Marketing 101

A friend’s son who started working at McDonalds behind the counter at Thornleigh went on to work as a chef in London and is now back as chef for the leading restaurant in Sydney. So if you want to start learning about marketing their model is a good place to start.

Firstly, when I applied for a McDonalds franchise for one of my clients in Albania, McDonalds  I found had a policy that a franchisee had to spend 60% of their working time on the job. No straight out investors.

Secondly you had to sign on for supply contracts. For example you had to agree that only one type of potato can be used (my client grew potatoes but at the time the wrong kind).

Then you look at location, access and parking.

You give consistent product. Stay on target. I never quite understood the different breakfast menu but I suppose it looked good for political correctness just like Kentucky Fried had to change to KFC.

You make sure your pricing is right and above all support the brand name. In Geneva in McDonalds next to the restaurant I used for lunch a Big Mac fries and a Coke cost the same as my waiter served three course meal. Same in the road up from my apartment in Beijing. I though McDonalds would never catch on because you could get a full meal for the price of a Big Mac but the place was packed. Two years ago I tried to test out the first McDonalds in St. Petersburg but never made it in the door with a 100m long queue waiting outside.

I also said McDonalds would not work in Singapore but there it is hugh.

So as you build your brand, you start calling your cafes “restaurants” and then to broaden the capture, call them “family restaurants”. You have a drive through service and of course if possible somewhere for the kids to play.

I told my mother that I always look up the location of McDonalds in any new city I visit. She was horrified at my lack of culinary appreciation until I told her that this was the only place I could be assured toilet access…

To ensure there is no possible backlash in the community where some might say McDonalds does not provide healthy food, you add in some green alternatives and you need to link your product with good deeds and charities. These need to be so worthwhile that any criticism of McDonalds would almost amount to a challenge to the goods deeds done. Everyone likes cute little kittens. Not sure who likes Ronald McDonald but then he has a house. It’s all about being seen to be a good corporate citizen. But all the time you need to build the brand, and as Chairman Mao found, you have to get them young and as the Jesuits said, “Give me a child up to seven years of age and you have him for life”. Build the brand. Make sure the Golden Arches can be seen from as far away as possible. Make sure there are free give-aways with kids’ meals so parents are pestered for a visit even if not for the food. All of this is not said unkindly, it is perfect marketing strategy. Don’t allow any detractors.

However in any business there is competition. The main thing in fighting competition is to ensure you are on top of your pricing. You might think Coles are involved in predatory pricing but most people will still go there if they can buy cheaper. But fighting competition you need to stick to the basics but (again as Mao said), you need continuing revolution. You need peripheral new gimmicks. The biggest change visible in McDonalds in Australia has been to divide ordering from delivery at the counter in order to streamline the process. A guru would predict that in the future you will see customers keying in their own orders and paying, then collecting separately from live people. Again Coles and Woolworths, Bunnings, Kmart etc. are all heading that way. Save 10 people at say $40,000 a year, $400,000 – get the picture? Meanwhile you can have games and toys linked to current kids’ movies, serve coffee and somewhere McDonalds will think of bringing in “Mobile Mackers” to attend and service outdoor events.

On this last one which I suggested to them after My Kitchen Rules showed you could cook major meals on mobile kitchens, I found that McDonalds HO in Australia said they were unable to discuss any policy and one had to contact HO in the USA. No surprise of course that they did not answer.

So the final point is in company structure. You need a fob off department and otherwise make it almost impossible to contact anyone worthwhile to complain. This includes making e mail contacts if there are any go around in circles so that nothing goes to a live person and most people give up. Of course you can link that to phone numbers which put you on hold for so long that most people give up. Given that the people trying to contact are those who are wanting to complain and not phoning or e mailing how much they enjoy your hamburgers, there is no great loss and they will be back buying your product tomorrow.

While some of the above sounds a little cynical, it is basic reality. An early Harvard text I read said that if you (the company) ever became involved in controversy, do not respond even if damaging and it will go away. Respond and they (the press) have a story. My NAUI scuba instructor’s manual said that should there be any accident during a dive, tell everyone not to say anything and appoint a spokesman as the only one to comment and preferably someone with no knowledge of SCUBA diving so any statement can later be refuted. They must have read the Harvard suggestion.

But otherwise McDonalds does provide a blue print for marketing excellence and should be a study for anyone taking that subject seriously – focusing on the theme of my book MAKE IT EASY FOR PEOPLE TO GIVE YOU MONEY…

Peter Nelson