Effective Brand Management: Case Study of McDonald's

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BRAND EQUITY MANAGEMENT
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BRAND EQUITY MANAGEMENT
Table of Contents
Task 1 (LO1)....................................................................................................................................4
Introduction..................................................................................................................................4
Brand is Power.............................................................................................................................5
Conclusion...................................................................................................................................7
Task 2 (LO2)....................................................................................................................................9
Introduction..................................................................................................................................9
Analysis of the Brand..................................................................................................................9
Hierarchy management of brand...............................................................................................11
Equity management in McDonald's...........................................................................................12
Conclusion.................................................................................................................................13
Task 3 (LO 3).................................................................................................................................15
Introduction................................................................................................................................15
Strength of McCafé....................................................................................................................15
Weakness of McCafé.................................................................................................................16
Suggestion for further improvement of McCafé.......................................................................17
Collaborative and partnership agreements for McCafé Conclusion..........................................18
Conclusion.................................................................................................................................18
Task 4 (LO 4).................................................................................................................................19
Brand Value...............................................................................................................................19
Brand Awareness.......................................................................................................................20
Market Share..............................................................................................................................21
References......................................................................................................................................22
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Task 1 (LO1)
Introduction
In the business environment, a brand of a certain business organisation is defined as the overall
identity of that business organisation in the minds of its customers. However, it has been seen
that in the business environment, a single business organisation can have two or more distinct
brands, since a brand is basically an image of a particular product or service that have been
created in the minds of the customers from the satisfactions that they gain while using those
products or services. On the contrary, Datta, Ailawadi and van Heerde (2017) opined that brand
equity is defined as the net worth of a particular brand in terms of monetary value in a particular
market. The brand equity is heavily depended on the evaluations of the branding components,
and the presence of a certain brand in a business market is directly determined by its brand
equity in that market.
Building a successful brand involves a set of distinct processes, which include the identification
of the target market as the very first step. Following this, the brand mission is defined, market
competition is researched, value proposition of their products or services are formulated, and
finally the brand guidelines are determined. Finally, the brand is advertised in the market. Thus,
according to Liu et al. (2017), it can be understood that the marketing department of an
organisation plays a very important role in establishing a brand. In fact, the marketing
department of an organisation conducts the market research and competitor analysis and designs
the strategies to approach the target customer segments. In this article, the various aspects of
strengthening brand equities and extension will be discussed, along with the reinforcing or
revitalising of brands and the processes of overcoming brand crisis
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Brand is Power
The brand equity of a particular existing brand of an organisation can be strengthened using
appropriate marketing strategies, which can be formulated using the Aaker's Brand Equity
model. The Aaker's Brand Equity model dictates that a brand is a combination of brand loyalty,
brand awareness and brand associations. Moreover, Iglesias, Ind and Alfaro (2017) opined that
this model also states that the strengthening of the brand identity allows a brand to be enhanced.
This can particularly be seen in the case of Zara UK, which has become one of the top fashion
brands in the UK. However, Aaker's Brand Equity model states that the formation of the brand
identity involves four aspects, which are:
 Brand as product: This aspect of brand identity is consisted of attributes, scopes or
value of the products or services offered by the organisation. In the case of Zara UK, it
has been seen that they have differentiated their products as the embodiment of latest
fashion in apparels, which has enhanced their brand identity.
 Brand as organisation: This aspect is considered as the attributes of the organisation,
including its workings and policies (Keller and Brexendorf, 2017). In the case of Zara
UK, it has been seen that their organisation has projected the image of their organisation
as employee-friendly and socially responsible by minimising their carbon footprints,
enhancing their brand identity.
 Brand as person: This aspect comes from the various important personalities or brand
ambassadors of a particular brand. In the case of Zara UK, it can be seen that their store
director Ana Oliviera is a charismatic personality, who has influenced the brand identity
of Zara UK in a positive manner.
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 Brand as symbol: This aspect comes from the advertisements, such as the various videos
and images used in the digital media (Shabbir, Khan and Khan, 2017). The brand logo
and heritage also contributes to this. In the case of Zara UK, it has been seen that they
have designed their advertisements and logo in an attractive manner, which has helped
them to increase the overall attractiveness of their brand.
Figure 1: Aaker's Brand Equity model
(Source: Shabbir, Khan and Khan, 2017)
On the contrary, Ahn, Park and Hyun (2018) opined that brand extension is the business
operation of extending an existing brand to new products in order to enhance the market
popularity and sales figure of an organisation. For instance, it can be seen that if a certain brand
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of an organisation becomes popular among their target customers, that organisation usually tries
to bring in all of their similar new products under that banner of that brand. According to Huang,
Jia and Wyer Jr (2017), this is a marketing strategy, which aims to turn a new and unknown
product quickly popular in the market by utilising the popularity of their existing brand. In the
case of Zara UK, it has been seen that they always release all of their new and fresh products
under their popular Zara brand in the UK, which enhances the chances of those new products
quickly becoming popular.
According to Gistri, Corciolani and Pace (2018), sometimes a brand falls into a crisis, where its
popularity is damaged. In such cases, the reinforcing and revitalisation of a brand is used to
recover from the situation. It is also one of the most used brand management policies. However,
Wilner and Ghassan (2017) argued that this is usually done by a variety of different methods. For
instance, in some cases, the brands of an organisation are revitalised by advertising the positive
features of that particular brand. In some other cases, the image of a particular brand is
revitalised by forming a strategic alliance with other successful brands in order to share its brand
image. In the case of Zara UK, while they conducted their business in the UK, their brand image
fell into a crisis once due to the rumors about them compromising the quality of their apparels.
