Brands in the News

McDonald’s Internet: Points of Parity, Points of Difference

17 Dec , 2009  

Yesterday McDonald’s announced that it would be introducing free internet access.  This is a good move and a long overdue one.

There are two important concepts when it comes to positioning: points of parity and points of difference.  When a brand establishes a frame of reference, or competitive set, there are obvious points of parity.  These are features and benefits offered by basically everyone.  They do not differentiate, but a brand that falls short on these dimensions will surely be hurt.  For example, all small cars have four wheels, a steering wheel, lights and pretty good gas mileage.  These are all points of parity.

Points of difference are the things that help a brand stand out.  These are the factors that drive purchase.  Small cars are all pretty similar but the Mini Cooper is uniquely sporty and fun to drive. 

For McDonald’s, internet access is fast becoming a point of parity.  In the world of coffee establishments, in particular, internet access is almost universal.  Starbucks, Caribou, Argo and my favorite local Chicago coffee shop, Intelligentsia, all offer it.  McDonald’s has to offer free internet simply to be a viable competitor in the space. 

This move will result in some lost revenue in the short run, as people no longer have to pay for internet access, but it will protect share.

Marketing isn’t always about growth.  Sometimes companies have to focus on improving the product simply to keep up.  This is one of those times for McDonald’s.

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  5. of course when you dont have time to cook, fastfoods would always be the best option “:,

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  7. Tim Calkins says:

    Chirag and Rob—Good points on question of defining competition.

    My sense is that McDonald’s is thinking of the competitive set very broadly, so Starbucks and Panera are key competitors.

    I agree with this broader frame of reference; it illustrates growth opportunities for McDonald’s and it highilights emerging threats.

    In the traditional fast food market internet access isn’t a point of parity. But in the broader marketing it is clearly essential.

    • Jaidev says:

      Offering free internet does not affect those who already come there. Free internet is important only to the Panera Bread/Starbucks customers whom it seems to be trying to attract. For this new customer set which maybe McDonalds thinks it can get, it is trying to offer a point of parity.

      For it’s existing customer base, maybe it is also trying to change the frame of reference. Something like, it is not just a cheap place, so don’t be surprised if you find different, expensive, healthy things here too. If it does not redefine itself, it may not be able to compete in the long run. It must have either determined that doing this will not change the behavior of the current customer base or maybe its current customer base is migrating to this new frame of reference.

  8. Rob Snyder says:

    Overall great point about internet access and parity…Funny you mention Starbucks..I actually started hanging out in Panera b/c the Starbucks near me don’t offer free access..

    I do agree however with the coment about cautioning the comparison to coffee shops…I would imagine that coffee shops have much more of a “lingering factor”…I’m not sure that people are looking to spend as much time on their lap tops in a place like McD’s vs. Starbuck and even if they do I wonder how much incremental business it drives…(i.e. you can sit and drink coffee all day, buy small snacks vs. buying quarter pounders all day)

    • Shirlee Berman says:

      Regarding the “lingering factor”, if I remember correctly from my business school days, historically McD’s had uncomfortable chairs designed to discourage lingering. Perhaps with the proliferation of smartphones and tablets, McD’s found that fast eaters are also web-using multi-taskers, and this is not targeted for people who want a place to work on their laptop or browse the web for hours.

  9. Chirag Gupta says:

    I agree that McDonald’s has made a wise decision by removing the fee for internet access in most of its locations. However, I would be cautious about placing fast food chains on par with coffee shops. Do you picture McDonald’s as a company that provides an uniquely different service from Burger King, Taco Bell, etc.?

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