My first 72 hours at McDonald’s were a squandered opportunity.

I still recall my first day at McDonald’s. My first meeting included an introduction to my office location and an introduction to using the computer network. Over the next three days, I was told how to use the e-mail system; given a variety of passwords to access my computer, e-mail, intranet, the server, and voice mail; and provided with a description of the McDonald’s medical benefits. This was followed by an explanation of the executive vehicle plan. Then I had a meeting on how to use my new mobile phone. I had to learn another password. That was the extent of my indoctrination. That was it!

I was to be the “brand guy.” Yet, I received no presentation on McDonald’s brand heritage. I heard nothing to help me feel proud of my new employer. There was no help in answering the questions of friends, “So, how do you like it at McDonald’s?” I did not receive indoctrination into the McDonald’s culture, its values, and its vision. Nothing. I was not given any presentation on the mission or the plans for the future. There was nothing except the implication: Just get to work.

So, as part of brand revitalization, we (leadership marketing) worked with Rich Floersch (human resources) to reinvent the McDonald’s “on-boarding” experience. It was called, “Learnin’ it. Livin’ it. Lovin’ it.” The program was designed to make the “welcome-on-board” experience welcoming, informative, inspiring, warm, and fun.

Of course, the in-restaurant service aspect is critical. Charlie Bell repeated again and again that we had to be committed to hiring, training, and cultivating people. We need to ensure that people are focused on best service. Employees must not only deliver fast, friendly, accurate service...but also do it with the McDonald’s spirit of hospitality.

Consumers cited poor service as a key reason for not returning to McDonald’s. Since people deliver the service at McDonald’s, there was an urgent need to develop and ingrain the hospitality mindset while still offering the McDonald’s high standards of speed. Such things as basic-operations training that had been moved out to the field were reintegrated into the curriculum at Hamburger University. Under Rich Floersch’s leadership of the HR function, Hamburger University was reinvigorated. Attendance increased by more than 40%. A commitment to interactive e-learning as a relevant tool for the workforce ensured worldwide training consistency. The concept of quality service is more than just serving people as fast as possible.

The heart of the McDonald’s training system is Hamburger University, which is where 5,000 to 7,000 store managers are trained each year. Hamburger University is housed in a 130,000-square-foot building at the corporate headquarters in Oak Brook. Built in 1983, it is in a tranquil setting on 80 acres, complete with two man-made lakes. Inside are four theater-style classrooms, a 300-person auditorium, 20 seminar rooms, three working restaurant labs, and various offices. Translation booths are at the back of classrooms.¹²

A staff of “professors” teach the essential elements of running and managing restaurants. More in-depth business training comes from outside instructors.

Many of the foreign visitors to Oak Brook are there for advanced management training. The basics are often taught through satellite operations using curriculum crafted in Oak Brook and customized as needed for local consumption. McDonald’s operates six satellite universities around the world.

The universities have a core curriculum used in hundreds of regional training centers globally.¹³

McDonald’s keeps tabs through a series of tracking methods. It begins with basic bookkeeping measures: How many people have taken training, what classes they took, and whether every shift manager is certified in safety.

Tracking then moves up in sophistication as McDonald’s seeks to measure the results of its training. Students take competency tests after completing classes. Participants and bosses give feedback on how the training worked. Finally, review teams visit and evaluate restaurants. The process includes “mystery shoppers” who drop in unidentified at stores around the globe.¹⁴

Service hospitality is about adding something good to each person’s day, in small, incremental welcome ways. Restaurant managers were exposed to critical learning programs on hospitality. Test projects on improving the service experience through superior QSC were initiated. Other programs for celebrating employees to reduce employee turnover were introduced.

Unlike years past, most of today’s employees are not looking for the promise of a valuable lifetime job. But they do want to gain valuable life experiences. They want valuable experiences that will help them throughout their lives—different jobs, different companies, different organizations, different places. And, they want to be proud of their job, workplace, and company.

Google is one of those companies that encourage employees to learn and grow while continuing to contribute to the corporation. “Google is in tune with the increasing importance today’s graduates place on work-life balance. Google culture is geared toward individuals who want to use innovation and creativity to make a tangible difference in the organization. We’re looking for people who are really thinking differently and out of the box, who want to do something that has an impact on the world. Every Google employee is encouraged to spend 20% of his or her time developing a new project, a practice that has already resulted in such Google innovations as Google News, Gmail, Google Talk, Orkut, and Froogle.”¹⁵

Nike is another example of a company where you learn as your inherent skills are nurtured. “The company’s ‘hit the ground running’ culture meant that young staffers are granted the opportunity for strong lateral and upward mobility. ‘There isn’t an incubation period. Nike doesn’t wait for you to hit 28 years old in order to recognize you as a valid employee,’ says Ben Elkin, university-relations manager at Nike. Although most employees get their start at Nike’s Beaverton [Ore.] world headquarters, there are opportunities anywhere—from European sales to running basketball programs in China. Nike staffers are engaged in the company’s ongoing discussions about corporate social responsibility.”¹⁶

PricewaterhouseCoopers, the accounting firm, has a reputation for imbuing employees with skills. As one new employee stated, “[The company] gives you a good basis for anything that you want to do in life.” Ernst & Young is another company with the same understanding of growing personal skills for a lifetime: “In return for my efforts, I like that they’re (E&Y) willing to provide me with opportunities to grow personally and professionally within the firm,” says Jasmine Rieder, once an intern now an employee full time.¹⁷

We wanted employees to feel proud again to work at McDonald’s, proud that they were acquiring skills that could last them a lifetime, and proud enough to recommend to their friends that they apply for work at McDonald’s, too. This can be accomplished, even in the fast-food industry. Chipotle has made a significant commitment to increasing employee pride, and it is working. Naturally, people who look for work want money, benefits, and security. But they also want to feel good about themselves. If we wanted to achieve our brand purpose that McDonald’s would be our customers’ favorite place and way to eat, we had to make sure that McDonald’s would be our employees’ favorite place and way to work.

