November 16, 2010 at 11:25 am | Blog
Everyone knows that McDonald’s is the world’s largest fast food chain – the Golden Arches are everywhere. Burger King is #2, but it’s nowhere near catching up with McDonald’s – and now that Burger King has been bought by a private equity firm, many industry analysts are predicting a major strategic shakeup in Burger King’s marketing.
What went wrong for “The King”?
A few years ago, Burger King was the darling of the advertising world, with attention-getting, award-winning ads from the Miami ad wizards Crispin Porter & Bogusky. Burger King was praised for its creative ads focusing on a key target market of young male “super fans” who ate at the fast food restaurant five times a week.
The recession has been bad for all kinds of businesses, but McDonald’s has thrived. In fact, Burger King should have been expected to do better during the recession, since people tend to “trade down” and spend less on their food budgets when times are tough. But instead, the opposite happened – even while McDonald’s has reaped record profits (while introducing a full suite of new products designed to appeal to a wider variety of customers, like McCafé premium coffee and fresh fruit smoothies), Burger King’s core audience of young male “super fans” has failed to keep spending.
Burger King’s marketing strategy became overly reliant on young men; and this recession has been especially tough on young men, with steep job losses in manufacturing and construction.
Lesson #1 – Adapt Your Business with the Times
One lesson from Burger King’s woes: always be ready to adapt. The solid market or lucrative target audience that exists today could go away tomorrow. Burger King bet too heavily on a single audience – and geared its marketing to speak only to that audience. Meanwhile, McDonald’s positioned itself as a quick, convenient destination for value-priced food that also offered appealing premium items for the health-conscious, and many other demographic groups.
Lesson #2 – Stop Focusing SOOO Much on Your Creative
Another lesson from Burger King’s struggles is that it’s definitely possible to focus too much on creativity in advertising. Burger King’s plastic king masks and clever viral marketing campaigns weren’t enough to keep up with the shifting tides of the recession – most of Burger King’s ads were more effective at winning advertising awards and building “buzz” – not selling more burgers.
It’s not clear that Burger King’s highly praised advertising actually helped sales – in 2009, AdAge ran an article stating that Burger King’s market share and annual sales growth fell between 2004 and 2008 – the years when Burger King’s advertising was receiving the most critical acclaim.
In addition, Burger King’s competitive advantage has not been sufficiently communicated. As far as I know, Burger King offers the only burger that is chargrilled of the major fast food international chains. If I have to eat fast food, I choose Burger King for this reason. This competitive advantage is “sung too softly”.
Burger King was good at getting attention, but not good enough at communicating competitive advantages and explaining why customers should keep choosing to buy their burgers from “the king.”