One for the Foodies – How very Un McDonalds Situation Analysis of McDonalds 2014 gourmet burger range ‘Create Your Taste’

Rachel Haffenden- n9183865 Tutor: Chelsea Smallwood

AMB220 Advertising Theory and Practice Advertising Campaign Analysis Part 1 Due Date: Wednesday 13th April

This campaign analysis is regarding McDonald’s ‘Create Your Taste – Hello Harold’ advertisement, which was published by McDonalds Australia in May 2015 and was endorsed by numerous television networks and throughout various social media platforms. The advertisement’s focal point is on “Harold’s”, the main protagonists respective burger creation, which he designed himself by choosing from the 30 gourmet ingredients in McDonald’s ‘Create Your Taste’ range.

1.0 Product Analysis

Characterized as a traditionally commercialized fast food chain, McDonald’s repositioned the companies identifiable lower price point by introducing the ‘Create Your Taste’ concept in 2014, which differentiates itself on a range of premium, Australian grown ingredients and table service (Werner, 2013). Substantially more expensive than the main menu options available at nation wide McDonald chains, the company innovatively allows the consumer to design their own ‘gourmet’ burger from 30 different ingredients by utilizing the affixed digital screens inside the newly furnished McDonalds stores. The ‘Create Your Taste’ burger ingredients are prepared in a different section to other menu items, and come with complementary table service from McDonalds employees. Constructed on the pretense of breaking through the barriers of the ‘boutique’ burger chains prevalent in Australia, the company invested over A$1 million over the period of 2014 to refurbish selected McDonalds stores (Passport, 2011). The company’s ability to extend the brand beyond the core fast-food restaurant concept without diluting its appeal to its core consumers, is significantly highlighted in the IBIS world reports (Carter, 2015).

According to the IBIS world report, McDonalds remains the biggest player in Australia’s quick-service restaurant sector dominating a staggering 39.2% market share in the burger specific category itself (IBISWorld, 2015). Collectively revenue for McDonalds grew by 2.2% to 2.35bn in 2015, despite the decrease in growth rates of 3.1% in 2014 (IBISWorld, 2015). Despite this declination in revenue, McDonald’s Australia remains the company leader in consumer foodservice in Australia. The company has outperformed the broader industry over the past five years, partly due to its extensive scale and large retail network with profit margins fluctuated over the period, subsequently due to the company investing money into introducing different gourmet menu items to boost demand.

In comparison to McDonalds, the Competitive Foods Australia Pty Ltd operating under the Hungry jacks brand holds a 24.8% market share in the hamburger sector (IBISWorld, 2015). Hungry Jacks has effectively disregarded the trend towards healthier menus, instead providing fast-food items that target the price- conscious consumer. Therefore although collectively Hungry Jacks can be compared to the cheaper menu at McDonalds, in this circumstance the create your taste line is unable to draw a coextensive comparison between the gourmet line and the identifiable lower price menu. As hungry jacks continually markets to price conscious customer it is expected to outperform the broader industry over this period, forecasting to grow by an annualized 4.0% in the five years through 2015-16(IBISWorld, 2015).

Grill’d, the key market leader specializing in gourmet range of hamburger’s in Australia, only accumulated a market share within the total burger culture in Australia at 6.9% (IBISWorld, 2015). This company realized a gap in the domestic market for healthy, premium burger range, with a heightened consumer health consciousness being a definitive factor in their success. A paradigm exists between the Grill’d varied burger range and the range supplied by McDonalds create your taste, as subsequently the vegan and gluten intolerance fads were based off this boutique burger chains menus. This focus on a premium menu offering has assisted the company to boost profit margins over the past five years, as consumers are often willing to pay a higher price for gourmet options. Another competitor within the burger segment in Australia is Burger Edge, who pertains a market share of less than 1.0% (IBISWorld, 2015).

In contradistinction to McDonald’s and Hungry Jacks lower priced burger menu, Create Your Taste’s personalized burger range is coextensive with Grill’d’s selective burger range and has modeled its choice of gourmet ingredients, and consideration of the vegan and gluten intolerance fads off Grill’d, which has positioned McDonald’s as an upcoming contender in the gourmet burger industry against Grilld’s cult following.

