Roy Bergold: Tales from McDonald’s | June 2012 | By Roy T. Bergold Jr.

The Evolution of Quick Service

Over the years, McDonald’s constantly evolved its business model to keep up with consumer demand. In its wake is a roadmap for other brands to figure out change.

McDonald's has evolved its business model over the years to satisfy customers.
McDonald's has evolved its business model over the years to satisfy customers.
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Ladies and gentlemen, I love the written word. I devour books. But with the exception of Charles Dickens, I never read the same book twice. Too many books, too little time.

I am, however, currently reading a non-Dickens book for the second time. It’s a fascinating read. It talks about what we are doing to solve the problems of education, communication, energy, health care, and the big T (technology; you know, robotics, artificial intelligence, and a chip that you put a drop of blood on and it tells you what’s wrong with you and sends the results to your doctor). If you would like the title and author, drop me an e-mail.

Anyway, it got me thinking about the problems of the quick-serve business back in the ’60s and ’70s, and, ultimately, what we did to try to solve them. There were no manuals or films or courses. When a problem presented itself, we had to reach into our creativity bank and find a solution.

I thought you might like to know what some of those problems were and what we did, how we adapted to the changing conditions of the marketplace. It might just apply to your business today in some way.

I will use three broad classifications for our discussion: the store; quality, service, cleanliness, and value (QSCV); and marketing. Can’t get much broader than that, right?

The ’60s were colorful and crazy. Movies, music, culture, and even education were all kind of out there. The red, white, and yellow McDonald’s building grew out of this atmosphere. It was identifiable, fun, and functional. But by the ’70s, we were having a couple of problems. Planning and zoning commissions were not appreciating our rainbow-cone buildings on the oak-tree-lined main streets of America.

The second problem was weather. These open buildings worked great in the South, but come January, business came to a screeching halt in the North, and when the snow melted, we found defrosting customers clinging to their hamburger, sitting on the benches on the side of the building.

Solution: a real brown, brick restaurant building with heat and air. How did we get the operators to make the large investment necessary to open the building? We showed the building in all of our television spots, starting with the “You Deserve a Break Today” campaign. That did it. Problem solved.

When McDonald’s first started, the jobs in the store were tough. Peeling potatoes, cutting them up, blanching the fries, and running the grill were demanding jobs, so teenage boys were the preferred crew. But as more women entered the workforce, it became apparent that we needed to change our thinking. The counter seemed the answer. After all, who brings young men into the store? Teenage girls, of course. Thus, McDonald’s no longer employed just teenage boys.

Speaking of workforce, another condition changed. Teens began to get more allowance than we could afford to pay them in wages. We were having trouble manning the stores. Moms with kids in school were part of the answer, but we needed more employees. We realized: Who is more dependable, hard working, honest, knowledgeable, and caring than senior citizens? They became the answer to our shortage. They were looking to be needed, and boy, did we need them.

Let’s move on to how the world was changing the requirements of QSCV. When we started, speed, price, and consistency seemed all we needed to think about. And then came individualism. The “me generation.” It’s all about me. There was also the double whammy of Burger King’s “Have It Your Way” campaign. We had to start thinking about condiments that personalized the experience, and even altering the products to the tastes of new customer thinking.

This led to new lines of products, like salads, to satisfy the growing health consciousness of the day. It even led to a new daypart: breakfast. There was definitely a market for fast, convenient, priced-right breakfast, and we could provide it. Of course, large sizes happened, too. But there is an interesting argument as to whether Super Size was an invention of the quick-serve business or whether the market began to insist on more food and the industry complied. I won’t even attempt to sort this out.

The industry also invented value meals, taking a cue from diners, where the daily Blue Plate Special was so successful. Taking a few cents off a combination sold a lot of very profitable sides and drinks.

Lastly, there was price. As the post-war economy wound down, price became so important. And as costs accelerated, price increases became more commonplace. We discovered a very important tenet about price increases: Do a lot of little ones, not one big one. People seem to accept a few cents at a time, but hit them with a buck, and they rebel.

The last of the three points I wanted to hit on is marketing. This one is a book all by itself, but here are a few changing conditions that had to be dealt with. Probably the biggest was the transition from individual store marketing to the co-op to national marketing. As the company grew, so did the marketing opportunities and the growing pains. Getting programs approved, keeping an eye on profits and sales, and staying contemporary with what the customer wanted all became more critical as the company grew.

But that’s not all. The rise in importance of the black and Hispanic markets emphasized the need for separate marketing programs. Tough economic times brought on the Value Menu, which squeezed profits. The attacks on Happy Meals came from the obesity issue.

So it’s rather apparent that McDonald’s and the industry have successfully changed with market conditions, most of the time correctly, with a few sore toes. And this is just the U.S. example. How you change to fit into the rest of the world is a whole other subject that many companies have already encountered. Maybe we should all get together and figure that one out.

Happy Trails and a peaceful, but changing, life.

Roy Bergold

Roy started his career at the Leo Burnett Company in 1967. Two years later he decided to sell hamburgers instead, and began his adventure at McDonald’s. Starting as an assistant advertising manager, he became manager, national advertising manager, director of advertising and promotion, assistant vice president of advertising and promotion, and vice president of advertising.

Roy retired from McDonald’s in 2001 as Chief Creative Officer. Along the way, he was responsible for U.S., as well as all advertising worldwide. While under his care, McDonald’s earned every creative award possible, including Cannes, Clios, and the Four A’s best five year campaign. Roy lives happily in Payson, Arizona, with his wife, dogs, and horses.