When McDonald’s opened its first UK restaurant in Woolwich, south London, 25 years ago, Ed ’Stewpot’ Stewart was the personality whoturned up to cut the ribbon, along with the local mayor and hundreds of people who had already heard about ’The Difference at McDonald’s’.



The manager of the outlet was Paul Preston, who has gone on to become chairman of McDonald’s UK. The serving staff were mostly middle-aged women who looked like dinner ladies, and the queue stretched down the road.

One customer opened her first burger and turned to her friend, ’There’s no butter in these rolls’ she tutted. ’No, and no knives and forks, either,’ her friend replied.



But the McDonald’s revolution had arrived. Since 1974, the burger giant has changed the face of Britain’s high streets, altered what and how we eat, and led the way in customer-focused marketing. McDonald’s made eating out a leisure experience for families. It promised fast food, a quality environment and, most of all, fun.



McDonald’s approach and brand originally traded on its American heritage and novelty factor before gradually evolving into a part of family life tailored for a UK market. When it opened its first British restaurant it had to educate consumers about this new concept of counter-service, fast eating. But the public took to the product and the number of restaurants grew from ten in 1977 to almost 200 in 1985. By 1996, there were 738 and this year the company will open its 1000th UK restaurant.



One of the most important reasons for McDonald’s success has been brand consistency. The emphasis on quick service, a functional interior and a standard selection of products available at value-for-money prices underpins the business today as much as it did in 1974. As McDonald’s spread throughout the world in the 1970s and 80s, the standard nature of the offering became more crucial, epitomised by the credo of quality, service, cleanliness and value.



The almost military planning of the company means that, from Birmingham to Beijing, if you walk into a McDonald’s and order a Big Mac and fries, you know how it will taste and what the wrapping will look like. It was the first real example of what a strongly defined brand could achieve.



This standardisation of food, training and restaurant design - even down to how much ice goes into a cup of cola - was particularly important in helping franchisees stick to the ’McDonald’s Way’. Globally, 70% of McDonald’s restaurants are franchise operations, but in the UK thisfigure is just 26%.



The franchise system was instituted early in McDonald’s US developmentas a way to increase the size of the business with minimal capital outlay.



Franchisees sign up for 20-year contracts and hand over 4.8% of theirsales to fund marketing. The unique nature of the UK market reflects the management of the company and is a perfect illustration of the ’thinkglobal, act local’ maxim

Flexibility for managers

Although standards of food, service and processes are tightly adhered to, UK managers have more flexibility in marketing and advertising than in other countries such as the US, where the high franchisee levelinevitably leads to product and price-focused promotion and advertising.



Country managers are also given flexibility in sourcing ingredients, and are encouraged to buy locally if possible. For McDonald’s UK, this meant the chain stopped using British beef during 1996’s BSE crisis. But the best example of the burger chain’s tailoring of UK strategies is its advertising. John Hawkes, McDonald’s UK senior vice-president, chief marketing officer, has total control to make the brand’s image as British as possible, working with its agency of 13 years, LeoBurnett.



Advertising has always been one of the most innovative aspects of McDonald’s marketing strategy. When the company hit our shores, the adsplayed on its American heritage. The first UK advertising used theslogan, ’There’s a difference at McDonald’s you’ll enjoy’, and reflected the novelty and ’come join the party’ feel that McDonald’s wanted consumers to tap into.

Early ads concentrated on images emphasising McDonald’s products andservices to educate a population familiar only with chip shops and Wimpy bars for their fast food.



But by the late-80s, when the McDonald’s national roll-out was completed and competition from rival chains KFC and Burger King was hotting up, the ads changed tack. McDonald’s appointed Leo Burnett in 1986 to help with a new approach. It needed to go beyond simply reiterating product benefits - which could now be copied by competitors - and to establish a more emotional link to consumers.



