brand challenges

As Its Woes Pile Up, It's Worth Asking: Has McDonald's Jumped the Shark?

Posted by Dale Buss on October 17, 2013 01:58 PM

Is it possible that McDonald's finally has jumped the shark? Its faltering performance has put the iconic chain in the crosshairs of securities analysts and investors lately, and even some of its own franchisees, as well as the predictable coterie of nutrition critics and low-wage-worker advocates.

"I think McDonald's has reached its apex,"said a franchisee in a new Janney Capital Markets survey of 29 McDonald's franchisees. Is he right?

Clearly the world's leading fast-feeder has been struggling for a couple of years under the leadership of CEO Don Thompson, who succeeded a very good run by the initially underestimated former CEO Jim Skinner. Same-store sales in the US and some other markets are barely staying above year-ago comparisons. And while new menu items proliferate, most of them have been for only a "limited time—such as the new Southwest Chicken Premium McWrap—and they tend to slow service.Continue reading...

sip on this

Coca-Cola CEO Muhtar Kent Steers Ship Through Positive Third Quarter

Posted by Dale Buss on October 16, 2013 10:53 AM

Buffeted by what CEO Muhtar Kent called "headwinds" and aided by "tailwinds" around the world, Coca-Cola reported a good but not great third quarter and vowed once again to meet its target of doubling 2010 revenues by 2020.

Meanwhile, PepsiCo today reported a 1.5 percent revenue increase for the period while US beverage sales slid by 2 percent.

While much of the attention to the Coke brand these days is how marketers wrangle with the obesity issue, sales of the globe's leading soft-drink brand still grew 2 percent by volume during the period. About 70 percent of the company's sales are soft drinks.

Overall sales volumes including non-soda drinks such as teas and bottled waters grew by 2 percent in the United States. But it was emerging economies that gave Coca-Cola enough momentum to post a 4 percent rise in earnings per share for the period, in line with analysts' expectations.Continue reading...

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Sprite Hopes to Spread Holiday Cheer with Limited-Time Cranberry Flavor

Posted by Alicia Ciccone on October 10, 2013 07:42 PM

Sprite is hoping to sweeten up the holidays with a new limited-time, cranberry-flavored version of the popular lemon-lime soft drink. 

In its first flavor innovation since it debuted Sprite Remix in 2005, the new flavor will contribute a kick of sweet and tart cranberry in regular and Sprite Zero forms. Available from mid-October through the New Year, the new beverage might lend itself well to holiday-themed drinks and even as a flavored mixer for alcoholic concoctions. 

The innovation comes as major soft-drink manufacturers Coca-Cola and Pepsi are feeling the squeeze of more health-conscious customers, with soda consumption volumes falling. Coke has tried to quell calorie concerns with widespread anti-obesity campaigns and the expansion of its "Zero" calorie-free line to more of its brands.Continue reading...

brand challenges

McDonald's Promotes Reading, Healthy Eating with Happy Meal Books—But Is It Enough?

Posted by Dale Buss on October 10, 2013 04:27 PM

McDonald's certainly can't win with some critics. Its new promotion involves giving away millions of books that will advance both children's literacy and their understanding of healthy eating. But all some people see are a cynical way to sell more fast food.

Which, of course, is what McDonald's is in business to do. It'd be tough to make a mass business, employ all those workers and pay all those taxes with a trade that offered only, say, hand-made artisan sandwiches of artichokes and avocados with a chaser of kombucha.

In lieu of toys, McDonald's US plans to distribute more than 20 million paperback books inside its Happy Meals in the US during the first half of November, a gambit which could make it the country's "largest children's book publisher for the month," as Ad Age observed.