Figure 1: Key Competitors in the Australian Burger Industry

9.30%1% McDonalds 6.90% Hungry Jacks

39.20% Grill'd

KFC 24.80%

Burger Edge

The regulations pertaining to the fast food industry in Australia, do not relate to the product itself, however maintains the integrity of fast food labeling within the restaurants under the Australia New Zealand Food Standards Code – Standard 1.2.8 (Australian Government, 2015). This legislation prescribes that McDonalds must provide extensive nutritional information, such as the kilojoule content and sets out additional nutrition information requirements in relation to nutrition content claims and health claims in which they have for their product line ‘Create your taste’ (Australian Government, 2005). Expansion in the company's product range reflects a conscious effort towards providing healthier fast-food options. This includes reducing the sugar and salt content of meal items, coupled with the addition of catering for both gluten intolerant and vegan consumers (IBISWorld, 2015). Subsequently, due to the stringent regulations pertaining to providing adequate nutritional value several nutritional considerations have been flagged in accordance to McDonald’s line of pre-designed burgers. Alarmingly the create your taste e-style Oz Burger contains 240 more kj than a standard burger within McDonalds main menu and also contained considerably higher in saturated fats, carbohydrates and sugars (McDonalds ,2016) (See Appendix). It is therefore imperative that McDonald’s does not claim any improvement in nutritional value from their staple menus in relation to create your taste, as it may be subjective to severe ethical and legal ramifications.

The advertising planning model developed by associates from the Foote, Cone and & Belding agency, delineates four primary advertising planning strategies. McDonalds ‘Create your taste burgers’ fall within the self satisfaction sector, as initially there is low involvement by the customer when choosing the product, however the sensory pleasures (a healthy gourmet burger) and social motives (dining at a social restaurant) of the demographic this product is marketed to is emphasized in the advertisement. Subsequently this product is mostly utilized when responding to people’s feelings about the product, in divergence to the consumer thinking the product through, where knowledge and rational thinking does not prevail.

Complementary to the FCB grid, psychologist Abraham Maslow’s Hierarchy of Needs proposes that at each level of the pyramid different priorities exist in terms of the product benefits the customer is looking for and their stage of development (Solomon, 2013).

Self Actualisation (self fulilment, Enriching Experiences) Figure 2: Maslows Hierarchy of Ego Needs (prestige, status, Needs (Solomon, 2013) accomplishment)

Belongingness (Love, Frienship, Acceptance of Others)

Safety (Security, Shelter, Protection)

Physiological (Water, Sleep, Food)

Applicable to this product analysis, it is pertinent to place the ‘Create your taste’ range in the self actualization peak of the pyramid as the consumer has surpassed the physiological needs of food and has established the product as a tool for self-fulfillment and self-actualization, due to their ability to express their individuality and creativity with the ‘Create Your Taste’ range.

2.0 ‘Create Your Taste’ Target Audience

McDonalds has delineated their product to appeal to the target audience of the Millennial’s generation, particularly focusing on the subordinate group described as ‘foodies’ . Foremost, an analysis into the psychographics of this segmented millennial generation will allow a theoretical and empirical examination of their buying behaviours, attitudes, interests and values (McCrindle, 2015) The preeminent millennial generation, born between 1982 and 2000, is broadly characterized as a distinctively digitally focused, idealistic, optimistic and socially conscious demographic (Hershatter & Epstein,2010, p.214).

This subculture has distinct desires and demands, as they are unidentifiable as being passive customers the millennial generations are inclined to actively participate and co-create with the brands they hold previous reverence for (Lantos, 2014). Millennial’s accredit a sense of responsibility for brands that emanate across all their personal and social domains, and that align intrinsically with their beliefs and values (Werner, 2013). This psychographic is of imperative importance to marketers as millennials are habitually influenced by their peers and demand authenticity and transparency in their products (Wright, 2006). Distinctively, millennials are enticed by novel experiences and adventure, plus desiring to make a difference in the world, and hence marketers should re-condition their products to suit the playfulness and fun elements of this target audience (Lantos, 2014).

