Title: Obesity is a pervasive problem in America, and as peopl
1McDonalds Corporation AndThe Issue of Health
and Nutrition
- An Arthur Page Society case study in issues
management
2The 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
3Targeting 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
4The 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
5McLibel 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
6McLawsuit 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.
7Fast 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
8Super 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.
9The 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.
10Response 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
11McDonalds 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
12Quote 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)
13Ineffective 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)
14Questions 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?
15McDonalds 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
16Marketing 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
17Timeline
- 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
18First 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
19Points 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)
20Questions 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?
21Page 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
22Page 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
23Page 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
24Page 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
25Page 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
26Page 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?
27Conclusion 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.