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McDonald’s ‘Beef Fries’ Controversy

Presented by:-

Adrita Nath(122)

S. Pramoth(148)

Shritama Sarkar(157)

Sujan Paul(163)

Swaroop Saha(167)

Upasana Roy(118)

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Contents About McDonald’s

Various allegations

Perceptual processes that contributed to

hostility and criticism.

Beef fries controversy

Critical comments on company’s stand.

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Contd……

Handling of rumor.

The Aftermath.

Steps to play down the controversy.

The big stigma.

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About McDonald's

1937: Started by two brother , Richard & Maurice McDonald.

• 1940: Emergence of a revolutionary new concept “self service”.

.

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Contd…….

Ray Kroc established a

Franchising company, the

McDonald system Inc.

1960’s:

Kroc established over 400

Franchising outlets.

He bought McDonald’s share.

McDonald’s went public

Mid 1950’s: Franchisees started showing interest.

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Contd…….

1990’s:

Facing minor challenges.

Entered into an agreement

with Wal-Mart & Disney.

Opened it’s first restaurant

in India.

Extended it’s business in

116 countries.

1970’s:

5000 restaurants and sale

exceeding $3 billion.

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McDonald’s social responsibility statement.

Contd……

Ronald McDonald’s house of charities. Environmental leadership. Diversity Employment Education Safety/quality

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Analysis of various allegations levelled against McDonald’s

before the French fries controversy…..

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Allegations

Nutrition

Environment

Advertising

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Contd…….

Employment

Animals

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The perceptual processes that contributed to hostility and

criticism despite McDonald's begin the no.1 fast -food chain

in the world……

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Unfair and unethical

business practices.

In 1994 the court declared

McDonald’s coffee as

‘unreasonably dangerous’

Hot Coffee, that caused

third degree burns.

Permanent scar by an extremely

hot pickle in Hamburger.

Crushed rat head inside hamburger.

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Contd……

Hiring detective agencies to break into activists group.

Endangering the health of customers.

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Contd…….

Paying workers unreasonably low wages.

This helped in creating a negative perception in the minds of people.

16th October ‘World Anti McDonald Day’.

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THE BEEF FRIES CONTROVERSY

The decision was responsible for the eruption of the controversy.

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Stage - I

In 2000,Hitesh Shah, a Hindu Jain, sent an email asking whether French fries contained beef or not……..

The customer service department of McDonald’s confirmed the use of miniscule amount of beef flavouring for flavour enhancement……

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Stage - II In May 2001, Harish Bharti a

U.S based Indian attorney filled a lawsuit, against McDonald’s………

McDonald’s defended themselves by saying , it

never claimed that the fries sold in U.S were vegetarian. Rather it was customers’ responsibility to ask about the flavour and its source………

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Contd……

McDonalds this statement was proved wrong when Bhrati found a letter sent by the company in 1993 regarding its vegetarian dishes……

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Stage -III

In June 2001,a law suit was filed on behalf of all the Hindus in Texas in the district court, in Travis County, Austin, Texas…….

McDonald's released conditional apology, that their recipe used ‘a miniscule trace of beef flavouring, not tallow’.……..

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Stage - IV

By this time, two more law suits were filed in Illinois and New Jersey, taking the total number of cases to be five……..

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Critical comments on the company’s stand that it had never claimed that the fries

were vegetarian…..

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Contd……

Irresponsible statement.

Suggested that people are

at fault.

Added “insult to injury”.

Played with ethics.

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How effectively did the company handled the controversy from

the point of view of management of rumor???

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Confirmation from BMC & FDA that the fries contained no animal fat.

Special menu for Indian customers.

Changed the suppliers.

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The Aftermath March 2002:-Mcdonald,s announced

to pay US $10 million to vegetarian & religious groups.

Company decided to pay US $4000 to 12 plaintiff of 5 law suits

Posted a new & detailed apology.

Convene an advisory board to advice on vegetarian matters.

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The steps taken by McDonald’s to play down the French fries

controversy…..

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Beef-not necessary to mention according

to Code of Federal Regulations.

Never admitted to claims that it

misled million of customers by

adding beef extracts.

Played with the words of FDA.

Conditional apology.

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Will the company be able to come out of this unscathed!!!

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Changing people’s perception.

Mandatory mentioning of the source

of flavouring agent along with the

usual ingredients.

Respect the sentiments of people.

All outlets should have separate open kitchens

for vegetarian and non-vegetarian items.

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