The move is "yet another effort to appease criticis who have lambasted its Happy Meals for the food quality, the licensed toys and kid-targeted marketing," noted USA Today. The brand launched a similar effort back in the UK back in January, where it received much the same criticism.Continue reading...

corporate citizenship

Coke Combats Sustainability and Nutrition Critics with Rural Ekocenters

Posted by Adeline Chong on October 8, 2013 06:36 PM

Imagine a shipping container painted bright red, with a solar panel on its roof, in the middle of a rural road. The red is a familiar one. It is the famed Pantone hue that accompanies Coca-Cola cans around the world. And suddenly, that bright red block on the side of the road doesn't look so out of place.

Coca-Cola has just opened its first Ekocenter kiosk in Heidelberg, South Africa. The makeshift refreshment centers are in fact revolutionary water distillery systems designed by Segway inventor Dean Kamen, and are capable of providing up to 850 liters of clean drinking water per day. In communities which lack access to drinking water, the Ekocenter will appear on the horizon like a mirage in a desert, except that it is very real. Coca-Cola said that one more Ekocenter will open in another location this year. 

The plan is to have 150 Ekocenters in remote areas in 20 countries in Africa, Asia, Latin America and North America by the end of 2015, with a pledge to give back the amount of water used in its products by 2020, which is a lot, since the company used 156 billion liters of water in its finished products in 2012 alone.Continue reading...

sip on this

Coca-Cola Carefully Navigates Anti-Obesity Messaging as it Combats Falling Sales

Posted by Dale Buss on September 23, 2013 01:36 PM

While Coca-Cola has never acknolwedged being part of the problem of rising worldwide obesity, it sure is working hard at being part of the solution.

The beverage giant noted today—in a new TV commercial and with a press release—its vast efforts to get people moving during a summer of initiatives linked to a series of grassroots events it kicked off in May, called the Get the Ball Rolling initiative. It extended a broad effort that Coke kicked off in January with a commercial playing down its role in promoting obesity and encouraging physical activity as the most important antidoate to the problem.

Nutritionists are united in believing that caloric inputs are far more important in determining obesity than lack of physical activity per se. But moving around clearly helps offset too much intake, especially in children, so Coca-Cola has focused its Get the Ball Rolling initiatives on kids. Those efforts are highlighted in the new TV ad.Continue reading...

brand battle

Responding to Diet Coke's Sales Slide, Coke Reassures Safety of Aspartame

Posted by Dale Buss on August 15, 2013 10:47 AM

Coca-Cola continues to adjust its defensive crouch with the publication of a new ad meant to shore up consumer confidence in the artificial sweeteners in its diet drinks.

Regular Coke sales were down by 2 percent in the first half, continuing a long slide. But it turns out that it's not just sugary soft drinks Americans are growing uncomfortable about; it's diet drinks as well. Though switching to Diet Coke is a typical gambit by those who want fewer calories but don't want to give up Coca-Cola altogether, sales of the company's diet sodas actually fell 6 percent by volume during the first half, three times the rate of decline for its regular drinks.

Coke's research determined that consumer hesitance over aspartame, the sweetener in Diet Coke, is largely to blame even though the chemical sweetener has been around for decades. Still, Nutritionists and consumer advocates are raising doubts about the long-term effects of aspartame.Continue reading...

chew on this

Taco Bell Drops Kids' Meals as it Looks to Corner Millennial Market

Posted by Dale Buss on July 23, 2013 01:47 PM

Maybe we should have seen it coming when, in its most recent Super Bowl commercial, Taco Bell celebrated a bunch of old geezers' night on the town. Or maybe it was evident in the brand's years and years of incessant messaging to teenage males.

In any event, it's hardly a surprise that Taco Bell is dumping its kids' meals so that it can focus even more on the maws and fast-food needs of the vital Millennial demographic. It's actually a bit more jarring that other QSR brands are undercutting their own kids'-marketing efforts by sending their well-known mascots—including the Colonel—the way of the dinosaur.

Yum! Brands-owned Taco Bell plans to drop kids meals and toys at all of its US restaurants by around January, USA Today reported. "The future of Taco Bell is not about kids' meals," Taco Bell CEO Greg Creed told the newspaper. "This is about positioning the brand for Millennials."Continue reading...

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