Web Exclusive | May 2012 | By Jordan Melnick

Burger King Aims to Reclaim Throne

Embattled burger chain investing a lot of money in its future to get past its recent troubled past.

With Burger King’s announcement of a $750 million, one-year investment in everything from menu to marketing, the burger chain is making a significant push to leave its recent troubles behind.

Supporting the company’s new slogan, “Exciting things are happening at Burger King,” the investment will focus on four priorities: a menu expansion designed to broaden Burger King’s appeal beyond its core of young males, a marketing campaign featuring various celebrities, store renovations, and operations improvements.

“We are focused on creating long-term value and increasing consumer consideration for the Burger King brand,” says Michelle Miguelez, director of global communications at Burger King Corp. “In order for this investment and this plan to work, all four of these areas are priority. One cannot outweigh another.”

New menu items such as mango and strawberry-banana smoothies, Garden Fresh salads, chicken wraps, and crispy chicken strips suggest Burger King is taking cues from industry leader McDonald’s, which rolled out similar menu items over the last decade to broaden its appeal with health-conscious consumers. Burger King’s roll out of mocha and caramel frappes also takes a page out of McDonald’s playbook, not to mention that of Starbucks.

Burger King “recognizes that most of the menu items we have rolled out are not category innovations,” Miguelez says, but “they are new to [Burger King].”

The Miami-based chain’s goal with its menu expansion is to attract new customers while retaining the young males that frequent Burger King for its heartier offerings, like the Whopper.

“As a quick-service restaurant, Burger King wants to appeal to everyone,” Miguelez says, “but we are also expanding our menu to appeal to a broader demographic, offering items that provide options for the whole family.”

The chain’s new star-studded marketing campaign features Salma Hayek, Jay Leno, David Beckham, Steven Tyler, Mary J. Blige, and Sofia Vergara. (Hayek stars in both English- and Spanish-language ads; Vergara’s ad is only in Spanish.) All of the ads strike a humorous tone—Jay Leno, a collector of classic cars, drives up to the counter to place his order—and lead off with Burger King’s new “exciting things” tag line.

As part of the investment, Burger King is also promising an improved restaurant experience with enhancements at every location. These include digital menuboards to replace the traditional slat-and-slide boards, new employee uniforms, and new packaging.

As a whole, the investment represents a spirited attempt to kick-start a brand that has fallen behind other quick serves in the race for second place to McDonald’s, which, according to Advertising Age, was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double its lead from 10 years earlier.

McDonald's was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double its lead from 10 years earlier.

The investment comes just in time, says Darren Tristano, executive vice president at Technomic, a Chicago-based consulting firm for the foodservice industry.

“It has less to do with following McDonald’s and trying to compete, and more to do with, ‘If we don’t do it, we’re not going to be around in five years,’” Tristano says.

Burger King’s downslide started in the early 2000s, when major franchisees publicly aired grievances with the company. Since then, the chain has passed into different ownership several times and jumped on and off the public markets every few years. (The company recently announced plans to list its shares on the New York Stock Exchange through a merger with a London-based investment company.)

Burger King has made “significant strides in repairing relations with [its] franchise community,” Miguelez says. “Burger King Corp.’s new senior management team has spent the past year evaluating the business and collaborating with franchisees on ways to create efficiencies and ultimately drive increasing sales and profits across the system.”

While repairing its franchisee relationships is crucial, Burger King’s menu expansion may be the most important aspect of its investment, especially since the majority of its business comes through the drive thru.

“The menu ultimately will be what gets more customers in the doors,” Tristano says. “[Burger King has] perhaps even a better tasting product than McDonald’s has. So you can make the argument that if your product is better, then why aren’t you doing better?”

Considering Burger King’s arguable leg-up on the field in food quality, some analysts question whether the chain should be doubling down on its flame-grilled offerings rather than expanding its menu to mirror McDonald’s or any other chain’s.

“They should be focusing on themselves,” says Jeff Davis, president of Sandelman & Associates, a foodservice consumer research firm. “People don’t need another McDonald’s.”

For its part, Burger King says it has no intention of losing sight of what made it one of the industry’s top chains in the first place.

“Burger King is and will always be the home of the Whopper,” Miguelez says.

Comments

The reality is, all the marketing dollars in the world can't save a chain that has some of the dirtiest and most poorly run restaurants (of any kind) in the United States.Unfortunately, Steven Tyler and David Beckham can't compensate for 10 years of terrible customer service.

