McDonald’s chairman and chief executive Mike Quinlan may feel the company scored an historic victory last week when it successfully prosecuted two anarchists for libel. Though Goliath beat David, public sympathy will always be with the guy with the sling.
McDonald’s won the libel action in a country where people still believe that the Germans lost the battle of Dunkirk. Whether Quinlan likes it or not, the company will have to live with the ‘McLibel spirit’.
The campaigners’ supporters have already begun heavily publicising the claims which the judge said were true: McDonald’s is guilty of paying its workers low wages; that it acts inhumanely towards animals; and, as McLibel author John Vidal points out, its marketing exploits children.
The same corporate arrogance that fuelled the McLibel case influences the wider marketing malaise at the company. It is one of the US’ most secretive and insular companies. A result of this insularity has been a refusal for years to adapt to market changes.
In recent years, it has attempted quick-fix solutions in an effort to catch up with the rest of the world. The McLibel trial was one such bid. It aimed to quash criticism of the company once and for all. It didn’t.
In mature markets, McDonald’s is acting like a company out of control, with a poor new product development record and constant changes in marketing strategy.
Npd failures such as the Arch Deluxe, a high-fat, high-calorie premium burger aimed at baby boomers, are coming through with alarming regularity. Earlier this year, it attempted to shift direction, in favour of price cuts, resulting in the doomed Campaign 55.
It has failed to react to changing consumer tastes. Consumers are much more aware of what they eat and of the food suppliers, especially in markets like the UK, where health scares frequently make front page news.
Rather than address concerns by making them central to its proposition, McDonald’s has sought to address them by issuing denials in leaflets and launching educational initiatives that have nothing whatsoever to do with its core business.
It doesn’t take much for consumers to see through such artificial responses to criticism.
So where does a company like McDonald’s go from here?
The burger giant needs to realise that it cannot find a quick-fix solution through the courts or by price cuts. It needs to change its core brand values in mature markets to adapt to the changing environment.
The childish, fun-loving formula that has worked for most of its 40 years needs to be updated to address concerns about ethics, nutrition and quality.
McDonald’s should stop blaming external forces for its problems, it should start doing something constructive about its brand and lift itself from the malaise.v
Cover Story, page 38