Burger king -Marketing startegies
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Burger King changed its marketing strategies in response to Covid-19. It focused on communicating safety measures through social media and increased delivery. Creative campaigns included delivering food to customers' homes and a virtual pride parade. Analytics show higher social media engagement during lockdowns. Burger King analyzed its competitive environment and marketing allowed it to connect authentically with customers during the pandemic.
Burger king -Marketing startegies
- 1. MarketingManagement How companies are changing their marketing strategies in the context of Covid19 Table of contents: 1. Introduction to the company 2. Pre-covid marketing 3. Post-covid marketing 4. Analysis of Market environment a. PESTLE Analysis b. Competitive Analysis c. 5C Analysis
- 2. Burger King Burger King (BK) is an American multinational chain of hamburger fast food restaurants which was founded in 1954. It is the second largest fast food hamburger restaurant chain of the world and operates as a quick service restaurant. It both owns and franchises hamburger restaurants. Its marketing strategies aim to maximize competitiveness against a wide variety of players. Burger King employs various tactics to promote its products. It uses the following promotion/marketing communications tactics, arranged according to significance: 1. Advertising: Burger King relies mainly on advertising to promote its products. The company advertises online and on TV and print media. 2. Sales promotions: It uses sales promotions in the form of coupons and other offers through its website and mobile app. 3. Personal selling: The firm’s restaurant personnel also typically use personal selling to encourage customers to buy more products from the menu, such as desserts in addition to what the customer already ordered. 4. Public relations: In applying public relations, the Burger King McLamore Foundation gives scholarships and financial assistance for educational programs, thereby also effectively promoting and strengthening the Burger King brand. 2. Pre-Covid19 marketing: BK has used several social media channels for marketing of its brand. From Facebook, Twitter, Instagram as well as Linked In, the company uses all these channels to market itself and promote its products. BK has achieved a nice level of engagement through social media communication. It communicates regularly with its followers and sends regular Tweets or messages to its customers. The company also markets its work culture and business strategy through these networks. Some classic examples are as follows: 1. Good SamaritanDay(CauseMarketing) Instead of a simple social media post for Good Samaritan Day, Burger king decided to stage a car fire on a highway, & surprised those who stopped to help. Whoever stopped to help was shocked to see that the car wasn’t on fire instead they were making burgers. People who had stopped were offered those burgers as a gesture tothank them for being kind to someone who needed help. https://www.youtube.com/watch?v=G64B13oDvcQ
- 3. 2. The Moldy Whopper (Brand Story-tellingmarketingstrategy) Burger king came up with a unique strategy of marketing with a video that showed a Moldy Whopper, this campaign was intended to increase awareness of Burger King’s commitment to remove artificial preservatives from all of its food by the end of the year. In most European countries their foods are 100% preservative-freeand 90% in North America. https://www.youtube.com/watch?v=0ef7xw2J500 3. Call of duty burger king (Co-branding strategy) One Burger King restaurant in Los Angeles transformed into a real-life version of the Call of Duty Burger Town restaurant. Within the restaurant, guests will find a gaming hub set up by Activision for visitors to play the new Call of Duty: Modern Warfare game. This is a classic example of Social media marketing combined with co-branding marketing strategy which benefitted both the companies involved. 3. Post-Covid19 marketing Burger King swiftly implemented more stringent food safety and sanitation norms which were in compliance with the government mandated requirements & communicated about the same with their customers through social media handles. Its main objective was to maintain Brand Saliency via Contextual Messaging, Creating Consumer Awareness of Safety Measures undertaken by the Brand, Contextual Food Craving, to fulfil the craving of the consumers and increase the delivery skew. They communicated Safe Deliveries via Swiggy and Zomato. They changed their social media strategy from topical content to daily posts, as they wanted to increase more customer engagement. Ex: “crown standard measures”& “Burger king Journey” were highlights of their posts. The Burger King Content and communication strategy was completely different from other players in the category, who were creating content on quarantine contests to maintain brand recall among the audience.
