Burger King and Wendy’s are undergoing big changes in their marketing departments, but both brands have a lot of work to do to close the sales gap with segment leader McDonald’s and its consistent brand message, according to a marketing analyst.
Miami-based Burger King Corp. on Wednesday named McGarryBowen as its new agency of record, replacing Crispin Porter + Bogusky, the creative shop behind the chain’s provocative digital campaigns and commercials starring The King. That agency switch comes months after Burger King rearranged its marketing and operations departments, which led to the departure of CMO Natalia Franco.
Also on Wednesday, Dublin, Ohio-based Wendy’s said chief marketing officer Ken Calwell was leaving to become president of Papa Murphy’s Take ‘N’ Bake Pizza. Calwell had been Wendy’s CMO since the 2008 merger of Wendy’s and Arby’s, and he led brand turnaround efforts that included a new ad agency, the new “You know when it’s real” branding campaign, and many new products, including revamped fries. Wendy’s spokesman Denny Lynch said brand president David Karam will take over Calwell’s marketing duties while the chain looks for a new CMO.
Meanwhile, as its rivals change agencies and CMOs, Oak Brook, Ill.-based McDonald’s has ridden its “I’m lovin’ it” campaign, in place since 2003, and several new product platforms to rising same-store sales.
Dan Dahlen, managing director of Columbus, Ohio-based Restaurant Marketing Team, said the state of marketing among the big three burger brands is “almost like everybody’s back to square one,” with McDonald’s far ahead of Burger King and Wendy’s.
“McDonald’s has its vision laid out and can spend all its time on brilliant execution,” said Dahlen, who was a marketing executive at Wendy’s from 1982 to 1986, when the famous “Where’s the Beef?” campaign broke. “The others are struggling and trying to find their way. In that situation, you tweak your calendar, introduce new products, and change agencies or CMOs.”
The gap is evident in the chains’ recent sales performances. While McDonald’s saw U.S. same-store sales rise 4 percent in April and 2.9 percent for the March-ended first quarter, its two biggest rivals have seen weaker trends. Wendy’s reported flat same-store sales for the April 3-ended first quarter, after seeing a 0.6-percent decline in comps for fiscal 2010. At Burger King, global same-store sales were down 2.8 percent in the first quarter, after falling 3.7-percent decline in the previous fourth quarter.
It doesn’t help Burger King or Wendy’s that McDonald’s is setting the marketing bar so high at a time when “super-regional” upstarts like Five Guys and Smashburger are threatening to steal share from all the more established burger brands, Dahlen said.
According to consumer perception research firm YouGov BrandIndex, all three big burger brands have seen fluctuating “buzz scores” — which measure positive or negative word-of-mouth — over the past nine months. All three had higher buzz scores on May 31, 2011, than they did Sept. 1, 2010, but McDonald’s buzz score actually fell the most before recovering recently to its current high score.
BrandIndex calculates a buzz score by surveying 5,000 consumers per day, asking “If you’ve heard anything about this brand recently, was it positive or negative,” then subtracting negative responses from positive.
For the nine month period between Sept. 1 and May 31, Burger King started out with a buzz score of 17.4 and finished with a 20.9 score, climbing as high as 22.7 on March 30 and falling as low as 17.2 on Nov. 15. Similarly, Wendy’s started with a 28.4 buzz score, which decreased to a low of 27.6 and rose as high as 32.0 before ending at 29.3 on May 31.
McDonald’s, meanwhile, began with a score of 23.2 on Sept. 1, and reached its highest buzz score at the end of the period, with 23.8. However, its buzz score fell the most during the nine months, dropping to a low of 11.9 on Nov. 4.
“McDonald’s gets the brunt of consumer disapproval or negative attention when bad industry PR comes out,” a BrandIndex spokesman said, explaining why the chain’s buzz score is so volatile. For example, McDonald’s often gets attacked by anti-obesity campaigns, animal rights groups and, more recently, advocacy groups that criticize the chain’s marketing efforts to children.
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Still, McDonald’s is now registering its most positive buzz scores, and Dahlen of Restaurant Marketing Team thinks it is in a better position to carry that momentum forward because its “I’m lovin’ it” campaign will keep going, while Wendy’s and Burger King are likely to change marketing plans again.
“Any time that you can achieve consistency from year to year in your brand positioning, and in the look, feel and tone of your advertising, it results in ‘one plus one equals four,’” Dahlen said. “It just ramps up on itself and solidifies your brand in the heart of the consumer. If you’re bounding around, consumers wonder what you stand for and lose confidence or lose interest.”
He compared McDonald’s longevity with the “I’m lovin’ it” campaign to Papa John’s continuity with its “Better ingredients, better pizza” slogan articulated in ads by founder John Schnatter.
“Nothing beats continuity” because it frees up the field marketing team and franchisees to concentrate on operations, Dahlen said.
“They’re asking franchisees to bring in a lot of new equipment in Burger King’s case, or new products in Wendy’s case, and each month … they don’t have the luxury of focusing on execution,” he said. “It’s so complicated out there, with thousands of restaurants and hundreds of franchisees and multiple agencies, so chains have to make sure whatever they put out there for the next 12 months is going to work, because they’re kind of stuck with it.”
Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN
