Wednesday, October 22, 2008

One of the world's greatest marketing machines...

Last night A's elementary school "sponsored" a night at McDonald's. I had seen this advertised on the marquee of the McDonald's and was hoping my daughter would not mention it. When I arrived home from work both A. and M. were all excited about McDonald's. Apparently A's teacher really talked up McDonald's to her class. So much so I practically had no choice but to take them, especially since A's teacher was going to be there (actually Dianna took them since I wasn't feeling good). Of course, the hook to all of this was that A's elementary would get a "portion" of the evenings proceeds. So here's a gripe...I pay some of the highest property (read, school) taxes anywhere but, apparently the local schools don't get enough money so they sponsor McDonald's night. McDonald's just hopes they have a good turnout and get a few kids addicted to their garbage food. I guess some of my tax money will go to the medical care of these McD's addicts when they get older. I am really exaggerating. If you want some real entertainment at McDonald's expense please watch Morgan Spurlock's Super Size Me DVD. If you watch it don't miss the bonus features, including The Smoking Fry. For a intellectually stimulating read try Eric Schlosser's Fast Food Nation (not the DVD). The book explores fast food chains targeting children and the link between fast food/empty calorie drinks and obesity.

I am not sure that pure capitalism and fast food mix. Think about this are an executive for a multi-billion dollar fast food empire. You pressure your beef supplier to sell their beef for one cent less/lb., and their is no discernible taste difference. In turn you save several million dollars. This supplier in-turn makes operational compromises to maintain a profit yet meet your lower price demand. So, do you see the point I am trying to make? For most of these companies it's about the almighty dollar...these guys worry about their bonuses and answering to shareholders, not the health of their fast food consumers.

If you don't have children you may not have experienced the McD's child marketing machine....the playgrounds, the happy meals with their "exclusive" toys, the characters, etc.

Need more proof this incredible marketing machine works? Today, while in a significant recession, McDonald's reported their 3rd quarter earnings....their comparable sales increased over 7%. I will have to remember this investment strategy the next time we go into a recession...go long on MCD and short EAT. I used to tell my wife that in the end it will just be WalMart and Microsoft. Now it will be WalMart and Google(they will outlast Microsoft) with the addition McDonald's. Oh well, I could go for a Big Mac right about now.....not really :)

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