I saw that RBI, parent company to Burger King, Popeye’s, and Tim Horton’s reported their earnings and folks were talking about how sales were dropping while Burger King is winning applause in the world of advertising for their ads.
It seems like this is one of those cases where if you look hard enough for something, you can find a reason to take shots at anyone, but what I got from digging into the story wasn’t just that Burger King’s ads don’t work…but that it is complicated like all things marketing and sales.
Here are 3 marketing lessons for me:
Even a rising tide doesn’t lift all boats: There are two ways of looking at this.
First, the success of Popeye’s didn’t translate to the other brands in the portfolio which is something you would expect to see if all brands were managed independently of each other.
Second, the lack of success would lead you to guess that there was something in the business plans and structures of Burger King and Tim Horton’s that made it tougher for them to respond to the pandemic’s effects on their business.
In the case of Burger King, it seems like location is playing a bigger role in their same store sales than for other brands.
For Tim Horton’s their entire business model rests very heavily on commuting and commuter traffic patterns. Which have been down around the world and have hit some of the chains bigger markets more severely.
What does this tell us?
In everything marketing related, it depends is typically the place to start.
Here, it depends.
Just because fast food restaurants are achieving an uptick during the pandemic, that doesn’t mean that every brand is going to be successful and that there aren’t factors that are going to cause a trend to be bucked.
Burger King looks to be going the market-oriented route to improve their business:
The world of marketing and advertising likes to take aim at Burger King for their ads and the awards they receive for ads that people often point to as being designed to win awards and not sell products.
Like everything, complicated.
In response to a decline in same-store sales and the pandemic, it does seem that Burger King is going to take a moment to turn their attention to the market and the environment their customers are living in with a focus on value.
As we saw with the recent promotion between Travis Scott and McDonald’s, value is a key driver for fast food purchases right now.
Why does this market-oriented approach matter right now?
Many reasons, but three prime ones.
It will help drive sales.
Burger King is likely going to be able to respond more rapidly to what they see their customers facing as the fall moves into winter.
If they play their cards right, they can find themselves being able to get customers to return regularly to their stores for food.
Tim Horton’s is going the other route towards a product focus: This is a risky strategy because they are changing up their coffee and offerings to find more sales when the brands were pretty strong to begin with.
A 12.5% decline in sales across a quarter is severe.
No two ways about it.
But to reflexively think that changing the brew and offering incentives in their loyalty program alone are going to change that is also largely misguided.
A better strategy here is to start by recognizing that there are less commuters and traffic patterns for the brand aren’t likely to change for a year, more likely than not.
That’s the history of pandemics.
Instead of dumping into action on a loyalty program and change to the coffee, look at this through the eyes of the customer and figure out what they are dealing with and what they value now.
For most consumers, the data has shown they want familiarity, value, and consistency.
For Tim Horton’s, maybe offering a way to give folks the products they buy and enjoy in a new way can get them to this destination through changing distribution points, making the purchases easier with technology or delivery, and finding ways to improve the value.
In fact, changing the formula on their house blend might be a bad move because they could mess with the delicate mix of loyalty and love that has built the brand to begin with.
I could be wrong, but in looking at this case…I see a lot of things that point me towards, it depends.
What do you think?