDBROWN.COM McDonalds…Creative Marketer of the Year Increasingly,  the   fortunes  of  the  ad   industry  fail  to  reflect   the  fortunes  of  its   clients
  47. GRAHAMDBROWN.COM
  48. GRAHAMDBROWN.COM These  are  the   LEAST  Engaging   Brands “Creative Marketer of the Year”
  49. GRAHAMDBROWN.COM49
  50. GRAHAMDBROWN.COM a 20th century model of marketing built on ad agencies, advertising and awareness that doesn’t work like it used to…
  51. The days of ARE OVERwinning awards and Tony the Tiger www.GrahamDBrown.com Sorry guys!
  52. People don’t wake up thinking about BRANDS anymore... www.GrahamDBrown.com flickr © commonbond
  53. GRAHAMDBROWN.COM “Authentic brands don't emerge from marketing cubicles or advertising agencies” 
 - Howard Schultz, CEO Starbucks
  54. GRAHAMDBROWN.COM This is not the McDonald’s brand
  55. GRAHAMDBROWN.COM or this…
  56. GRAHAMDBROWN.COM THIS is the McDonald’s brand The  inconvenient   truth  of  the   Connection   Economy
  57. www.GrahamDBrown.com Your brand is what people say about you when you’re not in the room - Jeff Bezos, CEO Amazon
  58. GRAHAMDBROWN.COM58 What ad agencies think is brand What actually is brand
  59. GRAHAMDBROWN.COM Brand = what customers say it is
  60. GRAHAMDBROWN.COM Brand ≠ what your agency says it is
  61. GRAHAMDBROWN.COM The Experience is the Brand
  62. GRAHAMDBROWN.COM So, how does McDonald’s build a better BRAND EXPERIENCE?
  63. GRAHAMDBROWN.COM Let’s look at the difference in these approaches…
  64. GRAHAMDBROWN.COM64 BRANDING BRAND EXPERIENCE
  65. GRAHAMDBROWN.COM BRANDING BRAND EXPERIENCE Model Top down “Loudspeaker” Bottom up “Telephone” Method Control Curation Focus External Internal Media Paid Earned Brand  Story Official agency narrative Everyday conversation Marke5ng Advertising, logos, celebrities People, Culture, Metrics Metrics Brand Likes: awareness Brand Love: recommendation Influencers Celebrities, experts, professionals Fans, influencers, customers Brand  owners Ad agencies, celebrities Employees, Fans, customers  Old  vs  New:  2  Marke0ng  Strategies Branding  vs  Brand  Experience
  66. GRAHAMDBROWN.COM vs  Old  vs  New:  2  Marke0ng  Strategies Branding  vs  Brand  Experience $  1.5  bn $  0.2  bnAD SPEND $  -­‐0.8bn $  +1.9bnGROWTH Net     Profit     2013  -­‐  2015 $3bn $6bn 2013 2014 2015E
  67. GRAHAMDBROWN.COM Share the love don’t forget to 
 hit the LIKE button so other Slideshare users can discover this too
  68. GRAHAMDBROWN.COM Brand Experience isn’t what happens outside your company (e.g. branding, agencies etc)
  69. GRAHAMDBROWN.COM But inside…
  70. GRAHAMDBROWN.COM People Culture Metrics These  are  the  3   elements  of   BRAND  DNA  in   the  21st  Century
  71. GRAHAMDBROWN.COM PEOPLE METRICS 85 of brand happens in daily  interac5on (tweets, status updates, content shares, conversations between customers, between customers and employees) PEOPLE CULTUREMETRICS Brand     Experience CULTURE % Brand= People + Culture + Metrics
  72. GRAHAMDBROWN.COM Here’s how McDonald’s can fix its broken brand…
  73. GRAHAMDBROWN.COM 1) PEOPLE Start  here…
  74. GRAHAMDBROWN.COM build your brand around your people not your ad agency
  75. GRAHAMDBROWN.COM75 McDonald’s Brand Now McDonald’s Goal Roadblock #1 old fashioned ad-agency model
  76. GRAHAMDBROWN.COM invest in your Frontline Frontline  is  the   point  where  your   brand  touches  the   customer  
  77. GRAHAMDBROWN.COM Obviously  this   isn’t  conducive  to   a  positive  Brand   Experience
  78. GRAHAMDBROWN.COM McDonald’s  said  it   was  going  to  raise   pay  of  Frontline   workers…
  79. GRAHAMDBROWN.COM When McDonald’s announced last month that it planned to raise wages for some of its workers in the United States, the increases —to $1 higher than the local minimum wage—would apply only to the restaurants it owned