Coinciding with the rise in technological advances and as an indirect result from growing up in a technology immersed environment, this audience is subjected to global communication platforms, media saturation and material excess (Fromm, 2011). Typically generation Y is attracted to a myriad of media, conventionally utilizing blogs, reviews and social networks to retrieve and share information about the products they desire, and through peer evaluation (Wright, 2006). The internet is the backbone of their lives and it provides a means of swift gratification, communication and social interaction; therefore utilizing the avenue of furvitive social digital marketing is vital for the product to be advertised effectively to this market (Dennis, 2012). Predominately, millennials diverge away from the traditional form of advertising; television, preferring exposure to advertisements in other platforms such as product placements, event market and digital media (Facebook, Instagram and Twitter)(McCrdinle, 2015). Foodies enjoy the thrill of the hunt and being the first to catch on to new food trends, and food outlets considered “authentic” carry the most prestige in the foodie world, uniformly finding a homogenous following in restaurant openings and closings in this demographic (Pryor L, 2015).

Literature delineates a foodie as an atypical subgroup of the millennial generation, notably as a person who has an ardent or refined interest in food, and who does not pertain food as just a biological sustenance but as a part of their identity and lifestyle (Baumman, 2009). Dissimilar to previous generations, foodies have the capability and resources to use food as a ‘narrative’ of self-expression, build relationships and distinctively purchase gourmet creations which they deem as authentic and exotic (Powers T.L, 2013). Customization represents a huge feature of Millennial dining, as they characteristically obsessively pursue the perfect food experience to either promulgate on social platforms about their ‘gourmet dining experience and express their respective culinary creation (Engel, 2011,p32).

Additionally, foodies value authenticity, freshness and quality within their culinary purchases, customizing themselves with healthier and quality organic produce in relation to their product (Baumman, 2009). Levenson (2010), dissertates that the occupations of this target audience are largely involved around nutrition and health, being largely dominated by occupations such as personal trainers, dietitians and medical associates. This aligns succinctly with the psychographics of ‘foodies’ as their activities and interests mainly revolve around food fads, food science and nutritional value (Smith, 2004).

As authenticity frequently equates to a degree of separation from big food conglomerates and corporate marketing campaigns, McDonalds has efficaciously separated themselves from their main stream lower priced menus, by pinpointing the distinctive psychographics of the millennial sub group of ‘foodies’ (Dennis, 2012). Conclusively, the most important key insight from this research into McDonalds succeeding with this campaign is to insist on acquiring a product that is perfectly tuned to their taste, with purchasing in comparatively little effort, and with information sourced from a myriad of platforms and trusted individuals.

Appendix

Figure 3: Nutritional Information for The Create Your Taste Beef Burger

Figure 4: Nutritional Information for The Main Menu Beef Burger

Retrieved from McDonalds Australia 2016

From comparing the attached appendices it is clear that there is a vast difference between the create your range nutritional value as juxtaposed to McDonalds main menu Aussie BBQ Angus. The clear distinction between the two nutritional information is that the Create your Taste Beef burger was surprisingly composed of more saturated fats, sugars and carbohydrates. All information has been successfully labeled by McDonalds and no nutritional or health claims have been false.

References

Australian Government, Australia New Zealand Food Standards Code - Standard 1.2.8 - Nutrition Information Requirements (2015). Retrieved from, https://www.legislation.gov.au/Details/F2015C00968,

Australian Government, Department of Health and Ageing,(2005). Nutrient Reference Values for Australia and New Zealand. Retrieved from National Health and Medical Research Council website https://www.nhmrc.gov.au/_files_nhmrc/publications/attachments/n35.pdf

Baumman S & Johnston J. (2009). Democracy and Distinction in the Gourmet Foodscape (2nd edition). Taylor & Francis Publishing

Carter, J.S. (2015) McDonalds Struggles with identity and changing tastes, ABC, Retrieved from http://www.abc.net.au/radionational/programs/blueprintforliving/identity-crisis-how-very-un- mcdonalds/6669196

Dennis, P (2012). The Challenges and opportunities of marketing to millennials, The Journal of Consumer Marketing,29(2), doi: 10.1108/jcm.2012.07729baa.002

Engel, C.J., Bell, R.L., Meier, R.J., Martin, M.J. & Rumpel, J.H. (2011), Young consumers in the new marketing ecosystem: an analysis of their usage of interactive technologies. Academy of Marketing Studies Journal, 15(2), 23-44.

