Tim Foster MKTG 485.

001 Problem: Eliminate waste altogether, but continue the use of paper and plastic products to maintain the company tradition of QSCV. While country managers were allowed some leeway in adapting the new standards to the specific market requirements, it was expected that they would abide by the directive from headquarters unless circumstances were so market specific as to warrant a different approach (p 29). Germany Specific Issues Justify switch from plastic to paper to German public 80% of German consumer willing to pay more for environmentally sound goods Germans spend highest amount of GDP on environmental protection policies 200 German cities ban disposable packaging Landfill costs are going to double Material going to landfills cannot be recycled Cities wont allow McDonalds to open unless they are convinced that the company can handle its waste problem Oehls Aspirations for McDonalds Germany 100% of material will be recyclable or converted into energy Recycled products used by other industries To do this: 1. Packing has to become standardized 2. Unnecessary packing has to be reduced 3. Separation of materials 4. Plastics broken down and organics processed into compost/bio gas 5. New raw materials would be used internally within the restaurant or for external purposes BTA and Belland BTA o Process to separate plastics, paper, and organic wastes o Convert paper and organic wastes to compost creates alternative energy bio gas Belland o Developed and produced a group of water soluble plastic polymers Allows for easy chemical separation from other materials o McDonalds has already invested $1.7 million BTA plants with Belland recycling units o Transform LIQUID organic waste into bio gas source of energy 1/3 of energy would be reused for the process itself 2/3 sold o Transform SOLID organic waste into compost Used for landscaping and gardening

Tim Foster MKTG 485.001 Costs Total cost for 15 plants = $150 million Each plant needs 20,000 metric tonnes of waste annually o McDonalds only produces 15,000 metric tonnes annually Processing costs for new system approx $150/tonne Average hauling cost $77/tonne Total cost per tonne approx $227 with new system o Hauling costs will decrease as number of plants increase Old system o Landfill approx $207 o Incinerator approx $227

Implement McDonalds/Belland/BTA Plants by Evaluating Marketing Mix Price One of McDonalds main principles is low price. Implementing the new plants will cause the price per unit to increase in the short run, but if an economy of scale is generated, price will return. Place McDonalds Germany is treating their International industry and their Domestic industry the same. The Germans have much stronger feelings about environmental protection policies. Germany would be the best market to implement this new system Promotion Promotion Mix o Advertising Generate awareness of 100% sustainability Inform customers of what can and cannot be recycled If successful this will reduce cost of separating materials o P.R. Oehl on various news networks to describe sustainability process Example Oehl on OReilly with Ralph Nader Donation of excess recycled/reusable materials and bio gas to noncompeting businesses Goal is to convert those businesses to Green McDonalds implements one of their oldest principles of employees picking up litter in a one block radius of the restaurant