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What Is a Sales Budget?
A sales budget is a valuable tool that gives a direction to a company with regard to its targeted sales. It helps
to improve the profitability of a company. The company makes a financial plan with regard to the amount of
goods and services that it plans to sell in a year and the price at which the goods and services are to be sold.
This plan is its sales budget.
Sales budgets are projections of the amount of sales that will be generated within given time frames. The
figures related to this type ofbudgetare commonly presented in units of the local currency, along withexpectations of when and how the revenue will be generated. Many businesses make use of the
sales budget to plan out overall operating budgets, since the revenue generated by sales helps to determinewhat the business can and cannot afford over the course of the upcoming budgetary period.
It is not unusual for a sales budget to cover an entire calendar or company year. Within the scope of the
coverage, most budgets will break down the anticipated sales figures in three different ways. One goalinherent in the budget is known as the break even component. This is the amount of sales that must be
generated each month or each quarter in order to allow the company to continue functioning at its current
level of production.
Along with identifying what constitutes essential sales generation, the sales budget will also often allow forwhat is known as targeted salesbudgeting. This is the amount of sales that the sales force believes can
reasonably be generated during the period under consideration. Ideally, this figure exceeds the amount ofsales needed to keep the current level of production intact. Sale managers often use this figure to help plan
out commission structures that provide incentives to the sales team as well as protect the interests of thecompany.
A final component in the sales budget is known as the return on sales. This is simply allowing for the cost of
supplies, marketing efforts, and other factors that may or may not be fixed during the entire period. Allowingfor some increases in production costs over the span of the year makes it easier to ascertain the likely impact
on the real value of the sale to the company, and plan accordingly.
Many factors go into preparing a well-crafted sales budget. It is necessary to not only allow for thepossibility of changes in the costs of production, but also shifts in how competitors market and producesimilar goods. Doing so helps make it easier to identify how the sales team plans on managing upselling
efforts among existing customers, while also attracting new business from new customers, and thusthwarting the attempts of the competition to gain a larger market share. Often, this means breaking downthe sale budget so that it reflects the costs associated with eachsales territory, and the return that must be
generated to cover those expenses and earn additional profits for the company.
There is no one right way to prepare a sales budget. The budget for a locally owned business that operates
with one store will be quite different from the sales budget needed by a multinational corporation. There arealso differences in how a brick and mortar business would prepare a sales budget versus a company that
operates exclusively in an online environment. While allowing for the differences, just about
every budget will begin with the need to determine what is necessary to maintain current production andmarket share, what is necessary to move beyond those figures, and how to most effectively position the sales
effort to accomplish those goals while remaining competitive in the marketplace.
Budget Planning in Sales
A budget is a financial road map companies use to plan future expenditures. Companies spend time and
resources in developing a budget to ensure it is accurate and relevant. The budget is typically the
responsibility of a company's accounting or finance department, and often focuses on individual
departments, such as sales.
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Facts
Companies typically create an operational plan to increase sales. These activities may need more money than
accounted for in previous budgets. Sales managers may need to review this plan with accountants during thebudget process to ensure the expenditures are sufficient, in comparison with sales forecasts.
Features
Sales managers should submit a list of potential large-scale expenditures to owners and executive managers.Large organizations often set aside funds for items such as marketing campaigns, promotions or other salesevents. Owners and executive managers spend these funds at their discretion, based on submissions from
sales managers.
Considerations
Planning a sales budget may lead to sales managers deciding to keep their own budget outside the accounting
department. This allows managers to compare their budget with accounting and look for differences orimproprieties. This can also help them negotiate or correct future budgetary issues.
Strategies for Creating a Sales Budget
Historical Base Strategy
Some budget teams create a new budget by starting with the previous budget. They may approach this
budget by determining an anticipate percentage increase in sales during the budget period. They apply this
percentage to all of the sales from the previous budget by multiplying each sales amount by the percentage.This determines the increase in sales. Adding this increase amount to the original budgeted amount
determines the total sales for the budget period. This strategy is easy; however, the numbers created mean
little in regard to the events that may occur in the future.