  80. GRAHAMDBROWN.COM some = only 17% of stores GOTCHA:  Less   that  1/5  of  all   stores  qualify  for   the  pay  raise
  81. GRAHAMDBROWN.COM81
  82. GRAHAMDBROWN.COM McDonald’s calls them “Crew” Not  a  week   passes  without   this  kind  of  news
  83. GRAHAMDBROWN.COM Starbucks calls them “Baristas” Yet  we  don’t  hear   the  same  about   Starbucks…
  84. GRAHAMDBROWN.COM
  85. GRAHAMDBROWN.COM
  86. GRAHAMDBROWN.COM Your brand starts with your people
  87. GRAHAMDBROWN.COM Invest less here…
  88. GRAHAMDBROWN.COM The  BRANDING   approach  to   building  the  McD   brand
  89. GRAHAMDBROWN.COM Invest more here…
  90. GRAHAMDBROWN.COM The  Brand   Experience   approach:  People   are  the  Brand
  91. GRAHAMDBROWN.COM These people will win you awards These people will win you customers
  92. GRAHAMDBROWN.COM You  can’t  create   positive  Brand   Experience  when  your   Frontline  staff  are   disengaged
  93. GRAHAMDBROWN.COM
  94. GRAHAMDBROWN.COM McDonald’s annual ad spend per employee = $3,500
  95. GRAHAMDBROWN.COM
  96. GRAHAMDBROWN.COM you don’t build a brand worth talking about by spending billions on your ad agency and cents on your employees…
  97. GRAHAMDBROWN.COM McDonald’s has a large population of young workers open to ideas, innovation and change - engage them
  98. GRAHAMDBROWN.COM 2) CULTURE
  99. GRAHAMDBROWN.COM99 McDonald’s Brand Now McDonald’s Goal Roadblock #2 marketing strategy build around short term awareness
  100. GRAHAMDBROWN.COM build your culture around conversations not campaigns
  101. In this ever-changing society, the most powerful and enduring brands are built from the heart. They are real and sustainable. Their foundations are stronger because they are built with the strength of the human spirit, not an ad campaign. – Howard Schultz, CEO Starbucks GRAHAMDBROWN.COM
  102. GRAHAMDBROWN.COM102 Campaigns Conversations
  103. GRAHAMDBROWN.COM You don’t need Big Ideas in 2015 this  is  a  chart  of   annual  ad  spend
  104. GRAHAMDBROWN.COM Stop the gimmicks…
  105. GRAHAMDBROWN.COM
  106. GRAHAMDBROWN.COM A “giant coffee cup ball pit”… GIMMICK ALERT
  107. GRAHAMDBROWN.COM GIMMICK ALERT McD  doesn’t  need   this  ad  agency  BS.   A  complete  waste   of  money.
  108. GRAHAMDBROWN.COM “The collection is based on the fast food brand's latest French advertising campaign by TBWA Paris, which features a set of elegant illustrations of McDonald's products, including fries, Big Mac and an ice cream sundae.”
  109. GRAHAMDBROWN.COM109
  110. GRAHAMDBROWN.COM WTF? Think  how  they  could   have  invested  that  money   in  creating  a  better  in-­‐ store  experience  or  staff   development
  111. We can no longer control and manage the brand conversation like we used to... CONTROL MANAGE www.GrahamDBrown.com flickr © posterboynyc
  112. GRAHAMDBROWN.COM Stop bankrolling agency awards
  113. GRAHAMDBROWN.COM
  114. GRAHAMDBROWN.COM and create a Social Space Millennials need and love…
  115. GRAHAMDBROWN.COM
  116. GRAHAMDBROWN.COM
  117. GRAHAMDBROWN.COM Starbucks  creates   a  social  space   that  customers   LOVE
  118. GRAHAMDBROWN.COM Yes, McDonald’s Millennials like waiting
  119. GRAHAMDBROWN.COM Inefficiency  is   good.  Waiting  =   meeting  people.
  120. GRAHAMDBROWN.COM McDonald’s young customer base and workforce are open to sharing the experience
  121. GRAHAMDBROWN.COM McDonalds = 
 Already 5 million shares on Instagram
  122. GRAHAMDBROWN.COM Start  curating  the   customer  stories.   This  is  the  McD   brand  in  2015
  123. GRAHAMDBROWN.COM Imagine if McDonald’s empowered employees and customers to tell their own stories
  124. GRAHAMDBROWN.COM124 Brand Heroes c. 1985 Brand Heroes c.2015
  125. GRAHAMDBROWN.COM How  can  McD  remove   the  walls  that  prevent   these  people  from   being  their  biggest   Fans?