They need to offer free wifi as Mcdonalds does, they have to do a restaurant by restaurant check because not all burger kings offer the same quality -- there are certain burger kings which are really good -- every Burger king in New York City is awful. The whopper is still a great sandwich

Burger King food tastes good, but the problem here in No. Jersey where I live is the cleanliness of the restaurants. Many are aged and dirty and unremodeled. Many McD and Wendys have sprcued themselves up, not tom ention other competiton like Arbys, 5Guys, and Smashburger! Burger King has fallen behind in their store appearance. I realize this may have to do with the franchisee, but it doesnt seem like coprorate cares or inspects anything at anytime.Plus much of the customer service is haphazard at best. The restaurants in my immediate area run out of menu items, run out of the latest toys for my child's meal and they dont replenish them very quickly.The biggest problem is that BK is SLOW! They never seem to have enough employees at critical times of the day,like lunch or dinner rush. That lack of employees seems to foster rudeness and frustration in the employees that are on duty and it comes thru to the customer.BK needs some serious help at the franchise level. All the good food in the world wont help these issues.

Almost 25 million potential customers have some kind of dietary restrictions or preferences-the demographics are changing-there are vegetarians, vegans, people with food allergies out there. The traditional approach of trying to concentrate on taste alone does not work completely. Of Course, it has to be tasty but there are lots of places who claim theirs is a better tasting burger. BK has an opportunity to appeal to this segment by offering better menu items, better identification of allergens, better identification of ingredients and healthier choices. The big juicy half pound hamburger does not appeal to all. Check out www.gipsee.com as an example of a tool that can help BK broaden its appeal.

I have found that the breakfast offerings at BK are uninspired and bland. It just seems the same items with a bit more creativity would be pretty good.

Best output to best out, BK beats MCD every time.But as all of the above comments seem to reveal, BK has real food and service issues that will only be made more complicated with the new offerings.BK Management must tackle their service and cleanliness issues first.Then with a positive customer experience (beyond new uniforms and an electronic menu for goodness sakes), their new products will actually bring in and RETAIN customers.Their approach is backwards.Suggest they go to school on the old McD "McGuarantee" program that was implemented in 1075.PS> I love Burger King. Actually managed a few in college. But their restaurants, as a rule, are way to unpredictable to visit.

Instead of broadening their menu they need to focus on what made them popular, the whopper. They do need to re-invent their breakfast with fresh products (eggs). Most of all they need to focus on getting staff that are friendly (say hello, and thank you), has a sense of urgency, and are customer oriented. After that it is time to renovate these outdated stores!

So their new menu is great but I think it looks just like McDonald's current menu, that being said why would I go there to get what I already get at McDonald's . It would have been nice if they cleaned up the restaurants and came out with something new, not a copy the industry leader. I'm afraid they may not be around in five years if that is the best they got.....

My two cents: I think BK's biggest issue is it is a brand that stands for nothing. I assume if you ask senior level execs what the brands purpose is for existing, you would get multiple answers. I agree that BK is just trying to stay alive, but unfortunately it seems like the real issue is their brand is on life-support and the company is fixing it with plastic surgery. All the menu changes, spruced up retail environments, and operational changes is not going to solve their biggest issue. What they really need is a purpose for being. Something that distinguishes the BK brand from their competition and explains from customers to crew why they exist in the market place. Until they find what the soul of the BK brands stands for, I wouldn't be surprised that they keep losing their way in the QSR category or worse.

My two cents: I think BK's biggest issue is it is a brand that stands for nothing. I would argue that both it's direct competitors, Wendy's and McDonald's, have a clear vision of who they are and why they exist. BK's real issue seems their brand is on life-support and the company is fixing it with plastic surgery. All the menu changes, spruced up retail environments and operational changes are not going to solve their biggest issue. What they really need is a purpose for being. Something that distinguishes the BK brand from their competition and explains from customers to crew to marketing why they exist in the market place. Until BK finds the soul of what the brand has the potential to stand for, I wouldn't be surprised that they keep losing their way in the QSR category or worse.

Well i tried in aussieland, it was always good, well hope they would expand to new markets which are untapped and have only heard of this chain but not have actually experienced, where anything american can be sold... come with local need study and accordingly designed menu, i remember Mc Donalds came but to exist changed menu..... secondly come to create culture not just to sell burgers, decrease outlet set up cost so can sell and open more franchise outlets so there is less ROI pressure, and more money can be spend on operations.My personal opinion is more money should be spent on substance .... Should keep packaging and designing cost to minimum, which would help you reducing cost of overall product, Educate people, contribute to community.Slogan should be " exceeding your expectation is our way of life"

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