Sales Target Strategy
Using a sales target strategy means that senior management determines what the total sales budget must be.Under this approach, senior management states that the sales team must earn a targeted level of sales in the
budget period. The sales team divides this amount among the different product lines and then spreads it over
the months in the budget period. This strategy ensures that the sales represented in the budget meet thetargeted sales level required by senior management. However, it does not consider any economic or industry
factors that may impact sales in the budget period.
Product Push Strategy
When company management plans to launch a new product line, they anticipate a specific level of sales for
that product line. Managers direct the sales team working on the budget to include this anticipated level ofsales in the budget and direct resources toward reaching this level of sales, often at the expense of other
products sold by the company. When the sales team spends its resources on the product line being pushed bymanagement, little time exists to focus on other areas. Without adequate time invested in budgeting the salesfor the other product lines, these product lines will lack realistic numbers. This reduces the credibility of the
entire budget.
Industry Comparison Strategy
Some companies approach sales budgeting by evaluating the events occurring in the industry. The companyacquires sales numbers from industry trade groups and government publications and uses this information toevaluate the potential sales of its own product lines. This approach incorporates a perspective beyond the
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activities and goals of the company and also considers external factors. Some information may not be readily available ordetailed enough to use in this approach.
How to Make a Projected Sales BudgetSales projections are what analysts use to gauge the direction of future earnings. This is particularly helpful
for management and investors. Projecting a sales budget is part science and part art. The foundation of the
projection is what is referred to as a "hockey-stick" financial model. The hockey-stick refers to the same
calculation copied and pasted systematically across the spreadsheet. A baseline "hockey-stick" projection iscalculated with percent of sales formulas and little reverence for outside information. The art of sales budget
projecting is in customizing the "hockey-stick" projection. A planned new product launching or a merger
may significantly alter base line protections.
Instructions
1Gather information from previous time periods that reflect the full spectrum of sales. Look for patterns ofwhen sales were up and when they were lower. Many circumstances, such as holidays and weather events,
can predictably affect the sales volume. Consider the size and experience of the sales force and the amount of
time the company has been in business to uncover patterns that will help with forecasts.
2Research the current market, including the competition. Find out what new competitors have emerged andwhere consumer spending is heading. Take into consideration new influences such as the state of theeconomy, employment figures, local and national politics and emerging technology that can influence your
sales.
3 Survey current customers to find out how much they plan to spend with your company in the coming year.Many businesses and consumers have fixed costs that you can depend on, while others may be expanding or
downsizing. Call a random set of prospective customers to poll them on their opinions about your productsand services.
4 Interview your sales staff members and find out how they feel about the current state of the market, theirterritories and their personal sales goals. Although the sales manager usually prepares the final sales budget,
input from those who are in direct contact with customers can provide insight into the market that managers
often miss.
5 Project the amount of sales you expect to make in the coming year. Forecasting can sometimes feel as ifyou are looking into a crystal ball in that it's just as reliable. But with careful research and by following the
previous steps, you should be able to come up with an accurate approximation of projected sales.
Sales Budgeting ProcessA sales budgeting is a smaller budget that is part of the master budget of a business. The sales budget focuses
only on the sales the business conducts and how much it is costing the business to produce the products or
services for sale. The sales budget is developed to help the business plan the sales, communicate the needs of
the production team, evaluate the sales and performances and control the expenditures.
List of Products or Services
A sales budget will have a detailed layout and list of each of the products or services offered in the business.
This type of budget will show how much each product or service offered through the company's product and
service line is earning the business on a monthly basis. For example, the budget may have a single line perproduct and service, so the reader can easily find out how much the product is selling for, how much it costs
to produce and how many quantities are being sold on a monthly basis. This type of sales budget should be
updated and printed monthly, so executives can use the information for financial planning.
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Production Fees
As mentioned in the previous section, the sales budget must show detailed information regarding the productor service. This includes the production fees. A product may cost a specific amount to produce, because it
uses specific tools or supplies that may need to be imported. The production fees may also include labor cost,
but whether or not it is included in the sales budget is up to the budget creators and executives. Services,
such as website development and design, may not cost much in production but can be costly in terms ofsoftware programs or membership fees that need to be paid for the business to use specific design programs,
for example.
