Burger King Case Study Solution

Case Study: Burger King

Client: Burger King
Agency: Crispin Porter & Bogusky
Award: Yellow Pencil / Interactive & Digital Media / Consumer Websites / 2005

There was a time when there were no significant American advertising agencies outside New York, Chicago and Los Angeles. Then Wieden + Kennedy began making a name for themselves in Portland, Oregon, and Fallon started making waves from Minneapolis. Even so, no-one believed an agency in Florida could ever make the big time. Miami was just too far from where the big clients held sway.

When, in January 2004, Burger King appointed Crispin Porter + Bogusky to handle their advertising, the business press was, frankly, amazed. It wasn’t just because what had been regarded as a creative boutique was now playing with the seniors as much as the fact that Burger King was in a challenging position and needed to effect significant change. Often, this type of situation induces corporate paralysis. Companies become more conservative rather than more adventurous. The result is thrombosis.

Burger King were brave. Bravely they acknowledged that a sharper communications strategy might be the route to improving market share, bravely they sought to talk to the agencies with reputations for visible, effective work and bravely they went to Florida.

Andrew Keller remembers that in January 2004 “We were given a week to put together a presentation that would include everything from instore to online. It was crazy but fun. We thought we might get a project from BK but not the whole lot, not the whole account.” But that’s what happened. Impressed with what they saw of the work and the people at CP+B, Burger King appointed the agency to handle their entire advertising needs.

There was no time for ceremonies. Burger King needed new advertising out in the marketplace and they needed it fast. But, you know, speed is an ally in getting out great work,” says Andrew Keller, Creative Director at the agency for BK. “Pressure is positive. When you have too much time, you get bored with ideas and move on before you should. Also, it gives the client space in which to kill your babies."

Subservientchicken.com was only one piece in a large range of advertising materials presented to the client in that January pitch. By February it was in pre-production along with a raft of TV commercials, including one to be shot by Rocky Morton featuring a man in a chicken suit being subservient.

When the commercials were shot, a small agency team borrowed the chicken suit and raced off to an apartment nearby, which they had rented for the day. There, on DV camcorder, they filmed their own Chicken Man.

No star director, no big production number, just a few people experimenting. It may even have been one of the creative team inside the chicken suit – no-one is saying. (One consequence of subservientchicken.com’s success is the agency now gets the directors of its TV spots to shoot the online video as well.)

The idea was simply to extend the life of the TV commercial with an online version. No-one could have predicted that the website would acquire a life of its own. And what a life. To date, subservientchicken.com has received 442 million hits and 16.5 million unique visits. Most of the people visiting the site have no idea of the television work it was originally intended to support.

Intriguingly, the website was never formally launched. It was uploaded internally and sent to a handful of people at both client and agency for them to look at. Someone mailed it on to a friend outside and that was it. Whoosh! It was in the public domain and travelling at incredible speed.

“A lot of people really thought what they were watching was live – a man in a suit who responded to their commands in real time. And they were ringing up saying, how do you do that? There was massive interest. It was like magic,” muses Keller before adding, “But that’s when I saw the dark side to the internet as well. There were people trying to hack into the site and subvert it, trying to figure out its commands.”

He suggests there is a valuable learning in that. The internet will also bring you into contact with those who are antibrands and anti-advertising, irrespective of how “cool” your site is. It is best to be prepared for their attempts to subvert or pervert your message.

Behind subservientchicken.com and all the other work presented in January 2004 was a big idea. Like so many big ideas, it may not have looked all that bulky at first. Indeed, it was an idea Burger King had already used, albeit some time ago. Back in the 70s, BBDO New York had run a campaign with the line “Have it Your Way.”

Crispin Porter + Bogusky retrieved this thought from the archives and built all their advertising around it. For BK, the dilemma was whether to abandon their positioning around ‘fire-grilled’. They had invested much time and money into what they saw as being a differentiating proposition.

“We’d done a lot of work with MINI,” says Keller, “And what we learned from research is that people really want to express themselves these days. Everyone is trying to be a bit different to everyone else. Other manufacturers are talking about ‘mass customisation’ too.

Well, we took that learning across from automobiles to burgers and said to BK, ‘Have It Your Way’ is what you should be saying. The tagline had only run a few times back in the past and yet people could still remember it.” BK, under attack from McDonalds, Wendy’s and Subway, bought the argument.

