Marketing Audit Report Of Burger King Marketing Essay

This paper; Marketing Audit Report; aims to explore the fundamental part of the marketing planning process, which is being conducted and applied by Burger King. The marketing audit report considers both internal and external influences on marketing planning, focusing on Burger King’s marketing philosophy, marketing environment, segmentation, targeting and positioning in practice and marketing mix strategies. As well as a review of their Marketing Plan itself.

Methodology:

This report is conducted by utilizing the available resources that could provide information about Burger King such as television advertisements, print advertisements, press releases, company annual report, and articles from major business periodicals. However, due to certain limitation such as access to primary data such as surveys, focus group discussions and observational research, the report does not reflect the most accurate representations of the market.

Corporate overview

History

Burger King is the name of fast-food chain restaurants often abbreviated as BK, headquartered in Miami, Florida, U.S. It uses the Burger King Holdings Corporation brand globally, the parent company of company Burger King in the U.S. Since its first restaurant opened, in 1953 in Miami by James McLamore and David Edgerton, many others opened later based on variety of franchising agreements. Three investment companies; TPG Capital, Bain Capital, & Goldman Sachs Capital Partners; each owns 25% of the company, despite being a publicly traded company. (Wikipedia Encyclopedia, 2010).

BK announced its 12,000’Th restaurant in Q4 of 2009. Those are in 73 countries 34% outside the U.S and only 10% are owned by BKC. To serving about 11.4 million customers daily, the company has above 37,000 employees.

Franchises differ to be either by region or by store attached with special developments rights for each. “These regional franchises are known a Master Franchises, and are responsible for opening new restaurants, licensing new third party operators, and performing standards oversight of all restaurant locations in these countries”; one key master franchise is Hungry Jack’s, which own, operate and license more than 300 restaurants in Australia. (Wikipedia Encyclopedia, 2010)

Vision, mission and objectives

Vision

“We proudly serve the best burgers in the business, plus a variety of real, authentic foods…all freshly prepared…just the way you want it” (Burger King, 2008).

As they always say “Have it your own way” the slogan that reflects the company’s customer focus consequently on its mission, target & its marketing plan.

Mission

“We will prepare and sell quick service food to fulfill our guest’s needs more accurately, quickly, courteously, and in a cleaner environment than our competitors. We will conduct all our business affairs ethically, and with the best employees in the world. We will continue to grow profitably and responsibly, and provide career advancement opportunities for every willing member of our organization.” (Burger King, 2010)

Many elements are missing in the mission statement and its effect can be further improved as explained in (Page23).

Objectives

The company doesn’t have a clear written objective, however the Chief Executive Officer of Burger King Corporation once said: “Our objectives are very clear and are aligned with our guiding values and overall vision for the BURGER KING business. We take pride in serving our guests the best burgers and a variety of other great tasting healthy foods cooked over an open fire. That’s what we’re all about.” (Burger King Corporation, 2003)

BK objectives are so much ambiguous and broad in its meaning, and missing major elements of its current practices.

Industry Analysis

“Quick Service or Fast Food Restaurant is the term given to food that can be prepared and served very quickly” (Wikipedia Encyclopedia, 2008). The consumer expenditure on fast food jumped from US$6 billion in 1970 to $102.4 billion in 2000 & in the United States alone. Fast food restaurants sales augmented 4.8% in 2006 above 2005 to get to $142 billion in the U.S while $173 billion has been generated in the full-service restaurant segment. A growth of 40% has been in the fast-food industry in some countries like India. Distributed in 130 countries, American fast food chains are the leading fast food industry in the world. (Wikipedia Encyclopedia, 2008)

As for Burger King which; in its 2010 Q2 financial report; it gave some facts about the last quarter’s performance: (QSR) traffic in the U.S. fell 3.0 % in Q3 2009, Sales were – 2.0 % compared to + 2.9 % in the same period last year, Restaurant margin improved to 13.8 % from 13.6 % in the same period last year, Earnings per share were $0.37 compared $0.33 in the same period last year; up 12 %, Revenues for Q2 of fiscal 2010 were up 2 % at $645.4 million, compared to $634.1 million in the same quarter last year, Revenues were aided by a worldwide net restaurant growth rate of 2.7 %. (Burger King, 2010)

To attract consumers, fast-food restaurants try to establish a clear and unique image of their brand.  For instance, KFC is the expert in American-style chicken, and McDonald’s serves the American hamburger.  In contrast, Burger King’s has difficulty of its lack of a clear differentiated image which might be the best burger!

