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McDonald’s – 3 Strategic Initiatives to attract ‘Newer Segments’

For most on this planet, one of the most recognizable brands in the world is undeniably McDonald’s or Mickey D’s or Macca’s (or any other lovable local name it has picked up globally)

The golden arch symbol has come to become a permanent member of the elite club; shared by it’s peers Coca Cola ribbon, Apple’s bitten apple and Disney’s Mickey Mouse to name a few


Challenge: Growing-Up & Growing-Out

For most of us, Macca’s has been a part of our lives in one way or the other growing-up… whether be that after junior school soccer game win (or loss) or high school after school hangout or even through college (usually after a late night @ the pub) or even a quick drive-in bite after that late night’s work at our first job.

In the U.S., McDonald’s is perceived as a staple for the sizable ultra-price sensitive segment (for whom it’s meals may be their only meals they can afford)

Perhaps, this is one of the key reasons, it’s initiatives such as McPick 2 for $2 or $5, morning breakkie are under the microscope for customers walk-ins and wall street analysts alike

But there is a sizable demographic(other than the price-conscious one) that Macca’s could be missing out on… 

…the demographic who is also growing-out of Macca’s; replacing it with ‘perceived healthier alternatives; including ‘gourmet burgers bars’ touting their locally sourced fresh GMO-free ingredients

The (broad spectrum) millennials segment in particular, are more skeptical of the fast-food category than any other generation before; which has translated into their visiting patterns

But often, I can’t help but think… Macca’s is in a prime position to cater to this rising younger demographic (whilst preserving their cash cow segment)


Initiative #1 – Menu Innovation

Connected Corners

Let’s face it, Macca’s menu in the U.S. is begging for innovation. Some initiatives that can be considered to appeal to the untapped segment may actually even add ‘add color to the menu’ – pun intended

Vegetarian / Vegan options

Macca’s could be missing out on this growing & lucrative segment… even meat eaters sometimes crave for veggie options (and No… rabbit food & salad are not the only thing vegetarians eat)

Having options such as black bean burger, quinoa spinach wraps, sautéed mushroom nuggets, etc. are some of the options that could potentially raise Macca’s’s ‘brownie point’ with this urban sub-demographic

Domestic/Regional Flavors

Macca’s could benefit from running monthly campaigns such as ‘Discover America’s flavors’… irony… as most of the world views these fast food burgers as staple of the so called American cuisine. But there is more to American cuisine than just fast food burgers & pizzas… some of the examples are:

  • South Discovery: From PoBoys, Beignets through to Gumbo and Andouille Sausage, Macca’s could unravel the hidden food treasures of the south to rest of U.S. (and potentially the world)
  • SoCal Discovery: California cuisine focuses on it’s fusion and presentation traits. Yes, strawberries and feta cheese go well together on a deconstructed burger / taco
  • Commonwealth of Massachusetts Discovery: Popular for their clam chowder, fish & chips and other seafood variety

International Discovery

One of the biggest advantage Maccas has on its side is it’s vast global footprint… where it serves up local flavors and delicacies

From my own experiences in Spain, France, Germany & Italy… I can say there is wide variety of options, the American Macca’s can bring stateside – Perhaps as ‘limited time run’

This would appeal to a large demographic who yearn to try international cuisine without having to spend at an expensive establishment.

  • Spain: Patatas Bravas, Iberico Jamoń Tapas, Pintxos of wide variety
  • France: Le Petit Moutarde, Croque McDo
  • India: Maharaja Mac, McAloo Tikki, Paneer Wrap
  • Australia: Aussie BBQ Angus, Aussie BBQ Breakkie roll

Having a diverse spectrum of menu (even in a rotational limited edition format) could appeal to wider group of demographics who may view Macca’s as a ‘Taste Destination’rather than boring ‘Fast food’

Critically the above cuisine would appeal even further in it’s delivery – from using fresh ingredients (locally sourced where possible), through to it’s presentation (Yes, tapas are meant to be ’small plates’ not ginormous) and even it’s composition (as close to the original regional recipe)

Mini-Size-Me, initiative where the above menu items could even be served in smaller portion sizes(e.g. sliders, tapas size – so consumers could try more than one variety in one sitting)


Initiative #2 – Flagship Restaurant

Connected Corners
If there is one thing Macca’s can borrow from the retail world, it would be the flagship / experience / destination stores

