Your article on McDonald’s, “A big McStake” (MW August 3), highlights an on-going issue, that of the interface between promotions and brand equity.
Over the past decade, major brands have realised the potential of promotional activity in raising sales, but all too often, they have ignored the detrimental effect it can have on their brand values.
In the case of McDonald’s, I think one can justifiably argue that the “entertainment/amusement/playfulness” achieved through promotional activity is central to their core proposition. However, it becomes a lot harder to justify the on-going promotional activity we see in the cereal market – where brand sales increasingly fail or succeed due to the latest promotional activity. Inevitably in this scenario, brand values get destroyed unless the activity is carefully honed to reflect and reinforce them.
This does not mean that occasionally you cannot run a promotion that has nothing to do with your values. However, one must be aware of the potential drawbacks, and accept it for what it is – a one off method of enticing new consumers into your brand.
The long-term role of promotions surely must be to gain sales (on a sustained basis) and put something into the “brand equity bank”. One tool we regularly use in this context is an “equity matrix” on brands that we work on, as a means of ensuring a positive rather than negative brand contribution.
2-4 Boundary Street