Why did McDonald’s give up selling those nice toys?

Q: I’M A MOTHER of two young kids and a struggling Facebook marketing entrepreneur. I just started this year after reading and being inspired by the book, Facebook Marketing for Dummies.

I’m not sure why but I’ve tended to follow how McDonald’s does its marketing. There was a time when my two kids would ask me to bring them to McDonald’s so they can accumulate enough points to allow them to buy and complete a collection of toys like the Dalmatian toy dog collection. As a mother, I sort of enjoyed that whenever I saw how happy my two kids were. Then suddenly, the toys were gone. When I asked why at the counter, I was just told: “Ma’am, that was just a promo. It’s over Ma’am.”

I’ve asked other moms and even my husband. No one really knows why and could not give me a good answer that makes logical marketing sense. Really, why did McDonald’s give up selling those nice toys when so many were still buying? For my Facebook marketing, I was thinking of doing something like what McDonald’s did with toys though not necessary via toys.

I read your column every Friday. Last Friday as I read your column, it occurred to me: “Why not ask you?” So, can you please help me make some marketing sense out of this questionable McDonald decision.

A: The toy selling you referred to is called “self-liquidating promotion” in the marketing literature. So the staff at the McDonald’s counter whom you asked was correct in telling you that was a promo. Of course, giving you the name of the campaign does not explain why it was stopped when (as you correctly observed) “so many were still buying” those “nice” toys. But we doubt if that counter staff would know the reason. That decision was an executive or might even have been a top management decision.

Northwestern’s Kellogg School Professor Robert Blattberg wrote in his best-seller sales promo book about research on sales promo effectiveness. Those research studies showed that a self liquidating promo that’s doing too well can be dysfunctional. For example, consider the case of those toys your kids liked collecting. Sooner or later, Moms (not including yourself as yet) might start wondering if McDonald’s is preparing to change business, that is, shift from a fast-food restaurant to a “Toys-R-Us” store.

In marketing, that’s the risk of “brand equity dilution.” It’s a weakening of brand equity. David Aaker, the inventor of the brand equity concept, defined brand equity as the brand’s underlying meaningfulness to its consumers, its ownership of a singular consumer need and priority, distinctive product value. So this is a serious risk.

There’s another risk. Consumers or most of them, can get used to the presence of the promo side by side with their purchase of the product they were really after. When the promo is no longer around, they may just wait until the promo is back to do their usual purchase. So to guard against this risk, it’s important that this dangerous point in time be avoided. One way of avoiding is to terminate the promo when it’s about to overwhelm the sale of the regular McDonald’s menu items.

The fact that toys happen to belong to a product category which is alien to McDonald’s category of products explains why there are those risks that should be the serious concern of brand managers. If the self liquidating promo item had been another food menu that would contribute or supplement rather than detract from or dilute the McDonald’s brand equity, then there would be no issue. This was the case when McDonald’s first introduced “Value Meal” as a sales promo item.

Sales were down during that year when the brand people at McDonald’s, taking their lead from Oakbrook, Illinois, thought of a “Value Meal” as a short-term one quarter long promo. Sales promos are a proven tactic in marketing for spiking reduced sales. As is well known, the “Value Meal” promo eventually outdid itself beating its sales quota from one month to the next and then from quarter to the next.

When its sales started accounting for over 30 percent of total McDonald’s revenue, top management decided to stop the promo. But in deciding to end the promo, it did not decide to do away with “Value Meal.” Instead, McDonald’s elevated the status of “Value Meal” from a promo to a product line member. Starting then, “Value Meal” became a legitimate menu food item.

So there’s the explanation you want. We couldn’t help noticing that you seemed to be thinking of a self-liquidating promo of your own. We hope our short diagnosis will also serve as a cautionary signal for you to consider and think about.

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