Sonic focuses on marketing, new prototype to drive salesSonic focuses on marketing, new prototype to drive sales

Ron Ruggless

Sonic Corp. is tinkering with its marketing strategy as it adds new menu items to boost sales and a new drive-in prototype to reduce franchisee costs.

Oklahoma City-based Sonic late last week estimated a 3.4-percent increase in systemwide same-store sales for the second fiscal quarter ended Feb. 29.

Same-store sales reflected an estimated increase of 3.5 percent at franchise drive-ins and 3.1 percent at company drive-ins. Sonic will release its full second-quarter 2012 results after market on March 21.

Sonic executives separately outlined the company’s post-recession strategy at the Bank of America Merrill Lynch 2012 Consumer Conference, where they said the 3,555-unit quick-service chain would play to its strengths of five dayparts.

Sonic chief executive and chairman Clifford Hudson said slightly less than half of the chain’s sales come at lunch and dinner, with the rest spread across breakfast, afternoon snack and late-night dayparts.

Thirty-nine percent of sales come from fountain drinks and ice cream, he said.

“As our former CFO used to like to say, ‘Anything mixed with air or water, we love promoting it because we love those margins,’” Hudson said.

New advertising would help the company highlight “layered dayparts” and new items, he added.

“I think it will really help us from a breakthrough standpoint in terms of customer awareness of our commercials and usage of the brand as a result,” he said.

The “layered” approach, which is being implemented from March through August, will emphasize snacks and add-ons, such as the recently introduced Sweet Potato Tots.

The company is also bringing back popular spokesmen from 2002 to 2010, the “Two Guys of Sonic” played by actor-comedians T.J. Jagodowski and Peter Grosz.

Hudson said the “Two Guys” fit well with building sales across dayparts, because they could emphasize specific products.

“Their play in social media at this point is particularly strong opportunity for us,” Hudson said. The build-up to their television ad debut included Facebook and YouTube posts.

Watch Sonic’s latest “Two Guys” commercials; story continues below

Hudson said Sonic, which moved its media buying from a regional to a national agency, has improved the effectiveness of marketing dollars and helped lead to an improved value perception among consumers.

“It’s a step from a standpoint in terms of reach and the impressions that a potential customer is likely to have from our advertising activity,” Hudson said.

While Sonic has grown unit counts historically by about 3 percent each year, recent growth has only been about 1 percent annually.

Sonic sees one component of unit growth as reducing the cost of entry, said Claudia San Pedro, head of Sonic’s investor relations.

“We’ve been working on a small-building prototype, where we’ve been able to reduce the cost of the building by about 15 to 20 percent,” she said, and the company expects franchisees over the next few years to adopt the smaller unit.

Sonic has units in 43 states.

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