’Marketing food isn’t the primary objective for McDonald’s,’ says JohnPrior, UK and Ireland marketing director of KFC, and former marketingchief of Burger King. ’They see the whole restaurant experience as beingmore important - it’s a very different strategy from Burger King, which pushes food quality.’



McDonald’s has always poured a healthy budget into its campaigns. Last year, its pounds 44m spend dwarfed Burger King’s pounds 15.6m presence.



Since the mid-80s, advertising has been split into three strands. Although the campaigns have different goals, they illustrate how tactical communications can be made to complement branding messages.



The TV branding campaigns are responsible for maintaining the sense that McDonald’s is at the centre of British family life. These ads took on particular importance after market research undertaken in 1991 showed that consumers were beginning to perceive the chain as arrogant and inflexible.



This was the first sign that its American roots, although understood to be behind efficient service and value food, were alienating the UK public. After this, TV ads became more reflective of British life, andattempted to show the softer, more humorous side of the burger giant.



The second element of McDonald’s advertising fits in with one of the company’s most consistent propositions - appealing to children. It understood early on that if you get the kids on side, the adults will follow. Those children rushing down to the first restaurants in themid-70s are probably parents now.



Happy Meals - the major pull for children - have always been well supported by advertising. These ads, like the current one showing a young boy buying a Happy Meal for his sulky older sister, are also designed to pick up on the ’fabric of British life’ theme by using everyday family situations.



The third element is promotional tie-ins. McDonald’s has always been eager to link activity with major film launches, such as the current A Bug’s Life promotion. Past link-ups have seen Hunchback of Notre Dame, Hercules and Pocahontas goodies given to children buying burgers. Since 1996, when McDonald’s negotiated ten years’ exclusive rights with Disney, all the studio’s children’s blockbusters have been accompanied by a flurry of themed merchandise in the restaurants.



McDonald’s is also a big believer in the power of product promotions, typified by the rather too successful two-for-the-price-of-one Big Mac offer last month. McDonald’s had expected demand for Big Macs to rise fourfold, but when eight times more burgers were needed, the system collapsed.



Full-page apology ads and crowing tabloid headlines followed. Although the episode proved the popularity of Big Macs and the effectiveness of the advertising, it also showed that even McDonald’s legendary logistics system is fallible.

Biggest promotion yet

But the problems with the Big Mac deal will at least make the burger giant doubly sure it has enough supplies for what is likely to be its biggest promotion yet - Beany Babies.



Giving away Beany Babies - squidgy dolls - was hugely successful in the US. When the promotion hits our shores later this year, possibly to coincide with the the 25th anniversary on October 11, McDonald’s is hoping the sales momentum will set it up to enter the new millennium with confidence.



But, of course, McDonald’s is not marketing in a vacuum. It may have had little competition when it launched - only Kentucky Fried Chicken and Wimpy offering any competition - but Burger King is here now. It emerged as a real competitor in 1989 when Grand Metropolitan bought the Wimpy chain and rebranded many as Burger King.



Many of McDonald’s promotions are used tactically to compete against Burger King. When BK launched its new King Fries at the end of January, McDonald’s ran a campaign for its ’Easy Cheesy’ promotion, offering three different sizes of cheeseburger at knockdown prices.



McDonald’s statement to the press in relation to King Fries is reflective of its attitude to its far smaller rival: ’We are aware of the Burger King product - a similar french fry was trialled and rejected by McDonald’s some time ago. Burger King appears obsessed with taking on McDonald’s.



With just 15% of the market, they try these sort of promotions every now and then.’ The release adds that sales of McDonald’s french fries increased by 7.4% in the US when BK launched King Fries there a year ago.



’This is typical of its arrogant, dismissive attitude,’ says one fast-food industry insider. ’Size matters and McDonald’s is a very powerful organisation. It can afford to be confident.’



This view of McDonald’s is one that the multinational has been especially keen to counter for the past two years, as it fought to minimise the effects of the McLibel saga.



