CONFLICTS IN AGGRESSIVE MARKETING ?

CONFLICTS IN AGGRESSIVE MARKETING?

I often wonder about the rising amount of conflicts in modern and sometimes aggressive marketing and who benefits from it. As you may see from my name I am not from the USA, and since this country is the leader of almost everything (you just name it) that being good or bad I choose to use this example to illustrate my views on a serious conflict of interests: McDonald’s versus The American Health System. I have chosen McDonald’s as a representative for the entire Fast Food Industry since this company is the largest in the world within said industry.

The full study of the marketing field is comprehensive as it involves economics related to private businesses as well as the execution of public policies. Marketing is integrated in our lives used by our communities as well as by companies producing or selling merchandise or services we need. In exchange we today pay for products with money and for the social services we pay with either money or contribute by other means to the development and maintenance of the social structure.

Role Models, examples:

The lady this is an INSULT how dares she?

and the guy below: SHAME ON YOU

The role models are easy to identify: McDonald’s is a Company with the main focus on the maximum dividends to its shareholders; The American Health System (in general terms) needs to focus on assisting the citizens of the States to live as long and healthy as possible. So here is then the conflict. In order to ensure attractive salaries and bonuses to the top management and pay an acceptable dividend to the shareholders McDonald’s must sell as many burgers and related products as possible. Focused marketing campaigns convince the USA citizens that burgers are a must and we all know the result of a high-burger-intake:

Obesity and for sure the burgers win. USA has the highest obesity rate in the world with close to 26 % of its population being fat. Obesity means having too much body fat. It is different from being overweight, which means weighing too much. The weight may come from muscle, bone, fat and/or body water. Both terms mean that a person’s weight is greater than what’s considered healthy for his or her height.

Obesity occurs over time when you eat more calories than you use. The balance between calories-in and calories-out differs for each person. Factors that might tip the balance include your genetic makeup, overeating, eating high-fat foods and not being physically active. Being obese increases your risk of diabetes, heart disease, stroke, arthritis and some cancers. If you are obese, losing even 5 to 10 percent of your weight can delay or prevent some of these diseases. Source: National Institute of Diabetes and Digestive and Kidney Diseases

The list of possible diseases is long:

• Coronary heart disease
• Type 2 diabetes
• Cancers (endometrial, breast, and colon)
• Hypertension (high blood pressure)
• Dyslipidemia (for example, high total cholesterol or high levels of triglycerides)
• Stroke
• Liver and Gallbladder disease
• Sleep apnea and respiratory problems
• Osteoarthritis (a degeneration of cartilage and its underlying bone within a joint)
• Gynecological problems (abnormal menses, infertility)

Source: Department for Health and Human Services.

McDonald’s

Let us look at McDonalds Corporation and get the figures as correct as possible since the USA is a 100 % capitalistic society with limited focus on human aspects. The Corporation is very extensive and is the biggest chain of fast food restaurants in the World. As far as I have been able to access the figure for the operating profit this amounted to close to 4.0 billion US$ in 2007. The total of restaurants operated (either on a franchise basis or owned by the Corporation) is around 31.000 serving some 47 million burgers every day. Number of persons working is around 1.5 million which makes the Corporation one of the largest in the world. Regardless of the ownership of the restaurant (The Corporation only owns about 20 % of all) they all have to work on very stringent Business Models and rules laid down by the Corporation. In order to just to finish this issue McDonald’s financial involvements are widely spread and may vary from country to country, only one rule seems to apply to all sales outlets being that the supply and logistics of all raw materials are 100 % controlled by the Corporation.

We all know McDonald’s we have all been there. Maybe we love or we do not love the fast food products, but the fact is that from a business and marketing viewpoint the McDonald’s Corporation has done a great job. Almost everybody knows what the BIG MAC stands for.

In Denmark we had a well known writer and story teller by the name of H.C. Andersen. In one of his famous stories he tells us that if you are successful you are the target of envy and slander. McDonald’s have had its share. Criticism have come from all sides about the aggressive and manipulating marketing methods, about the working conditions and environment for the staff, , health and labor record, its business practices and culinary blandness.