Testing
Depending on the product or service being created by the business, it may be subject to testing before it hitsthe market for sale. For example, any baby toys or products that could be potentially dangerous to users must
be tested to ensure it is safe to use for those who the product is designed for. Services must also be tested, as
a website needs to be fully functional before it is launched and given to the user. Depending on the testing in
question, it may require some additional fees, which needs to be included in the sales budget.
Maintenance and Updates
Once the sales budget has been completed with the relevant information, an accountant or sales managermust update the budget on a monthly basis to ensure that all figures and sales totals are truthful and accurate.
The information is not only used by the sales manager to determine whether the budget is maintained, but
also used by executives to plan ahead and make changes to the existing products or product line.
Features
The sales budget is the first component of the master operating budget. This is because sales affect all otherparts of the master budget. It includes the total sales valued in quantity. It consists of three parts; break even,
target and projected sales. The budget also includes sales by product, location, customer density and seasonal
sales patterns. It provides a plan for both cash and credit sales. The basis of a sales budget is the sale price
per unit of goods to be sold multiplied by the quantity of goods to be sold. A sales budget is planned aroundthe competition, the material available, cost of distribution, government controls and the political climate.
Significance
A sales budget controls the finances allocated for achieving sales targets of a company. It is the standpointfor comparing the actual sales performance and the budgetary sales performance of a company. The budget
guides the company with regard to how much money should be allocated to selling distribution andsometimes for advertising and marketing. A sales budget that sets realistic targets will help the company
make a profit.
Effects
A good sales budget should serve as a guide to company with regard to its sales target. It should be flexibleand resilient to the volatile changes in the market. The budget should not put too many restraints on the sales
functions of the company. A sales budget is a financial plan for the sales of goods and services of a
company. It is the basis on which all the financial decisions of a company with regard to sales are taken. Thebudget also controls the general sales prospects of a company. Online and off line marketing, marketing in
the media and other advertising expenditures are planned around a sales budget.
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How McDonalds came Back Bigger thanEver
The spots, which were rolled out in January, transported viewers to down-home places likeWarden, Wash.,
andAstoria, Ill., where gritty men wearing denim knelt in the soil or rode horses while talking about the sacrifices
they made for the harvest or the herd and dispensing nuggets of plain-spoken wisdom about their worthy jobs.
Beefs what we do, one supplier said. Good potato, said another, examining a dirt-encrusted spud destined to
end up as an order of French fries. McDonalds wasnt about fast food, the commercials suggested, but real food,
born of the earth.
On Twitter that day, everything went well, at least for a while. After clicking on the hashtag #MeetTheFarmers,
people were watching the videos online, and Rick Wion, the 39-year-old director of social media for McDonalds
U.S.A., was pleased.
We got lots of great engagement on that, lots of uptick from it, lots of video views, he says. But that afternoon,
when Wion moved the conversation to #McDStories, to encourage people to keep talking about the farmers, the
promotion quickly began to go sideways. From his eighth-floor cubicle at McDonalds headquarters in Oak Brook,Ill., Wion watched on his laptop were watching these things like a hawk, he would tell me later as other
kinds of stories made their way into the Twitter feed, horror stories, real or imagined, justified or not, about the
restaurants food, service, atmosphere, everything. In a matter of minutes, a public relations success had become
yet another public relations crisis for the company, which shifted quickly into damage-control mode. A little more
than an hour after the ill-fated #McDStories appeared that afternoon, Wion decided hed seen enough for one day
and pulled that hashtag off the Twitter home page.
http://www.youtube.com/watch?v=3xxlEkstcwMhttp://www.youtube.com/watch?v=3xxlEkstcwMhttp://www.youtube.com/watch?v=3xxlEkstcwMhttp://www.youtube.com/watch?v=8sjPnAYwdNIhttp://www.youtube.com/watch?v=8sjPnAYwdNIhttp://www.youtube.com/watch?v=8sjPnAYwdNIhttp://www.youtube.com/watch?v=8sjPnAYwdNIhttp://www.youtube.com/watch?v=3xxlEkstcwM -
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The episode got what Wion said was an undeserved amount of attention in the traditional and online press. It
wasnt even in the top 10 things that were talked about that day for our brand, he said. People on Twitter, he
pointed out, wrote about the Egg McMuffin four to five times as much as they complained about the company
at #McDStories. But the anti-McDonalds Twitter storm wasnt exactly an anomaly either; it reflected a larger and
longstanding problem facing the company.
