Quality, Service, Cleanliness, Value, and a Hamburger U: Check out how one man grew this fast food brand’s empire! [Monday: Marketing Marvels]
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
Hello! How are you doing today?
We hope all is well.
Let’s start the week with inspiration from today’s “Marketing Marvel.” Every Monday, we talk about successful people in the business and marketing industries, and highlight their contributions, life experiences, and insights.
In this article, we’ll focus on one of the pioneers of fast food franchises.
Keep reading to learn more about this “Marvel,” particularly his humble beginnings and the proven and tested strategies that enabled him to succeed as a businessman.
Miles Everson
CEO, MBO Partners
Chairman of the Advisory Board, The I Institute
Marketing Marvels
McDonald’s has come a long way since it was established by brothers Richard and Maurice McDonald in 1955.
From selling a simple menu of burgers, fries, and shakes, the fast food restaurant grew into a HUGE empire that has branches in over 100 countries around the world.
The brand has also undergone several changes over the years. From drive-through services to Chicken McNuggets to college credits from Hamburger University, McDonald’s has quite a colorful journey.
… and all these transformations were associated with the story of one man.
Photo from The Artistree
Raymond Albert “Ray” Kroc (October 5, 1902 to January 14, 1984) was an American businessman who purchased McDonald’s in 1961 and became its CEO from 1967 to 1973. He was known for the global expansion of the fast food brand.
Due to the company’s growth under his leadership, he was also referred to as the founder of the McDonald’s Corporation. After retiring as CEO of McDonald’s, he bought the franchise of Major League Baseball (MLB) team San Diego Padres in 1974 and became its owner until 1984.
The Ray Kroc and McDonald’s Story
How could someone create a restaurant business and achieve overnight success at the age of 52?
That’s almost impossible!
As Kroc said,
“I was an overnight success, alright, but 30 years is a long, long night.”
Let’s take a look at his humble beginnings…
Kroc was born to parents of Czech origin in Oak Park, Illinois. When he was a child, his parents made him take piano and other music lessons. When he reached his teenage years, he displayed budding business instincts by selling lemonade at his family’s lemonade stand and later on, by working at a soda fountain business.
In 1917, 15-year-old Kroc joined the Red Cross ambulance service on the frontlines of World War I even if the minimum age requirement to join the service was 18. He received proper training at Connecticut, and there he met his fellow trainee, Walt Disney.
However, the war ended before Kroc could be sent into service overseas. Because of that, he returned to Chicago and worked various jobs throughout the 1920s and 1930s—as a jazz pianist, real estate salesman, and paper cup salesman for the Lily-Tulip Cup Company.
His business dealings connected him with ice cream shop owner Earl Prince, who invented the “Multimixer,” a machine capable of generating 5 milkshake batches at the same time.
In the early 1940s, Kroc left his job at the Lily-Tulip Cup Company and became the exclusive distributor of the Multimixer.
This led him to his “big break” in the business industry…
In 1954, Kroc visited a San Bernardino, California restaurant that used 8 of Earl Prince’s Multimixers. The restaurant was owned by brothers Richard and Maurice McDonald, who used an assembly line format to prepare and sell a large volume of hamburgers, fries, and milkshakes.
Impressed by what he saw, Kroc became the McDonald brothers’ franchising agent and in 1955, he founded the McDonald’s System, Inc., the predecessor of the McDonald’s Corporation.
After 6 years, he bought the exclusive rights to the McDonald’s name and operating system, then set up a chain of drive-in restaurants.
A Unique Philosophy
After buying the fast food brand’s rights from the McDonald brothers, Kroc built a restaurant system that would be famous for providing food of consistently high quality and uniform methods of preparation.
In other words, he made sure the brand served hamburgers, fries, and beverages that tasted just the same in Alaska, Alabama, and other parts of the world where the franchises were located.
To achieve this, Kroc chose a unique path: He persuaded both franchisees and suppliers to buy into his vision of not working for McDonald’s but for themselves, together with McDonald’s. He promoted the slogan,
“In business for yourself, but not by yourself.”
This philosophy was based on the principle of a 3-legged stool—the first leg stands for McDonald’s franchisees, the second leg stands for McDonald’s suppliers, and the third leg stands for McDonald’s employees. The stool was only as strong as the legs that formed its foundation.
These were some of the things Kroc did after taking hold of the fast food business:
- Systems First
Kroc encouraged adherence to the company’s system approach. So, while many of McDonald’s popular menu items such as the Filet-O-Fish, Big Mac, and Egg McMuffin were created by franchisees, they were required to follow the brand’s core principles of quality, service, cleanliness, and value.
As Kroc said,
“If I had a brick for every time I’ve repeated the phrase ‘Quality, Service, Cleanliness, and Value,’ I think I’d probably be able to bridge the Atlantic Ocean with them.”
- Roots of Quality
Kroc’s passion for quality meant the ingredients used in preparing McDonald’s menu items were tested, tasted, and perfected to fit the operating system. He shared this vision early on in his leadership, and the franchisees, suppliers, and employees believed in him.
The result?
The brand’s franchisee-supplier-employee relationships flourished! This enabled the fast food restaurant to further boom and expand its reach.
- Hamburger University
Photo from SEGD
In 1961, Kroc launched a training program called Hamburger University at a new McDonald’s restaurant in Elk Grove Village, Illinois. Here, franchisees were trained on the proper methods for running a successful McDonald’s restaurant.
Additionally, Hamburger U established a research and development laboratory in Addison, Illinois to develop new cooking, freezing, storing, and serving methods.
Today, over 275,000 franchisees, managers, and employees have graduated from the program.
All in all, Kroc’s business dealings and the model he engineered for McDonald’s proved profitable. His strict guidelines regarding food preparation, portion sizes, cooking methods, and packaging ensured that the brand’s offerings looked and tasted the same across franchises.
These innovations contributed to the success and growth of the fast food restaurant on a global scale.
… and as McDonald’s became the biggest restaurant chain by revenue, Kroc continued to live by his motto of providing customers with what they wanted.
Even when he’s passed, his legacy continues to this day, as seen in McDonald’s great-tasting and affordable food, crew and franchisees’ opportunities for growth, and suppliers’ commitment to provide high quality ingredients and products.
From his pursuit of innovation and efficiency to his passion for quality, service, cleanliness, and value, Kroc’s legacy continues to be an integral part of McDonald’s—today and into the future.
We hope you learned great business insights from the story of Ray Kroc and McDonald’s!
With a mindset to be “in business for yourself, but not by yourself,” you’ll also develop good relationships with your staff, customers, clients, suppliers, and business partners.
“Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”
– Calvin Coolidge, the 30th President of the United States
(This was Kroc’s favorite inspirational quote.)
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some brand or company’s marketing strategy.
… only for the audience to later find out that its product was a flop, or worse, that the brand or company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the roles of marketing and communication are always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies, marketers, and communicators.
However, the difference between our articles and the numerous ones out there is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group) in keeping with a person’s leadership skills in the area of marketing and/or communication.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
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