Global Marketing of Food: Case Studies from Consumers International

Global Marketing of Food: Case Studies from Consumers International

Health(c): Marketing and Youth Conference

World Health Organization - Noncommunicable Diseases and Mental Health

April 17-19 2002

Fabrica, Treviso, Italy

Rajeswari Kanniah

Assistant Director

Consumers International

Regional Office for Asia and the Pacific

rajes@ciroap.org

Click here to download the original power point presentation from the WHO site.



Introduction

Review 200: Top 10 Multinational Companies - 2000

1. Microsoft
2. McDonalds
3. Nokia
4. Intel
5. General Electric
6. Coca Cola
7. IBM
8. Nike
9. Visa International
10. Motorola

Global Advertising

20 biggest spenders in advertising:

• 1986 - 3 developing countries
• 1996 - 9 developing countries

1986 - 1996 advertising expenditure growth:

• China - more than 1,000%
• Indonesia - more than 600%
• Malaysia & Thailand - more than 300%
• India, S. Korea, Philippines - more than 200%

Brand Recognition

• Coca Cola trademark recognised by 94% of world population. Topped the list of 24 brands worldwide with annual sales of over US$15 billion (March 2001).
• McDonalds Corp. has 27,000 restaurants serving 43 million people daily in 119 countries.
• McDonalds Asia Pacific region sales for the first quarter of 2001 is US$1.78 billion, an increase of 18% from the same period the previous year.

CI Study of Food Advertising on Television Aimed at Children

1. Study covering 13 countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Netherlands, Norway, Sweden, United Kingdom and the USA.(published as A Spoonful of Sugar, 1996)
2. Study covering 4 Central European countries: Hungary, Poland, Slovakia and Slovenia.(published as Easy Targets, 1999)
3. Study in India covering Maharashtra and Delhi, 2001: how children influence buying decisions of the family.
4. Study in Asia Pacific covering 5 countries: India, Malaysia, Philippines, South Korea, Indonesia.(to be published in 2002)
5. Study in the Philippines, 2002: survey of both children and parents, urban and rural

Main Findings of Studies

• Highest level of ads in Australia-double that of many European countries at an average of 34 ads an hour. Second highest in the USA and UK has the most within Europe.Level of advertising in Central Europe is typical that of Western Europe.
• Food ads are largest category of products advertised to children in all countries. Confectionery, breakfast cereals and fast food restaurants accounted for over half of food ads.
• Most prolific advertiser - McDonalds. Others widely advertised are Nestle, Kelloggs, Mars & Cadburys.
• Nutritional analysis of food ads:
  
  • 50% for products high in sugar
  • 62% for products high in fat
  • 61% for products high in salt
• Overall 95 % for products high in fat, sugar and salt.
• In Central Europe: food ads make misleading claims, use unfair or inappropriate marketing practices. (chocolates portrayed as healthy, chocolates kept in medicine cabinet, etc)
• In ALL countries surveyed, no specific requirements for food advertising in advertising regulations or codes of practice.
• Extent of protection of children from ads varies considerably from country to country.No consistent definition of “ a child”.
• None of the legislative and self-regulatory codes of practice meet minimum requirements of EU legislation or the ICC self-regulatory guidelines.

India:

• Advertising and purchasing power of the household are among the factors greatly influencing parent's decision
• Food ads are often aimed at children
• 50% of adults revealed that children influence their buying decisions.

Philippines:

• Children can recall immediately two popular fast food selling hamburgers and spaghetti: Jollibee and Mcdonald's. Easy recall is attributed to the employment of popular movie actors/actresses to endorse their products.
• 84% of children: ads update them about new products
• 78% of children: ads inform them about product features
• 59% of children: ads are a must.
• 40% of children: ads influence them to buy products that they don't need.

Recommendations

• Laws to regulate ads to children
• Cross-border advertising-broadcasters should be obliged to observe national rules of receiving state where the target audience are citisens of that state & the programmes/ads are in their language or with subtitles in their language.
• Advertising regulation should prohibit misleading, unfair or excessive number of ads, particularly products or foods which discourage healthy eating habits.
• Ad regulations should take account of age of likely audience; younger children require greater protection than older children & teenagers
• No ads to children under 12
• No ads during, just before or just after programmes for pre-school children
• Timing restrictions on amount of ads permitted during children's programmes
• Lack of differentiation between programmes and ads should be restricted
• Since food ads are largest category of ads to children and promoting unhealthy diet, should be of concern to WHO and Health Ministries. Laws should regulate food ads aimed at children.
• Need more research into how much food ads influence children's food preferences and choices.
• Nutrition education and consumer education in schools, including influence of ads.
• Ensure effective enforcement of ad regulations. Regulatory bodies should :
  
  • be independent and impartial
  • have transparent decision-making process;
  • include consumer representation;
  • have majority non-industry interests in decision-making bodies;
  • pre-check and monitor ads to ensure compliance with regulations;
  • be open to consumer complaints;
  • have power to enforce decisions and demand appropriate redress;
  • cooperate at the international level to harmonise regulations and codes of practice.