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Title: Obesity is a pervasive problem in America, and as peopl


1
McDonalds Corporation AndThe Issue of Health
and Nutrition
  • An Arthur Page Society case study in issues
    management

2
The Issue
  • Obesity is a pervasive problem in America, and as
    people increasingly become overweight, their
    health suffers
  • 64 of all Americans overweight and 30 are
    obese the percentage of children age 6 to 19
    that are overweight has doubled in the last two
    decades
  • Health risks heart disease, Type II diabetes,
    high cholesterol, high blood pressure

3
Targeting McDonalds
  • The nutritional content of fast food--high in
    fat, sugar, and calories--is linked to weight
    gain and consequent health problems. McDonalds
    bears the brunt of criticism because
  • McDonalds is a powerful multinational
    corporation and the fast food industry leader
  • McDs has more than 31,000 restaurants in 119
    countries
  • McDs feeds more than 46 million customers per
    day
  • McDs employs more than 1.5 million people

4
The Opposition
  • There are organizations, associations, government
    agencies, consumer groups, activists, bloggers,
    etc. critical of McDonalds on the issue of
    health and nutrition
  • This case study focuses on major attacks
    occurring from 1994 to 2006

5
McLibel 1994-1999
  • McDonalds sued two protestors for allegedly
    libelous statements made in a pamphlet, Whats
    Wrong with McDonalds
  • PR disaster that made McDonalds look like a
    bully
  • Built the media agenda on issues unfavorable to
    McDonalds
  • Appellate court ruled that the defendants were
    justified in claiming that regular customers of
    McDonalds did face a heightened risk of heart
    trouble
  • Pamphlet later reproduced on the Internet to
    massive international audience
  • Court case cost McDonalds over a million dollars
  • Court case provided the material for a full
    length documentary released in 2005, McLibel

6
McLawsuit 2002-2003
  • A group of obese teenagers who ate at McDonalds
    3-5 times per week sued McDonalds for causing
    their weight problems. They alleged that
  • McDonalds advertising and promotional
    representations create a false impression that
    its food products are part of a healthy lifestyle
  • McDonalds said it would have nutritional
    information available to customers but it wasnt
  • The court ruled in favor of McDonalds but the
    resulting press coverage put the issue once again
    in the forefront. This case was what gave
    Spurlock the idea for Super Size Me.
  • 2002 first time McDonalds posted a quarter loss
    in its history.

7
Fast Food Nation 2001, 2006
  • A book highly critical of the fast food industry
  • New York Times best seller
  • Version directed to children 11-15 years old,
    Chew on This, published in 2006
  • Fast Food Nation released as a movie in November,
    2006
  • Movie tag line The Truth is Hard to Swallow

8
Super Size Me, 2004
  • One mans journey into the world of weight gain,
    health problems, and fast food.
  • Morgan Spurlocks documentary account of his
    personal experience over a 30-day period of
    eating nothing but McDonalds food. He gained 25
    pounds and suffered physical ailments.
  • Spurlock called for eliminating super size option
    and providing nutritional information.
  • Educational versions for middle and high school
    students now available.

9
The Public Relations Function of Issues Management
  • Corporations must work to solve problems when
    confronted by people and organizations that may
    be against what the corporation says, offers, or
    does
  • Corporations must strive to repair relationships
    with external publics and enhance its corporate
    reputation
  • McDonalds must adopt strategic communication
    responses to those who disapprove of what they
    see as McDonalds role in promoting obesity and
    health problems.

10
Response Options in Issues Management
  • Acquiescence
  • Stop doing what is bothering critics
  • Negotiation (Two-way)
  • Work collaboratively for consensus and compromise
  • Confrontation (One-way)
  • Discredit the opposition
  • Argue your side
  • Take legal action

11
McDonalds Responses The Bad
  • One-way, asymmetrical communication
  • McDs has avoided dialogical, or two-way,
    communication with critics.
  • McDs declined invitation to appear with
    Schlosser on NBCs Today Show and instead sent a
    statement of facts and told them to visit the web
    site.
  • Denial of any concern or compromise with critics
  • McDs insists it did nothing in response to the
    film Super Size Me and has stated it had no need
    to plan proactively for the release of the film
    Fast Food Nation.
  • Main message is one-way More aggressive in
    telling our side of the story
  • Denial of investigative reports

12
Quote Examples
  • We dont sell nutrition and people dont come to
    McDonalds for nutrition. Rather than fight a
    defensive war of attrition by responding to
    constant nutrition attacks, lets not even deal
    with it. (1986, PR executive handling McD
    account)
  • We have media days and fact sheets that are
    available through our web site, as well as
    platforms that will afford us any opportunity to
    talk about whats important to McDonalds. We
    cannot be overly concerned about anyone else.
    (2006, Walt Riker, McDonalds VP of Corporate
    Communication and Media Relations, regarding the
    release of the movie Fast Food Nation)

13
Ineffective Response Promising action but not
delivering on action
  • McDonalds promised in 2002 to change its trans
    fat cooking oil to a healthier alternative.
  • Customers complaints led McDonalds to cancel
    that action
  • Legislation has been proposed in 2006 to ban
    trans fat cooking oils in restaurants
  • Other fast food chains have voluntarily
    instituted the change

(Questions for discussion next slide)
14
Questions for Discussion
  • How can the impact of changing the taste of their
    French fries be weighed against the health harms
    of trans fat cooking oil?
  • How is credibility affected by promising actions
    but not delivering on them?
  • Are there occasions when a company may take a hit
    on an immediate action in order to build better
    relationships for the future?