Looking forward, the industry competition soon won’t be about the variety of company’s products, price, or speed. It is also about the quality of the products and the service is been offered, which eventually results into repeat customers.

Company

Restaurants

Revenues

Operating Income

Operating Margin

Burger King

11,565

$2.5 B

$354 M

14.42%

McDonald’s

31,967

$23.5 B

$6.4 B

27.39%

Wendy’s

6,338

$1.8 B

$(410) M

(22.5)%

Yum! Brands

36,000

$11.3 B

$1.5 B

13.45%Competitors Analysis

Figure 1 illustrate how BK fell next among the most visited brands per month in 2008Burger King has always retarded after its major competitors McDonald’s. BK strives to have the best burger and fries in the world. McDonald’s focuses on the value of its food, nutritive value and flexibility in its menus, the same concern are for BK especially in its Flame-grilled burgers, like the signature burger Whopper, which is its specialty. However, people prefer McDonald over BK because of a “more attractive and promising” perception. Whereas there is nothing wrong with the taste of BK’s products, the rundown appearance of its food is a sober flaw BK has to put right. As how Eric Schlosser puts it, “between a bright and dull-colored food that tastes similarly, the bright will always look tastier”.

While Burger King Employees are always friendly, joyful, positive and well-mannered with clientele and others at work, McDonald’s is known for its welcoming service, in addition to the value & esteem to its employees. Both companies realized the importance of serving customers in the best way to secure them “to go back”. (Ivythesis.com, 2009)

To maintain cleanliness fast-food chains have put certain standards. In a press conference, Burger King CEO has said “that they are to close their restaurants if they disobey the policy of delivering high standard service, food safety and cleanliness”. In a review of fast-food chains in the U.S, McDonald’s ranked 9th, whereas Burger King ranked 1st in being the dirtiest. All fast-food restaurants have to implement stringent rules and policies to promote cleanliness, especially for BK, if it really wants to be the first ahead of McDonald. (Ivythesis.com, 2009)

Similarly BK is facing further indirect challenge with other fast food chains such as the Yum! Brands (Pizza Hut, Taco Bell and KFC). Plus the competition of other restaurants and food retail stores. (Ivythesis.com, 2009).

Weaknesses

Heavily concentrated in the US: about 65% of operations.

Not enough corporately owned stores mean it relies heavily on franchisees to execute its brand promise.

Threats

Changing consumer habits towards healthier food choices.

Away-from home consumption declines in the US due to tougher consumer environment.

Intense competition from McDonald’s, other restaurants and even retailers.

Increasing labor costs putting pressure on bottom line margins.

Strengths

Second largest fast food hamburger restaurant (FFHR) in the world.

Strong brand equity.

Growth model not capital intensive: 90% of its restaurants are owned by franchisees.

Strong financial performance.

Opportunities

New product development, particularly around breakfast.

Keep building its brand through ad campaign, such as the Whopper Virgin’s Expansion into emerging markets.

SWOT Analysis

Marketing Approach

Marketing Philosophy

BKC say: “There’s one thing we know for sure: If you’re not something to somebody, you’ll be nothing to everybody”. (Burger King Corporation, 2007) That’s why BKC main attention is to build a brand experience rather than just focusing on it products, by speaking out through different channels to assure that the brand vision and image is apparent to all of its stakeholders.

Burger King set its marketing research after clearly characterizing the needs of its customers. Following its marketing strategy, it has to constantly change, update and adjust its production lines and service to match demand, thus it will also bring success and growth to the company.