For years, critics have been taking on McDonalds, questioning its practices in an increasingly health-conscious
time. The most famous assault on the companys reputation was probably Morgan Spurlocks Super Size Me,
the 2004 Oscar-nominated documentary that suggested a month of eating only McDonalds meals might hasten
your death. But that has hardly been the only grenade lobbed in the companys direction.
In the last year alone, nuns in Philadelphia, Seventh-day Adventists in California, doctors in Chicago and activists
in Boston have warred with McDonalds over its menu, its marketing, its mission or all of the above. Critics say
McDonalds minimizes its role in Americasobesityepidemic while continuing to market its food to children
through Happy Meals. Some have called for the dismissal of the longtime clown mascot Ronald McDonald. More
recently, the presence in McDonalds hamburgers of pink slime beef scraps turned into a paste and treated
with an ammonia solution became a cause clbre. (McDonalds reported in January that it discontinued using
pink slime last summer.) And later this month at this years annual meeting, activists will get shareholders to vote
on a proposal that would require the company to respond to the growing evidence linking fast food to obesity and
other diseases, just as they did at last years meeting.
Now McDonalds is fighting back, quietly launching a major counteroffensive of its own. Andit isnt simply trying
to keep its current customers happy; its also hoping to convince McDonalds skeptics that theyre wrong.
The companys bottom-line success in recent years has been unmatched by its traditional burger-chaincompetitors. Wendys and Burger King have been losing market share, while McDonalds has been growing,
according to an analysis by Technomic Inc., a Chicago-based food-service research and consulting firm. Based on
2011 sales data, Technomic estimates that McDonalds owns nearly 17 percent of the limited-service restaurant
industry in the United States. Thats not only the largest share, according to the analysis, but also nearly as much
as the next four restaurants in that category combined Subway, Starbucks, Burger King and Wendys.
Even a sputtering economy hasnt slowed the company down. In 2011, the average free-standing McDonalds
restaurant in the United States generated nearly $2.6 million in sales, an increase of roughly 13 percent since
2008. Last year, sales nearly doubled the industrys projected growth rate by growing 4.8 percent over theprevious year. And people werent just buying the McRib, the highly processed pork sandwich whose popularity
baffles even some at McDonalds. Sales of the Big Mac, the chains signature product that was first introduced
nationwide in 1968, rose 10 percent last year, helping to push the companys stock price to nearly $100 a share.
Advertising no doubt has something to do with all this success. The companys annual advertising budget has
been estimated to exceed $2 billion making it unmatched in the industry, according to BMO Capital Markets,
and roughly the size of the gross domestic product of Aruba. That allows McDonalds to reach an audience far
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larger than the one that saw Super Size Me. But for McDonalds to keep succeeding, especially in the United
States, it cant be satisfied with serving only its core customers.
The goal, according to Neil Golden, the companys chief marketing officer for its American restaurants, is to win
over the holdouts. One way to do that is by improving the food itself. Another way is to change how
we thinkabout that food. The consumer perception of the quality of our food is not where we want it to be,
Golden told me. Listen, were serving 28 million people every single day; there are a lot of consumers that love
what were serving. But we believe that they would come more frequently. We also believe that there are more
people that would want to come if they could feel better about the product.
With their remodeled restaurants, additions to the menu and at least one nontraditional ally mom bloggers
executives are trying to present a greener, more healthful McDonalds. And in some ways the company is indeed
changing. For the first time lastyear, McDonalds sold more pounds of chicken than pounds of beef, a seismic
shift that would be like Starbucks selling more tea than coffee. Beverages, thanks to smoothies and espresso
drinks, are now a $9 billion annual business for McDonalds in the United States. The restaurants themselves are
changing, too, adding Wi-Fi, colorful chairs, tables that wouldnt be out of place in an IKEA catalog and, in some
West Coast test markets, flat-screen TVs playing the McDonalds Channel.
