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TheStreet Open House

McDonald's Reveals 'Special Sauce,' Shows Marketing Savvy: Opinion

However, according to my wise uncle, it was never a secret at all. He always insisted McDonald's was fooling everyone and selling Big Macs by the billions with what really amounts to Thousand Island dressing. You may have thought the same thing.

Thanks to McDonald's, the truth is now revealed. In a recent demonstration posted on the New York Daily News' Web site, McDonald's executive chef, Dan Coudreaut shows father everywhere -- many of whom probably sang that jingle when they were kids -- how they can become real-life superheroes to their children by making that special sauce at home.

He says all you need is store-bought mayonnaise, sweet pickle relish, classic yellow mustard, white wine vinegar, garlic powder, onion powder and paprika. Put those ingredients in a bowl, stir, and voila -- you have the "special sauce."

The last item grabbed my attention: I've always thought about paprika as an obscure spice and never was quite sure what to do with. According to Coudreaut, it serves to add a little flavor while enhancing the color.

So the next time we are singing that famous jingle two all-beef patties, special sauce, lettuce, cheese, pickles, onion, on a sesame seed bun, the "special sauce" will be that much more special, because now it comes with a kiss, from Dad.

What all this demonstrates is how savvy and innovative McDonald's is with its marketing. It shows how secure the company is in its brand and ingredients. It's also a fun lesson in public relations.

Bottom Line

Over the past decade, I would put McDonald's performance up against that of any other company. During the period, it has increased annual sales by at least 6% while more than doubling its operating margins.

Even more remarkable is that McDonald's boasts an almost 30% operating margin over the past five years, while its closest competitor comes in at just 14%.

In spite of this, the company seems to be mentioned rarely on Wall Street when the topic is the best-run businesses. McDonald's takes the disrespect in stride and focuses solely on producing solid quarterly performance while reminding investors what is possible when innovation meets sound execution.

At the time of publication, the author was long MCD and AAPL.

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