br4_078-079 6/22/05 6:47 PM Page 78 THE MARKET 100 million hamburgers within its first Dining out has always been a popular three years, and the 100th McDonald’s social activity. These days, eating away restaurant opened in 1959. In 1961, from home is a part of everyday life Kroc paid $2.7 million to buy out the that many people take for granted. McDonald brothers’ interest, and in However, meals in restaurants were 1963 the billionth McDonald’s ham- once only an occasional indulgence burger was served live on prime-time enjoyed by a privileged few. The pop- TV. The brand proved equally popular ular food service revolution of the last outside the United States. McDonald’s 50 years changed all that. quickly established successful inter- Today, dining out is a social activ- national markets in Canada, Japan, ity enjoyed every day throughout the Australia, and Germany. Today, more world by people of all ages and back- than 1.5 million people work for grounds. For McDonald's, this little bit McDonald’s around the globe. of sociology translates into tens of millions of customers daily. THE PRODUCT From its early roots as a small, family- ACHIEVEMENTS run hamburger restaurant, McDonald's McDonald’s is the leading restaurant has evolved into an American icon. brand, with over 30,000 local restau- While McDonald’s core menu of ham- rants serving nearly 50 million cus- burgers, cheeseburg- tomers daily in more than 119 ers, and World Famous countries and more than 13,500 com- Fries remain the main- munities across the United States. Approx- about 1,200 of McDonald’s U.S. res- stay of McDonald’s imately 70 percent of McDonald’s restaurants taurant owner/operators started in business, an instinctive worldwide are owned and operated by independ- restaurants themselves; and more than ability to anticipate and ent, local businessmen and women. half — 2,050 — of McDonald’s corpo- fulfill real consumer Twenty of McDonald’s top 50 worldwide rate employees in the United States needs has been central management personnel began their careers in a started as crew. to McDonald’s success. A prime example of HISTORY this approach is the The McDonald’s story began half a century ago in Filet-O-Fish® sandwich, which was conceived by San Bernardino, California. Ray Kroc was a sales- Lou Groen, a Cincinnati-based franchisee in a man supplying milkshake multi-mixers to a drive-in predominantly Catholic area. Groen noticed that restaurant run by two brothers, Dick and Mac his business was negatively impacted on Fridays, McDonald. Kroc, calculating from his own figures which was then a day of abstention from meat that the restaurant must be selling over 2,000 milk- for many Catholics. He developed a fish-based shakes a month, was intrigued to know more about the secret behind the success of the brothers’ thriving business. He visited the restaurant, which promised its customers “Speedee Service” and watched in awe as restaurant staff filled orders for 15-cent hamburgers with fries and shakes every 15 seconds. Kroc saw the massive potential and decided to become involved. The McDonald brothers accepted Kroc’s offer to become their national fran- McDonald’s restaurant, including chief execu- chising agent. On April 15, 1955, he tive officer Jim Skinner, whose first job was as opened his first McDonald’s restau- a crewperson at a McDonald’s in Davenport, rant in Des Plaines, Illinois, a sub- Iowa, in 1962. In the United States alone, more urb just north of Chicago. than 66,500 McDonald's managers — 70 percent Rapid growth followed. of all managers — started as crew. In addition, McDonald’s served more than 78 br4_078-079 6/17/05 4:11 AM Page 79 product to meet the needs of the If QSC&V is the cornerstone local community. The Filet-O-Fish of the McDonald’s brand, then sandwich was launched in 1963 trust is its bedrock. To its cus- and went on to become a popular tomers, McDonald’s is a brand that menu item in many of McDonald’s can be trusted to place the cus- international markets. tomer at the center of its world and Another franchisee — Jim to know the right thing to do. The Deligatti from Pittsburgh — was key to McDonald’s success has responsible in 1968 for the cre- been its capacity to touch universal ation of McDonald’s most suc- consumer needs with such consis- cessful menu item ever, the Big tency that the essence of the brand Mac sandwich. Nine years later, has somehow always been relevant Herb Peterson, another franchisee, to the local culture, no matter how was the driving force behind different that culture might be the development of the Egg from McDonald’s origins. With McMuffin for McDonald’s break- one of the most powerful brands in fast menu — a move that would the business, McDonald’s