(Name of the Writer)
The literature review covers the challenge faced by McDonalds in the increasing opposition to its marketing its products to children and the image of its food products being unhealthy. The research objective is to find solutions for the company to implement so that it can change this perception about the company and reduce opposition to its business practices.
Section 1: Business Problem and Research Objectives
McDonald's Corp. is in the business of running a fast food chain, one of the largest worldwide. It serves fast food like burgers and French fries to people from all age groups and has a chain of over 30,000 restaurants worldwide, increasing at an average of over 1,000 restaurants every year. In the past few years, medical professionals and studies have linked increasing problems of obesity, insulin resistance and other related conditions to the growing consumption of fast foods, mainly among children, adolescents and teenagers.
McDonalds has tried to deflect criticism away from its practices by engaging in a number of PR initiatives to support children’s causes and underprivileged students, etc. However, the criticism of the company has been growing and the company is under pressure from consumers and authorities to stop marketing its products to kids, the largest consumer base for the company.
The company is now looking to generate positive image by working on messaging that promotes its healthy food options. To do so, McDonalds needs to look at the kind of fast food being consumed, what attracts consumer to healthy fast food options and what can be done to reduce the perception of its food products being unhealthy among consumers and the public.
The study will look at ways to improve the image of McDonalds through changes in advertising, products, and communication. Therefore, the research questions have been framed as follows:
- What is the public perception about fast food?
- What is the perception of the public about McDonald’s products?
- What can be done to improve the perception of the public about the products sold by McDonalds?
Section 2: Literature search and Review
The rising cases of obesity in the US and many developed countries have been linked by many studies to the increasing intake of fast food. Fast food is defined as food that is available within a short period of time and takes limited cooking time. Fast foods generally tend to be high in fats, refined flour, calories, salt and refined sugars, all of which affect the body adversely. Between 1991 and 2001, studies found that the proportion of obese adults in the US grew at a compounded rate of 3% annually, from 23 per cent to 31 per cent of the population (National Center for Health Statistics 2002). Originally, this phenomenon was explained away by claiming that people burn fewer calories due to technological progress and changing lifestyles (Heini and Weinsier 1997). However this claim was contested by other studies which showed that the proportion of leisure time activity of people has actually increased, mainly due to increasing amounts of free time and greater awareness of health issues.
The U.S. Department of Agriculture provided data that showed conclusively that calorie supply and intake in the American population have increased by 18 per cent since 1983 (Putnam, Allshouse, and Kantor 2002) to levels of 2,800 calories per person per day in 2000. Since restaurants are exempted from providing detailed information about the calorific values of the food served, it can be difficult for a consumer to estimate how much they are consuming (Chandon and Wansink 2007; Livingstone and Black 2003). In the absence of this information, consumers often underestimate the calories present, through the lack of cues and an inherent sense of guilt about eating more. So, consumer may make assumptions about the calorific values of food based on the positioning or advertising of the restaurant.
Consumers can also generalize health claims inappropriately (Balasubramanian and Cole, 2002). Andrews et al. (1998) in his studies showed that consumers who thought foods were low in cholesterol are also low in fat, which may not be the case. Also, if a food item highlights one of the ingredients perceived to be healthy, the overall perception of the item improves disproportionate to the percentage of that ingredient (Wansink, 2003).
According to WHO figures, nearly two-thirds of American adults are overweight, and around a third are obese. Similarly, close to three in ten American kids and teenagers are overweight, with 16 per cent estimated to be obese (EIRIS, 2006). These figures are nearly double of what they were forty years ago, and continue to rise. Childhood obesity is considered singularly harmful as the complications arising from childhood obesity are likely to continue into adulthood and create long term health risks. The likelihood of obesity related health problems in adults is doubled if there is a history of childhood obesity (Krebs and Jacobson, 2003).
Based on the studies conducted, an increasing number of people are consuming high calorie, energy dense fast food, sugar-sweetened soft drinks and pre-prepared meals, which tend to be higher in fats, sugars, salt and calories. But what has made people start consuming these items in large quantities? Is it just the lifestyle changes or is there a definite marketing push from companies that sell these products?
Marketing is seen by many to be the main culprit of the increasing consumption of fast food. In order to avoid the regulatory impositions being placed upon them, many companies have adopted their own voluntary standards, claiming these are in line with the kind of legislation that would come from regulatory bodies anyway, hence there is no need for oversight. However, companies have been found to be in violation of their own operating standards on these guidelines (Spurlock, 2004). The largest fast food chains are widely known for their aggressive marketing to children. In one experimental study, children offered food and beverages in different kinds of packaging were more likely to pick the ones with the distinctive McDonalds logo and wrappings (Robinson et al. 2007).
In fact, a growing body of evidence has indicated the increasing impact of fast food on health of children. Keeping this in mind, the American Academy of Pediatrics recommended a national policy prohibiting junk food marketing to kids. Parents and health professionals alike have been scathing in their comments on the way McDonalds has affected the eating habits of children, and have called for the company to stop its use of Ronald, the clown mascot, toys and co-branding with kids movies to promote its products. McDonalds’ website also reportedly took down an article on its own employee page which spoke of the dangers of consuming fast food and asked employees to eat healthy (Mercola, 2014).
All these lead to the conclusion that the company is well aware that its foods are causing problems, but it has sought to hide the issue. In fact, whenever McDonalds was accused of trying to exploit children, it has apologized, changed campaigns and continued to woo children with its messaging around toys and attractive gifts. This has been widely noted and the increasing anger against the company has resulted in shareholders demanding “the company's policy responses to growing evidence of linkages between fast food and childhood obesity, diet-related diseases and other impacts on children's health,” according to consumer watchdog group Corporate Accountability International (AdAge, 2012). While the move was defeated in a vote, the increasing demands for accountability are likely to keep on rising until the time that the company has to finally accede to these demands.
In order to avoid this, McDonalds has been aggressively using its PR campaigns to mitigate the impact of such questions on its management. It has supported underprivileged kids, sponsored meals in poor districts, and tried every way to deflect attention from the core topic of the health impact of its burgers. While these have succeeded temporarily, it is criticized for the approach it takes in continuing its marketing through film merchandise promotions among others. Due to the increasing demands, the company has made some changes, printing nutritional information on its menus, and looking at ways to add more vegetarian and fruit items to the options available. McDonald's has also reduced its media spending on Happy Meals, lowering it to $92 million down from $115.2 million in 2010. Yet, the product represents ten per cent of the company’s advertising spends.
Increasingly, the company has been confronted with challenges of health perception, primarily due to competitors using the health issue as a differentiator to wean customers away from the chain. A study by Chandon and Wansink (2007) in the University of Illinois found that public perception of McDonald’s food was biased towards being higher in calories than Subway sandwiches which actually contained the same number of calories. To counter this effect, McDonalds launched a range of foods perceived as being healthier, including wraps and baked side orders (Strasser, 2013). Since surveys showed increasing customer interest in the nutritional value of the products being purchased (Louie, et al, 2008) McDonalds experimented with introducing various types of food and nutrition labels across their different markets as well.
It also increasingly faces legal action for its marketing tactics. In 2012, the company survived a legal challenge when the California State Court dismissed a lawsuit seeking to stop McDonalds from using toys in Happy Meals to market directly to kids. This kind of challenge is likely to escalate in the coming years. As yet, the biggest challenge to McDonalds lies in the US, but it is only a matter of time before other bodies like European Union take up the issue. In the past, EU has been more likely to convict American corporations of wrong-doing – the Microsoft case being a prime example. Should a similar case in Europe result in a verdict against McDonalds, the company’s reputation and future business growth could face a significant downturn. Therefore it is critical that the company take steps to avoid this situation by proactively building up an image of providing and caring for health issues related to its food products.
Analysis of the Literature Review
The literature review tries to take into consideration the aspect of how people understand healthy and unhealthy eating. It outlines the fact that people can be easily misled into thinking that some categories of food are good, even though they may not be. Similarly, it outlines a clear trend of people consuming more food than before, and the fact that a large portion of this food is now fast food which is not healthy for the human body. It also outlines how developing a preference for fast food in early childhood leads to early onset of obesity and its impact on adult life as well.
