Day 041 - 28 Oct 94 - Page 07
1 Q. Now I am going to ask you in relation to McDonald's how you
2 feel that that equation as between advertising and customer
3 appreciation of the product, how you think it balances
4 out. But first can I ask you, do you see any benefits for
5 the consumer in having advertisements put in front of him
6 or her?
7 A. Yes, I do. Apart from rather a large view which would
8 be, I think, advertising is considered to be a key element
9 of free speech in this country, it does allow different
10 manufacturers, different companies, different people to
11 purvey a choice to the customer, that maybe without that
12 the customer would not be aware of. Equally, in that
13 competitive environment it challenges producers of products
14 to improve quality, it keeps prices competitive and,
15 therefore, gives a much greater benefit in every area for
16 the customer.
17
18 Q. Have you considered what might happen to the business of
19 companies like McDonald's if they did not advertise?
20 A. Yes. Over time, I think, and particularly in our
21 marketplace which is extremely competitive, we would see a
22 slow erosion in our growth in our sales to a point that
23 I think we would be unable to sustain the basic structure
24 of the company that we currently have. I mean, maybe long,
25 long term you might see that the company declines
26 completely.
27
28 Q. Mr. Hawkes, perhaps I can put it this way: You have spent
29 a lifetime, professional lifetime, in marketing, and you
30 have spent the last 12 years at McDonald's; is there
31 anything about McDonald's advertising, whether the quality
32 of it or the fact of it, and whether we are talking about
33 advertising to adults or to children, that makes you
34 uncomfortable or uneasy?
35 A. No, there is not, save to say that in terms of our
36 standards, the odd commercial I may have a professional
37 view on as to whether the quality of it is up to our
38 standard or not. But in the sense you mean, in terms of
39 the ethics and the quality of the communication, not at
40 all.
41
42 Q. How do you react to the suggestion that McDonald's
43 advertising is seductive -- that is meant in a pejorative
44 sense.
45 A. Our advertising is designed to be as appealing as it
46 can be to the consumer. That is the reason we advertise.
47 But it does not work on any other level than you actually
48 see it on television.
49
50 Q. In your experience, is there any foundation for the sort of
51 suggestion which is sometimes made that advertising is
52 insidious, deceptive, pernicious, and so on and so forth?
53 A. Absolutely not.
54
55 Q. Is advertising in this country regulated?
56 A. Yes, it is. It is self-regulated.
57
58 Q. What does the Advertising Standards Authority do?
59 A. They are responsible for regulating the press side of
60 advertising, the sort of legal, honest and decent approach
