Day 037 - 14 Oct 94 - Page 10
1 Corporation spent in 1989 1.1 billion dollars worldwide in
2 advertising promotions. What is your conclusion on that?
3 A. There are several conclusions to draw. The first one
4 is that, had I still been in the marketing business,
5 I would very much like to have had their advertising
6 account in terms of its sheer volume. It is a huge amount
7 of money; it is an enormous sum. The second thing I would
8 like to know is what percentage of turnover that amounts
9 to.
10
11 Q. That is 5 per cent of turnover, I think, something like
12 that?
13 A. Five per cent of turnover. It strikes me that from
14 this, and from other information that I will refer to,
15 McDonald's have achieved a number of very significant
16 things here. The world of advertising uses its own
17 particular language to describe its activities and I will,
18 no doubt, be using one or two technical words which I will
19 explain.
20
21 The first one is a very simple one, which I am sure
22 everyone will understand, which is campaign. People talk
23 about marketing campaigns, advertising campaigns, and
24 public relations campaigns. The clear meaning here is
25 that you have a marketing effort of some sort that has a
26 clear objective, a clear start and a clear finish. That
27 constitutes a campaign. The reason this has grown up is
28 very simple. Until recently -- perhaps I could say until
29 the advent of McDonald's -- nobody could actually afford
30 to continually advertise their products with such amazing
31 amounts of money. It simply was not possible.
32
33 So, what again would traditionally happen would be that a
34 campaign would break across whatever media you selected,
35 your media schedule targeted to whatever audience you had
36 delineated, and if the campaign was successful you would
37 see (if, indeed, that was one of the objectives) a rise in
38 sales; as soon as the campaign had finished you would see
39 almost a commensurate drop in sales, hopefully not too
40 much.
41
42 What McDonald's seem to have done here is attain the holy
43 grail of marketing to continually promote themselves,
44 I should almost say "ruthlessly promote themselves". That
45 is a significant achievement. How they do it I am not
46 sure. You would have to examine the economics of the
47 McDonald's operation in some detail.
48
49 The need to do it, however, I think I can comment on.
50 That is, it seems to me very clearly now, indeed from
51 slogans used by the Plaintiffs, for example, "There is
52 nothing quite like a McDonald's", the need to do it,
53 I believe, arises from the fact that what McDonald's are
54 essentially selling is not a product or, indeed, a range
55 of products, but they are selling an image. A hamburger
56 is, after all, very much like any other hamburger, whether
57 it is McDonald's or Burger King or whatever; the
58 differences are minor.
59
60 What McDonald's has succeeded in doing (which I do not