Internal marketing is a necessity. External plans and programs will not be as successful if you put the outside world before your own people. Employees come first.

When we launched the global “i’m lovin’ it” campaign, we launched it internally first, before a single consumer saw the advertising and experienced the marketing. We demonstrated that our people were the most important elements for making the revitalization of the McDonald’s brand work. We wanted “i’m lovin’ it” to become an internal rallying cry, not just an external slogan.

Charlie Bell understood this intuitively. As a 15-year-old crew member in Australia, he saw firsthand the importance of great McDonald’s service. He understood the difference that exceptional service could make. He recognized that proud employees providing great service can make an indelible impression, and that impression will have impact on a customer’s loyalty.

For guidance, people look up not down. Leaders must lead. They must inspire. They must recognize and reward producing the right results the right way. When we say the people P, we do not just mean front-line employees.

One company with which we worked ran brand education seminars every year to infuse employees with the new brand policies agreed to by the board of directors. These three-day training sessions were designed to inculcate new brand concepts, new processes, new disciplines, new tools, and new metrics throughout the organization. These sessions were held in nice, off-site locations. The attendees received messenger bags embroidered with the logo for the event including souvenirs and binders of take-home materials. The content was interesting. The food was good. The location was excellent. The evenings were fun-filled. The sessions got excellent reviews. Surveys and follow-ups indicated that the sessions were well received.

After these sessions ended, people traveled back to their respective geographies, and it was business as usual. When they returned to their everyday work nothing changed.

When people looked up to management, they realized that there were the same timetables to meet, the same numbers to achieve. All of this “brand stuff” was just getting in the way of the “realpolitik” of business. The lessons imparted were irrelevant in the grand organizational scheme of things. The leadership did not lead.

Brand revitalization will not work if the employees think that the leadership does not really buy into the concepts and demonstrate that they are true believers. The franchisees and owner/operators would not have been committed if they saw a management in Oak Brook that preached business as usual.

Employees, store managers, owners, suppliers, and everyone in touch with the brand and in touch with the brand’s customers take their direction from top management. Top management must demonstrate commitment to the new brand direction if a revitalization of the brand spirit is expected.

McDonald’s was committed to revitalizing the brand spirit of the employees. For example, in the restaurant business, the key employee is the restaurant manager. The company recognized the need to restimulate its restaurant managers and rebuild brand participated in the first-ever McDonald’s global conference for store managers that took place in Sydney in 2004, attended by store managers from 37 countries.

An attitude is an accumulation of information about something resulting in a predisposition to act in a positive or negative way. Attitudes are resistant to change. To change the predisposition, we must change the base of the information on which the predisposition is based.

Apple excites its customers every year with new, coveted products. The TV and cable networks announce new shows every season. Tide is renovated year to year with new varieties (for example, Tide with Bleach) and new products (Tide to Go).

For people to continue to be interested in a brand and for people to think of a brand differently, they must learn something new; for people to change their behavior, they must perceive something new that is relevant. People need permission to change their minds. Learning something new provides the permission for people to change their minds. For McDonald’s, the critical news driver had to be “food news.”

Continuous renovation and innovation are imperatives for success. Product and service renovation and innovation are both essential to enduring profitable growth.

With the passionate leadership of Fred Turner and the support of Mike Roberts, McDonald’s rededicated its efforts to restoring a passion for product quality. As part of McDonald’s previous cost-management focus, product and service quality had been cut. Fred led the way in restoring McDonald’s core products to the original “gold standard” of quality. To achieve the new brand purpose to be our customers’ favorite, we had to ensure that the food and beverages would be our customers’ favorites. Some of the food improvement initiatives were as follows:

In addition to the products for which McDonald’s was famous, consumers wanted more choices. This is not unique to McDonald’s. In today’s environment, the proliferation of choice is a marketing fact of life. Look at the snack chip/pretzel aisle; just try to buy a toothbrush; observe the enormous amount of options in the beverage aisle. In this choice-demanding world, McDonald’s menu was too limited in appeal.

Iconic new products are an important contributor to brand revitalization. These icons are tangible evidence of the brand’s commitment to change. For Nissan, the icon that launched the brand revival was the relaunch of the “Z” in 2002. For Apple, it was the relaunch of the iMac computer and later the launch of the iPod. For GE, it is the investment in innovative technology demonstrating corporate commitment to environmental responsibility; for Toyota, the launch of the Prius demonstrated leadership and true commitment to delivering greater fuel efficiency.

In response to criticism that McDonald’s did not have any nutritious options on its menu, the iconic new product introduction of salads in early 2003 helped to launch the message that McDonald’s is relevant again: a line of salads endorsed by Paul Newman served with “Newman’s Own” all-natural salad dressing. A great-tasting salad on the McDonald’s menu helped to provoke people to think that McDonald’s is really changing.

The salad introduction was focused on young adult moms. While it is clear that a lot of people were eating salads, not just young adult moms, this focus gave the offer a specific appeal to a specific audience that gave the new product credibility.

When moms brought their kids to McDonald’s, a large percentage did not order food for themselves. So, salads were marketed to appeal to young adult moms as a natural way to get an immediate sales response. After all, she was already in the restaurant. With the availability of salads, yogurt, apple slices, and water, there was an opportunity for parents to not only buy food for themselves but also to eliminate the parental “veto power” when it comes to the decision of where the kids will eat.

McDonald’s success with new products had not been very good. History was littered with notable product failures such as McLean or Salad Shakers. In 1998, BusinessWeek reported that McDonald’s last successful new product was the Chicken McNugget launched in 1983: “In the ’90s, the company has careened from tests with pizza and veggie burgers to confusing discount promotions such as last year’s Campaign 55.” Additionally, the article stated, “The company has been unable to harness the strength of its brand to grow beyond its basic formula of burgers and fries.”¹⁸

A new approach to new product development was required. Mike Roberts led the way in insisting that a new, disciplined process be adopted. New products are terrific ways to change people’s attitudes. But, if operations become bogged down with too many changes, customers will become frustrated and have poor experiences regardless of how fabulous the new food idea.

