Day 042 - 31 Oct 94 - Page 08

     
     1        A.  Yes, there have.
     2
     3   Q.   Who would pay for that?  Is that the local stores, or is
     4        that the regional offices or the head office, or what?
     5        A.  That would typically go into the whole cost of running
     6        the programme.  Indeed, all of it, in that sense, would go
     7        eventually back to the restaurants.
     8
     9   Q.   Right.  But in the sense of the five per cent that is
    10        coming from the restaurants?
    11        A.  Not necessarily.  It is not always as clean a split as
    12        you are trying to define.
    13
    14   Q.   I am just trying to understand what you are saying, to be
    15        honest.
    16        A.  Normally, what would happen on something like that Lion
    17        King premium, all of the costs involved in that would be
    18        wrapped up in the costs of the premium itself.  Then the
    19        restaurant would effectively buy the premium and then sell
    20        it on for the same cost to the consumer.
    21
    22   Q.   The premium is the toy; yes?
    23        A.  Sorry -- yes.
    24
    25   Q.   When you have this kind of mutual agreement with Disney,
    26        for example, would they make any kind of agreement to
    27        publicise McDonald's at all in this particular promotion,
    28        or whatever?
    29        A.  In this particular one, in this country, I do not
    30        believe there was any specific deal, but these are all
    31        within the negotiations -- something that could be done if
    32        it made sense for both parties.
    33
    34   Q.   Has it been done in the past, then?
    35        A.  We have done things like joint promotions with cinemas,
    36        for instance.  I am not sure if that is the straight Disney
    37        connection, but sometimes a company that is doing a
    38        promotion with us will have a connection with cinemas and,
    39        therefore, they would bring that to the party within the
    40        negotiation.
    41
    42   MR. MORRIS:  Could you just give an example of a case where you
    43        have done a mutual deal with one of these types of
    44        promotions and you have publicised them and they have
    45        publicised you?
    46        A.  The area that I can think about that on would have been
    47        not actually on Happy Meals -- which is less common -- but
    48        on a promotion that we did with Woolworth's, whereby we ran
    49        a promotion in our restaurants and publicised it there and
    50        publicised the fact that they could go to Woolworth's, and 
    51        vice versa; Woolworth's also put up some material talking 
    52        about promotion, and saying they could come to McDonald's. 
    53
    54   Q.   Does that kind of thing happen quite often, that McDonald's
    55        is promoted in some way by others through some kind of
    56        deal, or whatever?
    57        A.  At national level, that does not happen very often.  At
    58        local level, where they are marketing a local restaurant,
    59        they may do local, reciprocal promotions with card shops or
    60        any other local retailer.