To coincide with a PR storm that unraveled around tainted meat used by McDonald's from food supplier Husi Shanghai, the chain is embarking on a year-and-a-half-long re-branding plan to reshape its basic offerings including business value, service, marketing and menu.
"During the quarter, we evolved our strategic Plan to Win framework to enhance our focus on the customer through insights, planning and actions. To reignite momentum over the next 18 months, we're focused on fortifying the foundational elements of our business by concentrating our efforts on compelling value, marketing and operations excellence to become a more relevant and trusted brand," said McDonald's president and CEO Don Thompson.
The announcement for rebranding comes after McDonald's announced that its second quarter comparable sales increased by just 1.1% in the Asia-Pacific, Middle East and Africa, with operating income having declined by 2% in the same time period.
Re-branding to turn around slowing sales
Globally, McDonald's will be reshaping its basic offerings including business value, service, marketing, and menu in a rebranding campaign that will last 18 months.
There will be no overhaul of the logo - instead, the purpose of the campaign is to transform McDonald's into a more trusted and respected brand.
But given the global scale of the Husi Shanghai PR crisis, would this one-size-fits-all template help turn the tide for all local chains around the world?
Rachel Catanach, managing director and senior partner at FleishmanHillard Hong Kong, suggests McDonald’s should better understand the drivers impacting its reputation in different markets.
“In China and Hong Kong, it’s food safety, in other markets, it’s dietary concerns or service issues," she said.
“A rebrand will only have a skin-deep impact unless McDonald’s really solves some of the business issues it seems burdened by, including supply chain integrity and service quality. Otherwise, rebranding will be as effective as a sticking plaster on a deep cut."
The PR Storm
After initially denying it earlier last week, McDonald's admitted last Thursday that it has indeed been using meat imported from Husi Shanghai, in a statement issued after the Hong Kong government's statement on the same day saying the food giant had imported chicken and pork from the food supplier.
Since Thursday, McDonald's Hong Kong stopped offering Chicken McNuggets, McSpicy Chicken Filet, Corn Cup, Iced Lemon Tea, and green and chicken salads, as well as vegetables in burgers.
Yesterday, the food giant held a four-minute press conference in which McDonald's Hong Kong MD Randy Lai said the food giant imported vegetables as well as meat from Shanghai Husi.
She apologised for the lack of clarity in the way the company communicated the incident and that the Husi food has been packed and sealed into boxes and handed over to the Food and Environmental Hygiene department. The food sealed and given to the Food and Environmental Hygiene department amounted to 60 tonnes.
No questions from journalists were taken at the end of the press conference.
McDonald's Hong Kong has also updated its website to show customers what foods have been affected and what products are temporarily suspended from the menu. It comes with a message emphasising that food sold at its chains conform to food and safety standards.
The pledge to rediscover its soul in the rebranding plan may or may not be a fair justification to customers at a time when the long established reputation is faltered.
But Richard Tsang, chairman of Strategic Public Relations Group, thinks the apologies and remedies came too late.
“They broke most of the rules in crisis management - check the facts, act promptly, apologise for any wrongdoings, establish countermeasures and regain trust and confidence.”
“McDonald’s was slow in apologising,” said Tsang. “In the beginning, the problem was not isolated to McDonald’s since the supplier also provides chicken and beef to various major brands; however, McDonald’s was among the first to deny its involvement and only later admitted that they had an issue.”
That said, he remains confident that the brand will still be well-received and popular among children.
“I believe McDonald’s is still a valued brand and that they are also a victim of the incident."
He said the angriest customers are parents and young people who have vented their frustration via social media. People are particularly disgruntled with the release of incorrect or confusing information.
“Children will still love the fast food giant, and despite all of the comments made about the unhealthiness of their products in the past, you just can’t prevent children from asking their parents to bring them to the Golden Arches.”
“Customers will still trust them if they take the necessary precautions so that incidents of this nature will not happen in the future. Also, adequate clarification of why misleading information had previously been released would go towards redressing public discontent,” he added.
Robert Grieves, chairman and CEO of communications agency Hamilton Advisors Limited, said, "In the McDonald's case, the information seemed to have come out at different stages. Companies should try to come up a full narrative from the onset and add to it later on."
He points out that basic crisis communications calls for companies facing a crisis to gather all the information about what happened, construct a narrative and a timeline and then go public about what happened and how the company will fix the problem. Then fix the problem and tell the world that it has been fixed, said Grieves.
"When McDonald's Hong Kong came out on Thursday and said there's a problem, they eventually got to it," Grieves said.
Companies should strive to be as transparent as possible, particularly food companies.
Grieves said, "When you sell food to the public, people trust that the food is healthy and not harmful. You are breaking that public trust if you sell a tainted product, and you need to rebuild that trust."
The rebuilding process begins from the very beginning when information about what happened is first shared.
"The company has to demonstrate that it has procedures to assure that the quality of its products and that it has the safety and well-being of customers in mind at all times," Grieves said.
Lorna Lennon, managing director of boutique crisis consultancy Bailiwick says rebuilding customer trust is a long and costly process.
"With the Husi scandal, crisis experts will be analysing both government and internal reports to ascertain what went wrong and where systems slipped up. The worrying factor is that in Wales, a new food scare is also unravelling, compounding the crisis in food production lines. The spotlight is once again on the complexity of the global food chain," she said.
For Lennon, the case also illustrates that crises can spread globally in a very short time span.
She said, "When we crisis consultants warn clients about incidents going global in our 24/7 world, this is living proof. It spread globally like bush fire."
This story was written by Apple Lam and Jennifer Chan.