The results of the new product discipline were remarkable. Not every new idea was successful. For example, the launch of chicken fingers did not meet expectations. However, the odds of success improved significantly. New products such as McGriddles, new salads, improved coffee, chicken snack wraps, and yogurt parfait are significant contributors to McDonald’s continued brand revitalization.

The previous approach to new product development at McDonald’s was to look at the competition and react. The R&D focus was to look for ways to take what we knew how to do and try to convince people that they needed what we knew how to produce.

This approach is not unusual. Many manufacturing companies are loathe to make changes to the existing assembly lines because they cannot have up-front assurance that the new product will be a success. Some appliance manufacturers were in this rut, changing only those superficial components added on post-manufacture such as handles, knobs, and colors.

But, effective marketing is about figuring out what consumers want and then figuring out how to profitably satisfy these wants at better value than competitive alternatives. Instead of beginning with the product, begin with the customer need.

Home Depot reinvented the fire extinguisher. Technically, there’s nothing wrong with standard fire extinguishers. But they happen to be eyesores, and eyesores end up hidden, shoved in a closet or otherwise out of reach when a grease fire ignites. The new HomeHero Kitchen Fire Extinguisher ($30) from Home Depot could help save your house, but not because of any chemical breakthrough. The powder it sprays is similar to baking soda. It simply looks good enough to stay on a counter, in full view, ready to smother a fire before it becomes a blaze.¹⁹ In the process of making the 16-inch-tall HomeHero look more appealing, Home Depot improved on the ergonomics of fire extinguishers. After pulling the safety pin, you can aim and shoot with one hand, pressing the trigger with your thumb. The simple instructions also indicate the two types of fires the HomeHero is designed to put out: grease and electrical.

Dyson reinvented the vacuum cleaner. As we explained in our earlier discussion about segmentation, consumers were frustrated trying to find the right bag for their particular vacuum. Dyson invented the bagless vacuum cleaner. It was so successful that the entire category had to respond with bagless offers.

Putting customer needs first turns the entire approach to innovation on its head. Needs-based market segmentation becomes a key driver for effective product development.

The menu management team, under the leadership of Claire Brabowski, welcomed the concept of needs-based segmentation. Claire became a big internal supporter of this new approach to innovation. Claire not only welcomed the needs-based segmentation, she volunteered to help sell the segmentation into the organization.

Childhood obesity is a wedge issue in food marketing, and the point of the wedge was aimed at McDonald’s. There was a clear need for healthier alternatives as part of the Happy Meal offer.

Jim Cantalupo declared that we needed to demonstrate leadership and not merely react. As a first step, recognizing that parents were looking for more beverage choices with Happy Meals, McDonald’s announced that Happy Meals would include wholesome beverage alternatives such as milk, mineral water, Sunny Delight, orange juice, and other fruit juices. In France, there was a yogurt beverage choice (Actimel). In many countries, bottled water was available. In addition some parents said they wanted an alternative to fries. So, McDonald’s started offering Apple Dippers, fresh apple slices and seedless grapes in some countries. To become the customer’s favorite place and way to eat and drink, the primary focus had to be on food and beverage choices. Chicken McNuggets were improved to be made with whole, white meat chicken.

If the place is the face of the brand, McDonald’s needed some face lifts. The redesign of the stores had to stay true to the “Forever Young” spirit of the new brand strategy. This required more than a “sprucing up,” more than a “nip and tuck.” While keeping the brand values alive forever, McDonald’s needed to embrace a contemporary new design for its restaurants to keep the public face of these values “Forever Young.” This would be the first time in three decades that McDonald’s would undertake such a huge redesign of its restaurants worldwide.

An article in BusinessWeek stated: “After 30 years without a major design overhaul, the 51-year-old fast-food giant is adopting a hip new look. The world’s largest hamburger chain is redesigning its 30,000 eateries around the globe in a 21st century makeover of unprecedented scale.”²³

BusinessWeek also pointed out that this redesign had to be done. “McDonald’s, whose restaurants are visited by more than 40 million people every day, has moved aggressively over the past three years to revamp its menu and attract a new breed of customer. It has added healthier items like premium salads targeted at women, and apple slices and skim milk for children. But as more upscale items like Asian chicken salad show up on its menu, the chain’s typical starkly lit, plastic-heavy look is at odds with the contemporary, welcoming image the company wants to present. ‘McDonald’s promises to be a forever young brand,’ says John Miologos, vice-president of worldwide architecture, design, and construction at McDonald’s Corp. ‘We have to deliver on that promise.’”²⁴ The last major change at McDonald’s restaurants was the introduction of play places for children in the early 1980s.

“The big red roof looks too dated today,” says John Bricker, creative director at design firm Gensler’s brand-strategy arm, Studio 585. It’s being replaced by a flat roof topped by a newly designed, contemporary, golden sloping curve.²⁵

Continuing the story, BusinessWeek reported that after conducting a global contest among design firms, the burger giant chose New York-based Lippincott Mercer in the summer of 2004. Peter Dixon, the design firm’s creative director, spent 2005 with McDonald’s internal architecture and design team testing and prototyping the new look, which is being officially rolled out this year. Lippincott Mercer, which until it signed McDonald’s had few clients in the restaurant business, has made a name for itself working with companies going through a shift in brand identity and image. In 2002, for example, it helped redesign Nissan Motor Co. dealerships to reflect the company’s launch of several new upscale cars. Within a year, the redesigned dealerships saw an average of 57% sales growth, versus 33% overall.²⁶

It is not easy to update more than 30,000 restaurants. But, keeping the face of the brand “Forever Young” is important. Restaurants are billboards—this can be a highly effective advertising.

