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Fast Food, Childhood Obesity and Local Government Regulations: No More Fun & Games
By Michael Germano and Ivan Montiel
Michael Germano is a Business Librarian at California State University, Los Angeles.
Ivan Montiel is Assistant Professor at the College of Business Administration at Loyola
Marymount University.
I. Introduction
A. Case Synopsis:
The purpose of this case is to examine the decisions required by marketing program
managers in large chain businesses when developing campaigns aimed at children as well as the
decisions of high level executives in terms of corporate strategies that may conflict with local
rules related to product healthfulness.
In what is widely considered the first law of its kind, Santa Clara County’s board of
supervisors voted in favor of a law requiring fast food chains to remove toys from high calorie
children’s meals or make them meet nutritional standards by May 2010. Concerns about the
increasing rate of childhood obesity prompted local government to act. The law requires
restaurants operating in Santa Clara to either eliminate toys from their meal packages or reduce
the amount of calories to a certain threshold established by the county. Bundling free toys with
meals has been one of the most successful strategies developed by fast food chains to attract both
children and parents to their restaurants. In fact, aggressive marketing campaigns and movie
tie-ins have proven to be an extremely successful way for fast food chains to grow sales
explosively. Not surprisingly, the response from businesses has been less than supportive. Harlan
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Levy of McDonald's disagreed with the local governments’ approach saying: "It substitutes the
county's judgment for the judgment of parents. It does nothing to address a holistic response to
the problem."
B. Use of the Case:
This case can be used in Business and Society, Corporate Social Responsibility type of
courses to complement these different topics:
Corporate Social Responsibility;
Individual versus social responsibility;
Interaction between businesses and governments;
Local regulation vs. state or federal regulation;
Current social responsibility topics, e.g. healthcare debate, obesity issues.
C. Case Objectives:
Examine the decisions required by marketing programs managers in large chain businesses
when developing campaigns aimed at children
Analyze the decisions of high level executives in terms of corporate strategies that may
conflict with local rules related to product healthfulness.
Debate whether local governments and the constituents they represent should have a say in
the ways in which companies conduct business within those communities.
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Discuss the social responsibility of businesses in protecting children from eating unhealthy
food as well as educating them about more healthy food choices..
II. Classroom Management
A. Timeline Outline
This case can be used to complement the different topics listed above (section Use of the
Case). This is a tentative outline of how to run the case during a class meeting:
1. Opening debate (10-15 minutes)
a. Ask students about their opinions on the Santa Clara decisions (10-15 minutes).
This should help the instructor to identify the differing opinions in the classroom.
2. Small group discussion (20 minutes)
a. Divide students in groups of 3-4 students and assign one of the following roles
(stakeholders):
i. Santa Clara County government officials
ii. Fast food chamber of commerce representatives (e.g. McDonald’s rep).
iii. Healthcare representatives
iv. Parents organizations
b. Permit students time to brainstorm on different arguments in favor or against the
law and reasons why it could help or harm business.
3. All class discussion and discussion questions (25-30 minutes)
a. Use the board to write down the arguments for each of the different stakeholders
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b. Go over the discussion questions
4. Concluding remarks (5 minutes)
B. Discussion Questions and Answers
1. Whose responsibility is it to solve the societal problem of obesity, especially with regards
to children: individuals, parents, government, or businesses? Exactly what roles should
each stakeholder play in correcting the problem?
In-class discussion probably evolves mainly around this question. Whose responsibility is
to control what kids eat? Students might have different opinions on this:
Parents’ responsibility: parents are the ones to oversee what their kids eat. Fast food
chain might provide incentives such as toys but at the end, parents are the ones
deciding on their kids’ eating habits.
2. Should businesses, especially ones that seek children and their parents as customers,
take a leadership role in doing ‘what’s right’ as a strategy that’s good for business?
This question relates to the previous one. The instructor might expect different views
from this question.
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3. Do businesses owe their customers a responsibility to provide only safe, healthy
products at all times?
4. How effective do you think local regulations are in promoting changes in industries,
especially those that are consumer driven?
The discussion can be expanded to what could be the consequences or outgrowth of a novel
regulation like the Santa Clara County law. The instructor should emphasize that we are
analyzing local regulations (in this case, regulation that applies to a county). Students can engage
in a discussion around these topics:
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C. Concluding Questions:
What did you learn from this case?
D. Other References and Resources
Admongo.gov. Retrieved 9/7/2010, 2010, from http://www.admongo.gov/
Adolescent and childhood obesity: Weight and obesity: Food and nutrition information
center. Retrieved 9/7/2010, 2010, from http://fnic.nal.usda.gov/nal_display/index.php?
info_center=4&tax_level=2&tax_subject=271&topic_id=1308
FTC subpoenas 48 food companies regarding marketing to kids - advertising age - news.
Retrieved 9/7/2010, 2010, from http://adage.com/article?article_id=145675
JAMA -- prevalence of high body mass index in US children and adolescents, 2007-2008,
January 20, 2010, Ogden et al. 303 (3): 242. Retrieved 9/7/2010, 2010, from
http://jama.ama-assn.org/cgi/content/full/303/3/242?
ijkey=ImvVL7s53Zyps&keytype=ref&siteid=amajnls
Obesity and overweight for professionals: Childhood | DNPAO | CDC. Retrieved
9/7/2010, 2010, from http://www.cdc.gov/obesity/childhood/index.html
Obesity and overweight for professionals: Data and statistics | DNPAO | CDC. Retrieved
9/7/2010, 2010, from http://www.cdc.gov/obesity/data/index.html
Scott Ballum: Kids learn target marketing from the FTC. Retrieved 9/7/2010, 2010, from
http://www.huffingtonpost.com/scott-ballum/kids-learn-target-marketi_b_169990.html
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YouAreHere - where kids learn to be smarter consumers! Retrieved 9/7/2010, 2010, from
http://www.ftc.gov/YouAreHere/
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