The literature review also highlights the areas where McDonalds is seen to be aggressively promoting its unhealthy foods to kids through questionable marketing practices which have managed to avoid the regulatory control imposed on other kinds of marketing. In spite of efforts by parents and health professionals, McDonalds continues to market to kids and the opposition to this is increasing. While McDonalds has tried to offset this through aggressive PR and some changes in its marketing and menu, it is not seen as enough and the company needs to do more.
Analyzing the points covered in the literature review, it can be seen that the review covers the major points raised in the research question. It also tries to bring forth the magnitude of the problem by highlighting figures and statistics posted by international agencies such as the WHO, indicating the magnitude of the problem McDonalds is likely to face. It also outlines some of the measures that the company has taken to offset this criticism of its products and marketing methods. Therefore, on the whole, the literature review covers the points outlined in the research question in a satisfactory manner and provides a possible set of solutions to evaluate for the company in order to answer the question of how McDonalds should tackle the issue of marketing to children, and the perception of its products being unhealthy for children to consume.
The summary of this analysis can be seen from the table below:
Ad Age (2012) McDonald's Shareholders Defeat Proposal to Weigh Impact on Obesity, retrieved from http://adage.com/article/news/mcdonald-s-shareholders-defeat-obesity-impact-proposal/234961/
Andrews J Craig, Richard G. Netemeyer, and Scot Burton (1998) “Consumer Generalization of nutrient content claims in Advertising” Journal of Marketing 62(4), 62-75.
Balasubramanian, Siva K., and Catherine Cole (2002) “Consumers Search and Use of Nutritional Information: The challenge and promise of Nutrition Labeling and Education Act” Journal of Marketing, 66(3) 112-27.
Chandon, Pierre and Brian Wansink (2007), “Is Obesity Caused by Calorie Underestimation? A Psychophysical Model of Fast-Food Meal Size Estimation,” Journal of Marketing Research, 44 (February), 84–99.
EIRIS Report (2006) Obesity concerns in the food and beverage industry, retrieved online at http://www.eiris.org/files/research%20publications/seeriskobesityfeb06.pdf
Heini, Adrian F. and Roland L. Weinsier (1997), “Divergent Trends in Obesity and Fat Intake Patterns: The American Paradox,” American Journal of Medicine, 102 (3), 259–64.
Krebs, N.F. and M.S. Jacobson (2003) “Prevention of Pediatric Overweight and Obesity,” Pediatrics, 112: 424-430.
Livingstone, M. Barbara E. and Alison E. Black (2003), “Markers of the Validity of Reported Energy Intake” Journal of Nutrition, 133 (3), S895-S920
Louie, J.C., V. Flood, A. Rangan, D. J. Hector and T. Gill, (2008) A comparison of two nutrition signposting systems for use in Australia. NSW Public Health Bulletin, 19(7/8): 121-126.
Mercola (2014) McDonald's Shuts Down Employee Website Advising Workers to Avoid Fast Food, http://articles.mercola.com/sites/articles/archive/2014/01/08/mcdonalds-fast-food.aspx
National Center for Health Statistics (2002), “Obesity Still on the Rise, New Data Show,” news release (October 8, 2002), http://www.cdc.gov/nchs/pressroom/02news/obesityonrise.htm .
Putnam, Judy, Jane Allshouse, and Linda Scott Kantor (2002), “U.S. Per Capita Food Supply Trends: More Calories, Refined Carbohydrates, and Fats,” FoodReview, 25 (3), 2–15.
Robinson, T.N., D.L. Borzekowski, D.M. Matheson, H.C. Kraemer (2007) “Effects of Fast Food Branding on Young Children’s Taste Preferences,” Archives of Pediatric and Adolescent Medicine, 161: 792-797.
Spurlock, M. (2004) “Super Size Me," Documentary Film. Produced by The Con in association with Studio on Hudson.
Strasser, Anne-Marie (2013) McDonald’s New ‘McWrap’ Plays On Public Perception Of Healthy Food, retrieved online from http://thinkprogress.org/health/2013/03/25/1770241/mcdonalds-mcwrap-healthy-food/
Wansink, Brian (2003), “Overcoming the Taste Stigma of Soy,” Journal of Food Science, 68 (8), 2604–6.