However, Zara UK managed to revitalise their brand image by continuously advertising their
products and highlighting its match with the contemporary fashion trends.
Conclusion
In the above article, the various aspects of brand management, such as brand identity formation,
brand extension, overcoming brand crisis and brand revitalisation has been discussed in the case
of Zara UK. It can be concluded that branding is one of the most important marketing tools,
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since a strong brand image allows a business organisation to enhance the sales figure of the
products or services under the banner of that brand.
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Task 2 (LO2)
Introduction
Brand portfolio is one of the most essential components that should help the organisation to
effectively perform business. The globalisation has increased the competition among the brands
and it has become very effective to perform market segmentation. This section will depict the
brand portfolio of McDonald's. Different concepts and models will be used to effectively to
analyse the Brand portfolio. Cash flow model, high market prestige and the low market entry
brand model will be used in the study.
Analysis of the Brand
In the opinion of Schivinski, and Dabrowski, (2015), Mc Donald’s is one of the premium brands
according to the global basis. It has a good amount of market share in the UK by almost30 % in
the food sector. One of the major methods is the use of market segmentation that is essential in
developing the branding profile of the organisation. The brand image is to be developed
according to the consumers buying pattern and the psychology of the buyers. One of the major
advantages of the organisation is that during branding they take care of every segment of the
consumer so the sustainable consumer base is very good in Mc Donald’s compared to the
competitors.
Market segmentation:
It is seen that the market segmentation in the UK for Mc Donald's is focused on the higher class
and the middle class working consumers who need to buy instant foods. Innovative management
is being done in Mc Donald’s to enhance the quality and the brand of the product by nullifying
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the use of the preservatives (Godey et al., 2016). The company wants to promote a brand where
the least amount of side effects should be there for the consumers who buy the food. The menu
is developed as per the culture of the countries. The UK market to attract the middle class and
higher class segments the content of food and digital marketing is being focused to establish
proper brand image. The different brands of Mc Donald's like the Mac cafe are given full rights
to develop the menu according to the specific necessities of the consumers.
Experimentation
Experimentation with the food is very important according to the requirement of the consumers.
The brand portfolio is totally dependent on the experimentation with the products. Mc Café
experiments with different food products in the UK market. The different types of Coffees like
ice creams are experimented in the Mac café according to the demands in the market. Especially
the authentic coffee and hot chocolate of Mac café are very famous in the European market due
to their enhanced brand image and popularity due to experimentation with the taste of the
products. This is a significant example of brand awareness among consumers by experimenting
with the product.
Brand Unique selling proposition
According to the opinion of Lu, Gursoy, and Lu, (2015), the unique selling proposition is one of
the most important components to differentiate the brand from the other competitive brands of
Mc café. In Mc café one of the most important selling proposition is the authentic ingredients
that create distinguished taste among the consumers. Another important part is that the cost of
the product is in the range of the middle-class population that helps in increasing the brand value
and consumer base.
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Hierarchy management of brand
Brand Hierarchy management includes the holistic process where different strategies are taken
by the organization to effectively manage the Brand awareness and brand promotion in front of
the consumers in an effective manner (Wang et al., 2016). The brand Hierarchy management
includes the development of the displays posters logos of the brand according to the exact
psychology of the target consumers. There is a presence of the Brand management tree that is
present below that explains the types of brand hierarchy. Mainly the Mc Donald's comes under
the category of the family brands as it is accessible to all members of the family. If Mac Café the
sub-brand of Mc Donald's is considered different types of product like hot chocolate, latte,
cappuccino authentic brewed coffee with varieties of snacks are present. Emphasis on the local
recipe is done by the organisation.
Fig 2: Brand Hierarchy
(Source: Pike, and Bianchi, 2016)
The detail depiction of the brand Hierarchy in Mc Donald’s is mentioned below:
1. Decision makers of brand strategy formulation
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Marketing Head
The head of brand management
Managers under the head
Analyst
Graphics head
Graphics manager
Research and development head
Main manager of designing
Senior analysis manager
2. The executive employees
Executive if branding departments
Communication and branding associates
Analysts of Brand management
Public relation researchers
Brand promotion associates
Equity management in McDonald's
Brand equity is one of the major components of the marketing that helps the organisation to
establish a competitive advantage in the global market. The brand equity is developing as the
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asset for the organisation that helps it to create awareness among consumers in such a way that
the name of the brand makes a perfect positive impression in the mind of the consumers. The
corporate social responsibility is one of the major parts that help to enhance the brand awareness
among the market (Dwivedi, Johnson, and McDonald, 2015). Moreover, according to corporate
social marketing there is new program that helps in raising the brand awareness known as the
Ronald Charitable organisation The Brand equity is done perfectly in Mc Donald’s as during
formulation of promotional programs social factors and cultural norms should be kept in mind so
that integrity and brand awareness makes maximum impact in the mind of the consumers.
According to the Pike, and Bianchi, (2016), the brand awareness is dependent on the strategy like
the corporate social activity that includes implementation of social activities for improving the
condition of the society in an efficient way.
Conclusion
This section mainly focused on the analysis of the brand portfolio of the Mc Donald’s it is
evident that the business proposition and revenue rate of the organisation is dependent on the
brand equity by almost 30 %.
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