Day 043 - 01 Nov 94 - Page 56


     
     1        promotions with baseball, as well as the Olympics and
     2        amateur sports.
     3
     4   Q.   Can you explain, please -- and I will not give you any
     5        help, at least not to start with -- what is the reason or
     6        the reasons why McDonald's does that?
     7        A.  Yes.  I think it is very simple.  These are things
     8        which our customers enjoy.  Sports in the United States is
     9        a very important part of the pastime of our customers,
    10        especially our heaviest users.  Therefore, by associating
    11        with something that they enjoy and they like, it shows that
    12        we enjoy and have the same kinds of values and likes as
    13        they do.
    14
    15   Q.   Is there any sense in which you are trying to tell your
    16        customers, by your association with sports of various
    17        kinds, that McDonald's is healthy food?
    18        A.  No.  That is not part of he proposition.  It is just
    19        part of -- this is something that they enjoy and we enjoy
    20        it, as well.
    21
    22   Q.   Is it part of what I might call the process of fostering
    23        brand awareness?
    24        A.  The association?
    25
    26   Q.   Yes.
    27        A.  Certainly, if that is something that someone enjoys,
    28        then they will associate that with the brand itself, and
    29        say that the brand is contemporary, the brand is so-called
    30         "hip": "It enjoys those things which I enjoy and,
    31        therefore, I enjoy going to McDonald's."
    32
    33   Q.   Do you have sales points at big sporting stadiums?
    34        A.  Very little, actually.  In fact, until recently, we had
    35        none that I know of.  We just started -- I think we have a
    36        place in Canada, the Toronto stadium.  We have recently
    37        started to serve food at some sporting events.
    38
    39   Q.   Is the effect of the arrangement between you and the sport
    40        that you pay money for the event, or whatever it may be; it
    41        may be a whole season, I suppose?
    42        A.  Usually, there is an exchange of dollars for the
    43        alliance, where we pay a royalty to that particular sport
    44        for the use of the sport, the logos of the sport, and to
    45        have promotions at McDonald's that feature in that
    46        particular sport.  For example, we might be called the
    47        official restaurant of the National Basket Association.  We
    48        might have a cup -- for example, we have done many times in
    49        the United States -- featuring key players that are in the
    50        league, and if you come to McDonald's and purchase a large 
    51        drink or purchase an extra value meal, then you will get 
    52        that cup with that person on it; and a small portion of 
    53        cost of that cup is royalty that in fact we do pay that
    54        particular alliance.
    55
    56   Q.   One or two other questions about that.  The first one you
    57        may not know the answer to.  I observe that you are pretty
    58        good at saying when you do not know an answer to a
    59        question. Do you have any perception about the reactions of
    60        your employees to McDonald's involvement in sports

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