‘Have It Your Way’ was an integrated idea from the very start. It wasn’t a TV campaign that was extended into other channels but a base-camp for all communications to move out from. “The work isn’t all identical,  every spot, every ad, every microsite featuring the same executional details. We had a theme and that’s what we were integrating,” explains Keller. 

“So in the ‘Lunchbreak’ commercials, you see office workers literally having their burgers the way they personally like them. Then there’s Dr. Angus at www.angusdiet.com, and he clearly has it his way and helps you have it your way.”

Today, there is less talk of above and below the line. Clients look for strategic partners to help them establish a clearly differentiated position and a differentiated personality across all media channels. Those agencies that are still media-driven rather than consumer-centric have their faces set to the 1980s when broadcast media guaranteed you mass audiences.   CP+B is most definitely one of the world’s more forward-looking agencies. Even when briefed to produce a TV campaign, creative director Alex Bogusky is said to insist on seeing poster ideas first.

Nothing forces distillation quite like a poster. Only when an idea will condense down to a simple and quick message will he give the goahead to proceed to writing scripts. He knows now the idea will work at any number of different consumer touchpoints, TV just one among many. Keller calls it “a cocktail approach.”

“We don’t want to do ads as much as we want to influence popular culture. People want change and we can have fun helping them make those changes,” he says. The agency has also integrated its creative people.

It is customary for a writer and art director to work as a pair. At CP+B, things are more fluid. Keller agrees. “I came from a music background and when you play in a band you get used to working with several people, five, twelve even, all combining ideas.

It’s the same on the Burger King account. Art Director, Mark Taylor and Copywriter, Bob Cianfrone came up with the TV idea, Jeff Benjamin, our interactive creative director, said, why don’t we go online as well and then there’s Alex always saying, ‘What else can we do? How can we push it further?’ We work as a team. There are no individual stars so the idea always ends up bigger than any one guy could make it on his own.” Sounds easy but isn’t.

“People come here wanting to see how we do it, because we make advertising people like and which works and they think there’s some magic to it, but actually it’s just hard work. The fact is, the more you do, the better the odds are on you doing something good. We just keep going at it until we get it. If the client doesn’t like what we do, that’s fine, we don’t get all temperamental about it, we just get down to it again. We are not confrontational at all.”

Mark Spates, Associate Manager, Interactive and Media at Burger King, assents. “Collaboration is important to us. I would say we talk ten times a day outside of the regular meetings and presentations. We talk ideas. I’ll say, ‘Hey I saw this website, how can we take it and make it better?’ and they’ll call me with ideas. It’s ebb and flow in free communication and we do it together.”

Spates supports the view that the success of subservientchicken.com has done two important things for the brand. Firstly, it has given it credibility. Secondly, it has given it permission. “What we did was use the web in a completely new and different way. Up until then there had been webisodes and video material you could get online but it was essentially passive. Subservientchicken.com was interactive. It was one-to-one, you and the chicken. That was new. Also, it said, we just want you to have fun with this. There was no desire for your e-mail address or anything. What we take out of this is the importance of bringing entertainment to our consumers because that’s how we come to feature in their lives.”

Taking its cue from CP+B’s holistic approach to communications, Burger King now actively seeks to engage with its customers in as many places as possible and in as many different ways. One new extension of the subservient chicken is as a Halloween mask.  Spates again. “Why are we selling Halloween masks? Why not? It’s just one more way of tapping into social currency. Already we’re seeing viral pick-up of the masks and people liking what we’re doing.”

In terms of the permission, what subservientchicken.com has done is throw the windows open on new ways of talking to people at Burger King. With the agency, they are now looking at engaging with their consumers through their cell phones, via online games, and, most recently, podcasting. Music is already on the menu, at Coqroq.com, where again the chicken gets to extend its wings, this time into heavy metal on a spoof fanzine website. 

Behind it all there’s now a real band, looking to have a hit record and play live gigs, but you can download ring-tones, buy tee-shirts and, “this is cool”, if you come across a piece of music and don’t know what it is, play it on your phone to the website for 15 seconds. By reply you’ll get a text back telling you what the song is and who is singing it. Why? Why not, as Spates says. “Usually, you market to people on the net only when they want your marketing. So our strategy is simply to try to get a look-in on their lives,” he says. “It’s about leveraging emerging technologies in order to engage.”