- 4. On the other hand, Burger King had a multi messaging approach comprising food safety, topical messaging and creating authentic connections with the brand by using videos and photographs shot and featuring the employees of the brand. Best marketing strategy was their unique Campaigns & Advertisements 1. Affinity marketing Strategy During June every year there is a pride parade held in Spain, but this year due to Covid19 the parade was cancelled but burger king decided to wow their customers by using their delivery trucks to create a mini parade instead. Every time someone placed an order for home delivery, burger king delivered with a parade from 1st to5th of July with a tagline which said “The pride is on you, the parade is on us” 2. Competitiveadvertising strategy When a Tesla owner posted a video online of their car mistaking a burger king sign for a stop sign. Burger king took the opportunity & turned this into an ad which said: “smart cars are smart enough to brake for a Whopper”. Even robots want you to stop for a burger. https://www.youtube.com/watch?v=A0cb7wZVFf4
- 5. 3. Brand Marketing plus promotional activities During the pandemic Burger king decided to encourage their customers by setting up huge “Home of the Whopper” sign outside every customers house who ordered food online from their App & also gave them free delivery all summer. This was quite a great strategy as since the beginning of the lockdown most of the American has been ordering food online. 4. Whooper Dance Challenge (Co-branding strategy): Burger king teams up with TikTok during the pandemic to engage their customers who may already be Tiktok users or vice versa. In this challenge burger king would offer Whooper for $1 if the customers imitated the creators moves. TikTok creators posted dance tutorial videos ontheir personal TikTok pages, demonstrating moves that represent Whopper sandwich combinations that user can incorporate into their orders.
- 6. 5. StayHome of the Whopper (Cause marketing): Burger king asked their customers to remain at home to help mitigate the spread of Covid-19 while also highlighting Burger King's support for healthcare professionals. Toencourage them to do so, Burger King is waiving all delivery fees on orders over $10 through its mobile app. As part of the campaign, to salute those on the frontline fighting the Covid-19 pandemic, Burger King is giving away 250,000 Whopper sandwiches to nurses. The American Nurses Foundation will distribute codes for nurses to order Whopper Sandwiches for free through the mobile app. It is also collecting money for the charity, asking its fans to text ‘THANKS’ toa hotline to make a one-time $10 donation directly to the American Nurses Foundation Corona virus Response Fund. https://www.youtube.com/watch?v=IsQ7Wto0FJg The COVID related communication commenced 17th March onwards. The content garnered positive responses from consumers and was highly appreciated by Burger King’s global team. Below is a brief comparison of the statistics pre lockdown and during lockdown. Stats Pre Lockdown Stats during Lockdown Post Reach: 4M Post Reach: 8M Organic Reach: 800K Organic Reach: 1M Organic Video Views per post: 800+ Organic Video Views per post: 1.5K+ Organic Followers: 300+ Organic Followers: 500+
- 7. 4a. PESTLE Analysis of Burger King during the Covid-19 pandemic The pestle analysis helps us analyse and monitor the macro- environment factors that might have an impact on burger king’s performance due to the Covid-19 pandemic. 1. Political factors- Burger King Brand operates in more than 109 countries around the world and most of its market share is driven by foreign expansion. Thus, because of the Covid- 19 pandemic many countries around the globe have implemented strict lockdowns and social distancing norms; this has had adverse impact on the burger king. The future of burger king’s sales and growth depends upon the graph of Covid 19 cases and government’s role of relaxing the restrictions in each country. 2. Economic factors- Since Covid-19 pandemic has led to layoffs in employment, consumer is cutting down on their discretionary spending’s due to the fear of economic downturn. Thus, burger king shall realign their strategies towards online deliveries, takeaways and cost management strategies. 3. Social factors- The current Covid-19 situation has led to higher health consciousness and has built a lifestyle where in people are avoiding restaurants and fast foods like burger king. Thus such quick service restaurants need to resort to low calorie fast foods and wait for the economy to revive back. 4. Technological Factors- Most quick service restaurants are realigning their strategies towards online deliveries and takeaways due to the Covid-19 pandemic. Thus burger king can apply this technology to improve operational efficiency and the company can tap mobile users to gain a bigger market share. In the pre-Covid times most QSRs used to get 20-30% of their revenue from deliveries, now they need to take this to 50-70%. 5. Legal factors- In the current pandemic burger king will need to consider the employment act and the corporate social responsibility towards society and commit itself in the code to encourage diversity among employees, franchisers, business sources, community involvement and prevent discrimination within the company. 6. Environmental factors- Burger King will also have to consider about people who put emphasis on quality of life rather than the quantity of goods. They will have to consider safety, durability, value in the foodstuffs they buy and to greater levels of overall satisfaction and happiness for example more environmentally friendly safe products and introduction of recyclable packaging. 4b.Competitive Analysis Intensive strategies in connection to Porters’ generic Strategies The following depicts the intensive strategies used by Burger King in the order of most application to least: 1. Market Penetration Opening new restaurants in its current markets toget a bigger market share. Expanding Burger King’s franchise network.