McLibel - the court case which followed McDonald’s decision to sue two British environmental protesters over claims in leaflets about the chain’s practices - was a public relations disaster. Almost overnight, McDonald’s was being talked of in the same breath as the worst excesses of American corporate culture. It had to deal with a huge amount of publicity that ensued from being cross-examined over its record in employment, nutrition, environmental matters, and the deliberate targeting of children in its ads.



By the end of two-and-a-half year trial, McDonald’s had won a legal victory but was the clear loser in terms of image. Many wondered why it had pursued such a case.



However determined Helen Steel and Dave Morris were, their protest campaign was insignificant until the moment McDonald’s lawyers decided to sue them - at a reported cost of pounds 10m.



Although there is no evidence that sales have been affected, McLibel was the kind of incident that directly contradicts McDonald’s carefully crafted image of family fun, honest and down-to-earth eating. An appeal by the two environmentalists is now under way, prolonging the potential for bad publicity.



As it faces the next 25 years, McDonald’s knows there is a tougher job to do sustaining growth than there was starting from scratch. Profits, although climbing, are growing at a slower rate as the chain runs out of high street locations for its restaurants.



New types of sites - on ferries, at football grounds, even in Guy’s Hospital - are part of the answer, but the future may require a different approach.



While McDonald’s taught everyone the trade of fast food, those lessons have now been learned. The eating environment is changing and if curren trends in nutrition, health and the general increase in consumer cynicism continue, these could all be areas of concern for McDonald’s.



But there is no disputing that the brand’s strength and formidable marketing skills have managed to turn a US invader into a very British burger.

MCDONALD’S FACTS

McDonald’s opened in 1940, when Dick and Mac McDonald opened a restaurant in San Bernadino, California. Businessman Ray Kroc bought the rights to develop the chain in 1955 and launched the McDonald’s Corporation.

The Filet-O-Fish was created by an American McDonald’s franchisee in 1963 after he realised that trade in his restaurant in a Catholic area of Cincinnati was low on Fridays - the day Catholics abstain from red meat.

Its value share of the UK hamburger market is 75%. Nearest competitor Burger King has just 15%.McDonald’s serves 38 million people across the world, every day.

One million British people eat at McDonald’s each day.

A survey by Interbrand ranks McDonald’s as the most recognised brandin the world - beating even Coca-Cola to the top slot.

It operates 23,000 restaurants in 109 countries.

In 1998, McDonald’s profit excluding charges was dollars 1.77bn (pounds 1.09bn) on sales of dollars 35.98bn (pounds 22.13bn). Strongest growth came from Europe, with fourth quarter operating profits up 17%.

ADVERTISING



McDonald’s has used four advertising agencies in its 25 years in the UK, beginning with an eight-year relationship with Colman & Partners (nowEuro RSCG Wnek Gosper) that ended in 1982. Two relatively short stints, with DMB&B and Saatchi & Saatchi, were followed by the appointment, in 1986, of Leo Burnett.



McDonald’s UK promotional work has been carried out by Simon Marketingsince the brand’s launch in this country.



1976: ’There’s a Difference at McDonald’s You’ll Enjoy’ was the first adfor the chain, shown on TV just as McDonald’s opened its first restaurants in London’s West End. Heavy on shots of food and restaurants, it aimed to explain this new concept of US-style eating to a wary British public.



1987: Meals on Wheels. One of the first ads by Leo Burnett, this campaign heavily promoted the takeaway side of the business by showing a series of people rushing out of McDonald’s, food in hand.



1990: Directed by Tony Kaye, ’A Day in the Life’ is seen by McDonald’s as a watershed campaign. Showing the action in one restaurant from dawn until dusk, it features customers giving their orders straight tocamera. The idea was to illustrate how one McDonald’s restaurant touches so many lives in just one day.



1998: Putting Alan Shearer into Eric Cantona’s role in a parody of the Eurostar ad proved a master stroke. Shearer’s version of Cantona’s philosophical ramblings - complete with Big Mac cravings - was a neat link to McDonald’s World Cup sponsorship.



