Presentation on theme: "McDonald’s Corporation And The Issue of Health and Nutrition"— Presentation transcript:
1McDonald’s Corporation And The Issue of Health and Nutrition An Arthur Page Society case study in issues management
2The IssueObesity is a pervasive problem in America, and as people increasingly become overweight, their health suffers64% 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 decadesHealth risks: heart disease, Type II diabetes, high cholesterol, high blood pressure
3Targeting McDonald’sThe nutritional content of fast food--high in fat, sugar, and calories--is linked to weight gain and consequent health problems. McDonald’s bears the brunt of criticism because:McDonald’s is a powerful multinational corporation and the fast food industry leaderMcD’s has more than 31,000 restaurants in 119 countriesMcD’s feeds more than 46 million customers per dayMcD’s employs more than 1.5 million people
4The OppositionThere are organizations, associations, government agencies, consumer groups, activists, bloggers, etc. critical of McDonald’s on the issue of health and nutritionThis case study focuses on major attacks occurring from 1994 to 2006
5McLibelMcDonald’s sued two protestors for allegedly libelous statements made in a pamphlet, “What’s Wrong with McDonald’s”PR disaster that made McDonald’s look like a bullyBuilt the media agenda on issues unfavorable to McDonald’sAppellate court ruled that the defendants were justified in claiming that regular customers of McDonald’s did face a heightened risk of heart troublePamphlet later reproduced on the Internet to massive international audienceCourt case cost McDonald’s over a million dollarsCourt case provided the material for a full length documentary released in 2005, McLibel
6McLawsuitA group of obese teenagers who ate at McDonald’s 3-5 times per week sued McDonald’s for causing their weight problems. They alleged that:McDonald’s advertising and promotional representations create a false impression that its food products are part of a healthy lifestyleMcDonald’s said it would have nutritional information available to customers but it wasn’tThe court ruled in favor of McDonald’s 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 McDonald’s posted a quarter loss in its history.
7Fast Food Nation 2001, 2006A book highly critical of the fast food industryNew York Times best sellerVersion directed to children years old, Chew on This, published in 2006Fast Food Nation released as a movie in November, 2006Movie tag line: The Truth is Hard to Swallow
8Super Size Me, 2004“One man’s journey into the world of weight gain, health problems, and fast food.”Morgan Spurlock’s documentary account of his personal experience over a 30-day period of eating nothing but McDonald’s 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 doesCorporations must strive to repair relationships with external publics and enhance its corporate reputationMcDonald’s must adopt strategic communication responses to those who disapprove of what they see as McDonald’s role in promoting obesity and health problems.
10Response Options in Issues Management AcquiescenceStop doing what is bothering criticsNegotiation (Two-way)Work collaboratively for consensus and compromiseConfrontation (One-way)Discredit the oppositionArgue your sideTake legal action
11McDonald’s Responses – The Bad One-way, asymmetrical communicationMcD’s has avoided dialogical, or two-way, communication with critics.McD’s declined invitation to appear with Schlosser on NBC’s Today Show and instead sent a statement of facts and told them to visit the web site.Denial of any concern or compromise with criticsMcD’s 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 don’t sell nutrition and people don’t come to McDonald’s for nutrition. Rather than fight a defensive war of attrition by responding to constant nutrition attacks, let’s 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 what’s important to McDonald’s. We cannot be overly concerned about anyone else.” (2006, Walt Riker, McDonald’s 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 McDonald’s promised in 2002 to change its trans fat cooking oil to a healthier alternative.Customers’ complaints led McDonald’s to cancel that actionLegislation has been proposed in 2006 to ban trans fat cooking oils in restaurantsOther 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?
15McDonald’s Responses – The Good Corporate social responsibility blogContains section “Engaging in the Global Obesity Dialogue”Allows feedback and discussionThe balanced, active lifestyles initiativeAdding more menu choiceProviding nutrition educationSupporting physical activityTheme: “It’s what I eat and what I do…I’m lovin’ it”
16Marketing ActionsMenu choice: premium salads, bottled water, low fat/skim milk, white meat chickenGo Active! Happy Meals for adultsWalking program and free pedometersGet Moving with Ronald McDonald and McMunchrightCelebrity brand ambassadorsNutritional labeling on products (in most restaurants within one year period)Collaboration with Scripps Research Institute for fighting childhood obesity and Type 2 diabetesUbiquitous advertising campaign emphasizing physical activity
17Timeline By 1986 Aware of Issue 1994 McLibel – McDonald’s food can be harmful to health2001 Fast Food NationMcLawsuit– Need for nutritional information; food harmful to healthMcD’s posts first quarter loss in corporate historyPer share stock price plummentsMcD’s promises to replace trans fat oilMcD’s introduces healthy options in 20032004 Super Size Me – Should cancel super size option, need for nutritional informationMcD’s cancels super size optionMcD’s introduces Balanced, Active Lifestyles initiative2006 FDA introduces proposal ban trans fat oil in restaurants2006 Fast Food Nation, the movie and Chew on This, children’s bookMcD’s starts putting nutritional information on packagingMcD’s still hasn’t replaced trans fat oils
18First Steps of Effective Issues Management Listen for threats through issue/environmental scanningDetermine whether the issue will affect the organization/corporationIf 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. McDonald’s 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 McDonald’s 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 McDonald’s withdrew the option just six weeks after Super Size Me premieredDenied any concern or need to plan proactively for the premiere of Fast Food NationDenied investigative reports regarding an internal memo sent to franchisees to discredit Eric SchlosserClaimed to have nutritional information available for 30 years
22Page Principles: Listen to the customer McDonald’s has experienced moderate and continuous growth in sales and per share stock priceHowever, fast food companies such as Chipotle, Buffalo Wild Wings, Panera Breat, Panda Express, Quiznos, Starbucks, and Jason’s Deli are the ones reaching highest growth in the fast food industry
23Page Principles: Manage for tomorrow Positive: McDonald’s has instituted several marketing programs addressing the need for balanced, active lifestylesPositive: McDonald’s has expanded healthy menu choicesNegative: McDonald’s 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 relationsMcDonald’s needs to focus on public relations reputation building through increased transparency and dialog
25Page Principles: A company’s 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 McDonald’s has done an excellent job of remaining calm and patientHowever, McDonald’s has not shown a sense of humor in the face of targeted criticismsQuestion for discussion: What would be the best way for McDonald’s to maintain a sense of humor in regard to the issue of health and nutrition?
27Conclusion: McDonald’s Challenge The main question facing McDonald’s 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. McDonald’s 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, McDonald’s 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 McDonald’s remains a key target in 2006.