McDonald’s: McLeader or McFollower? : Fast food: Analysts say the chain just markets its changes better than its competitors.
Is McDonald’s the fast-food industry’s boldest innovator--or its best mimic?
That is what industry executives and analysts were asking Wednesday on the heels of McDonald’s announcement that it will introduce a low-fat McLean Deluxe hamburger by mid-April. The move by McDonald’s follows a series of actions that the nation’s largest fast-food chain has taken over the past year, all clearly aimed at generating good will--and better business.
Last year, McDonald’s slashed the prices on a handful of menu items. It began phasing out foam containers and replacing them with paper packaging. McDonald’s stopped cooking french fries in animal fat and started frying them in vegetable oil. It posted signs that list nutritional information on basic menu items. And it expanded its recycling program.
Innovations? Although McDonald’s appears to be the innovator in fast food, analysts say it has been mostly reacting. Nevertheless, smart marketing and shrewd public relations have allowed the chain to appear to be ahead of the pack and, in many cases, swamp the competition.
“I don’t think they’re leading the way in any of this,” said Bruce E. Thorp, an analyst with the Philadelphia-based PNC Financial Corp. “In fact, I think they are taking all of these steps rather reluctantly. They’re reacting to rivals and to public criticism.”
For its part, McDonald’s denies that it is following anyone or anything--except the advice of its customers. “Many of our changes are in response to our customers,” said Linda Fontana, manager of communications at Oak Brook, Ill.-based McDonald’s. But McDonald’s doesn’t copy actions taken by its rivals, she said. “We only pay attention to McDonald’s.”
But marketing experts and rivals strongly question that. Granted, with its McLean Deluxe burger McDonald’s is the first to introduce a 91% fat-free burger. But the El Pollo Loco chain has long marketed nutritious fast food such as charbroiled chicken.
“It may appear they are taking the lead in healthier fast food,” said Gayle DeBrosse, director of research and development at Irvine-based El Pollo Loco. “But we’ve been selling it for over a decade.”
As for its use of cholesterol-free cooking oil, McDonald’s only announced plans to make the switch one week after Burger King revealed its plans last summer.
Likewise, although it was trumpeted as big news in November when McDonald’s said it would junk its use of foam containers, Burger King hadn’t been using them for years. But Burger King, whose top marketing officer resigned recently, has seen many of its marketing efforts fizzle in recent years.
McDonald’s cut its menu prices three months ago. But the move followed the lead of rival Taco Bell, which vastly reduced it menu prices nearly two years ago.
McDonald’s is “perceived” to be the industry leader because its actions are so widely publicized, “not just by their huge advertising budget but by their use of public relations,” said Tina Kiesler, professor of marketing at USC.
In an effort to embellish its environmental image, McDonald’s designed its 1989 annual report to look more like an Audubon Society brochure than a financial statement.
“The customer perceives the company as environmentally friendly,” said Diane L. Mustain, vice president at the Chicago investment firm Duff & Phelps. “It’s almost as if whether or not it is isn’t the point anymore.”
FAST-FOOD FAT Some examples of the fat content in various fast-food menu items:
CHAIN FOOD CALORIES HAMBURGERS: McDonald’s McLean Deluxe 310 Wendy’s Single) 340 (quarter pound) McDonald’s Quarter Pounder 410 Carl’s Jr. Famous Star 590 CHICKEN: Carl’s Jr. Charbroiler 320 BBQ chicken Jack-in-the-Box Chicken 292 Fajita Pita Hardee’s Grilled 310 chicken sandwich Kentucky Fried Chicken Original 283 Recipe breast OTHER: McDonald’s Large french fries 400 Wendy’s Chili (9 oz.) 220 Burger King Chef’s 178 salad (no dressing) Domino’s Pizza Deluxe 16-in.,2 slices 498 Long John Silver Baked cod 130 Various outlets Baked 250 potato (plain)
CHAIN TOTAL FAT (grams) HAMBURGERS: McDonald’s 10 Wendy’s 15 McDonald’s 20.7 Carl’s Jr. 38 CHICKEN: Carl’s Jr. 7 Jack-in-the-Box 8 Hardee’s 9 Kentucky Fried Chicken 13 OTHER: McDonald’s 20 Wendy’s 7 Burger King 9 Domino’s Pizza 21 Long John Silver 0 Various outlets (less than 1)
Source: Companies; Center for Science in the Public Interest