Marketing Strategies & Planning

Objectives :

BKC objectives are formulated from the company vision and mission statement, in which the company long-term, medium-term and short-term objectives would be drawn, whereas the normal corporate-level objectives is the company value and the rate of return on shareholders’ investments.

BKC ultimate objectives are to capture market share, acquiring then retaining those customers, which eventually translates into sales. Whether Burger King aims to challenge McDonald’s to eventually capture the lead position in the market or just increase its share in the local or global market that could be only the start of the objective development for the company.

Strategies development :

As regards strategic development, Burger King is crafting its strategy based on the opportunities in the market. One way to spot these opportunities is by conducting an industry analysis, and looking at the neglected segments of the market. Where McDonald’s has not dominated yet, Burger King chooses to capture it in order to enlarge its customer base without having to incur costs from head-to-head fight with McDonald’s. Thus, BKC has established first its primary and secondary target market.

By defining the demographics and psychographics of both its primary and secondary market, BKC grasped of what they need which they can in turn provide. By knowing exactly what aspects influence a consumer to purchase in its company, it focuses on those aspects and incorporates them in the Burger King brand.

Tactical planning:

Considered as a very essential stage in which BK strategies are impressed on its products lines, pricing and location; to name a few. Furthermore it is to formulate its required communication efforts to communicate the brand image and the by what channels, after deciding the target percentage of retained customers versus acquiring a new ones.

Implementation:

Burger King implements the desired strategies and tactics including its employees and other stakeholders as part of its target audience to whom the message will be communicated. The company needs the cooperation of the employees to carry with them what the company stands for as regards the brand as they are reflected by their interaction with customers. Implementing new strategies include change management and other employees in partnership with the human resource function of the company, which is vital in order for Burger King to make its employees adopt the new status quo.

Control:

Because objectives are set by quantifying them, Burger King track the performance of the company’s marketing efforts and see if the goal is being accomplished by the strategy that is employed. BK agility controls its people for whom the authority and responsibility is given over certain tasks, in order to make sure they fulfill the company objective, accordingly the company will either reward them for their good job or continue to motivate them, or make them responsible for some shortcomings.

Justification:

Justification is important for Burger King in order to make accurate decisions over its investment. The marketing plan is not the only investment decision BKC is making, and in order to convince other people that the project is worthwhile, and it will contribute to the company’s long-term objectives, justification is important.

Marketing Channels

The company’s integrated marketing communication has been aggressive through different channels over the years, under their “Have it your own way” slogan. The company’s ads emphasize freedom of choice.

In a television ad entitled ‘Are you man enough?’ which was made to communicate to men, the product emphasizes the calories that the product has and linking it to manliness, as men are perceived to be more patronizing of more indulgent food as they burn it through their active lifestyles.

Figure 2 Face Book as one sample of the non-traditional marketing channels used by Burger KingThe company relies on non-traditional media for its marketing communications such as the internet through viral marketing. The company has utilized sponsorship of some celebrities, events and scholarships, as well as product placement on movies.

Supply Chain

Delivering quick meals at reasonable prices in an ever-changing marketplace is no small billing, especially as chains prep against soaring fuel costs, product quality concerns, and nutritional mandates.

“As a global brand Burger King Corporation is committed to maintaining a diverse portfolio of suppliers,” said Cirabel Lardizabal Olson, director, diversity and multicultural relations in BKC. (Burger King Corporation, 2010)

Clipper Corporation as a key supplier of the U.S. major hospitality supplier, including Burger King Corporation, started by supplying caps and visors to the revamped company’s uniform, then expanded to further include items, such as knit and woven shirts, manager ties, scarves, plastic gloves as well as regular and tailored plastic and metal small-wares as part of BKC promotional campaigns. (investor.com, 2010)

Restaurant Services, Inc. (RSI), “as the exclusive purchasing agent for the vast majority of products and services used by BK restaurants, RSI works closely with restaurant owners, Burger King Corporation, food and packaging suppliers, marketing agencies, equipment vendors, distributors, and information systems providers to streamline and improve the supply-chain efficiency of the system, ensuring a continuous and reliable supply of products and services to restaurants at the best cost and at established performance standards”. (investor.com, 2010)

Burger King Corporation and RSI look for suppliers who match BKC view thus they have to be ( Produce high quality goods and services, Sell their products at the best practical cost, Deliver their goods on time, every time, are appropriately certified as minority, woman, or LGBT-owned business enterprises). (investor.com, 2010)

Integrated Marketing

Marketing Mix

Burger King; the “HAVE IT YOUR WAY” brand promise; assures that offering choice is what its restaurants are certain of and thus they offer a fusion of 11 global items and many other locals.