The experience from McDonald’s France indicated that modernizing the décor had a positive impact on the entire experience for the customer and boosted sales and profits. Rather than having one dominant design, McDonald’s adopted and adapted multiple design concepts to fit the needs of various neighborhoods. Brand standardization was out. Brand customization was in. The belief that every McDonald’s can look different, as long as each feels like McDonald’s and as long as the experience is a McDonald’s experience was a major change in the store design policy.

Cleanliness was part of Ray Kroc’s original mantra: Cleanliness is the “C” in QSC. In the intervening years, as the brand spiraled downwards, the focus on cleanliness became less clear. Charlie Bell was passionate that McDonald’s had to become again “the king of clean.” He insisted that McDonald’s recalibrate cleanliness standards making sure that restaurants would be spotlessly clean with franchised as well as the company-owned restaurants.

Charlie Bell’s idea of McCafé was another way to reenergize and enhance the McDonald’s experience. First executed in Australia/New Zealand, McCafé was generating a lot of buzz and was becoming a successful alternative to other coffee houses and cafés including Starbucks. The McCafé concept was an experiential corner in the restaurant for those who have the need for a more comfortable environment of a premium coffee house. The idea spread to several other countries.

Charlie had a McCafé designed for the lobby of the Oak Brook headquarters to help communicate that there is new thinking at McDonald’s. The purpose was to change this first impression from the look and feel of a boring bus station to a new “Forever Young” brand experience. As people entered the lobby, they were instantly confronted with a new brand experience that communicated that McDonald’s is innovating again. The headquarters McCafé drew the attention of employees during morning arrival, and allowed employees and visitors to sit and chat at lunch or during an afternoon break. It generated an ambiance of “i’m lovin’ it” internally within the lobby of McDonald’s. It wasn’t about sales. It was about delivering a brand message.

The newly designed model McDonald’s restaurant near the U.S. headquarters was designed to reflect the new brand experience to the public. It represented the new “Forever Young” brand attitude and also contained a defined coffee area.

Consistent with the original idea of becoming the “favorite place and way to eat and drink,” Don Thomson, President of McDonald’s USA, remarked at an analyst meeting, “We want to move from beverages as an accompaniment to being a beverage destination.” Charlie’s vision of the coffee opportunity persisted. Today coffee is a contributor to McDonald’s continued sales growth. Charlie also understood that to create the right coffee experience the normal McDonald’s front counter was not optimal. While separate McCafé’s were adopted in some countries and adapted in others, McDonald’s in the United States is refitting the front counter in some restaurants to provide a separate coffee station and to provide both better quality product and service.²⁷ This is a good example of how a global idea benefits from local customization.

McDonald’s restaurants had to be customized differently to meet the needs of these segments in different neighborhoods with different attitudes. Some restaurants had patio eating facilities. Some restaurants had kiosks for downloading movies and music.

Then there is the drive-thru. The importance of the drive-thru is growing. In the United States, more than 60% of McDonald’s sales are through the drive-thru window.²⁸ Because of the traffic flow and potential for traffic slow-downs, McDonald’s developed and began to implement the idea of double-lane drive-thrus. Even in China, McDonald’s launched the drive-thru concept.

The drive-thru brand experience has to be a “Forever Young” experience. Customers are not in the restaurant, so they are not seeing and feeling the new designs or the cleanliness. The challenge for drive-thru is how to establish the experience in such a way that the customer takes that experience with him wherever he is going with the food. This continues to be a challenge.

Following an idea that began in Europe, some restaurants created “community” tables that appeal to young adults. Others created conversation nooks.

Today, store design is taking on all kinds of new dimensions, most particularly in the area of multisensory marketing using the sense of smell, the sense of hearing with sounds, and so forth. Westin Hotels is using proprietary scent to enhance its brand experience.

Starbucks uses music, as does the retail chain Urban Outfitters. Designing the brand into the place is a serious factor to brand experience revitalization.

In addition to the appearance of the new store designs, McDonald’s focused on redesigning the whole experience. This includes the sounds of the equipment, the appearance of the front counter, a more open look, more contemporary music, plasma screens, and more comfortable seating.

Price is an important part of the customer’s value equation. But although part of the value equation, price is not the whole equation.

Defining the functional and emotional brand experience that differentiates the brand is the critical factor determining whether we will be a commodity or a valued brand. Value is the numerator in the brand equation of promised experience for the customer’s money and time.²⁹

Toyota understands this. Superior value perception does not just apply to the Corolla. When Toyota introduced Lexus it was not only a luxury experience, it was an affordable luxury experience—not cheap but much less than Mercedes. Lexus promised the best luxury automotive ownership experience for both your money and your time. What Lexus referred to as “the relentless pursuit of perfection,” meant more than merely focusing on price. They focused on the whole value equation.

McDonald’s had to provide more than just low price and speed to have a competitive advantage. We had to provide a relevant, differentiated experience at prices and convenience that allowed more customers to visit McDonald’s more often. It had to be a convenient and fast. But for these visits to generate customer perceived value, we also had to enhance the experience that can only be generated by operational excellence and leadership marketing.

Value is not just a menu invoice: It is a marketing imperative. Of course, we had to reassure our customers that we were still, as always, affordable. But making a brand affordable does not mean that we should cheapen the brand perception. McDonald’s value is not just about the “value menu.” The whole menu is a value menu. And, the whole experience determines brand value.

Charlie Bell liked to recall the story of a kid counting coins in the palm of his hand to buy his favorite McDonald’s meal. Charlie described this young boy standing in front of the menu board, sorting and stacking his coins in the palm of his hand until he knew he had the right amount. When that boy finally realized that he had enough money clenched in his small fist to purchase and enjoy the food, the kid smiled and knew he was about to have a great McDonald’s experience. It was by far the best, most valued purchase that kid made.

