Originally created 11/27/98

McDonald's marketing alliance with Disney broadens 112798 - The Augusta Chronicle



CHICAGO -- McDonald's Corp. is betting that big things will come in small packages as it launches a marketing blitz tied to the Walt Disney Co. film "A Bug's Life."

In the latest installment of its linkup with Disney, McDonald's is expanding its alliance beyond the usual Happy Meal toy promotions.

With the Thanksgiving holiday debut of "A Bug's Life," McDonald's for the first time is advertising directly at thousands of movie theaters. There are toy displays based on the film's characters as well as signs in ticket booths directing families to McDonald's restaurants.

Its advertising features creations from the Pixar animation studio that co-produced the film about an ant colony that struggles to free itself from slavery to grasshoppers. McDonald's also is offering digital clip-on watches to older children and adults with purchases of combination meals as it seeks to tap into the family-oriented nature of the film.

"The beauty part of having an alliance with another strong partner is that it enables you to think and act more strategically," said R.J. Milano, McDonald's vice president for marketing.

Food analysts say the new campaign illustrates the evolving nature of an unprecedented 10-year global alliance reached in 1996 as the fast-food chain based in Oak Brook, Ill., sought to bring more children -- and their parents -- into its restaurants in more than 100 countries.

"Who better to link up with when it comes to kids and capturing their imagination than Disney?" Merrill Lynch analyst Peter Oakes said Wednesday.

Critics of the alliance have contended McDonald's jumped aboard with Disney too late, after the film "The Lion King" netted millions for Burger King in a U.S. toy tie-in. But while no Disney film has yet to match that success, analysts say McDonald's is cashing in on the alliance with sales increases in Happy Meal tie-in promotions, and in other ways.

The chain was featured prominently recently in an episode of Disney-owned ABC's "The Drew Carey Show" in which the title character is trapped in China and finds a McDonald's as an American oasis in a sea of unfamiliarity. It also appeared in the Disney movie "George of the Jungle" and will appear in several other upcoming Disney films and shows, McDonald's executives said.

Analysts say any effort to showcase McDonald's -- already one of the world's most recognizable trademarks -- is likely to be profitable.

"Kids are one of the pillars of the McDonald's story, but my impression is we will see them continue to evolve their alliance in whatever way they can to reach customers," Oakes said.

That includes new sponsorship of Disney theme park pavilions and sales kiosks of McDonald's food. The chain and Disney also plan a marketing blitz to celebrate the new millennium, according to company insiders. But Milano declined to provide details.

"This is a strong partner for us that is delivering results," he said. "We think it is a relationship where we will continue to break new ground."