Chapter 2: Your Trusted Friends 5B

Chapter 2: Your Trusted Friends5B

Exposition-related material

•Walt Disney / Ray Kroc masterful salesman; mastered art of selling to kids; led other large world corporations to do the same (33-4)

•1972 – Kroc gave $250,000 to Pres. Nixon’s reelection campaign. This year, fast food industry was lobbying Congress and White House to pass “McDonald’s bill” –would allow employers to pay 16 & 17 year-old kids’ wages 20% lower than minimum wage. Around the time of Kroc’s $250,000 donation, McDonald’s crew members earned about $1.60 an hour. The subminimum wage proposal would reduce some wages to $1.28 an hour (37)

•Nixon administration supported the McDonald’s bill and permitted McDonald’s to raise the price of its Quarter Pounders, despite the mandatory wage and price controls restricting other fast food chains (37)

•1930’s – Disney pioneered “synergy” – signed licensing agreements with dozens of firms, granting them rights to use Mickey Mouse on their products and ads (40)

•1950’s – Middle of baby boom following WWII, Kroc hires publicity firm to get McDonald’s into new: children would be chain’s target audience (40-41)

•1963 – Ronald McDonald is born / predecessor Bozo drew large crowds (41)

1960’s – Kroc makes plans to create his own Disneyland- McDonaldland northeast of LA. Decided on more decentralized approach – small Playlands and McDonaldlands all over the US (42)

•1980’s - explosion in children’s advertising – working parents feel guilty for spending less time with kids, start spending more money on them (42)

•Major ad agencies now have children’s divisions, and a variety of marketing firms focus solely on kids. Companies hope to increase current and future consumption. Brand loyalty starts at age 2. Cradle-to-grave advertising strategy. Children often recognize a brand logo before they can recognize their own name (43)

•James U. McNeal (Texas A&M Univ. marketing professor) Kids as Customers identifies 7 categories of juvenile nagging tactics (44)

•Market researchers are studying kids’ behavior (sometimes surreptitiously) and organizing research groups as young as age 2 or 3 (44)

•Character Lab (division of Youth Marketing Systems) uses technique called Character Appeal Quadrant Analysis to help companies develop new mascots who fit perfectly the targeted age group’s level of cognitive and neurological development (45)

•Children’s clubs effective means of targeting ads and collecting demographic information – names, addresses, zip codes, and personal comments of young customers without them having to gain parental approval first (45)

•Burger King Kids Club in 1991 increased sales of children’s meals by 300% (45)

•April 2000 – Children’s Online Privacy Act. Now a violation of federal law to ask children to provide personal information without first gaining parental approval (45)

•Television remains primary medium for children’s advertising (45)

•1978 – FTC (supported by many other groups) tried to ban all ads directed at children after studies found that young children could not tell difference between television programming and television advertising. They also could not comprehend the real purpose of commercials and trusted advertising claims to be true (46)

•The FTC proposal was killed in Congress after lobby efforts by Natl. Assoc. of Broadcasters, Toy Manufacturers of America, Assoc. of natl. Advertisers (46)

•Typical Am. Child spends 21 hrs. a week watching TV – 1 ½ months every year. More time watching TV than any other activity except sleeping. In one year, s/he sees 30,000 TV commercials. ¼ of Am. Children between 2-5 have a TV in their room (46)

•Fast food chains spend $3 billion on TV advertising (47)

•McDonald’s operates more than 8,000 playgrounds at its restaurants: Burger King 2,000 (47)

•Every month, 90% of Am. Children between ages 3-9 visit a McDonald’s (47)

•Fast food industry links with nation’s leading toy manufacturers. Successful promotion easily doubles or triples weekly sales volume of children’s meals (47)

•McDonald’s sells 10 million Happy Meals in one week. With addition of tiny beanie baby, they sold 100 million – four for every Am. Child ages 3-9 in 10 days (47-48)

•Fast food industry also forms partnerships with sports leagues and Hollywood studios, Olympics (48)

•Hollywood Studios have started hiring fast food executives to advertise their films. By linking with a fast food company, studios typically gain anywhere from $25 million to $45 million in additional advertising for a film, often doubling its budget. Fast food companies often gain rights to a studio’s film and video output, positive feelings about their restaurant as consumers associate one thing they like with another (48-50)

•1993 – District 11 in Colorado Springs became first public school district in U.S. to place ads for Burger King in its hallways and on the sides of its school buses (51)

•1997 – Dan De Rose (president of DD Marketing, Inc.) brokered 10 year deal that made Coca-Cola District 11’s exclusive beverage supplier, earning $11 million for the schools (51). 1997-98 school year, the district had only sold 21,000 of the 70,000 cases of Coca-Cola products it was required to sell, faced reduced payments by Coke. Thus administrators urged principals to allow students to drink Coke products in the classroom, to place vending machines in places that would be accessible to students all day (57)

•Many school districts, out of inability to afford textbooks, use corporate-sponsored teaching materials. 1998 study by Consumers Union found 80% were biased favoring sponsor’s products and views. See examples (55). Corporations receive tax deductions for their “educational” materials (56)

CAUSE / EFFECT

•Fast food chains benefit enormously when kids drink more soda. Chicken nuggets, hamburgers, and other main courses usually have lowest profit margins. Soda has by far the highest. 9 cents of syrup only goes into $1.29 soda, sometimes $1.49 for an up-sell (54)

•1978 – Typical teenage boy in U.S. drank 7 oz. of soda a day; today he drinks nearly 3X that amount, deriving 9% of his daily caloric intake from soda – 5 or more cans of soda a day. Soda consumption among girls has doubled in this period – 12 oz. a day (54)

•Each can of soda contains 10 teaspoons of sugar and also contains caffeine. They provide. These are empty calories that provide no nutritional value (54)

•20 yrs. Ago, teenage boys in U.S. drank twice as much milk as soda; today this is reversed (54)

•Soft drink consumption now also common among toddlers. 1/5 of nations 1 & 2 year-olds now drink soda. 1997 study in Journal of Dentistry for Children found many infants were being fed soda in their bottles (54)

•Excessive soda consumption in childhood can lead to calcium deficiencies and bone fractures (54)