Chickenfight.com was yet another example of the chicken finding new ways to entertain online. Like subservientchicken.com, behind it is a painfully simple advertising idea. At Burger King youcan choose to have your meal in a variety of different combinations. Thousands of agencies for thousands of clients have tackled the problem of choice. Hmm, which is better, our traditional recipe chicken or new spicy chicken in a bun?

Step 1 in the creative solution was to dramatise a fight between two chickens, representing the two styles. Stage 2 was when someone said, “Now how can we get a guy in Kansas to fight with a guy in Denver?” Such is the culture in the brand team, the response from client was: well, let’s go and find the technology to do it.

The site reached a million hits on some days during the promotion. Spates concedes they are numbers any other marketer would think brilliant but subservientchicken.com is a tough act to follow. “There has been huge pressure to repeat it but we do know you can’t hit a home run every time and that something like subservientchicken.com is rare but what it’s done is encourage us to innovate, innovate, innovate.” Many of the learnings went into CP+B’s next major online foray, Angusdiet.com, featuring lifestyle guru Dr. Angus and his ‘Eating the Angus Diet.’

If subservientchicken.com was an accidental “brand toy”, an amusing way of engaging the interest of bored, ad-averse folk within just three or four seconds, hoping to keep them for as many as three or four minutes, then Dr. Angus was designed to give you, the surfer, as much control as possible. Do you clean your house too much? Send All Staff e-mails? Slump on the sofa too often? Dr. Angus gives verbal advice which you can edit and download, or tailor to send to a friend. Clever stuff, deliberately so.

Either you like it or you don’t So, what of the results of all this innovation? Keller reflects. “Well, a lot of agencies told us we were crazy to take on Burger King, that they’d pull us down when they went down. With our first TV work, directors who usually were clamouring to work with us suddenly became shy but now everyone wants to get a piece of it.” He goes on to say, “Russ Klein, Chief Marketing Officer for Burger King, and the top people at BK are generous in singling out the advertising as a big reason for the turnaround.” And turnaround there has been. Burger King Chairman and CEO Greg Brenneman recently announced that they have seen their sixth consecutive quarter of positive comparative sales in the US.

Keller believes that the advertising made BK visible. “You’d drive past a Burger King and you just wouldn’t notice it. Now you have to make a decision about the brand. Either you like it or you don’t. That’s a significant change. Now when you drive past a Burger King, you see it. A friend of mine called me recently to say she was in a Burger King having breakfast and she didn’t know why.”

When pressed to talk about winning Silver at D&AD he laughs. “I’d just about given up on D&AD. They are almost impossibly hard to win. But, you know, when you ask me what I’m proudest of, it’s not subservientchicken.com or the TV spots, which also got in The Book, it’s the cups and bags.” Keller had identified the bags you get your fries in and the cups for your Cola as perhaps the most important communication channel of all for his client.

“That space is worth the equivalent of two Superbowl commercials each month and they weren’t doing anything with it. Worse, they were giving it away to Disney and Co whenever they ran a joint promotion.”

Next time you’re in a Burger King in the US, read your bag. The story about bagglers, those last, tasty fries that linger at the bottom, is also the story of an agency that believes in joined-up thinking and a client that is prospering from it.

If you think you have a campaign that deserves a Pencil, enter your work into the D&AD Awards and see if our judges agree. When it comes to awards, nothing matters more.

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Burger King Success Story and Case Study –  A Short History of Burger King  

The world’s one of the leading hamburger chain was founded in 1953.The company have been operating in over 70 countries and 90% are privately owned franchises.This executive summary demonstrates the brand value of Burger King and how the company has revolutionized itself over the years.

Despite of the challenges and intense competition in the market, the Burger King holds a strong position with the help of its successful marketing strategies. The tastes of its hamburgers are much better than McDonalds but they are unable to make the brand perception as strong as McDonalds globally.For Burger King, the move to merge with the Canadian market will bring out a potential hook for those millennial who love coffee and breakfast sandwiches.

How was Burger King founded?

The company began in 1953 as Insta-Burger King, a Jacksonville, Florida-based restaurant chain. After Insta-Burger King ran into financial difficulties in 1954, its two Miami-based franchisees, David Edgerton and James McLamore, purchased the company and renamed it Burger King.

