Category Archives: McDonald’s

Why commuters will love Apple’s tiny videos

When we suggested in a BusinessWeek column that Apple’s emerging tablet device could encourage commuters to begin working from home, UK Guardian tech editor Charles Arthur pushed back. “No, I’m not really seeing how the iTablet makes telecommutes happen more than a laptop and a second monitor, but anyway…” he wrote. Perhaps. But it’s worth reviewing that idea, since what most people miss is we have just entered the uncharted waters of a new two-way video age.

It’s 2010. Can you guess what device you’re missing?

Quick, grab your gadget and make a video call. What? You can’t do that from the subway stop or corner deli? A bit curious, isn’t it, that in this modern age you don’t have a video transmission device (unless you like walking around with a laptop flipped open near a WiFi hot spot).

That will change this year. Video has been with us for more than a century in some form or another, but it’s only been two years since two-way video began appearing on most laptops — and just four months since Apple stuck a video camera on iPods as small as sticks of gum. Society still has no cheap, simple, small, portable device that you can carry easily that captures and shares video via wireless (well, at least in the U.S.; in parts of Europe they can video-dial Jesus). The iTablet may be that device, since analysts predict it will hold a webcam; if not, another gadget will be. As sure as you can say telephones-never-really-needed-cameras, you better believe the version creep of manufacturers trying to outsell each other will soon put tiny webcams and video screens in most handheld portable electronics.

It’s 2010. Do you still hate your commute?

As technology rushes to enable you to video-conference loved ones in Hawaii from any location, society also has a sore point that no market tool has adequately addressed: Your daily commute. In the United States, a land with 3.9 million miles of highways, 9 in 10 U.S. workers get to their employment via car, and they spend a collective 3.7 billion hours each year stuck in traffic. One of the fastest trends in the U.S. is workers leaving prior to 6 a.m. to beat the morning rush; in 2007 McDonald’s announced it would open 75% of its U.S. restaurants at 5 a.m. to help those bleary-eyed souls make it there with coffee.

The psychology of why people feel they must work together probably goes back to ancient clans instinctively huddling for shelter, or the fact most communication is nonverbal … but what if you could really see other people easily on screens, from anywhere, at any time? What if your visual community was anyone you can reach with a click?

Cheap, two-way portable video is finally coming. Travel is expensive, wastes time and stresses both individuals and the society that bears its energy, infrastructure and pollution costs. Hey. You connect the dots.

Image: Christian Spinelli

Why every business should give away free food

Hurry. You have five minutes left before Starbucks closes its free pastry offer in the U.S. at 10:30 a.m. Eastern time. But don’t worry, the strategy of sampling is here to stay.

McDonald’s is running a Free Mocha Monday promotion through Aug. 3. Kraft is engaging consumers with a First Taste community to share news of emerging products. Former McDonald’s CMO Larry Light told Ad Age a year ago that studies show 80% of consumers prefer a free sample to a coupon — and about a third said they would come back to buy again. Sampling works because customers who take the trouble to visit a store usually buy something else, the samples are typically inexpensive items, and a lift in future sales more than justifies the expense.

Sampling is worth trying in more complex business models, such as business-to-business sales. Whitepapers, free consultations, assessments, workshops and speeches are all freebies that give a little in exchange for getting a lot. In recessionary times, improving your offer could help attract clients. Make a list: What could you give away to lure future customers to your service?

Photo: He@rt

McDonald’s Sarah Palin moment

McDonald’s slams Starbucks in a new series of TV spots that American Public Media’s Marketplace calls an outright Sarah Palin moment. Tired of being intellectual, listening to sappy music, wearing a goatee and funky glasses? Well, Middle America, you don’t have to put up with that faux-hip-snobbery at Starbucks any more — you can get damned good coffee at the Golden Arches.

The timing is brilliant, if fortuitous. Marketplace noted these spots must have been in production long before Palin hit the GOP ticket. But the vibe is the same.

That’s right, coffee-swilling intellectuals. Your gig is up. Now let’s get some Joe then go a-huntin’.

McDonald’s, just the stop for interplanetary road trips

Someone has cut an eerie crop circle in Nebraska that looks an awful lot like a McDonald’s ad. At first glance, this “media placement” is downright silly, since only 0.58% of the U.S. population lives in Nebraska, you can’t see it without a plane, and surely participants walking in the maze pack a picnic.

Yet all this goofiness points out the new media strategy of seeding a viral campaign — using lever A to set off a cascade of people talking B. Someone at McDonald’s, we bet, was willing to invest a few thousand dollars in cutting up a cornfield in hopes that web sites would pass along the message. The cost of creating corn mazes has fallen in recent years as companies such as The Maize give farmers GPS-guided tools to design paths that resemble almost anything.

Or perhaps space aliens just get hungry.

Via Marta Kagan and Brandcurve.

Did Starbucks stop being cool?

We think something more than recession led to Starbucks announcing it will shutter 600 stores in the U.S. Two years ago Starbucks was the darling of Wall Street, with management-guru books out almost every day, expansion into music and DVDs, a stock pumped to $39.63 per share (up from a split-adjusted $0.53 back in 1992), and brand partnerships with everyone from Apple to Jim Beam.

