Marketing Strategy of BURGER KING 

- December 7th, 2010

Burger King, often abbreviated as BK, is a global chain of hamburger fast
food restaurants headquartered in unincorporated Miami-Dade County,
Florida, United States. Burger King Holdings is the parent company of Burger
King; in the United States it operates under the Burger King Brands title
while internationally it operates under the Burger King Corporation banner.
The company began as a Jacksonville, Florida-based restaurant chain in
1953. Originally called Insta-Burger King. After the company ran into
financial difficulties in 1955, its two Miami-based franchisees, David
Edgerton and James McLamore, purchased the company and rechristened it
Burger King. Over the next half century the company would trade hands four
times, with its third set of owners, a partnership of TPG Capital, Bain Capital,
and Goldman Sachs Capital Partners, taking the company public in 2002.
The current ownership group, 3G Capital of Brazil, acquired a majority stake
in the company in a deal valued at $3.26 billion (bn) in late 2010.

A. INTRODUCTION OF BURGER KING

A leader in today's fast-food industry, with locations in all 50 states
and 62 countries around the world, Burger King Corporation was
founded in 1954 in Miami, Florida, by James McLamore and David
Edgerton.
McLamore and Edgerton, both of whom had extensive experience in
the restaurant business before starting their joint venture, believed in
the simple concept of providing the customer with reasonably priced
quality food served quickly in attractive, clean surroundings.
B. The success and size of Burger King Corporation is the result of a
tradition of leadership within the fast-food industry in such areas as
product development, restaurant operation, decor, service, and
advertising.
C. PRESENT STATUS
At the end of its fiscal year 2007, Burger King reported that there are
more than 11,300 outlets in 69 countries; 66% are in the United
States and 90% are privately owned and operated. The company has
more than 37,000 employees serving approximately 11.4 million
customers daily. The company's two largest franchisees are Carrols
Corporation with over 325 restaurants in United States, and Hungry
Jack's, which exclusively owns, operates or sub-licenses over 300
restaurants in Australia.
As with other multi-national corporations, Burger King has had its
share of controversies and legal issues over the course of its existence.
Issues have included trademark disputes, controversies with animal
rights groups, health issues and labor relations. Several of its legal
cases have been precedent setting in their scope, both in the United
States and abroad. Depending upon its ownership and executive staff
at the time, its responses to controversial situations has varied from
acceding to demands to refusal to concede its position regardless of
the outcome.

D. INTERNATIONAL EXPANSION
While BK began its foray in to locations outside of the continental
United States in 1963 with a store in San Juan, Puerto Rico, it did not
have a large international presence. This situation changed shortly
after the acquisition when Pillsbury opened its first international
restaurant in Canada in 1969. Other international locations followed
soon after: Oceania in 1971 with Hungry Jack's and in Europe in 1975
with a restaurant in Madrid, Spain. Beginning in 1982, BK and its
franchisees began operating stores in several East Asian countries,
including Japan, Taiwan, Singapore and Korea. Due to high
competition, all of the Japanese locations closed by the end of 2001.
BK reentered the Japanese market in mid-2007. BK's Central and
South American operations began in Mexico in the late 1970s. While
Burger King lags behind McDonald's in international locations by over
12,000 stores, it has managed to become the largest chain in several
countries including Mexico and Spain. To assist in its international
expansion, Burger King has established several subsidiaries to develop
strategic partnerships and alliances to expand into new territories; in
Europe, Burger King's subsidiary Burger King Europe GmbH is
responsible for the licensing and development of BK franchises in the
that market, Africa and Western Asia. In Asia, the BK AsiaPac, PTE.
Ltd. business unit handles franchising for East Asia, the Asian
subcontinent and all territories Oceanic territories except Australia.
Over the ten year period starting in 2008, Burger King sees 80% of its
market share to be driven by foreign expansion, particularly in the
Asia-Pacific and Indian subcontinent regional markets. While the TPG-
lead group has continued BK's international expansion by announcing
plans to open new franchise locations in Eastern Europe, Africa and the
Middle East, and Brazil, the company plans to focus on the three
largest markets, India, China and Japan. The company plans to add
over 250 stores in these Asian territories, as well as other countries
such as Macao, by the end of 2012. Its expansion into the Indian
market has the company at a competitive disadvantage with other
QSR vendors such as KFC because the country's large Hindu majority's
aversion to beef. BK hopes to use it recent non-beef products, such as
it's TenderCrisp and TenderGrill sandwiches, as well as other products
to help it overcome this hurdle to expand in that country. 
Today, Burger King is the second largest chain of hamburger fast food
restaurants in the world behind industry bellwether McDonald's
 (31,000 locations) and the fourth largest fast food restaurant chain
overall after Yum! Brands (34,000 locations), McDonald's and Subway
(28,400 locations).