To generate brand value, we build the power of a brand, not exploit the brand power we have inherited. To increase shareholder value, we must be the most efficient and productive provider of a branded offer that customers value.

To build brand value, we must manage the relationship between what customers are willing to pay and the benefits they receive, as we discussed in describing the brand value equation. What is the “fair value” for our offer? Fair value is not determined by the marketer. It is determined by customers.

In Figure 5.1, brands A, B, and C are all perceived to be fair value for the benefits offered. The diagonal in the figure is the fair-value corridor. Brands located above the corridor are perceived to be poor value for the promised benefits. And brands located below the corridor are perceived to be superior value.

Figure 5.1 Customer-perception fair value map

Target stores in the United States have low prices. But Target also delivers a contemporary brand experience of trendy style. Their brand promise of “chic and stylish that is affordable” differentiates Target in a relevant way from Wal-Mart.³⁰ As the Financial Times reported in May 2005, “Target appears to be running a better business.... Wal-Mart’s shares are becoming as cheap as its products.”³¹

An immediate action for McDonald’s was to decrease significantly the excessive marketing communications emphasis on price. Building deal loyalty does not build brand loyalty. Deal loyalty is not real loyalty. Brand loyalty cannot be bought with bribes. All you do is make the customer loyal to the deal instead of loyal to the brand. If there is a better deal elsewhere, deal loyal customers are out your door and in through the competitor’s door. If a customer does not prefer our brand experience, then making it cheaper and easier will not build our brand. Matt Paull, the CFO, continually emphasized that this type of behavior was the rocky, downhill road to “brand commoditization.”

Occasionally reminding people that a brand is affordable is important. But excessive emphasis on price alone destroys real loyalty and builds deal loyalty. Instead of the dominant message being about price, to revitalize a brand, the new communications emphasis needs to be on brand relevance.

Unfortunately, promotion has taken on a limited meaning in marketing. Promotion is often interpreted to mean short-term tactics designed to generate immediate traffic. It is more than “20% off this weekend.” It is more than “two for the price of one.” It is more than a short-term tactical incentive to buy now.

I am often asked, “How much should we spend on promotion and how much on brand-building?” This is a false dilemma.

We need to go back to the original definition of promotion. To “promote” means to elevate to a higher level, to advance in rank or position. The purpose of all brand communications should be to elevate a brand to a higher level, to advance the brand to a higher position in the customer’s mind. According to Merriam-Webster’s Dictionary, promotion means “the act of furthering the growth or development of something.” So, when people discuss the balance of advertising versus promotion, this is a false choice. All marketing communications should promote the brand in a manner that furthers the growth of the brand.

The promotion P in the Plan to Win does not mean a monthly promotional calendar of separate, short-term, disconnected, activities. The promotion P includes every communication about the brand whether it is a game, a tie-in, an advertisement, or a corporate brochure. All brand communications activities need to be executed around a coherent message with a consistent voice promoting the brand to a higher level, furthering the profitable growth of the brand.

The opposite of “promote” is “demote.” Unfortunately, a lot of promotions today are not brand promotions. They are brand demotions in disguise, activities that drive the brand’s sales at the expense of the brand reputation, all to the detriment of the long-term health of the brand. Excessive reliance on inconsistent, short-term brand messages demotes a brand. Brand demotion does not promote the brand to a higher level; instead it cheapens, confuses, and detracts from brand building.

We cannot demote our brand today and expect a strong brand tomorrow. Disconnected promotional communications lead to incremental brand degradation. Instead of communicating “great price,” we need to communicate “great brand at a great price.”

An integral and immediate part of the turnaround was to ensure that we created marketing communications programs that promoted the brand to higher levels of customer appreciation. Our campaign strategy for McDonald’s was to move from an excessive emphasis on the deal of the month, to a consistent, coherent, integrated brand building message.

For mega-brands like McDonald’s, Coca-Cola, Kellogg’s, GE, Samsung, Sony, HP, and Visa, we need to reinvent the concept of brand positioning by instituting the new concept of brand journalism. Mega-brands are multidimensional, multisegment, multifaceted brands. No one communication alone can tell the whole, multifaceted megabrand story.

The concept of unique selling proposition, or USP, later known as brand positioning, is fine for launching new brands and for creating niche brands. But, this old-fashioned view of brand positioning can create a mental lock-box within which there is no leeway for a mega-brand to respond to a changing world.

Think about journalism for a moment. Journalism is the collection and communication of news, events, and happenings. Journalism provides order to otherwise disparate or unconnected events. Journalism informs, entertains, and persuades.

Think of magazines like the newsweeklies. Whether Time, Newsweek, The Economist, The New Yorker, or US News and World Report, the principle is the same—just as it is with the monthlies such as the Atlantic Monthly, Vanity Fair, or Rolling Stone. An overarching brand direction defines the common brand character that differentiates each magazine and provides a coherent, integrated vision for the brand. However, each magazine covers a variety of topics that interest a variety of people. The editors do not expect every reader to read every article. Different people with different interests will read different articles. And, at different times in their lives, as people’s interests change, they will be interested in reading different articles. Only a few people will be interested in every article in every edition.

It is the same with brand journalism. Brand journalism is a chronicle of the varied things that happen in the brand’s world, throughout the day, throughout the years. This is how we create real customer-perceived lifetime value for a brand.

Think about a college student who has declared a major. This student’s major is his or her mindset. To satisfy the needs defined by this mindset, the student will take a variety of courses, not all the same but associated with the major. A student can have some liberties within this mindset to add classes that may be off-beat or only tangentially related to the major. And yet, everything is still connected to the overarching essence of that student’s mindset.

