McDonald's CEO outlines turnaround, calls out Aus as lead market

Rosie Baker
By Rosie Baker | 5 May 2015

McDonald's CEO Steve Easterbrook has outlined a turnaround for the global fast food business to reverse a long-term trend of stagnant growth. In doing so, he outlined changes to marketing and brand experience and called out Australia as a lead market that has already exceeded the rollout of a number of initiatives that will now become global.

Easterbrook, the former UK CEO who took on the global top job in January, stressed that this is a “global turnaround”, saying “we have to modernise our approach.“I'm not interested in average.”

He said that the business has been too slow in decision-making, with too much bureaucracy and too many layers of management, saying that it will be faster and more agile, “smarter with risk, bolder with moves that drive transformation” as it looks to get “closer to markets” and to customers.

The turnaround, he said, would focus on three main points; driving operational growth, returning excitement to the brand and unlocking financial value.

Marketing will also be impacted because Easterbrook said that it will focus more on what customers want, when they want it.
“We will unlock growth – by building stronger, more consistent everyday value propositions and improve marketing executions to drive demand,” he said.

It will make no more “sweeping generalisations” about millennials as if they are one homogeneous group of people, will use data better in various stages of the business and look for “better ways to engage customers in and out of the restaurant”.

“We'll lead with teams that are customer-centric in planning and execution. We'll be more customer centric and that means [having] a deeper understanding that cuts pathways through complexity. We'll bring the customer voice into the heart of the business. An example is through the creation of digital hubs around the world that will feed into the global hub opened earlier this year.

“We'll focus on better listening, better segmentation, less sweeping talks of millennials as if they are one single group with shared attitudes and more focus on customer groups where we need to win, sharper insights.

The restructure shifts McDonald’s from slicing its business geographically, to dividing it into segments that have more relevance to each other and sharing strategies “with similar needs, challenges, and opportunities for growth".

These are: the US, which accounts for 40% of the global business, International Lead Markets, of which Australia is one, High-Growth Markets such as China, and Foundational Markets where McDonald’s has more opportunities.

Australia is placed into a group labelled “International Lead Markets”, alongside the UK, Canada, France and Germany, which make up about 40% of the fast food chain's global sales. Doug Goare, currently president of McDonald's Europe, will become president of the International Lead Markets and Australian management will now be more closely engaged with those in Canada, France, Germany and the UK.

“[Australia] will now interact directly with markets where that experience is most transferable,” he said.

The UK, he said, is far along this turnaround plan, and Australia is ahead of the pack, already exceeding expectations with the roll out of its 'store of the future stores' which feature new technologies, and menu options such as Create your Taste,which allows customers to order bespoke burgers, as well as new-look stores.

“Australia is on the road to true turnaround momentum … marketing and execution has been improved around key promos such as Monopoly, new menu news like the premium rump steak burger are doing well. Australia is our lead market for experience of the future and in fact has accelerated the rollout plans for Create Your Taste, and national advertising is set for the end of July," he said.

Create your Taste was launched in October and is being hailed as the biggest initiative McDonald's has rolled out here since McCafe.

AdNews understands that the campaign has begun in the Gold Coast, with this set to roll out across major cities around June time, although Easterbrook stated July.

DDB is thought to be currently working on the creative with the TV ads being finalised now. The kiosks have already begun popping up in stores.

It is also thought that McDonald's could, in the future, look to utilise consumer data via the kiosks with functions such as remembering customers' regular orders, a possibility.

Easterbrook said: "These are exciting and liberating moves for our system, and this is how leadership brands evolve to stay in step with their customers. Meaningful, positive measures of improvement will take time. The most impactful measures of our performance will be through the eyes of our customers.”

Last month, McDonald's Australia appointed VML to handle its digital and social accounts.

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