Marketing Planning for Burger King - Essay Example

? Marketing planning report: Burger King BY YOU YOUR SCHOOL INFO HERE HERE Marketing planning report: Burger King SWOT and PEST analysis dataBurger King maintains many different strengths that enhance its brand visibility and help to increase market share in certain international locations. The first positive strength of the company is its globally recognised brand that has been in existence for decades, built on the foundation of ongoing successful marketing strategy and its presence in many international locations. For its current loyal customers, Burger King and its flamed-broiled concept, unique among competition, is a preferred taste that supersedes the brand importance of competition such as McDonald’s, Wendy’s, and other well-known international fast food brands. In some target audiences, Burger King has established brand insistence, or “consumer refusals of alternatives and extensive search for desired products” (Boone & Kurtz, 2007, p.383). Unlike some competition that only establishes brand preference or brand recognition, the unique production capabilities (flame-broiling) has managed to improve its loyalty ratios over many competitors. Additionally, Burger King achieves higher revenues through its franchisee programme that allows royalties to be paid whilst still using current advertising methodology. This is accomplished through its widespread geographic diversification and its presence in a multitude of international locations across the globe. By handing operational costs to the franchise owner, Burger King is able to earn revenues without considerable overhead costs. Unlike corporate owned, competitive fast food companies, Burger King maintains much lower operational costs and would normally be associated with corporate-owned facilities. Burger King’s weaknesses include the influence of ever-changing labour laws that provide concentrated regulatory presence related to worker treatment, hours allowable, and diversity policies that differ internationally. This creates cost associated with maintaining new training programmes and also increases governmental control over how the business structures its labour pool in relation to retention and corporate organisational structure. Burger King also relies heavily on attempting to retain currently loyal customers rather than seeking new target audiences. This could be an effort to save on advertising costs by consolidating, however the business misses out on opportunities for gaining new market loyalty. Opportunities for the business include gaining higher revenues and more international brand visibility through its breakfast menu that grows more diverse over the years (marketingteacher.com, 2010). There are many threats to Burger King’s increased market share expectations, including troubled international economic conditions that lead to less disposable income for customers (such as the current rise in oil prices globally). This changes consumer sentiment related to pricing and their willingness to buy based on cost alone. Troubled economies represent unstable and uncertain operating environments that impact marketing strategy in a multitude of different ways. At the same time, consumer eating habits are changing due to international or domestic trends in healthier eating or acknowledgement of problems with obesity that directly impact an organisation where high fat content products are part of the core menu variety. Finally, consumers today are willing to defect to new brands based on many factors, with cost being one of these main trends. There is no guarantee in current market conditions, based on fluctuating buying behaviours in multiple consumer markets, that brand loyalty will be guaranteed over the long-term. There are virtually no political factors impacting business other than the aforementioned regulatory increases in labour protectionism. At the economic level, there are currently ongoing lawsuits related to franchisee unrest related to value pricing models that erode business owner profitability. Socially, there are changing attitudes about what constitutes acceptable advertising and different religious and cultural values related to menu variety and acceptable food product demands. This drives changes to core menu options across the world, somewhat complicating having a streamlined and functional core menu establishment that are uniform internationally. Technologically, the environment provides for more Internet marketing as user ratios increase globally that allows for new marketing tactics and the redemption of coupons and other incentives through mobile phones and other wireless networks. There is also technological opportunity for new payment systems such as credit transactions that did not exist in previous years. All of the different factors that are considered externalities drive changes to existing marketing strategy and somewhat force different geographic locations to have varying core menu products. It adds cost to advertising and requires the addition of more skilled marketing professionals (thus adding to budget costs) in order to maintain a positive ad presence internationally. Technology improvements, higher Internet and wireless usage in many demographic consumer segments, and new breakfast foods for higher revenue production are some of the most notable opportunities for Burger King going forward. 2. Identification of current target segments As identified, Burger King tends to rely on its current loyal customers and works to retain them rather than locating new market potential due to costs of advertising or the need it would create to further diversify an already vast core menu. Burger King seems to recognise that economic factors are some of the largest threats to its business model and has developed a value menu premise that is in-line with other large scale fast-food competitors, such as McDonald’s. In 2011, Burger King rolled out its affordability menu that features many different bite-sized snacks (Reynolds, 2010). The company has invested considerable funds into this value offering and launched the ‘King Deal’ that includes a sandwich, fries and drink for ?1.99 (Reynolds). This is more of a competitive tactic that is designed to keep up with current pricing trends with competition, however it has attracted more loyalty and some new market segments in the process that are value-conscious or hail from lower-income households. Though these value-conscious consumers are not their intended target audience, Burger King still gains additional support and revenue that help to improve