Inasmuch Koftegen is served in Turkey, whereas Korean guests have Shrimp Burgers. Similarly BK built-up its own pipeline in the U.S. It also added items at both breakfast and lunch like CHEESY TOTSâ„¢ and advantageous trimmings like Mocha BK JOE®, which is intended to be for the tasteful SuperFans who want a sweeter, conventional taste, rather than the coffee enthusiast. (Wikipedia Encyclopedia, 2010)

Product

Burger King offers a variety of product, the following are on its menu: Whopper sandwiches, other fire-grilled burgers, lean and greens, chicken and fish, breakfast, treats, sides and beverages, kid’s meal. BK’s product line is mainly comprised by its signature burger which is made of authentic beef and ingredients. Over the years, the company has evolved and included healthier options and alternative to beef such as chicken and fish, as well as lean and green products such as salads. Recently, the company has also offered kids meals.

From the above mentioned we can imply how BK range of products is part of their market satisfaction.

Price

Burger King positions itself at a premium over its largest competitor, McDonald’s by charging a higher price on its products. According to some customer reviews, other customers perceive Burger King as more expensive than its competitor McDonald’s, which eventually another challenge BK brand has to overcome.

Place

Burger King employs the distribution strategy that is most common for the fast food-the most frequented locations. Among its requirements include, as indicated in its “Optimal BURGER KING® site characteristics: 20,000 – 40,000 square feet; corner or corner wrap location; high traffic counts on two major streets; excellent visibility for signage and building; capacity for 1,900-4,000 square foot building; space for parking and drive-through that meets all applicable code (Bk.com, 2008).”

Much more care has to be considered in choosing a restaurant location such as the neighborhood occupation, walkability, service access disturbance of the neighborhood.

Promotion

Every company seek to best serve its customers wants, thus BK decide its marketing partners to supplicate different customers/market segments, hence BK launched with Microsoft three XBOX® racing games, action and adventure with the King; likewise a NASCAR sponsorship took advantage of one of the most popular sports in the U.S. (Burger King Corporation, 2007).

BK created a Web site called simpsonizeme.com as part of sponsorship for The Simpsonsâ„¢ Movie. Which; in one moth only; recorded half a million hit and converted 25 million of digital photos into Simpsonized versions of the consumers themselves.

The mysterious, unconventional and, some say, somewhat scary King is still the heart of BK brand. The King has re-mystified the brand. A pop-culture icon whose creepiness makes him cool, he’s got people talking everywhere from YouTube to late-night TV. (Burger King Corporation, 2007).

BK diverse media approaches and means of communication with their customers

People

Children BK has a menu that specifically targets children “The Kids Club Meal”. In the North American market its children’s menu is divided into three segments: “Toddler”, “Kids” and “Tween”. The only difference between the first two groups is the prize offering.

Adult To appeal to the adult market, BK offers several sandwiches and other products made with higher quality ingredients such as whole-breast chicken fillets, Angus beef, and other “premium” ingredients. Products such as the BK Veggie, a meatless burger initially introduced in 2002, target the female and more health oriented demographic. While another sub-market in this group is on-the-go parents and commuters; the company’s “Chicken Fries” is specifically targeted to this segment.

The “SuperFans” The SuperFans is a demographic group that includes individuals that are 18 to 49 years old, primarily male, visits a fast food restaurant five times a month and eats fast food 16 times a month.

Analysts have stated that by focusing its marketing and advertising programs towards men has alienated women, children and other customers. To help counter the perceived male bias, the company is adding newer calorie-conscious “Positive Steps” combo meals that will be advertised in female oriented media as well as a continuing cross promotional tie-in with the female-oriented Twilight film series.

