McDonalds’ Free Product Promotion Does Not Make San Francisco Happy

San Francisco Bans Happy Meals (Los Angeles Times)

Happy Meals Ban in San FranciscoPremium product sales promotions are a widely used promotional method in which one type of product is given away when customers purchase another product.  It is important to note, premiums are different product than the main item the customer is purchasing.  For instance, one of the oldest products to package free merchandise is Cracker Jack, which started its “Prize in Every Box” promotion in 1912, by including small toys and other items inside its famous popcorn and peanut product.

From a marketer’s perspective, offering free product is intended to entice customers to purchase additional product.  Advertising often presents the premium as adding greater value (e.g., unique toy; part of a collectable series) to the primary product purchase.  From the customer’s view, a free product promotion is attractive since it usually does not require the customer to pay more to obtain the free product.

While widely used in the consumer market, there are critics who believe that some well known premium promotions are a bad idea.  In particular, nutrition advocates are viewing promotions as being unethical when tied to products that are largely viewed as unhealthy.  These advocates believe these promotions encourage the purchase unhealthy foods, thus raising health risks, especially in children.

It now appears that one city has had enough of certain premium promotions.  San Francisco is placing significant restrictions on McDonald’s Happy Meals claiming free product, included with these meals, helps to promote the purchase of unhealthy food by children.  With childhood obesity rates running high, the move by San Francisco is likely to be applauded by many health advocates and the banning of such promotions could possibly be followed by similar action in other major cities.

Under the ordinance, scheduled to take effect in December 2011, restaurants may include a toy with a meal if the food and drink combined contain fewer than 600 calories, and if less than 35% of the calories come from fat.

Technically speaking, sales promotions are considered to be a short term promotional technique.  But, Cracker Jack and Happy Meals have continually offered free product for many years.  How then are these premiums considered a short-term promotion?

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