Ben Wise on Branding

Watching the world through the lens of the brand

Posts Tagged ‘Burger King

Burger King Changes Course in the UK

with one comment

The Burger King 'King'For years, Burger King has played second fiddle to McDonald’s. Their response has been to try to entice users with promotional offers. Considering that a distressed Burger King was just sold to 3G Capital Management, the brand strategy based around promotional offers wasn’t a bit hit. In the year to June 30, sales fell by over 2% while their key competitors, McDonald’s and Subway, both grew sales. Under new management, the fast-food brand is changing course for the better.

The Problem with Promotions

Promotions are often a necessary part of brand marketing, which isn’t likely to change anytime soon. I can accept that. But a strategy based around promotions is inherently too short-term focused. Promotions might get customers in the door, but unless you have an amazing and differentiated product (something extremely difficult to do in the fast-food business), it will never garner the loyalty required to build a sustainable brand.

Burger King’s promotions could easily be matched or beaten by competitors and never created a lasting, emotional connection with customers.

The New Way

Burger King has launched a new campaign that is centered around their iconic King character. The campaign will be tied into Foursquare, as well as other social and digital ads promoting the same message. The obvious benefit of this campaign is the introduction of a brand character that has the potential to create an emotional connection with customers, something sorely lacking in their brand strategy. As well, it does a great job tying in multiple media channels to reach different customers in the manner best suited to them. This helps create an experience out of the campaign, another effective way of providing an emotional benefit.

Unfortunately, Burger King isn’t moving far enough from their old ways, as following the King will lead customers to discounts and special offers.

A move in the right direction, but still a few steps too short!

What do you think? Will the change help Burger King turn their sales around?

Advertisements

Written by benwisebranding

September 14, 2010 at 10:07 am

Starbucks Protects Itself with Defender Brand

leave a comment »

While marketers love to examine the price premium that a strong brand can command, the reality is that all brands face price pressures. There is always a cheaper alternative. As most brand managers are in their role for only a few years and are evaluated primarily on short-term results, the temptation is to cut price to maintain volume.

But there is another way!

A Defender brand is one used to protect against low-cost competitors. For example, if P&G were to launch a low-priced laundry detergent it would be a defender brand. The new brand would protect P&G from losing market share to private label competitors, without having to lower the price and potentially damage the brand equity of Tide.

Seattle’s Best Coffee: The Defender of Starbucks

Starbucks acquired Seattle’s Best Coffee in 2003, but only recently has gained much value from it. Facing increasing pressure from less expensive competitors (McDonald’s, Tim Horton’s, etc), Seattle’s Best Coffee allows Starbucks to compete in the low-price segment of the market without harming their core brand. Starbucks is now pushing Seattle’s Best Coffee into national fast food chains, including Burger King and Subway.

Starbucks is able to successfully implement a defender brand strategy for two key reasons:

  1. Starbucks can leverage their geographic coverage and get national distribution quickly for Seattle’s Best Coffee
  2. Both brands are kept almost completely separate. It is important that consumers don’t have a close association between the two brands, or they won’t effectively play in their respective segments.

What do you think? What other companies are effectively using Defender brands?

Written by benwisebranding

May 17, 2010 at 10:14 pm

Starbucks Benefits From A Portfolio Of Brands

leave a comment »

Since Starbucks invented the mass market for upscale coffee shops, there has been great competition in this space among quick serve restaurants (QSR). McDonald’s is increasingly pushing coffee and has launched their posh McCafe’s across the US. Now Burger King is entering the fray with the signing of a deal with the Seattle’s Best coffee brand.

The most interesting part of this deal is that Seattle’s Best is actually owned by Starbucks. Starbucks is cleverly using a portfolio of brands to reach a more diverse set of consumer without sacrificing the integrity of their core brand.

The Starbucks brand is positioned as your ‘home away from home’. They could not credibly maintain this position if they were to offer their coffee through fast food chains like Burger King (although I believe they are pushing the boundaries on their brand already with instant coffee for the home). However, the number of consumers of fancy coffee is increasing and are looking for more product distribution. Emerging segments are more concerned with the coffee than the atmosphere.
Starbucks has realized that the market for upscale coffee is becoming more mainstream, and thus consumers are willing to purchase it on a more regular basis from more traditional outlets. By selling Seattle’s Best instead of their Starbucks branded coffee ensures that they do not miss out on this growing segment of the market. And, the core Starbucks brand is untouched and able to remain your ‘home away from home’.

What do you think? Is Starbucks making good use of a portfolio of brands?

Written by benwisebranding

February 19, 2010 at 1:58 pm