Process

“Over the course of a month, one Burger King in the USA produces 34227 sandwiches.  This means, that for an average hour, Burger King produces 198 sandwiches per hour during normal hours!!!” (Wikipedia Encyclopedia, 2010)

Focusing on operation excellence not to satisfy customer needs and expectation only but to far exceed them is BKC ultimate goal for which Burger King Restaurant worldwide fundamentals are:

Figure 3 illustrate the process been followed by Burger King Employees to achieve the operation excellence in food deliveryTeach & Coach is to guarantee that a trained employees deliver a better guest experience, which are also willing to stay and develop.

Clean & Safe is a commitment by BKC to train their employees on best cleaning practices, and efficient safety methods designed to drive operational reliability.

Hot & Fresh is to technologically assist BK restaurants improving its food quality and consistency and advance to new levels of superiority, such as the Kitchen Minder; an automated product management system; which reflects BKC commitment for innovation as well. (Burger King Corporation, 2008)

Friendly & Fast: for its welcoming, quick and precise delivery, BK scored the highest on Guest Trac SM scores.

Cost & Controls is the way BK Restaurants’ the manager get recommendations, based on stored data, on how to arrange their employees forces and their logistics on daily bases. Managers thus are able to alter on their operation according to different factors like building type, location or even the climate.

The accurate, resilient, and sophisticated operation management of BK is a key of their success supported by technical innovation, continuous PEST analysis, and strict quality control measures.

Physical Evidence

Where is the service being delivered? Physical Evidence is the element of the service which allows the consumer again to make judgments on the organization. If you walk into a Burger King restaurant you can see the cleanness, environment-friendly, and welcoming staff are a basic ingredients of Burger King Restaurants’ experience. Thus BKC always adjust its perceptual plan to match the consumers’ perception of Burger King Brand with BKC vision and objectives.

Marketing Environment

Micro Environment

The internal environment:

The organizational structure of BKC largely dictates the effectiveness of the company in its management systems. It gives an impetus for work coordination efficiency.  Herein, the organizational actors and processes are embedded in a larger organizational system with unique structural descriptions which eventually distinguish most fast food companies. All work together toward achieving the corporate mission and goals.

The external environment:

BKC monitor its suppliers, marketing intermediaries, customers, competitors and publics, as well as obvious groups such as shareholders by sustaining channels of communication to operate effectively, maximize its value, exceed its competitors offering and measure its customer’s satisfaction.

Macro Environment

Political

The international operations of Burger King are highly influenced by the individual state and country policies enforced by each government. For instance, there are certain groups in Europe and the United States that clamour for state actions pertaining to the health implications of eating fast food. They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products.

Economical

Organisations in the fast food industry are not excused from any disputes and troubles. Specifically, they do have their individual concerns involving economic factors. Branches and franchises of BK experience hardship in instances where the economy of the respective state or country is hit by inflation or a downturn. The customers consequently are faced with a stalemate of going over their individual budgets whether or not they should use up more on these foreign fast food chains. In regarding the operations of the company, food chains like Burger King tend to import much of their raw materials into a specific territory if there is a dearth of supply. Exchange rate fluctuations will also play a significant role in the operations of the company.

Technological

The company’s key tool for marketing is by means of television advertisements. There are similarly some claims that Burger King is inclined to interest the younger populations more. The existence of play spots as well as toys in meals offered by the company shows this actuality. Other demonstration of such a marketing strategy is apparent in the commercials of they use. They employ animated depictions of their characters or/and employ popular celebrities to promote their products.

Moreover, the operations of Burger King have significantly been infused with new technology. Elements like the inventory system and the management of the value chain of the company allows for easy payments for their suppliers and other vendors which the individual stores in respective markets deal with.

Environmental

The social responsibilities of Burger King are influential to the operations of the company. These entail accusations of environmental damage. Among the reasons why they are charged with such claims is the employ of non-biodegradable substances for their drinks glasses and Styrofoam coffers for the meals. Several civic groups in Hong Kong have made actions to make the Burger King franchises in Hong Kong aware of the rather copious use of Styrofoam containers and the resultant abuse of the environment.  further indicated that in 1995, Burger King Hong Kong went over the Styrofoam used by both Australia and the United States combined.

