After four years of flat or declining sales in Singapore, McDonald’s embarked on a brand overhaul to put it back on a positive trajectory. As it celebrates its 40th anniversary in the region this year, The Drum catches up with the senior director of marketing, menu and innovation Agatha Yap.
Yap has witnessed many phases of McDonald’s evolution in Singapore, from its growth spurt when the government opened the doors to foreign investment (resulting in a population boom) to the competition it faced with the explosion of shopping malls and more fast food available at the click of a button.
Five years after McDonald's set off the Hello Kitty craze in Singapore which caused riots Yap joined the marketing team, before leaving to spend a year in its China division and then departing two years later. Then in 2017, as the brand navigated changes with its franchisee model, she returned to take on a wider role that encompassed marketing and menu innovation.
“The ketchup never leaves the veins,” she jokes.
But the brand she came back to was facing multiple challenges. Though the 122 restaurant-strong chain remained the market leader in its category by a significant margin, its sales for the past four years had been flat and were getting worse.
“We were serving to fewer customers every year, showing us how easy it was for people to just switch [away from the brand] with no effort at all,” Yap says. It was a wake-up call.
“When you're so ubiquitous it's easy to be the brand that everyone's aware of but that loses its novelty,” Yup continues. “It was a forever young brand that was getting old and grey, so how do we stay fresh and yet be sustainable and not without losing our brand DNA? And remain locally relevant.”
So, in 2017 it reset the business. But it wasn’t a marketing job. “If you're offering crappy food there's only so much marketing can do,” she says.
Instead, it took a step back and looked at the menu, stripping it back to figure out what was really appealing to increasingly demanding Singaporeans.
After years of “random and reactive” products being put on menus, it started becoming far more “stringent” in what it went to market with and by 2018 the entire menu had been “rationalised.”
“It's very tactical and easy for a marketing person to just keep creating new things and trying to sell and hoping that the hundredth item would sell and that would be incremental on top of everything else. That's a fairly hopeful assumption that everything else stays equal. So we had to streamline our menu over two years and really go back to refine the brand,” she says.
“I'll be really honest, when we looked at the data we had product launches, with marketing spend, that where we would see a temporary spike. But when we stood back that spike didn't lift the baseline [of the restaurant] or in the case of 2017 was still on a negative trend.”
In tandem with the shake-up of its menu Yap also changed the structure of its marketing division and the way it was working with its local creative agencies, Leo Burnett, DDB and its media agency OMD respectively.
While many brands in troubled water will immediately dump their agencies in the hopes that new creative thinking will solve fundamental business problems, Yap’s position was to work out how the relationships could be improved.
This was especially vital as its marketing budgets during this time of brand reappraisal were not increased.
“After a couple of conversations with agencies we asked, are we clear about our own plans? If we don't know our own plans and the business indicators then how do we expect the agencies to advise us?”
It wasn’t. So Yap changed the structure so that each internal team took ownership of a “platform” (for example breakfast, beverages, sandwiches) rather than the campaign-based approach it had been working against previously, which simply saw quick-win adverts launched with no thought about how they would impact the overall bottom line.
“I really want to see them take full ownership and look at it end to end rather than being tactical for a launch,” she says. “Now they handle every single campaign within a category and that was a big mindset shift. They have a sense of ownership and pride, and better communication with the agency. It's less of a siloed view. They basically get a longer view. They understand the pain points and highlights.”
Through the closer working relationship Yap has implemented clearer guidelines on where a McDonald’s marketer’s role ends and the agency’s begins.
“I didn't expect the agencies to consult our business. That's stretching the expectation. I know a lot of agencies try to provide that, but the marketers ought to be the ones to know the business better. If you need to sit in a meeting for an agency planner to tell you where your sales points are then there's something fundamentally wrong.
“Instead what I told the agency to do what they're best at. Challenge the communication of something. At the same time, I told the marketing - your job is not to be an art director. Your job is to understand the opportunities and pitfalls. And so it was that clear demarcation of roles to have meaningful conversations.”
And the work is more effective, and efficient. It’s approving work on the first few rounds of pitching and more open to takings “risks”.
One example of this came last year. The category teams had realised that during the month of fasting it was “neglecting” the community, a huge issue in a Singapore where 14% of the 5.8m population is Muslim.
“We wanted to reconnect so we came up with a brand ad that was underpinned by our delivery service. When you're fasting, our 24/7 delivery service anytime anywhere that performed very well for us despite a humble production budget and it resonated very well with us.”
The business is slowly on the turn, says Yap. It’s had consecutive quarters of growth and perceptions of the brand and its food are improving, according to its own internal metrics.
“Together, with our agencies, we've seen positive business results. The pressure to the agency is not just to elevate marketing but to get some industry recognition. No scam ads! We now want to go to market with real ads supported by real results. That's celebrating the marketing and brand piece.”
Hear from top brands about how they operate with agencies and their global brand strategy at the upcoming Agency Acceleration Day APAC.