Day 041 - 28 Oct 94 - Page 52
1
2 Q. So when did television start playing a key role in
3 attracting custom?
4 A. Off the top of my head, it was, I think, 1976, that
5 type of area. We had, I think, six restaurants open at the
6 time in London.
7
8 Q. In it says that the first five years the English joint
9 venture lost $10 million in its first five years. Is that
10 something you know about?
11 A. I do not, no.
12
13 Q. There is a quote from the book on page 441 "When they
14 started building stores in the West End", and it says:
15 "The West End stores were immediately profitable, and that
16 in turn justified Rhea's" (that is Bob Rhea) "first use of
17 television". Over the page, it says on 442:
18
19 "The television ads - featuring original music to a
20 quality orientated theme ('There's a difference at
21 McDonald's') - had immediate an impact. Even sales at the
22 initial low volume stores jumped 10 per cent almost
23 overnight. From then on Rhea put virtually all his
24 marketing money into television and the business it
25 generated repeated."
26
27 So, would you say that television advertising in the
28 pioneering days was the key ---
29 A. Yes.
30
31 Q. -- to a successful McDonald's?
32 A. One of the keys.
33
34 Q. Well, in there it seemed to imply that it is the key?
35 A. That is only because they are talking about going on to
36 television as boosting sales. It also assumes that
37 everything in the restaurant and the operation was
38 appealing to the consumer. If that had not been the case,
39 then that would have been a wasted investment in
40 advertising because the people that would have come in
41 would have been very disappointed and not come back, so it
42 is only one of the key reasons.
43
44 Q. If the quality of the in-store experiences is so
45 uniformally excellent why do you need to advertise?
46 A. I would just say that we do endeavour to make the
47 in-store experience as good as it can be. We need to
48 advertise in order, as I have demonstrated before, to try
49 to have people visit more frequently to our restaurants
50 than they do the competition. The competition is
51 continually trying to find ways of attracting customers to
52 their restaurants through all of the standard marketing
53 techniques.
54
55 So, we have to ensure that we can keep our brand fresh,
56 invigorating, so there is always something new happening at
57 McDonald's to keep us in the lead. The basic bedrock of
58 our operation just has to be there even to qualify to play
59 the game-----
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