Today, Starbucks’ stock is off more than 60% from the height, like the cresting bell curve of a consumer fad. Some have criticized Starbucks for over-expanding stores, or stretching its products too far into dishware, CDs and breakfast sandwiches, or even rethinking its logo.

We think competitors caught up. Starbucks shook an entire industry by making the consumer experience part of the food buy. But soon McDonald’s launched gourmet Newman’s coffee and redesigned its stores. Dunkin’ Donuts added wood paneling and gas fireplaces. Heck, our local Stop & Shop grocery now has oak floors.

It’s a puzzle for competitive design: You can copyright a logo, but how do you copyright a customer experience? The sensory delight of the fragrant, earthy, green point-of-purchase environment became just another commodity. Sort of like a cup of coffee.

Photo: Dan LaMee. Via Bill Green.

Free lunch today: How McDonald’s flips the bird

Interesting bit in Advertising Age this week on the age-old marketing question of discounting. If you give stuff away, do you erode your brand?

Both McDonald’s and Dunkin’ Donuts are betting no. Today, May 15, both food chains are giving away millions of free chicken biscuits and ice coffees, respectively. Former McD’s CMO Larry Light tells Ad Age that the strategy of sampling is different than discounting; meaning a small freebie entices repeat consumption, while simple price cutting can erode the brand. Light’s current consulting firm Arcature has a study showing that 80% of consumers prefer a free sample to a coupon, and one-third said they would come back to buy again.

However, this data is misleading, because not all business models have the built-in repeat purchase patterns as popular national food chains. A typical consumer might visit McDonald’s or Dunkin’ Donuts scores of times each year, so there is a high likelihood that a small freebie today will entice the consumer to buy again in his or her next visit to the retail location. For other businesses where the innate consumer repeat purchase is very low, discounting against perceived reference prices might encourage more sales than freebies while protecting margins (after all, the margin on “free” is zero).

Marketers should monitor giveaways carefully for the overall impact on total consumer consumption, cost per sale, and lifetime value. But if you do have free food, please give us a call. PS: McDonald’s, your chicken for breakfast idea is a brilliant way to repackage your existing products. We smell a hit.

McDonald’s sexy new image

The new Mickey D’s makeovers have started to land near our home town. We stopped at a red light by a McDonald’s restaurant in an old Connecticut mill town today and did a double-take — behind huge glass panes we could see elegant lighting, muted greens, and what looked like granite tables.

McDonald’s started the massive redesign of its 30,000 global stores back in 2006, chasing Starbucks with three new ambient partitions — a sitting area with Wi-Fi and arm chairs, a “grab and go” zone with bar stools and flat-panel TVs, and a “flex” zone with colorful — but not plastic — seating for families. Even the red mansard roof will eventually get whacked, and the total cost works out to about $350,000 per store, about equal to a year of a single store’s profits.

The McDonald’s revolution, along with upscale salad, coffee and chicken menu tweaks, may be the ultimate sign of the democratization of good design in the U.S. And the hyper-expensive move should pay off. McDonald’s was on the verge of becoming a plasticky anachronism, got crap a few years ago for dirty stores and sloppy operations, and even though we loved it as kids, we cringed as parents every time our kids asked to go. The old McDonald’s was akin to reading a week-old newspaper; even if the content was OK, we don’t want things that are out of date.

Funny how changing red and yellow colors to terra cotta, yellow, olive and sage makes little burgers on stale buns taste better. We’re loving it.

Proof that global warming is 2008’s marketing message

1. Smirnoff skewers the North Pole with blueberries.
2. Coke’s web site saves polar bears.
3. BP extends envirobranding to carbon calculators.
4. Consumer groups get critical about green-washing ads.
5. Poland Springs promotes cheaper packaging as eco-friendly, easier-to-crush bottles.
6. Public accepts newspapers are shrinking by 3 inches.
7. 84 percent of Americans think the environment is a moral obligation.
8. McDonald’s installs dry urinals in Switzerland.
9. Apple will remove arsenic and other nasty stuff from computer products by the end of 2008.
10. Republicans for Environmental Protection propose … oh never mind.

Enjoy your ride in?

We thought so. NBC Today Show reports this morning that 1 in 8 Americans now leaves for work before 6 a.m. to beat traffic. About 9 in 10 U.S. workers travel by car, creating 3.7 billion hours annually of people stuck in traffic. The Census Bureau reports “extreme commuters” — workers who spend more than 90 minutes driving each way — is the fastest growing group. No wonder outdoor ad spending is up.

Could be worse. Consider Dave Givens of Mariposa, Calif., whom Midas awarded for America’s longest commute. Seems Mr. Givens spends seven hours each day driving 372 miles round trip, which over two and a half years is exactly equal to the distance from the Earth to the moon.

Good news is McDonald’s, noting the trend, now opens 75% of its 16,700 U.S. restaurants by 5 a.m. That’s 12,525 places to grab hash browns with your morning coffee, before you watch the billboards roll by.