Repositioning McDonald's McDonalds is a ubiquitous part of life in both American and global culture. Traditionally, McDonalds restaurants were largely standardized and consumers knew what to expect when they entered any one of its restaurants: They would walk up to the counter to order fast food from an employee. Then, if they stayed in the restaurant to eat, they would expect a brightly colored and well-lit environment where they could sit in hard plastic chairs, perhaps near a playground. This was fine for decades, but now the competitive environment has changed with the likes of Chipotle and Panera Bread entering the marketspace. Not all of that scene is changing, but quite a bit is. McDonalds is gradually reimaging its stores in an effort to improve consumer perceptions of quality by repositioning the brand as a modern, progressive burger company. According to CEO Steve Easterbrook, who has successfully turned around McDonalds downward slip: As customers expectations increased, McDonalds simply didnt keep pace with them. Making meaningful improvements in quality, convenience, and value will win back some of McDonalds best customers. Many adjustments have been made as part of this repositioning effort in many areas, including changes to the (1) interior design, (2) menu and ingredients, (3) packaging, and (4) use of technology. Franchise locations are in the process of updating the interior designs to one of GSRM7344 CONSUMER BEHAVIOUR AND MARKET INTELLIGENCE 2 several new modernized styles. The colors of the new styles are more muted than the former bright primary colors. Individual franchisees can select the style they prefer from style books that provide a catalog of options of tabletops, wall patterns, and lighting fixtures. The idea is not for a standardized dining room for every store, but for there to be a cohesive theme with individual differences that best suit the particular space. The expectation is that these design changes will create a more welcoming environment and have a positive effect on sales. According to Max Carmona, McDonalds senior director of U.S. restaurant design: Weve moved away from a cafeteria feel to a more comfortable and, in some ways, more intimate restaurant. . . . At any point in time well have 8 to 10 designs in our portfolio, and how theyre applied to different building types, they end up manifesting themselves a little bit differently based on size and restaurant configuration. Under Easterbrooks leadership, several changes were made to the menu and the ingredients. The changes were largely based on customer feedback and dietary trends. The McCaf beverages and signature crafted sandwiches were welcome additions to the menu. Another very popular change that began in 2015 was all-day breakfast. According to Easterbrook: Customers have been asking for this for years. We challenged ourselves to move past legacy barriers to deliver, and we did. Several of the changes made involved the quality of the input ingredients. For example, the quarter pounders are made with fresh versus frozen beef and butter is being used rather than margarine. Artificial preservatives are no longer in Chicken McNuggets, artificial growth hormones are no longer in milk, and high-fructose corn syrup is no longer used in the buns. One change that is especially appealing to socially conscious consumers is that McDonalds has begun using cage-free eggs and has committed to using only cage-free eggs by 2025. In 2016, McDonalds redesigned the packaging of its bags, cups, and sandwich containers. The design was meant to be a modern font and simplified feel to stand out in a landscape of distractions. This was the first packaging redesign since 2013. The package redesigns also brought McDonalds closer to its commitment to using 100 GSRM7344 CONSUMER BEHAVIOUR AND MARKET INTELLIGENCE 3 percent fiber-based packaging from recycled or certified sustainable sources by 2020. McDonalds also has made some radical changes from its traditional model in terms of technology. According to Stephen Dutton, Consumer Foodservice Analyst for Euromonitor International: Going digital is McDonalds most recent push to lure customers back to its stores. Digital engagement is an increasingly important aspect of the modern foodservice experience, and it enhances the level of convenience that consumers want and expect from a quick-service chain. McDonalds is increasingly implementing the Experience of the Future at its restaurant locations. In these restaurants, rather than ordering food from an employee at the counter, customers can skip the counter all together. Instead, they approach a digital video kiosk with a touchscreen to select and customize their food order. A guest experience leader is nearby to assist customers with any issues. Then, customers proceed to their table, where their food is delivered. Another new development is the McDonalds app with the mobile order and pay function, where customers can purchase their order from the app and then have it delivered to their car on the curbside of a McDonalds restaurant. Finally, McDonalds has partnered with UberEATS to provide delivery in many markets. By the end of 2017, the mobile order and pay function was available in 20,000 U.S. stores and the digital kiosks were in 2,500 locations. By 2020, the vast majority of McDonalds restaurants are planned to be updated to the Experience of the Future. McDonalds various efforts to reimage its stores and reposition its brand appear to be effective so far. In 2017 and 2018, both customer traffic and sales were up after dropping in the several years prior. This performance is outpacing competitors such as Burger King and Taco Bell, during the same time period. Further, measures of customer perceptions and satisfaction illustrate an increase in regard to service, taste, and quality.

Discussion Questions:

1. Construct a perceptual map that;

a) includes McDonalds prior to repositioning versus its competitors.

b) includes McDonalds after repositioning versus its competitors.

2. Compare and contrast the two perceptual maps and write a brief description summarizing your findings.