The predecessor to what is now the international fast food restaurant chain Burger King was founded in 1953 in Jacksonville, Florida, as Insta-Burger King. Inspired by the McDonald brothers’ original store location in San Bernardino, California, the founders and owners, Keith J. Kramer and his wife’s uncle Matthew Burns, began searching for a concept. After purchasing the rights to two pieces of equipment called “Insta” machines, the two opened their first stores around a cooking device known as the Insta-Broiler.

The Insta-Broiler oven proved so successful at cooking burgers, they required all of their franchises to carry the device. After the original company began to falter in 1954, it was purchased by its Miami, Florida, franchisees James McLamore and David R. Edgerton.

The two initiated a corporate restructuring of the chain; the first step being to rename the company Burger King. The duo ran the company as an independent entity for eight years, eventually expanding to over 250 locations in the United States, when they sold it to the Pillsbury Company in 1967.

Pillsbury’s management made several attempts at reorganization or restructuring of the restaurant chain in the late 1970s and early 1980s. The most prominent change came in 1978 when Burger King hired McDonald’s executive Donald N. Smith to help revamp the company. In a plan called Operation Phoenix, Smith initiated a restructuring of corporate business practices at all levels of the company.

Changes to the company included updated franchise agreements, a broadening of the menu, and new store designs to standardize the look and feel of the company. While these efforts were initially effective, many of them were eventually discarded, resulting in Burger King falling into a fiscal slump that damaged the financial performance of both Burger King and its parent. Poor operating performance and ineffectual leadership continued to bog the company down for many years, even after it was acquired in 1989 by the British entertainment conglomerate Grand Metropolitan and its successor Diageo. Eventually, the institutional neglect of the brand by Diageo damaged the company to the point where major franchises were driven out of business and its total value was significantly decreased. Diageo eventually decided to divest itself of the loss-making chain and put the company up for sale in 2000.

In the twenty-first century the company returned to independence when it was purchased from Diageo by a group of investment firms led by TPG Capital for $1.5 billion (USD) in 2002. The new owners rapidly moved to revitalize and reorganize the company, culminating with the company being taken public in 2006 with a highly successful initial public offering.

The firms’ strategy for turning the chain around included a new advertising agency and new ad campaigns, a revamped menu strategy, a series of programs designed to revamp individual stores, and a new restaurant concept called the BK Whopper Bar. These changes re-energized the company. Despite the successes of the new owners, the effects of the financial crisis of 2007–2010 weakened the company’s financial outlooks while those of its immediate competitor McDonald’s grew.

The falling value of Burger King eventually lead to TPG and its partners divesting their interest in the chain in a $3.26 billion (USD) sale to 3G Capital of Brazil. Analysts from financial firms UBSand Stifel Nicolaus agreed that 3G will have to invest heavily in the company to help reverse its fortunes. After the deal was completed, the company’s stock was removed from the New York Stock Exchange, ending a four-year period as a public company.

The delisting of its stock was designed to help the company repair its fundamental business structures and continue working to close the gap with McDonald’s without having to worry about pleasing shareholders. 3G later took the company public again after a series of changes to its operations and structure. Burger King would eventually be merged with Canadian-based donut and coffee chain Tim Hortons, igniting a political controversy in the United States over tax inversions.

Is Burger King a public company?

Burger King shares are up nearly 90% since the company returned to the public market in the summer of 2012. Individual franchisees may vary, but shares of Carrols Restaurant Group, a relatively large, publicly traded Burger King franchisee, are up better than 22% over the same period of time.

Burger King Marketing Strategies

THE CHALLENGES AND GOALS

The organizational goal of Burger King is to serve its customers with the best quality fast food. The brand is known to be the second largest burger chain in the US. The recent most strategic goal adopted by the company is to buy Tim Hortons (THI) .The aim is to merge with the Canada’s biggest seller of Coffee and Doughnuts.

SITUATIONAL ANALYSIS

COMPANY ANALYSIS

Burger King World wide Inc is a global chain corporation that works as franchises and operates fast food hamburger restaurants under the brand name of Burger King. The company offers a diversified menu item from burgers, milk shakes, soda etc. The company achieve revenue from three sources i.e. franchise revenues, the property income that they receive from leasing or subleases to franchises and retail sales.

1.GOALS

The Burger King and Tim Hortons made an agreement under which the two companies will establish a new global powerhouse in the quick service restaurant sector.

2.FOCUS

The Company constantly focuses on the menu development, market penetration and basically works on an establishment based model.