Now think about McDonald’s communications. For McDonald’s, this all added up to a distinctive journalistic brand chronicle. We defined a common brand purpose and brand character for the McDonald’s brand. We defined a common brand promise. But, the relevance of the promise means different things to different people at different occasions. The motivation to go to McDonald’s is different for kids, teens, young adults, parents, and seniors. The appeal of McDonald’s is different at breakfast, lunch, dinner, snack time, weekday, and on the weekend, as well as with kids, without kids, or on a business trip. The competitive set is different for different people with different needs in different situations.

A brand journalism approach does not mean changing the overarching brand vision or the brand promise. It does mean appealing to different people with different desires in different contexts. The communications plan consists of a compilation of varied messages, different subjects, and different topics, that all come together in a dynamic, ever-evolving, overall relevant brand story. Brand journalism allows us to express the multidimensional essence of a brand in a way that is appealing and compelling to specific audiences with their specific needs.

Brand journalism requires multimedia communications such as sports, outdoor, indoor, special events, global, local, educational, musical, radio, television, print, online, offline, in the streets, and so forth. This is a challenge. All the various brand messages in various media need to be integrated into a coherent brand story always respecting and imbued with the brand promise.

After I first explained the concept of brand journalism, at a June 2004 Advertising Age conference, as not only the new marketing approach for McDonald’s, but also as the future world of marketing, the traditionalists struck back creating a mild media frenzy. The staunch traditionalists anchored in the past stood their ground, furiously defending their passé views on positioning. These prophets of the past protested that this new approach to marketing would fail.³²

The good news for marketing is that there were also those who saw the future coming and who recognized—again in letters to Advertising Age—that social trends were pointing to continued fragmentation of culture. Brand journalism was a way to address this “mincemeat society.”³³

At the Association of National Advertisers (ANA) conference in Naples, Florida, later that year, James R. Stengel, global marketing officer of P&G said, “The traditional marketing model we all grew up with is obsolete. We are taking the reinvention of marketing very seriously at P&G and we all need to do that.”³⁴

Jim Stengel recognized that the narrow focus of Crest as a fluoride toothpaste preventing childhood cavities was limiting the profitable growth potential of the brand. Crest has evolved its brand from a narrow focus on a fluoride toothpaste that prevents cavities among children—“Look, Mom, no cavities.” Today, Crest has a mega-brand vision with greater growth potential. The new vision is a lifetime of oral care promising a healthy beautiful smile and fresh breath—“Healthy, beautiful smiles for life.” This new approach does not just focus on kids. To communicate the new Crest message, different messages in different media designed to interest different people with different needs are required. This brand journalism approach to Crest has helped to revitalize the brand.

As the world changes, outmoded ideas need to be rejected. Hanging on to the traditional marketing model is not the way to create a brand’s future.

The “positionistas,” as I like to call them, are glued to the glory of an immutable, narrow, unidimensional view of a brand. They believe that brands are simple, single-word ideas. And once this idea is established, they believe that you cannot change people’s minds. This is wrong. Brands are complex, multidimensional ideas, and you can change people’s minds. McDonald’s is a good example. These same people tell us that line extensions are bad. But as the revitalization of Crest demonstrates, these views are wrong.

Regarding line extensions, the positionistas say that brand extensions threaten brands. This is not always true. A disciplined line extension strategy can strengthen brands. In fact, for mega-brands, line extensions are an important part of the brand growth plan.

Consistent with the redefinition of the Crest brand promise described above, line extensions are now an important part of the Crest brand story. By extending the Crest brand to include a wide variety of dental hygiene products providing cavity protection, tartar protection, sensitive teeth protection, enamel protection, and protection against stains, the brand is stronger, not weaker. There are gels, pastes, teeth whitening pastes, rinses, toothbrushes, strips, and so on. These line extensions strengthen the appeal of the Crest brand. They allow the brand to appeal to different people at different times in their lives.

The brand journalism approach to a “healthy, beautiful smile for life” appeals to more people with a variety of needs throughout the various stages of life. It creates a lifetime brand relationship. It recognizes the profitable growth opportunity of the lifetime value of a customer.

Tide is another P&G brand that evolved from a single-minded powdered detergent brand that promised heavy-duty cleaning to a mega-brand that promises “Tide knows fabrics best.” There are liquid versions; cold water versions; versions with bleach, stain removers, fabric softener, and fabric refresher; versions with new scents; and even a portable version that helps to remove food stains on the spot (Tide to Go). These line extensions help to strengthen the brand journalism story of Tide.

What do we learn from all this? Traditional approaches to marketing need to be regularly reassessed. Innovation and renovation apply to marketing.

While market segmentation is a foundational concept of modern marketing, the idea that a brand can be reduced to a single word appealing to only one market segment with only one benefit is wrong for today’s marketing world.

Cultural marketing means aiming to make a brand relevant in various cultures. The goal is to embrace individual cultural segments and cross-cultural fusions that are becoming more and more apparent in global society. How do you make an American brand like McDonald’s relevant in different cultures such as France, Australia, and China? How do you make a brand like McDonald’s relevant to different cultures within the United States? It is important to make a global brand relevant in a wide variety of cultures. Marketing standardization leads to marketing homogenization. Multicultural and multilocal is what we aimed to achieve in the execution of “i’m lovin’ it.”

The phrase and the spirit of “i’m lovin’ it” became a universal cultural expression. In the United States, Russia, Denmark, United Kingdom, and China, we witnessed examples of “i’m lovin’ it” in popular culture. In Russia, more than 20,000 students participated in a parade featuring “i’m lovin’ it” flags, banners, and signs. In Korea, “i’m lovin’ it” joggers were seen running through the streets. In China, it became a hand signal.

