When it comes to finding success in the marketplace, knowing your competition is key. But even more important than understanding your competition is knowing your target customer - and this is the mistake McDonald’s made with the 1996 release of the Arch Deluxe burger.
What has been referred to as the chain's “biggest product launch” was also one of its greatest marketing failures. The Arch Deluxe burger, which was developed with the intent of activating and drawing in a more adult clientele, featured everything that the fast food giant considered to be fancy and adult: one large piece of lettuce instead of shredded pieces, a larger patty, a decadent Dijon-mayonnaise spread, and a fluffier split-top bun with fewer sesame seeds.
Despite having been allotted a $200 million advertising campaign, the Arch Deluxe never lived up to what it promised in taste or profitability. Within four years of its original launch, meager sales and a lack of enthusiasm led the franchise to discontinue the burger for good.
In 1996, McDonald’s Sank $200 Million Into The New Arch Deluxe CampaignVideo: YouTube
In the mid-1990s, the ultra-successful fast food chain found itself in a market that was becoming increasingly competitive. With the continued rise of other fast food operations like Burger King and Wendy’s, and steadily dropping sales rates at its own restaurants, McDonald’s knew that it was high time to add some flair to its menu offerings.
The result was the creation of the Arch Deluxe burger, an item that simultaneously promised to mature the chain's menu offerings and customer base. In 1996, McDonald’s set aside a $200 million budget exclusively for the release and promotion of the new product, which spent nearly two years in development.
The adult-themed burger was officially released on May 9, 1996, at an event held at the Radio City Music Hall. The Arch Deluxe would come to be known as “the biggest product launch in the company’s history” - and eventually one of its greatest blunders.
McDonald’s Wanted To Change Its Reputation As A Restaurant For Kids And Flaunt Its New 'Grown-Up Taste'Video: YouTube
By 1996, McDonald’s was steadily losing customers to its competitors. Sales had been declining at the more than 12,000 McDonald's restaurants scattered across the US, while sales at Burger King and Wendy’s had gone up by 2.5% and 7.5%, respectively.
McDonald's was also dealing with an image problem. According to internal research conducted by McDonald's, "78% of its customers feel the chain has the best food for kids, but just 18% say it offers the best fare for adults." The fast food giant decided it had perhaps been missing out on an entire consumer market: adults.
Historically, the chain's advertising campaigns and gimmicks had been clearly targeted toward children with Happy Meals, playgrounds, and toys being an expected and highly anticipated part of the consumer experience. With the Arch Deluxe, McDonald’s finally had an item specifically crafted for a more adult customer base.
The company hoped the new burger would shed their reputation as a kid-centric eatery. They even labeled it as such, marketing the Arch Deluxe as the “burger with the grown-up taste.”
- Photo: McDonald's
The Sandwich Featured New 'Grown-Up' Ingredients: A Soft Potato Flour Roll And A Secret 'Dijonnaise' Sauce
Up until the release of the Arch Deluxe, the majority of menu items at McDonald's were made with kids - and their taste buds - in mind. As such, McDonald’s began to worry that its lack of flavorful and mature meal offerings could, in fact, be contributing to falling sales.
This grown-up burger was the chain's response to the perceived gap in their consumer market. The Arch Deluxe, which a Washington Post reporter once described as sounding “like [the name of] some guy your mother didn't want you to go out with,” was a reflection of everything that McDonald’s thought an adult consumer desired in a burger.
Featuring a significantly larger beef patty embellished with a large leaf of lettuce, a tomato slice, only one slice of cheese as opposed to two, and a fluffy bun, the burger’s secret was (apparently) in the sauce. Unlike other McDonald’s burgers, this one featured a Dijonnaise sauce, or "Arch Sauce," complete with whole, crunchy mustard seeds that promised to bring burger connoisseurs straight to McDonald’s.
In 1996, the burger cost a cool $2.59 each, plus 20 cents extra if you wanted to add a curiously round piece of bacon on top.
- Photo: McDonald's
McDonald’s Unveiled The Burger At Radio City Music Hall With Ronald McDonald In A Tuxedo Dancing With The Rockettes
Operating with a lavish $200 million marketing campaign, McDonald’s booked the Radio City Music Hall for an evening of luxury. The event featured not only the release of the Arch Deluxe burger, but also a more sophisticated Ronald McDonald - insofar as he was clad in a suit instead of his traditional stripes and oversized shoes.
As the company’s clownish mascot, Ronald was created to appeal to children. For this '96 update, he was introduced with a "cool new swagger" alongside a troop of glamorous, dancing Rockettes.