E. F. NATURE OF THE PRODUCT

Tangible Elements: The tangible elements are those elements, which

you can see and feel. These include:
• The chairs and tables on which the customer eats. In Burger King the
tables and chairs are made up of plastic.
• The menu of Burger King is also a tangible element. It is specially
designed with pictures alongside the food listings so that it attracts the
customers.
• The food is also one of the tangible elements, which the customers
can feel by tasting The room décor is another tangible element.
• The service counters are also one of the tangible elements. In Burger
King the service counters are made out of wood and behind them on
the walls there are pictures of the food like burgers, chips, etc. This
attracts the customers to the counters. 
• Lighting is yet another type of tangible element which the customer
can see and experience.

Intangible Elements: Intangible elements are classified as those

elements, which we cannot feel or which cannot be touched. These
include:
• The ambience, which cannot be sensed or imagined by the customer,
is an intangible element.
• The customer also cannot judge the service of the restaurant. So this
is an intangible element. The service in Burger King is single point
 service.
• Room heaters or AC’s are also intangible elements because they
cannot be seen or touched.

Perishable Products:. The perishable products of Burger King include:

• Raw materials, which if kept for too long can get spoilt and
eventually perish.
• Cooked food is also a perishable product because if it is not
consumed with a limited time span then it has to be thrown away.
• The cutlery of burger king is a perishable product, because the
cutlery which they use, is ‘use and throw.’
• The plates, which they serve on, are also perishable because they
are also use and throw.

H. OTHER SERVICES PROVIDED BY BURGER KING

• Drive-Thru: It was introduced in Burger King in 1975. It is a form of take-

away where the customer drives vehicle past order, payment and collection
points. This type of service accounts around 58.8% of the company’s total
business. 

• Take-Away: It is a type of service where the customer orders and is served

from a single point, at counter, hatch or snack stand, customer consumes off
the premises. It represents about 19.6% of the total business.

I. PRODUCTION STYLE

The production style of Burger King is “cook-serve”. The service is related to

the production in the outlet. No sooner the food is produced than it is served
to the customers. If the time-span between production and service is more
than 10-15 minutes then the food is thrown away for the safety of the
customers. When the customer orders, the food is being cooked and then
immediately served to him.

J. TARGET MARKET

Burger King basically targets customers like 

• Young children: Young children often like to visit Burger King because they
get attracted to the complimentary toys which Burger King provides on
certain meals. So young children with their parents visit Burger King.
• Students: Students from colleges and schools want to satisfy their
immediate needs of eating so they prefer to go to Burger King. Also they
prefer fast food more than heavy food, so they prefer Burger King.
• Families: Families like to eat-out many times without wasting a lot of time
and as well as lot of money, so they prefer to go to Burger King.
• Old people: Old people like to have light food so they like to visit Burger
King.
• Businessmen and Working People: Businessmen who do not like to waste a
lot of time and just want to satisfy their basic needs of eating and drinking.
• Also customers who are in a hurry come to burger king just to satisfy their
basic needs of eating and drinking. They mostly prefer drive-thru or take-
away.

SWOT ANALYSIS ON Burger King - November 29th, 2010

Burger King, often abbreviated as BK, is a global chain of hamburger fast
food restaurants headquartered in unincorporated Miami-Dade County,
Florida, United States. Burger King Holdings is the parent company of Burger
King; in the United States it operates under the Burger King Brands title
while internationally it operates under the Burger King Corporation banner.
The company began as a Jacksonville, Florida-based restaurant chain in
1953. Originally called Insta-Burger King. After the company ran into
financial difficulties in 1955, its two Miami-based franchisees, David
Edgerton and James McLamore, purchased the company and rechristened it
Burger King. Over the next half century the company would trade hands four
times, with its third set of owners, a partnership of TPG Capital, Bain Capital,
and Goldman Sachs Capital Partners, taking the company public in 2002.
The current ownership group, 3G Capital of Brazil, acquired a majority stake
in the company in a deal valued at $3.26 billion (bn) in late 2010.