The content on the nascent channel is breezy (think Top 10 lists) and anodyne. The objective is an agnostic view
of the world, according to Lee Edmondson, the founder of Channel Port Communications, the California
company building the channel for McDonalds (its only client). In the test markets, at least, this means there will
be no jarring images from CNN or Fox News. Instead, every few minutes between short features, the companys
catchy jingle ba-da-ba-ba-bah serenades the dining room as a reminder that all is right and good. We dont
want to have graphic images up on the television screens, says Brad Hunter, the senior director of customer
engagement for McDonalds U.S.A. Were not in this to keep the news from somebody. But the way that its
shown is important for us and for our brand. Even if the new channel does not make it into every one of the
countrys 14,000 restaurants, the audience, Hunter says, is everyone.
If there isone McDonalds franchise that seems to epitomize everything about the companys recent efforts to
win over new customers and strengthen bonds with old ones, it can be found in Riverside, Calif. There are solar
panels on the carport, eco-friendly L.E.D. lights in the ceiling panels, totally new dcor and soaring sales.
Im not the smartest, certainly not the prettiest, says Candace Spiel, a 58-year-old franchisee. There are a
whole lot of things Im not. But I can be persistent. I can work hard. And thats what I was on this project: I waspersistent.
Riverside, population 303,000, sits in the valley of the Santa Ana River, just south of the San Bernardino
Mountains and about an hours drive from Los Angeles to the west and the desert to the east. The community,
which is now almost half Hispanic, sprang up around the fruit-growing industry in the late 1800s, and the region
still remains something of a citrus hub. Groves of navel oranges dot the arid, brush-covered landscape.
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Candaces husband, Tom Spiel, came here to sell hamburgers. A Chicagoan by birth, he fell into a job at
McDonalds the really old-fashioned way: in 1962, a family friend introduced him to the companys founder, Ray
Kroc, who got the young man a job bagging French fries, then dispatched him to manage restaurants in California
and finally awarded him his own franchise in 1966 McDonalds store No. 855, in Riverside.
The neighborhood was rough, Spiel recalled earlier this year, blighted with cheap motels. The ladies of the
night, he said, would parade up and down the street. But his restaurant, which initially had no dining area, was
a success. Spiel made a few good hires, including the woman who would later become his wife. Candace started
on the job in 1972, and together the couple would come to own nine McDonalds franchises. Given the annual
sales generated by the average McDonalds restaurant in the U.S., thats no small operation.
The Spiels have long been pleased, they said, with the sales at their Riverside location. Candace, however, thought
the building was tired, with its hard, plastic furniture inside and its glaring, red double-mansard roof outside. By
2007, she wanted to tear the place down and start over. It was a risk many franchisees were unwilling to take at
the time. The double-mansard, however kitschy, was considered part of the McDonalds brand, almost as
recognizable as the arches themselves. Some franchisees didnt want to part with it; others didnt believe that
redesigning or rebuilding new buzzwords from corporate headquarters would pay off. Even with the
company offering to cover a portion of franchisee costs, owner-operators can easily spend hundreds of thousands
of dollars. Remodels can cost $600,000, and rebuilds can exceed $1 million, a big request, especially in a
recession.
But corporate executives were committed to the idea. At best, the old restaurants felt like a cafeteria, says Steve
Norby, McDonalds vice president and general manager of the Southern California region. You dont necessarily
want to be seen in that environment, Norby told me. You want to be seen in an environment that replicates the
personality you want.
Candace Spiel shared that sentiment. And she pushed for not just new dcor and a new roof but also for solar
panels, L.E.D. lights and eco-toilets that used less water per flush. She got final clearance from the company and
approval from the city in 2009, clearing the way to build the new restaurant in late 2010. Ideally, she said, she
hoped it would increase sales by 12 percent. Instead, the restaurant did 50 percent better in its first week, Spiel
told me, and 20 percent better in the first year. We were an instant hit, jam-packed inside, people waiting to get
inside, she said. We were, like, the talk of this town.
A structure by itself cant entirely explain this sort of growth. New menu items like snack wraps, Angus burgers,specialty coffees and smoothies have also helped boost sales in Riverside and elsewhere. The beverages were
especially successful last year, with the company reporting 16 percent growth in the McCaf category, thanks in
part to popular items like a frozen strawberry lemonade last summer and a peppermint-mocha drink over the
winter holidays.