The new campaign direction and the executional approach resonated with employees and customers around the world. Mary Dillon became CMO of McDonald’s toward the end of 2005. She quickly concluded that the campaign she inherited was still working. There was no reason to change. In 2008, she said, “‘i’m lovin’ it’ is a campaign that has a lot of life ahead of it. Awareness of the words and the five musical notes is about as high as it gets and the likability of it is quite high.”³⁵ This consistency of a campaign idea is in great contrast to previous McDonald’s advertising practice. From 1960 to 2002, McDonald’s implemented 21 different advertising themes.³⁶ Lack of consistency creates brand uncertainty. In 2003, McDonald’s launched its first-ever global advertising campaign. It is still strong in 2008.

In 2008, Neil Golden became the new CMO for McDonald’s in the United States. In an Ad Age interview, Neil endorsed the authentic feel of the advertising. He appreciates that the “I” in “i’m lovin’ it” represents the voice of the consumer. The “it” in “i’m lovin’ it” refers to the small things people love about life and how McDonald’s fits into that life. When asked how long this campaign can last, Neil said, “As far as I can see, and probably beyond that. The campaign is a marvelous idea; the campaign line is clearly one of the most recognized in the world. We believe this to be an asset.” This view of campaign endurance is in stark contrast to the previous practice of short-lived campaign ideas. Just look at the following list of McDonald’s advertising themes throughout the years:³⁷

“i’m lovin’ it” became a widely recognized universal expression of how people with a Forever Young spirit feel about life, a spontaneous feeling that we hoped our customers, employees, suppliers, and owner/operators would feel. “ili” crossed cultures, age demographics, and geographies. But, it had to be expressed differently in France, in Australia, in the African-American market, and in the Hispanic-American market.

The McDonald’s brand revitalization campaign was much more than advertising. The core idea was developed with a global intent from the beginning. In March 2003, we visited each of our major agencies in our top ten countries around the world. We solicited ideas from everywhere. Each agency had the opportunity to show how it would execute the brand promise with local cultural relevance and global coherence. As a result of the presentations, we identified a common global brand expression that also had relevant local cultural flexibility.

The “i’m lovin’ it” idea was born in Unterhaching, Germany. But it was nurtured worldwide. Our view was that to reenergize the brand we needed a whole new brand attitude, not just an advertising campaign. “i’m lovin’ it” fit the bill. I was told that this was the first-time ever that McDonald’s would be speaking with one voice and a common brand vision around the world. Aligning more than 110 countries worldwide for the first time would not be easy. But because it would meet organizational resistance did not mean we would aim for anything less ambitious. With the support of Jim Cantalupo and Charlie Bell, we overcame this resistance.

It all began with developing relevant consumer insights. This crucial phase of the process—customer insight—began as soon as I arrived. I insisted that we examine everything and truly understand our customers. Here is how we applied some insights to the promotion P.

There is always an opportunity to improve your understanding of a brand and its customer base. To revitalize a brand, we must rebuild brand relevance. The world changes: A static brand loses its place in the customers’ mind. So a new brand direction had to be based on a new understanding of our customers and their needs.

The Age of I refers to an era of individuality, inclusivity, and interconnectedness. We saw a generation of people who value their individuality and yet want to belong. This generation wants to be part of a group. They want to be connected to other like-minded individuals. However, they do not want to lose their independence, creativity, and freedom. Although they enjoyed shared values, they also savored their differences.

This understanding informed our new direction. And it brought new insights to our understanding of our own McDonald’s brand—a community of individuals. This idea underlies the marketing communications concept we described as brand journalism.

McDonald’s is a community of people who share some similar values. It is a global brand that opens its doors where people can feel comfortable under the Golden Arches and maintain their individuality satisfying their individual occasion-based needs.

Our understanding of the customer indicated that this is a group of people who do not want to be told what to do. They do not want a corporation to tell them what decision to make. This generation wants to think and speak for themselves. The major advertising campaigns that McDonald’s had successfully run in the past—“McDonald’s is your kind of place,” or “You deserve a break today,” or “We do it all for you,” or “You, You’re the One,” or “We love to see you smile”—would not ring true with this new generation of consumers. These communications were based on the idea of “us” telling “them” what to do, how to feel, and so on.

Over the years, we told customers that they should take a break today; that we do it all for them; that nobody makes their day like McDonald’s; that we would love it if customers would smile; and so on. Cheryl Berman, who was the creative director of the Leo Burnett advertising agency, referred to this approach as a bunch of marketing “We-We.” We do this. We do that.

We had to change the way we spoke to our customers from a “we” voice to an “I” voice. We labeled this creative voice the I-attitude.

The I-attitude focused on expressing how our customers feel about McDonald’s. It expressed how McDonald’s fits into their everyday lives. The expression “i’m lovin’ it” said that it doesn’t matter how old you are, there are things that you love about life and enjoy having McDonald’s as a part of your life. The appeal of “i’m lovin’ it” is that it did not focus only on product. It portrayed the simple pleasures of everyday life. As McDonald’s Canada says on its Web site, McDonald’s is “a part of our lives and culture.” McDonald’s advertising focuses “not only on product, but rather on the overall McDonald’s experience, portraying warmth and a real slice of everyday life.”

A forever young spirit is not a demographic; it is an attitude about life. Whether people work for McDonald’s or visit McDonald’s as a guest, the “i’m lovin’ it” spirit strikes a relevant chord.

Great ideas can come from anywhere. We learned this over and over again while developing and executing the “i’m lovin’ it” campaign.

One of the greatest strengths of a global brand organization is the extraordinary diversity of creative talent and ideas.

In a global organization, powerful talent is often hidden from view. Great ideas can come from anywhere. Those who say that big companies cannot be creative are wrong. In fact, just the opposite can be true. It is precisely the scale and scope that give a large company an enormous variety of talent on which it can draw.

The problem is that many companies still adhere to the global mantra—“think globally, act locally.” The unintended consequence of this kind of thinking is usually, “We will do all the important thinking globally, and you just act without thinking locally.” Some people around the world feel the real message is, “Think USA. Do as we say.” In fact, some leaders at McDonald’s initially resisted the idea that it should adopt a global idea not invented locally.

