Is McDonald’s Kid-Themed Business Model Obsolete?

[marmar]

from Civil Eats:


Is McDonald’s Kid-Themed Business Model Obsolete?
By Michele Simon on August 29, 2013


A few weeks ago, USA Today announced: “Taco Bell will shock the fast-food industry on Tuesday by announcing plans to drop kids meals and toys at all of its U.S. restaurants.” CEO Greg Creed told the paper: “The future of Taco Bell is not about kids meals. This is about positioning the brand for Millennials.”

Some were skeptical about the announcement, given that kids’ meals only represent half of one percent of Taco Bell’s overall sales. While increasing pressure on the fast food industry to stop marketing to children wasn’t the main reason for the change, it’s still a significant development.

That a large fast food company thought it could gain a public relations boost by showing off what amounted to a failed business strategy is a sure sign of success by children’s health advocates. Restaurant executives have heard the message loud and clear: Marketing junk food to children is a scourge on their industry and any move that distances your company from such negative PR is a good thing.

The move also leaves McDonald’s increasingly isolated in its steadfast refusal to change its ways. Taco Bell is not in fact the first or only company to abandon children as a target market. In 2011, Jack in the Box announced it was pulling toys from its kids’ meals, explaining to Reuters: “Our advertising and promotions have focused exclusively on the frequent fast-food customer, not children.” ......................(more)

The complete piece is at: http://civileats.com/2013/08/29/is-mcdonalds-kid-themed-business-model-obsolete/#sthash.rHwHGXYD.dpuf

[Jenoch]

1. When was the last time anyone saw a McDonald's TV spot

featuring either Ronald McDonald or a Happy Meal?

[snooper2]

3. Yesterday

[Jenoch]

5. I suppose I should have

thought things through a little more before writing that post. I guess I'm just not watching TV when McDonald's TV spots targeted to children would be broadcast.

I'm not a big McDonald's eater so all I really know about their business is from advertising. It seems to me they are targeting adults with their knew 1/4 pounders and wraps, their coffee and smoothies are targeted at adults as well.

I have a SIL that went to buy Happy Meals at about 20 differnt McDonald's stores years ago just to get all of the McDonald's Beany Babies.

[snooper2]

8. You don't watch SpongeBob!

[Jenoch]

13. My kids used to get annoyed

when I called him Sponge Bob Crap Pants.

Of course, that was the point.

[kiva]

2. More and more adults are childfree.

Personally I don't care if a fast food place tries to attract children by kid's meals or by playgrounds, when I do buy fast food it's at the drivethru to take home, but I suppose for some people who were eating kid's meals a few years ago it might matter.

I think claiming it's a victory for children's health advocates is silly, it's simply a matter of the market changing - if a company can make more money aiming at adult customers, then it will aim at adults.

[Fawke Em]

6. They're not, actually.

But, even if that was true, the more relevant issue is that more and more parents have come to realize that fast food is crap and is making both them and their children fan, ill or both.

[kiva]

16. Yes, more women are not having children:

http://www.datalounge.com/cgi-bin/iowa/ajax.html?t=9849766#page:showThread,9849766

As to greater parental awareness...given the rate of childhood obesity, I don't know that what you say is true, but it would be good if it were so.

[aikoaiko]

4. It would be nice if this were due to parents feeding their kids better,

...but I worry that its due to parents not feeding their kids as much regardless of food type because of poor finances.

[Fawke Em]

7. It's still cheaper to cook than to purchase food from

ANY restaurant - even the crap fast food places.

[aikoaiko]

9. Its true if you have the time to cook and grocery shop.

[KurtNYC]

10. McDonald's is in kid's meals for the long haul.

One of their core clients is working parents -- too busy or tired to cook and clean up at the end of the day AND with the money to pay for prepared food.

Lower income people are more likely than high income people to have kids. McDonald's meals are not part of WIC or other assistance and they are far from the cheapest way to feed kids. So fast food has clustered around the working poor but I think Taco Bell is not really aimed at kids -- the food is more spicy than sweet. Taco Bell sells more soft drink per customer than McD's and soft drinks are where the bigger margins are. Taco Bell was owned by Pepsi at one time. Tacos are messy and have lots of "weird stuff" all mixed together, not that kid friendly really.

Compare that to chicken nuggets and little cups of sugary sauces. So for Taco Bell to stop kids meals is a much smaller change than it would be for McDonald's.

On nutrition, I think the working poor are price sensitive. That's how "dollar menus" spread to all the chains -- value. People will change what they feed their kids when they see that change as enhancing the value they get for their hard earned dollar. A free toy is a value enhancement. If they charged for the toys then IMHO Happy Meals would fade.

[bluestate10]

11. I agree. The McDonald's that I visit on occasion does a large volume of "family"

business, as much as it does childless adult business.

[bluestate10]

12. Wendy's is the smartest operator in the fast food business, IMO.

That chain started upping it's healthy options several years ago and now those options appear to be the mainstay of the chain's business. The chain is constantly pushing the bubble, testing new healthy sandwiches, sides and drinks. It has become my stop of choice when I am away from home and fast food is the only logical option.

Burger King was doing a commendable job of producing healthy options, but that chain has back tracked badly in the last couple of years.

[hughee99]

14. If TB is successful in targeting Millennials, in 10 years, they'll bring back

the kids meals to keep those same Millennials from going to McD's with their new children.

There is, and will be, a market for both.

[Bake]

15. But Taco Bell doesn't have a red-haired clown ...

McD's would have to kill off Ronald.

bake

[Supersedeas]

17. not a chance

[Hayabusa]

18. I think it should be.

Personally, I have no problem with children eating at McDonalds, but marketing to kids takes the "moderation" out of it. I'd personally start marketing to adults with a slogan such as "Isn't it time to treat yourself?" or something to that effect. But of course, they'd lose money in the process, so...