  126. GRAHAMDBROWN.COM These are the new heroes of the McDonald’s brand story
  127. GRAHAMDBROWN.COM127 Not this guy…
  128. GRAHAMDBROWN.COM or this guy…
  129. GRAHAMDBROWN.COM Give customers the tools and the space to make it happen
  130. GRAHAMDBROWN.COM 3) METRICS
  131. GRAHAMDBROWN.COM131 McDonald’s Brand Now McDonald’s Goal Roadblock #3 short term metrics controlled by ad agencies
  132. GRAHAMDBROWN.COM what’s measured gets done
  133. GRAHAMDBROWN.COM
  134. GRAHAMDBROWN.COM focus on recommendation not awareness
  135. GRAHAMDBROWN.COM Starbucks  Dominates  Instagram  Shares Number of photos tagged on Instagram by brand name SOURCE: TOTALYOUTHRESEARCH BASED ON EMARKETER DATA STARBUCKS  IS  ONE  OF  THE  MOST  POPULAR  BRANDS  ON  INSTAGRAM   Nearest  big  brand  Apple  not  even  half  of  Starbucks  Earned  Media Pepsi Coke Apple Starbucks 19.1m 9.1m 5.2m 3.4m That’s  a  lot  of  people  sharing   Starbucks  experiences
  136. Experience is only real... when shared www.GrahamDBrown.com flickr © zoetnet
  137. brands that don’t get shared don’t get experienced www.GrahamDBrown.com pic © GoPro
  138. GRAHAMDBROWN.COM Starbucks  concentrates   its  marketing  on   customer   recommendation  not   awareness
  139. GRAHAMDBROWN.COM McD  is  losing  big   time  in  the   recommendation   game
  140. GRAHAMDBROWN.COM focus on earning BRAND LOVE not buying BRAND LIKES
  141. GRAHAMDBROWN.COM141 Brand Likes, Awareness, Brand Equity, Top of Mind, Brand Recall Recommendation, word of mouth, NPS
  142. Branding in 1985 www.GrahamDBrown.com
  143. Brand Experience in 2015 www.GrahamDBrown.com
  144. GRAHAMDBROWN.COM
  145. GRAHAMDBROWN.COM
  146. GRAHAMDBROWN.COM you can’t buy LOVE in a campaign
  147. GRAHAMDBROWN.COM GIMMICK ALERT This  is  how   agencies  win   “creative   marketer”  awards
  148. GRAHAMDBROWN.COM But  it  only  wins   awards,  not  Brand   Love  or  customer   loyalty
  149. GRAHAMDBROWN.COM
  150. GRAHAMDBROWN.COM implement Frontline metrics like NPS to create a constant customer-employee feedback loop
  151. GRAHAMDBROWN.COM Apple’s  success  stems   from  a  rigorous   implementation  of  NPS   at  the  Frontline
  152. GRAHAMDBROWN.COM Starbucks  is  passionate   about  customer   feedback  -­‐  data  which   impacts  employee   reward  and  promotion
  153. GRAHAMDBROWN.COM McDonald’s has legendary systems and efficiency
  154. GRAHAMDBROWN.COM Apply that knowledge to building customer feedback loops and recommendation
  155. GRAHAMDBROWN.COM
  156. GRAHAMDBROWN.COM “I often describe McDonald’s as possibly the most democratic brand in the world” - CEO Steve Easterbrook
  157. GRAHAMDBROWN.COM Let’s see that happen by putting customers and employees, not ad agencies and clowns, in control of the Brand Experience
  158. GRAHAMDBROWN.COM Share the love don’t forget to 
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  159. GRAHAMDBROWN.COM Learn more about Brand Experience and Brand Leadership…
  160. GRAHAMDBROWN.COM160
  161. www.GrahamDBrown.com Learn how they do it
  162. GRAHAMDBROWN.COM162 Learn  how  to   market  like   Apple,   Starbucks   and  LEGO http://www.GrahamDBrown.com/Manual  
  163. GRAHAMDBROWN.COM If you want to get access to my FREE marketing strategy guide for McDonald’s click the link on the next slide
  164. GRAHAMDBROWN.COM CLICK HERE to ACCESS this FREE case study giving you background insights and analysis for this presentation

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