The challenge for every company, big or small is to leverage the power of ideas. Powerful ideas do not care where they come from. We wanted the best ideas from our communications partners and our suppliers. So we broke down these barriers to creativity.

Along with the fact that the basic, foundational theme of “i’m lovin’ it” came from Germany, McDonald’s actively sought out and adopted ideas from around the world. We saw what the reimaging of restaurants was doing in France and adapted this concept globally. We saw the success of coffee initiated in Australia, and the coffee opportunity was embraced in a variety of countries.

The new approach to packaging design came from Birmingham, England, and was adopted worldwide—giving McDonald’s a global approach to packaging for the first time. While the idea of salads at McDonald’s was developed in the United States, the extension of this product into a broader menu concept was developed in Australia. Later this same concept was introduced in Europe. This is a good example of adopt, adapt, and improve.

As well as ideas for food and beverage offerings, there were many other instances of good ideas being created around the world such as a dramatic approach to outdoor advertising initiated in Brazil and later adapted in the United States, Europe, and Asia.

Local creativity was unleashed. New crew T-shirts were designed in the Netherlands that became so desirable these were soon sold in Dutch department stores. There was a remarkable Toronto, Canada, train station promotion; an impactful pop-up Fruit & Walnut Salad print advertisement from the United States; and eye-catching subway art generated in Taiwan.

Nothing promotes alignment within an organization more than seeing that ideas and creativity from countries other than the home-base country are used around the world.

We learned that communications based on universal truths cross cultural boundaries. For example, some of the advertising developed by DRM for the US Hispanic marketplace was eventually used as general market advertising in several countries. The African-American agency, Burrell, developed effective advertising for McDonald’s new premium salads that was used in the general market. A McDonald’s global brand commercial reflecting the world’s passion for football (soccer in the United States) was created in the United States and produced in Argentina.

Using the brand journalism approach, the marketing behind “i’m lovin’ it” shared its common spirit around the world but was implemented locally, customized to address local opportunities.

“i’m lovin’ it” became the message integrating McDonald’s summer and winter Olympic communications; the World Cup; Justin Timberlake’s tour called “Justified and I’m lovin’ it;” relationships with Sony, MTV, and ESPN; Internet development; service training; global packaging; event marketing; and the revitalization of Ronald McDonald, just to name a few marketing communications areas.

Brand packaging is a critical and remarkable communicator. Everything communicates: signage, letterhead, shopping bags, store design—including in-store aroma and in-store sounds—everything.

When you buy an iPod, before you even get to the object itself, you hold and unpack a glorious, beautifully designed box. When you order from Bliss, the outer box is its signature robin’s egg blue box whether it is delivered by the US Post Office, FedEx, or UPS. The distinctive blue Tiffany box is part of the brand promise of a luxury gift. Target’s pharmaceutical packaging is a brilliant and socially responsible public statement of its distinctive personality.

Every day millions of people hold the McDonald’s brand in their hands. Marketers should not treat packaging as if it were a mere container incidental to the brand: The package is there not only to hold the product, but also to herald the brand. In McDonald’s case, there was inconsistency of brand impression. Especially for the McDonald’s bag and the cup, it is not just the customer who sees the packaging but those around the customer. With the new package designs, consumers are both holding and promoting the brand in their hand.

Modern day retail packaging in the United States owes a lot to the original Bloomingdale’s shopping bag. This bag started a trend but also created unfathomable awareness for the store, helping it to become a fashion icon, the place to shop in the United States during the 1960s.

When you walk in the street holding a Starbucks cup, you are an outdoor advertising medium for the Starbucks brand. Walking around with a Starbucks cup identifies you to others as a coffee connoisseur.

When you are in a meeting and you flip up the cover for your Sony or Apple laptop, the logo reads right side up for your counterpart across the table. The packaging communicates to everyone that this is the brand you prefer.

The woman who bought a McDonald’s salad before getting on an airplane holding the package in her hand is communicating to the other passengers that McDonald’s is right for her.

We reinvented the McDonald’s approach to packaging. Revitalizing the brand meant changing the packaging perspective from viewing packages as merely food and beverage containers to viewing packaging as an effective brand medium with the widest reach. The packaging was given a brand-new look. The global packaging was designed to make a distinctive “i’m lovin’ it,” “Forever Young” brand statement.

Renovating the image of Ronald McDonald was also an important part of the promotion P. If you have an iconic figure, whether it is Charlie the Tuna, the Geico gecko, the Travelocity gnome, Tony the Tiger, the Aflac Duck, Betty Crocker, the Pillsbury Doughboy, the Marlboro Man, or Mickey Mouse, it is imperative that you treat that brand icon with respect and with the utmost care.

Ronald McDonald is one of the most well-known brand icons. According to reports in US News & World Report and The Economist, he was the second most recognizable brand icon after Santa Claus.³⁸ Unfortunately, McDonald’s relegated Ronald McDonald to the playpen prison. McDonald’s forgot that clowns also appeal to adults. Great clowns like Emmett Kelly’s Weary Willie, Charlie Chaplin, and the great mime Marcel Marceau entertained adults. Circus clowns do not just make children smile. The clowns of Cirque du Soleil have broad appeal. But at McDonald’s, Ronald McDonald was allowed to be positioned only as entertainment for kids.

As mentioned previously, Ray Kroc designed McDonald’s to be a happy place, and Ronald McDonald became the personified icon of that happiness. His role was to create happiness. So to revitalize the McDonald’s brand we had to revitalize Ronald McDonald’s role.

The importance of having a brand promise is played out in the redefinition of Ronald McDonald. All we had to do was give him a contemporary, “Forever Young” spirit in ways that appealed to more than just children.

Redefinition was not new for Ronald McDonald. McDonald’s had changed him before, albeit not always for the good. Some changes were small, some were big, but they were changes nevertheless.