its overall financial portfolio and economic strength. Ultimately, the production of the iconic ‘KING’ that is representative of Burger King is designed to gain more support from its loyal customer segment: the male 18-35 year old fast food purchaser. This is the ideal and most targeted segment for Burger King, using both humour to gain relationships with this group and also to show the company’s flexibility. Offers one Burger King marketing professional, “the company is not afraid to use humour to talk to its customers. It wants to engage with people on the street and humour is a great way to get their attention” (Seaton, 2005, p.6). Youth consumers in the 18-35 year old male segments seem to appreciate this modern and intelligent style of using iconic images to improve Burger King’s reputation as a leader that continues to build more loyalty with this important, superseding market segment. By using announcers on television commercials with masculine values, the company earns its largest revenue stream from this male 18-35 year old market group. Print, radio and television advertising is usually geared toward meeting the value and lifestyles of this youth market. Burger King also uses indoor billboards as part of captive audience marketing that has signage in men’s restrooms with strategically placed messages that remind restroom users of the different specials and menu improvements offered by the company (Cronk, 2009). This further reinforces its dedication to using unusual and unique tactics to gain further attention from its desired male audiences, including restroom marketing in night clubs and other locations where the male 18-35 year old market segment frequents. Burger King used what is referred to as its subservient chicken campaign to promote the TenderCrisp sandwich to its youth target market (Liodice, 2010). This included a viral-marketing website in which young followers of the brand have been able to interact virtually with the Burger King image. Again, this reinforces the company’s commitment to achieving more support from its most profitable youth market group. 3. Marketing mix analysis The three most important elements to Burger King’s marketing strategy, when considering the marketing mix, are product, price and promotion. In terms of product, Burger King has conducted considerable consumer research about its primary 18-35 male audience to uncover their lifestyle and eating habits related to menu options and variety. The TenderCrisp sandwich and the flame-broiled Whopper have been the largest sellers for the business and continue to evolve with youth eating habits. The product’s flame-broiled strategy in terms of preparation is unique among all other competitors and it helps the business maintain its competitive edge. There is no evidence that Burger King introduces new products without having a keen understanding of what drives target market youth behaviours and eating preferences and then adopts advertising to meet these needs. Nearly all of its core products and new introductions are geared toward the younger, masculine persona with minor variations noticeable related to production (such as adding new sauces or cheese options) without losing its core product visibility and youth market following. Burger King remains relevant to its core customers, and new clients gained as a matter of clever marketing strategy, by not losing its devotion to the flame-broiled innovations in its sandwich line and remains true to product as a selling point in most advertising and communications with its desired target markets. Product preparation and style are the main revenue earners competitively and in terms of youth market taste preferences. Pricing is a major factor related to profitability and gaining more consumer interest in the Burger King name. As mentioned previously, economic conditions internationally are unstable and unpredictable, causing the business to further diversify its products (even at risk of damaging core brand profits) by offering value-conscious food options. The dollar menu, a competitive tool to maintain market share with large-scale fast food competitors, gives higher revenues from untargeted markets that have less disposable income for such food purchases. Pricing is a consideration when costs of distribution continue to rise, global food prices continue to increase, and as youth consumers are amidst higher unemployment rates than in years previous. To compensate, the company offers more specials, more value-conscious food options, and then advertises these changes competently to show its flexibility in meeting the economic problems of its many different market segments. Even though this seems to erode market share by a small percentage, it ensures loyalty from existing market groups and gains attention from less-important groups that add to profitability. The presence of lawsuits by disgruntled franchise owners related to value pricing also adds risk, however avoiding a value option on the menu would take away from its competitiveness associated with larger competition such as McDonald’s. Pricing in difficult economic times would seem to almost guarantee brand defection by value-minded buyers struggling with rising oil prices, rising food prices, and less disposable income caused by environmental situations in the local economy. Promotion, however, is where Burger King excels the most notably. The business uses guerrilla marketing, another modern strategy, which is an innovative, low-cost and sometimes invasive strategy to gain loyalty (Boone & Kurtz). Street teams are often used, consisting of low-paid promotional teams that hand out promotional items such as CD’s produced by Burger King or bumper stickers (or other low-cost promotional merchandise) to gain street consumer loyalty and enhance its visibility as a brand. Street teams in guerrilla marketing for Burger King might “stage events, show up at community events, or promote upcoming specials or hand out coupons” (Smith & Reynolds, 2008, p.145). Promotion is designed to capture attention, rather quickly, so that buyers can take advantage of changes to Burger King’s core menu. This is one of the most profitable and low-cost ventures that allow for incentive productions and often uses the Internet to gain even more consumer following for the brand. Promotion in relation to television and radio are more expensive and contain more risk than the firm’s guerrilla marketing tactics that blend humour with in-your-face brand strategy. Guerrilla marketing as a primary promotional tool for Burger King is highly effective and provides opportunities for instant redemption of coupon offers. It provides short-term sales increases when needed (Boone & Kurtz) and enhances overall credibility of the business by illustrating its innovative and flexible efforts to maintain lifestyle-oriented relationships with multiple consumer segments. This type of marketing is customizable and easily adaptable without outrageous costs associated with more concentrated advertising produced to gain specific market segment loyalty. 