May 16, 2008
THERE’S A STORY ABOUT THE EARLY IMPACT OF THE DAIRY QUEEN CHAIN in Texas that might be apocryphal but hopefully is not. According to one historical observer, Dairy Queen (DQ) outlets became the social focal point for life in rural Texas towns so rapidly that they would open for early-morning prework gatherings although they had no breakfast food on the menu. Maybe you could get coffee and a doughnut, but the point is that right from its earliest days—the chain reached 2,500 units by 1955, the same year McDonald’s opened its first corporate unit—DQs were consecrated as civic turf as important as the town square.
This fairly quaint notion is essential to an appreciation of today’s International Dairy Queen (IDQ), which in January will celebrate a decade of ownership by Warren Buffett’s Berkshire Hathaway Inc. It’s been an often-stormy 10 years, with core nostalgia and capital necessity going toe-to-toe over a host of issues from menu expansion to suppliers to unit construction and operational formats. Yet even at 6,000 units, 90 percent of them in North America, it’s hard to deny that the IDQ of today remains a culture built on the backs of mom-and-pop franchisees and legions of Little League families who have stopped by for a treat on the way home from a game.
From a marketing perspective, the issues are difficult indeed. One can easily discern the divisions between small owner-operators who see their contribution to community as the modest dispensation of soft-serve summertime treats and the modern corporate executives who need to grow unit earnings and fully appreciate the rigors of surviving in today’s competitive marketplace. Much of this struggle with regard to marketing is dependent upon a demographic definition of customers. There’s an apparent need to decide between the enormous brand collateral vested in DQ traditionalists and the irresistible appeal of today’s coveted 18- to 34-year-old market, which gravitates more to the hip than it does to history.
Enter IDQ chief brand officer Michael Keller, who meticulously explains that you can have it both ways through the act of intelligently pairing disparate visions even if you don’t entirely merge them. Considering the DQ business has been built on Blizzards and dipped cones, Keller might be allowed the dogsled analogy to describe creatures of diverse temperaments harnessed to a common vision of quality and a goal of success. Here he gives considerable credit to Chuck Mooty, whose family sold IDQ to Warren Buffet and who has served as CEO for the passed seven years. He says Mooty appreciates the appeal of the past but understands that progress must be harnessed to pride of effort in the present and an enlightened sense of what lies down the road.
Thus, Keller first takes care to describe how his own role is vested in a much broader set of responsibilities than just traditional marketing areas like advertising, promotions, and public relations. A brand officer, he explains, is concerned with every consumer "touch point." He is involved in such areas as product development, customer service, and quality assurance, along with a host of additional responsibilities ranging from selection of franchisees to unit design. These are strategically intertwined with the customer-brand relationship. The thing to note, Keller says, is that "in some ways building a brand has less to do with marketing and more to do with how the brand is represented in other critical functions."
He says understanding this allows the system to share core values and yet have at least some flexibility regarding menu and marketing emphasis. Many franchisees originally bridled over what seemed to be a strong-armed corporate insistence to convert to the chain’s expanded Grill & Chill format. Keller says, however, that IDQ is actually committed to a two-tier strategy that allows for "food-centric" destinations (Grill & Chill, Braziers) and for "treat-centric" destinations (the chain’s purchase and merging of Orange Julius is part of this strategy). For Keller, marketing is pinned to the notion that a consumer is identifying a DQ occasion along these lines.
Despite initial resistance, Keller says that a lot of corporate alignment along with a successful multiyear run of same-store comps has come around since DQdiscovered national advertising in 2003. Working with what Keller describes as "a great creative team" at Grey Worldwide, DQ identified the crave that customers experience for the brand and how to express it in a way that was both fun and compelling for a young audience. This summer’s "Made for Each Other" waffle bowl campaign, in which soft-serve ice cream and a waffle bowl discover romantic, not to mention sexual, attraction as new neighbors, illustrates just how far a modern Dairy Queen is willing to push the envelope.
"It’s good clean fun," says Keller when pressed on this matter. "The waffle and soft serve are soul mates."
Most revealing, though, is Keller’s full-circle indication of where DQ’s creative appears to be headed next. Explaining that the brand’s strength is not just the "craveability" of its products, Keller says that future spots will emphasize the "great feelings" and "wonderful experiences" associated with nearly 70 years of DQ history. Comparing the local DQ experience to the equivalent of "an English pub," Keller says that the chain wants to bring that community vibe forward and "not lose it in a more dynamic world."
And thus history comes full circle, with whipped cream and a cherry on top.