- 8. Highlighting unique product features to penetrate markets and grow the business. 2. Market Development. Opening new stores in overseas locations where it does not have operations. This strategy is only secondary or minor in Burger King’s business because the company already has operations in most markets around the world. Grow Burger King by attracting new customers in new markets based on low prices (Cost leadership strategy) 3. Product Development. Product development and innovation is the least significant of Burger King’s intensive growth strategies. The company introduces new products at a slow rate. Most of Burger King’s products remain on the menu for years. This intensive growth strategy supports Burger King’s generic strategy of broad differentiation by highlighting new products that are unique compared to those of competing firms. From the above data, we can see that Burger King follows a Model of Cost leadership along with Differentiation in order to reach a wider range of customers and achieve customer satisfaction. Competitive advantage BurgerKing McDonalds Wendy’s Subway KFC Food QuickService × Price × Ambience × × × × × Netcompetitive advantage × × × Buyingpower × Franchising × Rapid Expansion × × × × 5C Analysis 1. COMPANY: Founded in 1954, Miami, Florida- United States by James Mclamore& David Edgerton. Its restaurant brands international which is one of the largest fast food hamburgers Fast food restaurant in the world with strong brand equity and most of its restaurants are owned by franchisees. 2. COLLABORATORS: The chain market was Rs 350 billion in FY19, Burger King operates in this market under the QSR category. They operate through franchisee model.
- 9. On the investment side the company has bought both operating and financial assets. On the financing side the company has issued equity shares worth 270 Cr in FY17 and raised monies through CCPS in FY19 for Rs 100 Cr. Some of the suppliers of the company include – Hyfun Foods, Mrs Bectors, OSI Vista, Pepsi Co, Schreiber, Veeba and Venky’s. Supply chain is an essential piece of the business, it is very important for the company to get its supplies on time and in the right condition. The company manages its supply chain through a third-party distributor – ColdEX. The third-party distributor buy supplies from the vendors and Burger King then buys it from ColdEX. This arrangement gives the company access to ColdEX’s warehousing facilities and extensive logistics network across the country. In addition, the company saves on investing in working capital, as the third party distributor keeps all the supplies on its books before the company purchases it. 3. CUSTOMERS: Due to the current covid-19 all dine in restaurants are closed however they are currently delivering it customers through Zomato&Swiggy, their target audience, average 15 yrs. to 45 yrs. of age group however they have customers from the age of 10 yrs. to45 yrs. While pre-Covid 19 scenario their market grown by 14% CAGR. The QSR and CDR segment have seen the fastest growth – 18% and 15% respectively, Casual dining (CDR) constitutes 56% of the market followed by QSR which is 21%. Together these markets have 77% of the market, Fine dining (FDR) has seen the lowest growth 4%, quick service restaurant -QSR has seen the highest market share gains in this period at 3%. Post Covid 19 there is dip in QSR and CSR however they have been doing the delivery through Zomato&Swiggy. We are yet tosee how over the next few months they perform. They have been promoting to their customers in creative ways with all hygiene levels followed in preparing the food and delivering it. 4. COMPETITORS: Primary competitors are, McDonalds, KFC, Subway, Pizza Hut Wendy’s, Dominos. The organized chain market has more than 100 brands with over 6,500 outlets spread across various cities in India. Competitors of the company are other international QSR chains such as McDonald’s, KFC, Domino’s Pizza, Subway, Pizza Hut and other local restaurants operating in the QSR segment. Food services market is fragmented in India, 62% of the market is with the unorganized players. In this kind of an environment it is a challenge to retain customer loyalty and companies have to constantly spend/carry out initiatives to gain footfalls. There is shortage of skilled labour and attrition rates in the industry are 35-40%, the cost of manpower is also high. This can impact the quality of products that the restaurant offers. There are lot of regulations and over licensing to start a food service business. It is estimated that players wanting to enter the food services market require 12-15 licenses from various authorities. Awareness among the public for healthy food may hamper businesses of companies operating in this space offering pizza, burgers, sandwiches. Cloud kitchens offering the same type of food will be more profitable than walk-in restaurants as there is no major CAPEX in setting this up versus a fully furnished restaurant Delivery aggregators may charge higher commissions to restaurants which will impact the profitability of the players operating in this space.
- 10. 5. CLIMATE: When it comes to law and regulations in the fast food segment there are as many as 12 to 15 regulations they need to file and maintain with the local authorities, they have been very active in promoting their brands and we can often see their creative adverts through their social media platforms teasing McDonalds (rival brand) in creative ways. Customers do follow and enjoy the brand and they have a fair share of market and its followers. We will have towait and see at what price/valuation will the shares be offered at by the company. There are twoother players in this space – JubliantFoodworks (Domino’s) and Westlife Development (McDonald’s). Drivers like higher incomes, people eating out more frequently and women joining the workforce will drive the demand for the offerings that companies make in this space. The price at which retail investors can participate in this story will be the decider. The Burger King Content and communication strategy was completely different from other players in the category, who were creating content on quarantine contests to maintain brand recall among the audience. On the other hand, Burger King had a multi messaging approach comprising food safety, topical messaging and creating authentic connections with the brand by using videos and photographs shot and featuring the employees of the brand.