4. Recommendations As identified, Burger King seems to try to gain more loyalty from already-loyal customer groups (the 18-35 male segment) and misses out on new opportunities to gain new brand preference from other market groups outside of this youth group. Using the same low-cost guerrilla marketing tactics, Burger King can emerge in different lifestyle-oriented functions to gain other market segment demand. This can be accomplished by sending street teams into female-oriented clubs or other relevant organisations, adding humorous sex appeal to the ‘KING’ mascot or other tactics to gain female youth buyer sentiment. This would attract more attention from the non-primary target segment and improve short-term sales internationally in the process. It is the most low-cost and effective method of shocking or outraging groups not necessarily familiar with Burger King, its products, or its core values. Burger King also maintains the opportunity to share many of the same healthy eating values of its competition, such as McDonald’s, by offering low-fat food options. There is a healthy eating trend that has coerced competition such as McDonald’s to offer apples, fruit drinks, and other low-fat food options to its core menu to satisfy this growing trend. Burger King can develop different salads or other low-fat food options that would be acceptable to its desired target audiences if proper research is conducted with different target segments prior to development and launch. Since this healthy eating trend is changing competitive tactics, Burger King should get on board with this concept to gain new market interest and improve short-term or even long-term revenue generation. At the same time, the company can use its well-established, global image to improve its revenues through brand licensing agreements with the production of Burger King branded merchandise. Utilising appropriate strategies with different retailers, Burger King can advertise its new merchandise and seek out production facilities that are low-cost and easy to procure. The youth market attracted to Burger King’s modern and humorous advertising and philosophy of business operations would be the most loyal for this merchandise, therefore it should be targeted to the currently-loyal 18-35 year old male consumer audience. Such merchandise can be promoted in the same fashion as guerrilla marketing and the captive audience philosophy such as restroom banners near urinal stands or through interactive website content printed on different Burger King product packaging. This is a long-term strategy for additional profitability if distributed and advertised properly. Through appropriate marketing research, such as the focus group, Burger King can gain an understanding of what drives morning eating habits related to the fast food customer and develop appropriate menu options to satisfy these new markets. There are opportunities associated with marketing and extending the hours of business operation to ensure higher profitability. An entirely new, professional market of adult labourers would be ideal to target for this, improving sales in coffee, breakfast food products, and improve long-term loyalty is conducted with these groups’ lifestyles in mind. A focus group consisting of these older professionals would be necessary to understand their preferences. 5. References Annual report. (2010). [internet] BKC Annual Report Filing. [accessed 3.2.2011 at http://quote.morningstar.com/stock-filing/Annual-Report/2010/6/30/t.aspx?t=:BKC&ft=&d=525f1de8f871b98639ccbe1c2a8ddfb4] Boone, L. & Kurtz, D. (2007). Contemporary Marketing, 12th ed. Thomson South-Western. Cronk, P. (2009). [internet] The guerrilla market’s 10-round ammo clip, Riger Knowledge Base. [accessed 3.3.2011 at http://www.riger.com/know_base/advertising/guerilla.html] Liodice, B. (2010). Ten big marketing risks that paid off for brands, Advertising Age. 81(20), p.34. Marketingteacher.com. (2010). [internet] Burger King Swot, Chichester United Kingdom. [accessed 3.2.2011 at http://www.marketingteacher.com/swot/burger-king-swot.html] Reynolds, J. (2010). Burger King to launch first value menu, Marketing, London. October 27, p.1. Seaton, J. (2005). Burger King guns for rivals in guerrilla push, Media, Hong Kong. September 9, p.6. Appendix A: SWOT and PEST Analyses of Burger King BURGER KING SWOT ANALYSIS Strengths Globally recognised brand (Annual report, 2010). Increased royalties from expanding franchisee network International geographic diversification Weaknesses Very heavy influence of labour laws Too much emphasis on retaining pre-existing customer base Reduced global market share due to rising competition Opportunities Opportunities for increased breakfast customers with diversified morning menu options Opportunities for healthier eating options in the menu variety Brand licensing agreements for Burger King branded merchandise Threats Troubled international economic conditions at the consumer, business and governmental levels Rapidly fluctuating consumer eating habits Consumer brand defection based on price BURGER KING – PEST ANALYSIS Political Factors – Increasing influence of changing international regulations pertaining to labour laws that alter internal political dynamics related to employee relations globally. Economic Factors – Unstable international and domestic economies leaving uncertainty regarding pricing and consumer behaviour trends. Unrest in franchisee networks related to value pricing and the presence of lawsuits related to franchise profitability and restrictive Burger King policies. Social Factors – Religious and social values dictate the menu varieties that are considered acceptable for international clients. Changing attitudes about the acceptability of certain advertising principles in geographic areas Technological Factors – Increasing use of mobile technology for incentive production and coupon redemption Widespread global use increases of Internet technologies providing new marketing opportunities Changing payment systems allowing for credit transactions Read More

 

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