The top management of the Corporation has cleverly reacted promptly to many of above mentioned issues among them the introduction of the “happy meal” product, other more healthy products and a change in the staff policy replacing low paid workers (called Generation X) with more motivated staff where this has been possible and changes in the supply chain has taken place as well.

The negative side of the success is that all fast food products contribute to obesity unless you take some appropriate actions like reducing the intake of fat, exercise regularly, avoid drinks with sugar but more importantly eating less. In Denmark the rate of obesity is much lower than in the States for the reasons just mentioned. I do agree however that there are many additional factors playing a vital role when we talk about obesity.

THE DEPARTMENT FOR HEALTH AND HUMAN SERVICES

The scope of any marketing campaign (regardless of form) from this important department must be to draw the attention to the negative effects of obesity and related diseases. I have not been able to establish the exact numbers of funds spent for this purpose but the reality is published by the department:

• Unhealthy diet and physical inactivity can contribute to or aggravate many chronic diseases and conditions, including type 2 diabetes, hypertension, heart disease, stroke, and some cancers.
• During the past 20 years, obesity rates among adults have risen significantly in the United States. In 2005–2006, data from the National Center for Health Statistics show that 34% of U.S. adults 20 years of age and older—over 72 million people—are obese.
• In 2005, few adults met the Healthy People 2010 objectives for fruit and vegetable consumption; only 33% consumed fruit two or more times per day and even fewer (27%) consumed vegetables three or more times per day.
• Despite the proven benefits of physical activity, less than half of American adults in 2007 engaged in enough physical activity to provide health benefits.
• More than a quarter of children born in 2004 were never breastfed.
• The percentage of young people who are obese has approximately tripled since 1980. In 2003–2006, 16.3% of children and adolescents aged 2–19 years had a body mass index greater than or equal to the 95th percentile for age and sex on the CDC growth charts.
• Over one third (34%) of adolescents in grades 9–12 had a soft drink (not diet) at least one time per day during the previous 7 days.
• In 2007, 65% of young people in grades 9–12 did not get the recommended amount of physical activity; 35% watched television for 3 or more hours on the average school day.

The Cost of Obesity and Chronic Diseases

• Among children and adolescents, annual hospital costs related to obesity were $127 million during 1997–1999 up from $35 million during 1979–1981.
• In 2000, the total cost of obesity in the United States was estimated to be $117 billion—$61 billion for direct medical costs and $56 billion for indirect costs.
• In 1996, $31 billion of treatment costs (in year 2000 dollars) for cardiovascular disease among adults was related to overweight and obesity.

Source: Department of Health and Human Services

Being a marketing oriented person I like figures, but I do realize that they need relevant background. My question is actually this: What is the price for any society for repair of persons suffering from obesity and related diseases? If you use the total of all costs paid by the society for Health Services and calculate the percentage of these used, caused by obesity and related diseases the USA is in front with 6 %, the figure for Denmark is 3 % only. (Figures are from 2002). All right I do know that one needs much more solid statistics to produce the financial effects of all related effects, how to get the information?

Conclusion:

IF the USA Department for Health and Human Services could increase its marketing budget and inform the citizens about the sad results and related costs for obesity and consequently reduce the total costs for above mentioned treatments from 6 % to 3 % who will benefit the most The USA Society (all relevant and related effects that cost money) or McDonald’s ? Or should I rephrase my question: If now President Obama imposed a cut of the total marketing costs in the USA for all fast-food-restaurants would that benefit the society? Or would it be helpful now that he is chancing USA into a democratic state to hand over the cuts from the marketing costs as mentioned to companies selling healthy food or to e.g. fitness centers? He seems to be able to impose radical changes in the capitalistic society, so why not instigate a law setting a maximum for the weight of the citizens say 90 kilo? It would be nicer for the rest of us to look at.

PS The average of an adult Danish man is 83 kilos or 183 lbs.

Ole Casthoej

31st May 2009

You can read more about me here

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