McDonald's corporate rebranding strategy and brand equity restoration

Poor Public Image

Conceptual framework

Perceived quality, brand loyalty, brand awareness and brand associations are all widely used concepts and therefore they are applied in this study. Apart from the analysis of the way brand equity influences consumer behaviour, the connections between these four dimensions are also studied (Buil, Martinez & de Chernatony, 2013). Previous researchers have identified connections among perceived quality, brand loyalty, brand awareness and brand associations (Vukasovic, 2016; Buil et al., 2013). Laying emphasis on the immediate impact which the sizes of brand equity could have on it would reveal that the biggest effects are expected to be from brand associations, brand loyalty and perceived quality. Brand awareness has been identified as an important but insufficient factor for value creation. This paper talks about the concept of corporate rebranding strategy as well as the concept of a coordinated group of proposition proposals focused on its conceptualization as well as establishment in a chosen case study.

The case study: MacDonald's rebranding strategy

The McDonald's restaurant, founded in California by two brothers in the mid-20th century, fast became a common relaxation spot for teens during the post-war financial boom period. As at today, McDonald's boasts over 30000 global restaurants and services over 50 million customers in over 100 nations daily (Botterill & Kline, 2007). Nonetheless, this brand often found itself at the centre of media criticism especially for the environmental, social and labour externalities displayed by its ever-expanding business. These criticisms focused on the biggest worries and concerns which include youth labour issues as well as the company's adverse effects on healthy lifestyle among children, community values, culture globalization and the environment.

Rebranding strategy

i. Young workforce

The PR personnel of the company have tried to legitimize the labour policies of the company using publications on employee reward systems. They equally showed huge care in their selection of servers, choosing only the happy and helpful ones for their marketing programs (Botterill & Kline, 2007). With the reducing number of teens during the '80s, the company hired increased numbers of immigrant, disabled and elderly workers so as to put an end to or reduce the youth labour controversy.

ii. Environment issues

In the year 1989, McDonald's decided to establish a $16 million national recycling programme to produce its packaging materials and it became one of the largest purchasers of recycled substances. So as to prove its legitimacy, the company collaborated with three Environmental Defense Fund members in order to research as well as outline recommendations for an alteration of McDonald's waste and packaging. Just a year on, McDonald's drafted a 40-point plan aimed at reducing the waste it produces by 80%, via the implementation of measures such as reducing its napkin size and using reusable coffee mugs. The major part of this plan involved the agreement to remove foam packaging from all its 8,500 outlets in America and go back to the initial paper wrappings (Botterill & Kline, 2007).

iii. Fat kids and burger panic

In mid-1990s, McDonald's acquiesced to reveal information on the nutrients contained in the food which it serves in all it's over 8000 restaurants via charts. Later in the year 1993, McDonald's asked for the help of the American Dietetic Association concerning its efforts in improving the information about its food which children have access to, a move which was aimed at proving the sincerity of this information. Specially designed fliers were shared among kids in Happy Meals, as well as toy food designed after famous characters and this was combined with television commercials (Botterill & Kline, 2007). McDonald's equally made a number of claims, like meat "can make it easier to do things like climb higher and ride your bike farther".

iv. McLibel

Typically, highly protective when it comes to the issue of the company's image, McDonald's lawyers secured court summons for the five campaigners who were claiming slander against the company. This trial, dubbed the McLibel case, still holds the record of the longest trial ever in Britain, as it took over ten years. Expending £10 million on this case, McDonald's legal department engaged two environmental activists who put up an impressive defence with the backing of several witnesses claiming they had rights to criticize the company in print. In the year 1997, the judge presiding over the case gave a final judgement in favour of McDonald's on a large number of counts and ordered the plaintiffs to pay a fine of £96,000 (Botterill & Kline, 2007). Nonetheless, the judge equally stated that it wasn't a slanderous act for anyone to state that McDonald's influenced labour markets, gave false claims regarding its food, put the health of its dedicated customers in jeopardy and took advantage of the naivety of children with its advertisements. This court case simply proved the activists' allegations that the company applied its global strength and wealth in nullifying anybody or organization which would take on its corporate image.

Due to these diverse challenges, the company experienced and as they got bigger with the corporation's worldwide expansion, it had no choice but to carry out a complete rebranding in 2004.

Current status of the company

McDonald's books are still very much in the green and they show that the alterations carried out by the company are still weighing heavily on customers. The corporation released a net income running into $1.09 billion, or a share price of $1.25 with sales amounting to $6.26 billion in the fourth quarter of the year 2016. Net income had a strategic charge of 20 cents therefore the company full earnings were $1.45 per share which was quite higher than what the analysts expected (Berk, 2017). The global expansion of the company boosted its financial performance, even though currency fluctuations negatively affected it occasionally.

The corporate image of the company as at this time is good. The company is well known for consistency. All over the globe, a potential buyer is aware of the king of experience he/she will get which is delicious, economic, fast, simple and clean food. Of recent, McDonald's is now more respected due to its higher sense of animal welfare and environmental laws which it shows with its enactment of strict standards for its meat contractors, monitoring of livestock handling methods making sure it is gentle and finally prohibition of contractors from applying growth substances on its livestock (Berk, 2017; Whitten, 2015). However, the company still comes under a considerable level of criticism though people will debate that the company provides Happy Meals and much more to a large number of children and kids-at-heart all over the world.

Favourable opinion regarding the McDonald's franchise reached a peak within two years. The recent ad promotion by the Golden Arches' concerning an all-day breakfast is seen as the major reason for the chain's more positive and favourable brand opinion. People who prefer fast-food breakfasts were clearly taken by the massive action of the company. From a survey of adults (> 18 years) who have breakfast at restaurants at least once in a month, 46% claim there is a high possibility of getting their next meal for the day at a McDonald's outlet (Whitten, 2015). Nonetheless, this increased public opinion might be sustained for a duration ranging from a number of weeks to a number of months subject to the size it attains and the amount of financial backing McDonald's gives it.