This is usually one (company owned) flagship restaurant per major urban city that Macca’s can use as a platform to showcase it’s latest, greatest & the future… whether that be the actual restaurant, it’s menu, new technological implementations or even enhanced service (including table service)

As opposed to the ~90% of franchise owned Macca’s in the U.S.; the company owned destination restaurant could typically comprise of:

‘Thorough’ Restaurant Look & Feel: That of a high end restaurant, complete with environmentally sustainable decor, comprehensive seating arrangements (intimate, family & group), lighting & locally themed. Something that could be ‘date-takeable’ (place where you are not embarrassed / ridiculed to take your date to)

Innovative Menu: Ranging not only their core menu options, but also becoming a launchpad for the innovative menu options stated above. This may also benefit Macca’s supply chain in procuring fresh ingredients & locally sourced produce to only one / two flagship stores per city

McTech Experience – New Technology Implementation: Mobile related tech is here… and brings limitless (monetizable) benefits for the service industry. Macca’s has lately been testing various new tech such as VR, Mobile Order, in-store Touch Screens for Ordering & even piloting the benefits of Gig-economy (Uber deliveries). They could further leverage the flagship store to trial experiences such as –

  • VR Video & Eat: Where short videos / original content can be beamed to the VR for customers at each table… Imagine wanting to getaway to a tranquil place; away from all the city noise & buzz on your ½ hour break; whilst chowing down on your McAngus
  • VR Nostalgic meet-up: Where friends, family members & colleagues from across the globe can get together (virtually) whilst enjoying their McMeals

McPlay Interact – Play on the Table: Yes physical playpens sporting slides & merry-go-rounds will always be dear to growing kids, but the future play area could also be right on the table and be that of interactively challenging the mindFor example introducing McTablets with (in-house developed) social games on each table; where every family member could be involved through a multi-player mode. Other myriad of benefits include –

  • Family time: Complementing Macca’s high-level family restaurant theme
  • Fostering Developer Support: Helping upcoming developers to create engaging content for McTablets
  • Ad-Revenue: Partner Ads served directly to the table can account for untapped revenue source
  • Analytics & Insights: Anonymized data points collected at table level can account for valuable Big Data Insights & Analytics
  • Repeat Business: Technology based engagement complements the In-Order-Out model by providing customers with choice and increasing the repeat business

Tourist Destination Potential: Similar to Apple of 5th Avenue, Macca’s flagships (if implemented right) could create a high ‘foot-traffic’ zone, for locals & tourists alike


Initiative #3 – McDonald’s within a McCafe

Many people may not be actively seeking for McDonald’s, but they could be yearning for a coffee place… a place where they could put their feet up, grab a brew and zone-out… or work. Having (smaller footprint) McCafe’s peppered across key locations could unlock untapped revenue for Macca’s

In fact, according to IBISWorld’s recent research; the bakery cafes industry has been one of the best-performing industries within the food service sector over the past 5 years with revenue forecasted to rise by 3.5% ($7.4B) in 2015 alone…one doesn’t need to look beyond Starbucks’ ongoing success in this field

One way this initiative could look like would be –

Coffee-centric: Macca’s could unlock McCafe’s true potential by decoupling it from McDonald’s core stores and making it a Coffee/Tea-centric proposition; that also allows for the menu to be scaled as needed

Mid-tier Pricing: Starbucks has positioned itself as ‘Premium Coffee Brand’ in the market leaving a gap that could be filled by Macca’s by provision of quality brew at reasonable price

Footprint flexibility: Similar to a typical Macca’s store footprint, McCafe strategy can allow for multi-footprint options, ranging from Airport Kiosks, Commercial in-building stores, Malls & even standalone Cafes providing options for drive-thru (where feasible)

Offerings: As mentioned above, whilst the key offering would be Coffee/Tea centric, Macca’s could complement the menu with selected core offering such as bakery items (muffins, et al.) and cold-storage/ heatable options such as Paninis, Wraps & even small McSliders

McDusk: Down the line; Macca’s could even introduce McDusk menu comprising of select alcohol items such as local beers, spirits & wine complemented with dedicated evening Small Bites menu items (from their core range) – truffle fries, McCroquetas, et al.


So…

These are only some of the many strategic initiatives Macca’s in the U.S. could unlock to transform into an all encompassing restaurant brand

Initiatives such as these could potentially attract segments & demographics across the board; including families, singles, urban dwellers, busy-professionals, broad-spectrum of millennials whilst preserving it’s core cash-cow ultra-value propositions