The sales bounce the Spiels have experienced in Riverside has been repeated at other redesigned McDonalds,
which are growing in number every day. In recent years, 3,000 McDonalds in the United States have been
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redesigned, including 900 just last year; another 1,000 or so are slated to be rebuilt or renovated this year. On
average, these restaurants experience 6 to 7 percent sales growth over the markets increase, according to
McDonalds.
The Spiels restaurant won recognition as well as more sales. At an event in January, attended by the mayor and
nearly 200 others, the U.S. Green Building Council awarded the restaurant LEED gold certification, a top eco-
design honor (and something of an irony, given that McDonalds is a major consumer of beef, whose production,
critics say, floods the atmosphere with greenhouse gases). It was 64 degrees and sunny. The only glitch was that
the clown had yet to show up.
Youre nine minutes late, Tom Spiel informed Ronald McDonald when he arrived.
Nine minutes late? the clown replied, smiling and cheerful. Oh, goodness.
Ronald, decked out in a gold tuxedo, a red wig, white face paint and red, floppy shoes (size 29 EEE) with yellow
laces, had awakened around 5:30 a.m. that morning and driven about 90 minutes from somewhere near Burbank
with his personal assistant, David Roe, to be here for the Spiels. The clown, who declined to break character, talk
about the makeup required for his job or give his real name He is Ronald, Roe told me, straight-faced; that
is his real name mugged for photographs and then finally found Candace Spiel, wrapping his arms around her
in a long embrace.
Its Ronald! Spiel gushed.
Hi, Candy Spiel, the clown replied. Congratulations on everything.
The new buildings have helped burnish McDonalds image. This is change directed at everyone (andcustomers have reported that the food actually tastes better in a remodeled McDonalds). On a narrower front,
meanwhile, the company has also begun courting a specific, important class of customer: mothers. Central to this
strategy is one of McDonalds most prominent moms, Jan Fields, the president of McDonalds U.S.A.
Fields, who is 56, assumed leadership over the companys American business nearly three years ago and soon
earned the respect of her colleagues for her focused but hands-off leadership style and for her personal story.
When she was 23, Fields, a young mother and the wife of a military serviceman stationed in Dayton, Ohio, got a
job at McDonalds cooking French fries on the night shift. The work was harder than she expected. The smell of
the fries stuck to her, she recalled, and there seemed to be so many rules. I went home and cried, Fields said,remembering that first night. I thought, Boy, I dont even know if Im going to be able to make it at McDonalds.
She briefly considered quitting, she said, but thought better of it. And over the course of three decades, she
worked her way up. Its a success story that, at McDonalds anyway, isnt all that unusual; countless other
executives have what industry analysts like to call ketchup in their veins. Many started with jobs behind the
cash register, often earning minimum wage.
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The company seems especially fond of telling Fieldss story in public, perhaps because, in person, Fields doesnt
come off as some scripted corporate type trying to change negative perceptions of McDonalds but as a chatty
soccer mom charming wary customers with a folksiness that appears genuine. As Rick Wion put it, Jan is just a
plain old nice person. But the strategy, Wion added, isnt just about Fieldss personality. Its about the
principles shes bringing to the table, he told me, and the openness of the conversation.
Franchisees report that shes accessible. If Candace Spiel has a problem, she says she can e-mail Fields and get a
reply. Fields says she even tries to answer McDonalds critics, whose e-mails make it to her in-box from time to
time. There are some that just would like us not to be in business, she told me. What can I say?
Fields has also made herself available to everyday mothers especially those who happen to have blogs. The
company has been reaching out to them, giving them personal access to Fields and other company V.I.P.s and
essentially trying to influence McDonalds would say inform, critics would say spin the influencers in the
blogosphere.
In mid-2010, the company invited 15 bloggers to visit the Oak Brook headquarters, flying them and theirfamilies to Chicago, putting them up at a nice hotel and giving them the grand tour: a meeting with Fields, a
chance to make McFlurries in the test kitchen, a visit to a nearby Ronald McDonald House and photo sessions for
the kids with Ronald. There was just a great deal of care taken with my family, Loralee Choate, a mother and
Utah-based blogger, says of the trip. I did not have one expense, she adds. They even took into consideration
that I was two hours away from the airport, so they sent a car to take me. It was very, very gracious of them.