15
McDonalds Responses The Good
  • Corporate social responsibility blog
  • Contains section Engaging in the Global Obesity
    Dialogue
  • Allows feedback and discussion
  • The balanced, active lifestyles initiative
  • Adding more menu choice
  • Providing nutrition education
  • Supporting physical activity
  • Theme Its what I eat and what I doIm lovin
    it

16
Marketing Actions
  • Menu choice premium salads, bottled water, low
    fat/skim milk, white meat chicken
  • Go Active! Happy Meals for adults
  • Walking program and free pedometers
  • Get Moving with Ronald McDonald and McMunchright
  • Celebrity brand ambassadors
  • Nutritional labeling on products (in most
    restaurants within one year period)
  • Collaboration with Scripps Research Institute for
    fighting childhood obesity and Type 2 diabetes
  • Ubiquitous advertising campaign emphasizing
    physical activity

17
Timeline
  • By 1986 Aware of Issue
  • 1994 McLibel McDonalds food can be harmful to
    health
  • 2001 Fast Food Nation
  • 2002-2003 McLawsuit Need for nutritional
    information food harmful to health
  • McDs posts first quarter loss in corporate
    history
  • Per share stock price plumments
  • McDs promises to replace trans fat oil
  • McDs introduces healthy options in 2003
  • 2004 Super Size Me Should cancel super size
    option, need for nutritional information
  • McDs cancels super size option
  • McDs introduces Balanced, Active Lifestyles
    initiative
  • 2006 FDA introduces proposal ban trans fat oil in
    restaurants
  • 2006 Fast Food Nation, the movie and Chew on
    This, childrens book
  • McDs starts putting nutritional information on
    packaging
  • McDs still hasnt replaced trans fat oils

18
First Steps of Effective Issues Management
  • Listen for threats through issue/environmental
    scanning
  • Determine whether the issue will affect the
    organization/corporation
  • If yes, give the issue priority in proactive,
    timely strategizing

19
Points of Discussion Timeline
  • Effective issues management calls for monitoring
    and identifying emerging issues early in order to
    plan proactively. McDonalds knew of the issue
    for years, yet delayed taking actions until it
    was defensive rather than proactive.

(Questions for discussion next slide)
20
Questions for Discussion
  • With advance knowledge of the brewing issue, what
    proactive steps could McDonalds have taken?
  • Why is it advantageous to take action proactively
    rather than defensively?

21
Page Principles Tell the truth
  • Denied Super Size Me had anything to do with
    cancellation of the super size option even though
    McDonalds withdrew the option just six weeks
    after Super Size Me premiered
  • Denied any concern or need to plan proactively
    for the premiere of Fast Food Nation
  • Denied investigative reports regarding an
    internal memo sent to franchisees to discredit
    Eric Schlosser
  • Claimed to have nutritional information available
    for 30 years

22
Page Principles Listen to the customer
  • McDonalds has experienced moderate and
    continuous growth in sales and per share stock
    price 2003-2005
  • However, fast food companies such as Chipotle,
    Buffalo Wild Wings, Panera Breat, Panda Express,
    Quiznos, Starbucks, and Jasons Deli are the ones
    reaching highest growth in the fast food industry

23
Page Principles Manage for tomorrow
  • Positive McDonalds has instituted several
    marketing programs addressing the need for
    balanced, active lifestyles
  • Positive McDonalds has expanded healthy menu
    choices
  • Negative McDonalds has refused to engage in the
    debate over nutrition and health with its critics

24
Page Principles Conduct public relations as if
the whole company depends on it
  • Emphasis is placed on marketing, rather than
    public relations
  • McDonalds needs to focus on public relations
    reputation building through increased
    transparency and dialog

25
Page Principles A companys true character is
expressed by its people
  • Top management acknowledges a one-way message
    strategy of emphasizing their need to do a
    better job of telling their story
  • Top managements statements tend to project a
    position of power rather than a more concerned
    and open viewpoint

26
Page Principles Remain calm, patient, and
good-humored
  • McDonalds has done an excellent job of remaining
    calm and patient
  • However, McDonalds has not shown a sense of
    humor in the face of targeted criticisms
  • Question for discussion What would be the best
    way for McDonalds to maintain a sense of humor
    in regard to the issue of health and nutrition?

27
Conclusion McDonalds Challenge
  • The main question facing McDonalds is whether
    they can continue their world dominance in the
    fast food industry by promoting active, healthy
    lifestyles when their mainstay products continue
    to be linked to obesity and related health
    problems. McDonalds has done a laudable job in
    marketing the concept of consumer choice and in
    establishing a generous corporate social
    responsibility program. However, in the U.S. at
    least, McDonalds has not reduced advertising to
    children, reformulated its trans fat cooking oil,
    or lowered fat, salt, and/or calorie counts on
    its core products. Rather than diminishing, the
    issue of health and nutrition continues to
    escalate and McDonalds remains a key target in
    2006.
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