Social

“Across the globe, consumers want to have it their way”. (Burger King Corporation, 2008)

Throughout the world customers seek different features and characters of a product; hence the guests’ require a quick and ease of service in North America, Europe guests enjoy the time with a tasteful & valuable product in a beautiful restaurant. While in Latin America, restaurants are for parties and social activities gathering many people in a vast enclosed room. Similarly, in Asia, the region culture formulates the menu items.

Taking into consideration the vast expansion of BK during the last decade, BKC have been doing wonderfully in adopting their products & service to match with the different social & cultural aspects trying always to understand people needs and concerns by using the concepts of consumer behaviour product personality and purchasing decisions to its advantage.

Demographical

The demographical differences force BK and other Fast-Food restaurants to adopt their market offering and service delivery to suite the expectation of each market.

While BKC endure to have a franchised business which provide the same level of service and consistency at every location, their way of thinking locally and act globally gives them the advantage of field teams who understand the local perspective, while ramping up their worldwide transition toward standardized operational platforms, keeping the promise of “HAVE IT YOUR WAY” brand. (Burger King Corporation, 2007).

Legal

There has been the recurrent bellowing in opposition to the fast food industry. This has similarly made Burger King apply a more careful consideration on its corporate social responsibilities. The company has provided their customers the relevant data that they need with reference to the nutritional substances of their products. This is to attend to the arguments of obesity charged against the products of the company. In the same way, the consumers provided freedom in choosing whether or not they want to purchase their meals.

Customer Relationship Marketing

CRM has been a revolution not every industry has been affected by. Fast-food industry is a seamless example. With a long and effective history of brand awareness advertising it’s easy to understand its reluctance. In addition to the difficult data capturing, while the emphasis on speed of service, means opportunities to gather information are limited.

Burger King, however, is clear about its CRM intentions. Last spring, it announced plans to build its first comprehensive database of UK consumers by capturing details such as age, gender, address and e-mail from its website, www.burgerking.co.uk.

Although the company had always ruled out direct marketing as being too expensive and exclusive for its large market audience, this feedback was a first step towards the development of an online CRM strategy. The site also offers e-mail postcards to remind its users of BK shortly before lunch.

Another good example of BK CRM applications is demonstrated by its calling centers, where each phone number is assigned with a user or set of users for whom a profile is created to include the customer address, contact number and last time order (preferences).

Despite the fact that BK excels in its service and delivery process, it has also to work on its people to orient them into the organization’s customer relationship culture and define key communication skills, while emphasizing on effective the service delivery processes, or well-trained the service deliverers.

BKC many initiatives to further develop its CRM is not yet enough to first raise its customer retention rate, and then to acquire some of its competitor’s customers (Page23).

Social Responsibility Marketing

BKC initiated The Positive Steps on 2009 a forward-looking statements which includes their:

Commitment to PEOPLE

BKC emphasize of its support and investment to Burger King widespread family of employees, franchisees, suppliers, and more than 11million restaurant guests, assuring that BK is making a positive influence on them.(Burger King Corporation, 2009)

Commitment to FOOD

Over the last period of 50 years and till now BKC continues to fascinate its customers with affordable, amazing tasting and high quality food. (Burger King Corporation, 2009)

Commitment to Corporate Governance

BKC simple philosophy of “integrity, honest, and compliance with the law” has been clearly demonstrated in its comprehensive corporate governance and compliance program. In which BKC illustrate how it will work hand in hand to contribute to “prosperity and social responsibility”. (Burger King Corporation, 2009)

Commitment to the environment

BKC share people around the globe their interest in the future or our planet and precautions and action through which we have to protect our natural resources especially the endangered ones, having said that, BKC claims to minimize its carbon foot print while serving an affordable great testing food.(Burger King Corporation, 2009)

BKC Positive Steps and their plans in the areas of childhood nutrition,