At the end of fiscal year 2010, Burger King reported it has more than 12,200
outlets in 73 countries; 66% are in the United States and 90% are privately
owned and operated. The company has more than 38,800 employees
serving approximately 11.4 million customers daily. Over the course of its
history the company has used several variations of franchising to expand its
operations. In North America, franchises are licensed on a per store basis,
while in several international locations licenses are sold on a regional basis
with franchises owning exclusive development rights for the region or
country. These regional franchises are known as 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; the largest example of a master franchise is Hungry Jack's, which
exclusively owns, operates or sub-licenses over 300 restaurants in Australia.
Despite its reliance on its franchisees for the majority of its revenue, Burger
King's relationship with its franchises has not always been harmonious.
Occasional spats between the two have caused numerous issues, and in
several instances the company's and its licensees' relations have
degenerated into precedent setting court cases.

Strengths: International distribution, product differentiations...i.e. larger

burgers, flame broiled, croissanwhich, special advertising and appeal...the
King and the commercials, different taste profile, different rapidly growing
(18-34) consumer segment

Weaknesses: weaker over sales appeal, less distribution than McDonald's,

possible weaker association with pre-teens, less of an international appeal,
branding weaker overall than competitors, less cash on hand

Opportunities: it's all about product improvement and brand improvement

Threats: Higher priced products during down times get crushed, food costs
are rising higher than standard inflation, health concerns among general
public, etc etc
PRICING.

Franchises have long held the power when it comes to pricing, but after a ruling in 2008
that opened the door for more pricing mandates by corporations, Burger King and several
other companies have decided that pricing is their concern and should be under their
control.

The current argument between Burger King and its franchise chains is the price of a double
cheeseburger (strangely, the same menu item that caused McDonald’s and its franchises
issues in 2008). Burger King says that the double cheeseburger should be no more than a
dollar, which allows it to be placed on the already corporate-mandated and corporate-priced
Value Menu.

 Burger King recently announced that starting in June it will significantly increase its
price message.  Burger King will be spending two thirds of its ad budget on value meal
products, like its BK Shots and $1 Whopper Jr.  Cheap, Cheap, Cheap. 
“The current marketplace is demanding value and the company is being responsive to that
consumer-driven demand,” Russ Klein, Burger King’s president of global marketing strategy
and innovation, said in an email.
But is low cost and low quality really what Americans are looking for?  McDonald’s has taken
the exact opposite approach.  McDonald’s is boosting its support for higher priced/higher margin
products

Product distribution.

Burger King Corp. announced today the addition of Onion Rings to the existing line of
branded Burger King Snacks. Onion Rings, a round, crispy puffed snack with a zesty
onion flavor, joins the potato snack flavors of Ketchup & Fries, a beloved American taste
combination and Flame Broiled, the legendary flame broiled flavor of Burger King
burgers. All three branded snacks are currently available in a variety of sizes and price
points in vending machines, convenience stores, warehouse clubs, drug and grocery
stores.

The Inventure Group, which manufactures the line of snacks, is expanding distribution
of the Burger King Snacks to the Caribbean, Mexico, Central America, South America,
India, Hong Kong, Thailand, Taiwan and the Philippines.

Onion Rings are available in single serving sizes of .75-ounce bags and 1.125-ounce
bags in vending machines, 2-ounce bags are available in convenience stores, and 3-
ounce bags are available in grocery stores. Nine and 12-ounce bags, as well as variety
packs, will also be available in club stores and additional outlets this fall.

“During concept testing, Onion Rings continually received high ratings from consumers,”
said Russ Klein, president, global marketing, strategy and innovation, Burger King Corp.
“The popularity of our Onion Rings menu item translated to this new snack product. The
familiar flavor profile of Onion Rings rounds out the snack line as we begin to distribute
the snacks internationally.”

“We are thrilled with the initial success of the Burger King Snack launch,” said Steve
Sklar, senior vice president marketing, The Inventure Group. “We know that the Onion
Rings will add excitement and a great tasting product to the snack line up.”

Sales promotion.
The new decoration concept, "Twenty Twenty", will be applied to all Burger King restaurants all
over the world. In Asia, the new store concept has been launched already in some major
markets such as Beijing and Singapore.

"We have renovated four major Burger King stores in Bangkok to be under the new 'Twenty
Twenty' decoration concept - at Silom, Khao San Road, the Paradise Park shopping complex on
Srinakarin Road, and CentralWorld in the Ratchaprasong area," said Nongchanok Stananonth,
assistant vice president of Burger (Thailand), local franchisee of the US-based Burger King
chain.

She said the company would spend Bt60 million this year on the renovations, focused primarily
on Bangkok stores.

