McDonald's Trial And Error

Marketing

26th Jun 1997

Was the burger giant's McLibel case a wise defensive move for the brand, or a miscalculation of public opinion, asks Julian Lee.

After nearly three years and 10m in legal fees, McDonald's last week won a qualified victory in its libel suit against the authors of a six-page leaflet entitled 'What's wrong with McDonald's'.

However, judging by the headlines, public sympathy for the defendants, including TV dramas being made about their plight, it seems McDonald's may have won the legal battle but lost the PR war.

The 313-day McLibel trial has revealed the underbelly of one of the world's favourite brands so much so that Ronald McDonald's smile will no longer look quite so benign.

McDonald's may have been vindicated on three charges: of selling unhealthy food that leads to heart disease, of destroying rainforests and of starving the Third World but three more charges will leave a stain on the company's reputation. Allegations that McDonald's paid low wages, was responsible for the cruel treatment of animals being held for slaughter, and directly targeted children with its advertising were all found to be true.

So is McDonald's the real loser and will the PR fiasco affect sales?

Apparently not. John Stonborough, of the eponymous company which specialises in crisis management, argues: "It makes little or no difference to their sales.

People are not buying from McDonald's because of their green credentials". However, experts say that although it may not have dented the Golden Arches it has taken some of the shine off the brand which feeds 1.8 million people a day in the UK.

As one leading consultant, who wishes to remain anonymous, puts it: "It's as if a great family friend had been caught doing something terrible. Most people would prefer to ignore it and keep the image of that person untainted."

Ray Perrier, brands evaluation director at brand consultant Interbrand, says that companies have to walk the tightrope of profit and probity: "We are moving into a world where brands are not judged just by the quality of their product but by the integrity of that supplier."

When they were sued by McDonald's Helen Steel and Dave Morris were activists in London Greenpeace. McDonald's could have rightly assumed that the court action could be confined to its own backyard.

But, with the aid of a Web site carrying 19,000 pages of court testimony and countless 'facts' about the burger organisation, the little local difficulty soon became global.

The terms 'David and Goliath' appeared in every article as the press played on the UK public's love of the underdog. Here was a couple with a combined annual income of 7000 pitting themselves in court against the country's finest barristers and a company with annual sales of $30bn ( 19m).

Not only was McDonald's guilty of underestimating the PR power of the duo but the timing of the case also coincided with a subtle shift in public sympathy for rebels embracing environmental causes.

"Companies must start taking activists seriously when the public begins to take them seriously," says Stonborough.

However, if McDonald's is to restore its tarnished reputation then it must be more proactive, advises Judy Larkin of crisis management consultants Regester & Larkin.

"They must be seen to be responding to public opinion. If it put its hands up and said, 'Yes we have been wrong but we're going to take action to rectify those areas', then the public may be much more sympathetic to McDonald's in the future," she says.

That seems unlikely given that McDonald's has spent so long, and so much money, insisting its hands were clean all along. What is more likely is that other companies will weigh up the PR costs, along with the legal ones, when considering court action to protect their brand.


    Customers chew it over

    Marketing visited its local McDonald's in Hammersmith to gauge opinion among customers.

    Laurie Tilley, 41, sales manager
    "I can't say it has really changed my mind and anyway I don't really come here often enough for it to make a difference.

    "I would be more worried by issues like BSE than some of the things that McDonald's is guilty of."

    Adrian Sinclair-Burke, 35, policeman
    Said he hadn't given it much thought but was swayed by some of the criticisms of the burger giant.

    "I wouldn't come here again if there was a competitor nearby and even if there wasn't then I would definitely think twice about going to McDonald's again. These are issues that would certainly affect my decision."

    Katrina Apps, 23, Australian tourist
    "I've only been here three months so I haven't been following the case but if they (McDonald's) are responsible for bringing down wages then I wouldn't want to go there again."

    Geoff White, 16, unemployed
    "I don't know what you're talking about and anyway I wouldn't really care."

    Doreen Jones, 68, grandmother
    "I don't eat there myself but I get it for my grandchildren but I don't like the fact that they are cruel to animals so I don't think I'll come back here again."


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