3.CULTURE

The Burger King adopts a specific culture and values that is noticeable in the form of diversified menu items they offer. They advocate the culture of “Have it your way” to attract the customers.

4.STRENGTHS

The biggest strength of the Burger King lies in their geographic expansion by operating 11,500 fast food restaurants mostly located in over 70 countries.

5.WEAKNESSES

The product line is highly focused on the fast foods which may withdraw those customers who are conscious about their health especially children.

6.MARKET SHARE

The current earnings growth rate is +15.96%.and the annual revenue gained last year was up to $1.1bn.

CUSTOMER ANALYSIS

The company has a strong product offering to attract and retain the loyal customers. According to the recent news, the company acclaimed that they have been attracting more customers after the launch of Satisfries, in North America. The Satisfries are low calories French fries which have got 20% lower calories than a regular fries. This brought an incremental change in the customers who would not think of Burger King before.

COMPETITOR ANALYSIS

COMPANY: McDonalds

McDonalds’ is the world’s largest chain of fast food restaurant that serves around 68 million customers worldwide. The secret behind McDonald’s success is the strategic competitive advantage and remarkable supply chain. They offer the food at the lowest price possible comparatively to its rivals and have a strong distribution channel as well.

STRENGTHS OF MCDONALDS

• Largest fast food market share worldwide.

• Diversified product line.

• Strong brand presence.

• A growing middle class has a massive customer loyalty.

WEAKNESSES

• Unhealthy food menu.

• Negative image for introducing unhealthy food items in their menu that causes obesity.

MARKET CAPITAL:

 It has market capital of $91.84BN.

COLLOBARATORS

JOINT VENTURES

A huge joint venture between Tim Hortons and Burger King will take place that aims to achieve $23billion sales.

DISTRIBUTERS

US, UK, Canada etc.

SOCIAL AND CULTURAL ENVIRONMENT

The Social-cultural factors vary from country to country. In an Islamic Country the company has to be careful about the content of food such as the burger king only serves halaal food to the Muslim countries and refrain from pork meat.

TECHNOLOGICAL ENVIRONMENT

The Company has recently planned to add a mobile payment option in all its domestic stores. The application will help to provide coupons and nutrition facts.

SWOT ANALYSIS

STRENGTHS

• Geographic Diversification: Burger King has adopted a geographical strategy by expanding its business in over 70 countries where 4538 are located internationally in Asia, Middle East etc.

• Strong brand presence

• Diversified product offerings.

• Advertising campaigns are appealing.

WEAKNESSES

• Some people avoid Burger King because of its unhealthy food items.

• International appeal is quite low.

• Franchise management is weak.

OPPORTUNITIES

• Market expansion.

• New Product Development, catering to the needs of the consumers like new healthy menu etc.
THREATS

• Food costs get high during inflation period.

• Fierce Competition with McDonalds, Hardees, KFC.

MARKETING SEGMENTATION

The Burger King has developed three market segments for its customers such as Kids, African- American teenage crowd, working women. For kids, they have formed a full developed integrated new products, menus, media and advertising. The working women segment is specifically based on the menu products like chicken tenders, chicken sandwiches, and salads.

GROWTH STRATEGY

Burger king’s new move to merge with Tim Hortons is considered to be a growth strategy from both the brands. However, some people have disapproved this stance of Burger King as it’s a tax aversion strategy by the company. The company denied this rumor and stated that they want to bring together both the companies under one flag to serve even better.

INTEGRATED DIGITAL MARKETING STRATEGY

The digital marketing is a new target move and the company has been constantly innovating through enhancing all the channels of communication to serve the customers with the best possible experience.

MARKETING MIX (4P’S)

PRODUCT

• Began the business with burger and fries.

• Adaptive strategy.

• Diversification strategy tailoring the needs of the customers.

PRICE

• Psychological marketing strategy.

• The company continues to sell the new premium burgers, the Steakhouse XT at $3.99.

PLACE

• Burger King receives its revenues from three sources: sales at its own restaurants, property income and the franchise fees.

• The company is operating in various prime locations mostly in the form of franchises.

PROMOTIONS

• The launch of $1 big value meal.

• The company used the term of “Next big move” to showcase the scheduled promotional tours in urban communities around the country.

FINANCIAL PROJECTIONS

In the first half of 2014, the Burger King’s global unit count grew to more than 5%, previously expanding into 682 locations and to more than 13,808 units in 2013.

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