appears change the breakfast habits of mil- set to enjoy healthy growth long lions of Americans. into the future. McDonald’s was also built on RECENT DEVELOPMENTS the philosophy, instilled by Ray In December 2004, Advertising Kroc 50 years ago, to give back to Age magazine named McDonald’s the communities it serves. Because “Marketer of the Year” for the of this long-standing commitment brand’s marketing achievements around the Reflecting McDonald’s appeal as a local to help others, McDonald’s has pledged to raise world. In March 2005, McDonald’s unveiled business in communities around the world, $50 million for Ronald McDonald House a major company initiative centered on a the interior of the 50th Anniversary restau- Charities® (RMHC®) and other children’s causes multifaceted education campaign to help rant features a contemporary flair with a 40- in communities locally and worldwide in cele- consumers better understand foot Brazilian granite counter, bration of its 50th anniversary. “Giving a hand to the keys to living balanced, glass from Germany, exterior help children is what RMHC does best, and this active lives. The theme “it’s finish from the Netherlands, and pledge by McDonald’s will allow us to help more what i eat and what i do . i’m red S-shaped chairs from Italy. children, in more places and in more ways,” said lovin’ it” underscores the The interior dining area is Ken Barun, president and CEO, RMHC. “RMHC important interplay between zoned like a home, with first was founded in memory of Ray Kroc, and it is in eating right and staying active. floor representing the foyer and his spirit of helping and serving others that this As part of McDonald’s ongo- kitchen and second floor fea- pledge will be honored.” ing commitment to food-energy turing a living room, dining balance, the company introduced room, and family room. Two the Fruit & Walnut Premium escalators, an elevator, and a THINGS YOU DIDN’T KNOW ABOUT Salad in May 2005. The latest staircase connect customers to MCDONALD’S addition to McDonald’s Premium the second level, a spacious Salad portfolio includes USDA dining area with a corner “con- No. 1 sliced apples and red seedless grapes, with ference room,” tech- ❍ Glen Volkman of Eau Claire, Wisconsin, a side of low-fat vanilla yogurt and candied nology, and modern was one of the first customers served at the Diamond® walnuts to sprinkle on top. comfort, including: original McDonald’s Des Plaines location, • Five decades of McDonald’s on April 15, 1955 . and he was back 50 PROMOTION memorabilia displayed in seating years later for McDonald’s anniversary cel- On April 15, 2005, McDonald’s chief execu- areas overlooking the garden. ebration in Chicago. tive officer Jim Skinner led the company’s • Two custom CD-creation ❍ The 50th Anniversary restaurant replaces the 50th Anniversary celebration at the stations and two Internet Web former “Rock ‘n’ Roll McDonald’s” restau- unveiling of a spectacular 24,000- stations with music download- rant, which was the third-busiest McDonald’s square-foot restaurant in down- ing and instant photo printing location in the United States, and 12th- town Chicago that features a capabilities. The entire restau- busiest in the world. Reminiscent of its Rock 60-foot Golden Arches, seat- rant is wi-fi enabled. ‘n’ Roll years and committed to remember- ing for 300, a double-lane • Images on three interactive tables ing the many good times there, the 50th Anniversary restaurant showcases a free- drive-thru, historic memo- react with the wave of a hand. standing outdoor “Rock ‘n’ Roll Pavilion,” rabilia, and stunning views • A “Living Room” featuring leather featuring original pieces from the former of Chicago’s skyline. The furniture by Mies van der Rohe and restaurant, including a 1959 Corvette, life- spectacular restaurant — Le Corbusier. size Beatles statues, and guitars. dedicated to McDonald’s ❍ late CEO Jim Cantalupo BRAND VALUES More than 65,000 managers in McDonald’s — ties the future with the Founder Ray Kroc developed his brand vision restaurants from all over the world have graduated with Bachelor of Hamburger- past by incorporating the for McDonald’s around a simple but effec- ology degrees from Hamburger University, classic red and white tive consumer-driven premise of qual- McDonald’s international management train- design of Ray Kroc’s ity, service, cleanliness, and value. ing facilities. first building with a Kroc’s winning formula was quickly ❍ 1 21st-century, high-tech shortened to QSC&V — an Ronald McDonald wears size 14 /2 Big restaurant that delivers acronym that would become Red Shoes: “extra long, by extra wide, by a special experi- and remain an enduring cor- extra red.” ence for customers.