In response to the growing health concerns, one of the first steps taken by mcdonalds was to phase out supersizing

by the end of 2004. The supersizing option allowed customer to get a larger order of French fries and a bigger soft drinks by paying a little extra. Mcdonalds alo announced that it intends to start providing nutrition information on the packaging its products. The information will be easy to read and will tell customers about the calories, fat, protein, carbohydrates, and sodium that are in each product. Finally, mcdonalds pledged to gradually remove the artery-clogging trans-fatty acids from the oil that it uses to make its French fries.

Skinner was also trying to provide more offerings that were likely to be perceived by customers as being healthier. Mcdonalds continued to build on its chicken offerings, using white meat with products such as Chicken Select. It also placed a great deal of emphasis on its new salad offerings. Although the firm had failed to attract many customers in the past with its salads, mcdonalds carried out experiments and tests with its new, premium versions. It chose higher-quality ingredients, from a variety of lettuces and tasty cherry tomatoes to sharper cheeses and better cuts of meat. It offered a choice of Newmans Own dressings, a well-known higher-end brand. Mcdonalds has also been trying to include more fruits and vegetables in its well-known and popular Happy Meals. The addition of fruits and vegetables has raised the firms operating costs because the perishable nature to produce makes it more expensive to ship and store. But skinner believes that the firm had to push more heavily on fruits and salads. Salads have changed the way people think of our brand, said Wade Thoma, vice president for menu development in the United States. it tell people that we are very serious about offering things people feel comfortable eating.

The current rollout of new beverages, highlighted by new coffee-based drinks, represents the chains biggest menu expansion in almost three decades. Under a plan to add a mccafe section to all of its nearly 14,000 United States outlets, mcdonalds has been offering lattes, cappuccinos, ice-blended frappes, and fruit-based smoothies to its customers. in many cases, theyre now coming for the meal, said lee renz, the firms vice president, who is responsible for the rollout. Revamping the Outlets As part of its turnaround strategy, Mcdonalds has been selling off the outlets that it owned. More than 75 percent of its outlets are now in the henads of franchisees and other affiliates. Skinner is working with the franchisees to address the look and feel of many of the chains aging stores. Without any changes to their dcor, the firm is likely to be left behind by other, more savvy fast-food and drink retailers. The firm is in the midst of pushing harder to refurbish or reimage-all of its aoulets around the world. This is all part of becoming more relevant to our consumers, enters our restaurant, they enter our brand.

One of the prototype interiors being tested out by mcdonalds has curved counters with surfaces painted in bright colors. In one corner, a touch-activated screen allows customers to punch in orders without queuing. The interiors can feature armchairs and sofas, modern lighting, large television screens, and even wireless internet access. The firm is also trying to develop new features include music aimed at queuing vehicles and a wall of windows on the drive-through side of the restaurant, allowing customers to see meals being prepared from their cars. the chain has even been developing mccafes inside its outlets next to the usual fast-food counter. The mccafe concept originated in Australia in 1993 and has been rolled out in many restaurants around the world. Mcdonalds has just begun to introduce the concept in the United States as it refurbishes many of its existing outlets. In fact, part of the refurbishment has focused on the installation of a specialty beverage platform across all U.S outlets. The cost of installing this equipment is running at about $100,000 per outlet, with mcdonalds subsidizing part of the expense. Eventually, all mccafes will offer espresso-based coffee, gourmet coffee blends, fresh baked muffins, and high-end desserts. Customers will be able to consume these products while they relax in soft leather chairs listening to jazz, big-band, or blues music. Commenting on this significant expansion of offerings, Marty Brochstein, executive editor of the Licensing Letter said: Mcdonalds wants to be seen as a lifestyle brand, not just a place to go to have a burger. A new and improved mcdonalds? Even though skinners efforts to transform mcdonalds have led to improvements in its sales and profits, there are questions about the future of the fastfood chain. The firm is trying out a variety of strategies in order to increase its appeal to different segments of the market. Through the adoption of a mix of outlets dcor and menu items, mcdonalds is trying to target young adults, teenagers, children, and families. In so doing, it must ensure that it does not alienate any one of these groups in its efforts to reach out the others. Its new marketing campaign, anchored around the catchy phase Im loving it, takes on different forms in order to target each of the groups that it is seeking.

Larry light, the head of global marketing at mcdonalds since 2002, insists that the firm has to exploit its brand by pushing it in many different directions. The brand can be positioned differently in different locations, at different times of the day, and for breakfast with its gourmet coffee, egg sandwiches, and fat-free muffins. Light explains the adoption of this approach as multiformat strategy: The days of mass-media marketing are over.

As mcdonalds expands on its concept of fast-food, it is moving beyond its staple of burgers and fries to a wider variety of offerings. In particular, many analysts are questioning the decision to invest in specialty beverages during a period when consumers are cutting back on spending. In fact, there are indications that the initial sales of lattes and frappes have not met expectations. Skinners recently denied that beverage addition mat not have been successful. You have to remember that everything we do at mcdonalds is for the long term, he responded.

Nevertheless, the additional offerings do raise some fundamental questions. Most significantly, it is not clear just how far mcdonalds can strectch its brand while keeping all of its outlets under the traditional symbol of its golden arches. Chief financial officer Paull acknowledge that burgers continued to be the main draw for mcdonalds. There is no question that we make more money from selling hamburgers and cheeseburgers, he recently stated.

Above all, skinner is convinced that mcdonalds must do whatever it can to make sure that is keeps its established customer base from bolting t the growing number of competitors such as the California-based In-N-Out chain. The long term success of the firm may well depend on its ability to compete with rival burger chains. The burger category has great strength, added David C. Noyak, chairman and CEO of Yum! Brands, parent of KFC and Tco Vell, Thats Americas food. People love hamburgers.