According to Wion, a creator of the strategy, the premise was simple. Bloggers, and specifically mom bloggers,
talk a lot about McDonalds, he says. Theyre customers. Theyre going torestaurants. And even more
important, these women have loyal followings. Why not let them behind the curtain, hope they like what they seeand let them tell readers about it? We identified them and said: These are our key customers. These are key
influencers for our brand, Wion says. We need to make sure were working with them.
In the blogging world, this is called brand work. In exchange for perks like free trips, access to important people
and sometimes financial compensation, bloggers are encouraged or even contractually bound to write about a
company, says Thales Teixeira, an assistant professor of marketing at Harvard Business School who has studied
the trend. Some bloggers, he notes, get paid as much as $20,000 for the work, which by McDonalds ad-
campaign standards isnt much money.
The benefits go both ways. Through bloggers, Teixeira says, corporations like McDonalds believe they are
reaching an audience that has become wary of slick ad campaigns. Its basically an advertisement sometimes but
not directly from the company, Teixeira says. Instead they are receiving it from somebody they trust.
But giving bloggers new digital cameras or vacuum cleaners in the hope that they might write about the products
is somewhat different from what McDonalds is doing. Mothers, after all, are often among those most inclined to
consider the healthfulness of the menu at McDonalds. By bringing them in, the company appears to be making a
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specific play at winning the support of a potentially skeptical demographic. And generally speaking, Teixeira says,
this sort of practice is blurring the line of P.R., and its blurring the line of advertising.
Wion, who joined the companys public relations team two years ago, told me that McDonalds has on occasion
paid travel expenses for bloggers attending conferences. But the company, he says, does not pay bloggers for
content, require that they write anything specific or edit their posts in any way. The bloggers who came to Oak
Brook, for example, were asked to write one post recapping their trip. Beyond that, Wion says, we gave them,
and we wanted them to have, free rein.
The posts that followed each accompanied by a disclaimer noting their sponsorship by McDonalds were
overwhelmingly positive, however. And late last summer, McDonalds was courting the bloggers yet again. The
company sent Fields, Wion and Cindy Goody, the companys U.S. senior director of nutrition, to San Diego for
the BlogHer conference, an annual meeting that last year attracted 4,100 bloggers, most of whom were women.
About 25 of them were invited to a private luncheon with Fields and other executives. The conversation there
focused on the improved nutritional content of Happy Meals. McDonalds had recently announced that it wasreducing the size of the French fries and putting apple slices in every meal, changes that took effect nationally in
March and that earned praise from even the companys critics.
But Fields took all questions, no matter the topic, listening to the women even if she didnt always agree with
their ideas. I heard some that probably wouldnt fly with the average person, Fields conceded later, recalling
one suggestion that McDonalds make broccoli available for kids. Im thinking that just would not work in a
Happy Meal, Fields told me. I dont think its universal enough yet. But red pepper might be.
Bridgette Duplantis, one of the bloggers in the room that day, was impressed. When I met with her months later
over a wild berry smoothie at a McDonalds near her home in suburban New Orleans, Duplantis admitted that
she still has complaints about the fast-food chain. Shed like McDonalds to offer carrot sticks for kids and more
healthful, whole-grain buns. And she recognized that it was savvy marketing for the company to hold the
luncheon. Somebody like me? the 37-year-old mother of two said. Meeting Jan Fields from McDonalds? When
does that ever happen?
Duplantis said she felt a connection with Fields that day, something personal, mother to mother. Now I relate to
her, Duplantis told me, and in turn I relate to McDonalds. Which means, more than likely, that the Duplantis
family will be seeking out one of its restaurants for its next fast-food outing instead of going somewhere else a
small victory, perhaps,but one that McDonalds will take and try to replicate. I know they have smoothies and
they have yogurt and they have other things that my kids would want, Duplantis said. I really couldnt tell you
what Burger Kings doing right now, she added with a shrug. I have no idea.