"We expect to complete our store renovations by the next two to three years, and that will
require up to Bt200 million in investment," Nongchanok said.

She said the new decor would make Burger King restaurants more contemporary and would be
used until 2020.

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"We also plan to open two to three new Burger King restaurants this year, two of which will be in
Bangkok and one upcountry, at Central Festival Phuket," said Nongchanok.

The company currently operates 15 Burger King restaurants in Bangkok, including three stores
at Suvarnabhumi Airport and one at Don Mueang Airport, and another 11 upcountry.

"We plan to open 10 additional restaurants in Thailand in the next three years. Each restaurant
will require about Bt15 million of investment."

Nongchanok said the company would not be "aggressive" in expanding Burger King restaurants
in Thailand, but look for strategic traffic-generated locations, such as at office buildings,
shopping malls and tourist destinations.

"We are positioning ourselves as 'burger expertise', focusing on two niche groups of customers -
university students and working people aged between 22 and 39.

"We don't want to compete in the mass market, which has used pricing as its major fighting
tool," she said.

Nongchanok said Burger King's sales were stagnant last year because of the political unrest,
which caused many foreigners to cancel their trips to Thailand.

"Many of our restaurants are in key tourist destinations and were hit by the local political
problems," she said.

However, the company expects its sales to increase by 10 per cent this year, driven by newly
opened restaurants and the improving economic and political environments.
Nongchanok said it wanted to increase the ratio of Thai customers as opposed to foreigners,
which now stands at 40 per cent of sales, to about 50 per cent by the end of this year. She said
the company also would like to increase the ratio of Bangkok customers as compared with
upcountry customers from 40 per cent to 50 per cent of sales by year-end.

Burger (Thailand) yesterday announced the launch of its first promotional campaign for 2011.
Titled "Buy 1 Meal Get 1 Burger", it is designed to focus on expanding its local customer base
and introducing a series of activities as well as new products and promotions that meet
customer requirements.

"Under the new 45-day campaign, we want to double our client base in Thailand, by highlighting
Whopper, which is a signature product of Burger King," Nongchanok said.

Public relation.

Last week, people discovered wallets all over cities like Chicago and Orlando. These
weren’t typical wallets that people lose and others often find. These wallets were
purposely left around cities for people to find and keep.
What’s going on here? Well, this was a creative PR tactic that Burger King put into
action. The fast food chain dropped wallets in busy places and told people to keep
them. When people opened the wallets, they were pleasantly surprised to find
money, Burger King gift cards and other random Burger King items.

I’m not a big fan of fast food, but this is a great PR tactic. By doing something
different, people will talk about Burger King. This generates buzz for the company.
I’ve found multiple blogs written by people who’ve heard about this tactic or found
a wallet themselves. This also shows that Burger King is generous because they
give away free things.
Isaacs PR Blog discusses three reasons why this PR tactic worked for Burger King.
The first reason is because the tactic was unexpected. People drop wallets all the
time, but they don’t usually do it on purpose. You also don’t hear much about
companies dropping free items around town, especially without making an
announcement. The second reason why this tactic worked was because the timing
was perfect. Because of the poor economy, people could use a little help. A $5
Burger King gift card and a few bucks could really benefit someone. Finally, this
tactic grabbed the audience’s attention faster than any other tactic. People are
more likely to notice this tactic than the usual commercial or billboard.

If I found a wallet, my first instinct would be to return it to the owner. So, if

somebody told me to keep it, I’d be pretty excited. I wish I could have found one of
these wallets and been a part of Burger King’s PR tactic!

Direct marketing.

Direct marketing is a type of advertising that allowsbusinesses to be able to speak

directly to the consumer and receive a fairly quick response. Unlike formal
channels of advertising such as television, newspapers or radio, direct marketing
utilizes fliers, product catalogues, sales letters and the Internet to reach
customers. Direct marketing techniques for advertising are usually marked by
driving a particular "call to action," which is a core principle of successful
advertising. This part of direct marketing focuses a great deal on actionable and
measurable outcomes that produce positive responses from consumers.

Hoping to sell more burgers, fast-food chain Burger King recently introduced a mobile Web site
as a direct marketing vehicle designated for driving consumer traffic to its restaurants. The site
comes equipped with a Burger King restaurant finder, which uses maps and zip code, and
nutritional data on the restaurant's offerings. Burger King emphasizes the importance of
extending traditional and digital marketing so that it can connect with the growing number of
customers who use mobile communication as a source of information. Burger King's internal
research outcomes show that customers welcome this option.