Product Concepts
MCDONALD’S HAS TEAMED UP WITH CONAGRA TO TEST A LINE OF WRAPPED SANDWICHES MADE WITH HEALTHY CHOICE DELI MEATS. THE LINE, WHICH HAS FOUR VARIETIES, PUTS MCDONALD’S IN THE TRENDY WRAP SANDWICH CATEGORY AND COULD PROVIDE A MUCH NEEDED FOOD ITEM THAT IS LOW IN FAT, PORTABLE, AND CONVENIENT. THE SANDWICH IS TARGETED TO ADULT CONSUMERS, LONG A DEMOGRAPHIC SORE SPOT WITH THE RESTAURANT CHAIN. For McDonald’s, the Healthy Choice brand will provide a good-for-you image that is lacking in many of the restaurant’s food items. McDonald’s USA president Alan Feldman has noted that he is interested in borrowing brand equity from other brands as well. A source close to the company said, “I think you’re going to see a lot more of this cobranding at McDonald’s.”
The McDeli test is part of McDonald’s attempt to upgrade its overall food quality and to develop new products that will attract consumer groups other than kids. Its last adult-targeted Deluxe sandwich line proved to be an expensive disappointment. The Arch Deluxe burger has been dropped from many stores, and the Fish Deluxe is being redesigned.
The McDeli Wraps, developed by a franchisee in Michigan, have an average six to twelve grams of fat. The four varieties—Grilled Chicken Caesar, Turkey & Swiss, Turkey Club, and a no-meat Veggie Wrap—are intended to be a healthier product that mothers can have while the kids eat Happy Meals and that’s easy to eat while driving. The wraps have been selling briskly in test markets, with one store manager reporting sales of two hundred wraps daily. Wrap sandwiches have grown in popularity and are meant to address three large trends among time-pressed consumers: portability, a growing concern over fat content, and a desire for more freshly made, out-of-home dining solutions. However, wrap sandwiches have a mixed record among fast-food restaurants. Long John Silver’s, KFC, and Wendy’s have all introduced wrap-style offerings. KFC has since pulled its entry, whereas wraps at Long John’s and Wendy’s have not produced incremental sales.1 Why would a company like McDonald’s—which already has a strong brand name and identity—choose to team up with |another brand? What are the positives and negatives of such a strategy? Do you think that McDonald’s strategy is sound?
Global Perspectives
The Name Game Heats Up
As the world goes global, it is more important than ever that companies screen their brand names for multilingual suitability. Here are a few examples of U.S. companies that ran into brand-name problems overseas:
• General Motors named a new Chevrolet Beretta without getting permission from the Italian arms manufacturer. It cost GM $500,000 to settle the lawsuit.
• Estee Lauder was set to export its Country Mist makeup when German managers pointed out that “mist” in German is slang for “manure.” The name became Country Moist in Germany.
• A food company advertised its giant burrito as Burrada. The colloquial meaning of that word is “big mistake.”
Imported names can be just as embarrassing. Consider:
• Creap (Japanese coffee creamer)
• Bimbo (Mexican bread)
• Darkie (Asian toothpaste)17
What should companies do to avoid these kinds of mistakes? What would also be some important considerations for brand names used in other countries?
Entrepreneurial Insights
Staking Claim on Branded Diamonds
As the world goes global, it is more important than ever that companies screen their brand names for multilingual suitability. Here are a few examples of U.S. companies that ran into brand-name problems overseas:
• General Motors named a new Chevrolet Beretta without getting permission from the Italian arms manufacturer. It cost GM $500,000 to settle the lawsuit.
• Estee Lauder was set to export its Country Mist makeup when German managers pointed out that “mist” in German is slang for “manure.” The name became Country Moist in Germany.
• A food company advertised its giant burrito as Burrada. The colloquial meaning of that word is “big mistake.”
Imported names can be just as embarrassing. Consider:
• Creap (Japanese coffee creamer)
• Bimbo (Mexican bread)
• Darkie (Asian toothpaste)17
What should companies do to avoid these kinds of mistakes? What would also be some important considerations for brand names used in other countries?
Ethics in Marketing
Ti-Gear: Owning Up to a Name
The name of GolfGear International Inc.’s new product offering, the “Ti-Gear” wood, is raising a few eyebrows. On the one hand, “They (GolfGear International) don’t have Tiger (Woods’) authorization, and we can’t give further comment on the advice of our attorneys,” says Bev Norwood, spokesperson for Cleveland-based International Management Group, the sports representative’s agency working on behalf of Woods. On the other hand, the golf club is made with a patented “forged titanium insert” intended to help the ball travel farther. GolfGear International’s president and chairman, Don Anderson, noted in a written statement that his company has been using the name Titanium Gear since 1990 or 1991.
“(W)e shortened it to Ti-Gear: ‘Ti’ is the symbol of Titanium, and ‘Gear’ follows our family of products since we started in business nearly 10 years ago. The name . . . clearly has nothing to do with Tiger Woods,” the statement read. He also noted that other GolfGear products use similar names that reflect their components, such as “Carbon Gear.” “Determining whether or not the use of a particular mark is likely to cause confusion with another mark is based on a number of factors. The fact that two marks may look or sound similar is important, but it’s only one factor,” said Bart Lazar, a partner specializing in the protection and enforcement of trademark rights with the Seyfarth, Shaw, Fairweather and Geraldson law firm in Chicago. Among the criteria that would factor into a trademark infringement case would be whether GolfGear knew of Tiger Woods at the time the company adopted the mark, and whether consumers are likely to be confused, Lazar said.34 Is the Ti-Gear brand a trademark violation? Is the branding strategy ethical? Discuss. 