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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

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.

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

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.

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:

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

YouAreHere – where kids learn to be smarter consumers! Retrieved 9/7/2010, 2010, from

http://www.ftc.gov/YouAreHere/