Day 258 - 07 Jun 96 - Page 12

     
     1        marketing.
     2
     3   MR. JUSTICE BELL:  What you are saying, this is what they should
     4        be doing in the restaurant rather than what you are trying
     5        to persuade them to do by television advertising?
     6        A.  That is right, that is correct.  This is the manual the
     7        restaurant would use.  What we would try to do would be to,
     8        obviously, link up or build a synergy between what we talk
     9        about in the advertising and what the restaurant executes
    10        at local level.  So it would be a link, but the advertising
    11        has a very different job to do than the local level
    12        marketing.
    13
    14   MR. MORRIS:  Right.  But this would be the test to see whether
    15        what you are doing on a national scale is having an
    16        effect?
    17
    18   MR. JUSTICE BELL:  It starts off, 'In general there are three
    19        ways that a store increases its sales'.  I would have
    20        thought it is obviously applying to what happens when
         someone comes to the counter?
    22
    23   MR. MORRIS:  Yes, I understand that.  I am trying to work out
    24        the relationship between your department and the store.  I
    25        mean, obviously, the store is their testing ground for what
    26        you are doing generally, whether it is a success or not?
    27        A.  To clarify further, the one thing that advertising can
    28        do that a restaurant cannot do is enhance the image of the
    29        Company, or the brand, by adding attributes to it.  It
    30        could be more fun, more caring, more food value related,
    31        and so the role of the advertising is to create the
    32        personality of the brand, or the product, if you like,
    33        which is another way of making people more likely to use a
    34        product or service.
    35
    36   Q.   Right.  Then if we go down this page, 'increasing the
    37        frequency of visits' section, this is where I got the
    38        figures yesterday just for the point that 'McDonald's heavy
    39        users make up about 27 per cent of our customers yet this
    40        small group generates about 77 per cent of all visits', and
         that would be figures for the USA or is that international
    42        figures?
    43        A.  Those numbers would relate to the US market but would
    44        broadly apply to most McDonald's market places.
    45
    46   Q.   Right.  If we go over the page, if we look down the bottom
    47        of that first column.
    48
    49   MR. JUSTICE BELL: Yes.
    50 
    51   MR. MORRIS:  The bottom of the first column, last sentence, of 
    52        that paragraph, 'and if you can develop a medium into a 
    53        heavy user you increase your income potential from that
    54        individual by almost 4 and a half times or about 271
    55        dollars'.  Then it has a kind of chart there, and it says
    56        "average McDonald's lunch\dinner customers, category
    57        heavy, medium and light".  Under the 'heavy category visits
    58        per year', '135, expenditure per person $2.47', and this is
    59        five, 6 years ago.  'Approximate annual sales per person,
    60        $334'.  So, just looking at the heavy category, the US