Fromm, J. (2011). Do You Have a Millennial Marketing Strategy?. Franchising World, 43(9), 56-57. Retrieved from http://search.proquest.com.ezp01.library.qut.edu.au/docview/894767149?pq- origsite=summon

Hershatter, A. & Epstein, M. (2010), Millenials and the world of work: an organization and management perspective, Journal of Business Psychology, 25(2), 211-223.

IBISWorld Industry Report, (2015), Fast Food Burger Shops in Australia, Industry Report OD5498, Retrieved from, http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/au/industry/majorcompanies.aspx?entid=54 98#MP728

Lantos, G. P. (2014) Marketing to Milennials, The Journal of Consumer Marketing, 31(5), 401-403, doi: 10.1108/JCM-03-2014-0909

Levenson A.R. (2010). Millennials and the World of Work: An Economist’s Perspective. Journal of Business and Psychology, 25(2), 257- 264. Retrieved from http://link.springer.com/article/10.1007/s10869- 010-9170-9

McCrindle, M. (2015). The Generation Map. Retrieved from http://mccrindle.com.au/resources/whitepapers/McCrindle-Research_ABC-03_The-Generation-Map_Mark- McCrindle.pdf

McDonalds Australia. (2015, May). Create Your Taste: Hello Harold. [Video file]. Retrieved from https://www.youtube.com/watch?v=2dIEZTd-OZo

McDonalds Australia. (2016). Create Your Taste Menu Allergen – Ingredients – Nutritional Information. Retrieved from https://mcdonalds.com.au/sites/mcdonalds.com.au/files/CYT- AUS_Chicken%26Beef-21-10-15.pdf

McDonalds Australia. (2016). Main Menu Allergen – Ingredients – Nutritional Information. Retrieved from https://mcdonalds.com.au/sites/mcdonalds.com.au/files/Main-Food-Menu-2-Dec-2015.pdf

Passport (2011). Australia’s Premium Foods Trend Dominates Foodservice New Product Development. Retrieved from http://www.portal.euromonitor.com.ezp01.library.qut.edu.au/portal/analysis/tab Powers T.L. & Valentine D.B. (2013),Generation Y values and lifestyle segments. Journal of Consumer Marketing, 30(7), 597 – 606. Retrieved from http://www.emeraldinsight.com/doi/pdfplus/10.1108/JCM-07-2013-0650

Pryor, L (2015). The Foodie Generation: Millennials force the food industry to face the facts. Brogan & Partners, Retrieved from http://brogan.com/blog/foodie-generation-millennials-force-food-industry-face- facts-0

Smith, T. G. (2004) The McDonald's Equilibrium: Advertising, Empty Calories, and the Endogenous Determination of Dietary Preferences. Social Choice and Welfare, 23(3), 383-413. Retrieved from http://sf5mc5tj5v.search.serialssolutions.com/?ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF- 8&rfr_id=info:sid/summon.serialssolutions.com&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft. atitle=The+McDonald%27s+Equilibrium%3A+Advertising%2C+Empty+Calories%2C+and+the+Endogenous +Determination+of+Dietary+Preferences&rft.jtitle=Social+Choice+and+Welfare&rft.au=Smith%2C+Trenton+ G&rft.date=2004-12-01&rft.issn=0176-1714&rft.eissn=1432- 217X&rft.volume=23&rft.issue=3&rft.spage=383&rft.epage=413¶mdict=en-AU

Solomon M.R., Russel Bennet R & Previte j, 2013, Consumer Behaviour,; Buying, Having, Being. (3rd ed.). French Forest NSW: Pearson Publishing Werner, T.R. (2013) Tangy Temptation: McDonalds and Marketing to a Foodie World. Retrieved from http://chrestomathy.cofc.edu/documents/vol12/werner.pdf

Wright, M. (2006). Pyschographic Characteristics of the Millennial Generation: Developing a Market Segmentation for Use in the Wine Industry. Retrieved from https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/7809/2006-wright.pdf?sequence=1