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.

including Japan. Burger King reported that there are more than 11. Due to high . Puerto Rico. The company has more than 37. D. which exclusively owns. This situation changed shortly after the acquisition when Pillsbury opened its first international restaurant in Canada in 1969. Several of its legal cases have been precedent setting in their scope. BK and its franchisees began operating stores in several East Asian countries. and Hungry Jack's. Beginning in 1982.C. Issues have included trademark disputes. Other international locations followed soon after: Oceania in 1971 with Hungry Jack's and in Europe in 1975 with a restaurant in Madrid. both in the United States and abroad. Burger King has had its share of controversies and legal issues over the course of its existence. Singapore and Korea. its responses to controversial situations has varied from acceding to demands to refusal to concede its position regardless of the outcome.4 million customers daily. PRESENT STATUS At the end of its fiscal year 2007. As with other multi-national corporations. The company's two largest franchisees are Carrols Corporation with over 325 restaurants in United States. operates or sub-licenses over 300 restaurants in Australia. 66% are in the United States and 90% are privately owned and operated.300 outlets in 69 countries. health issues and labor relations. Depending upon its ownership and executive staff at the time. INTERNATIONAL EXPANSION While BK began its foray in to locations outside of the continental United States in 1963 with a store in San Juan. it did not have a large international presence. Taiwan. Spain. controversies with animal rights groups.000 employees serving approximately 11.

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. as well as other products to help it overcome this hurdle to expand in that country. BK's Central and South American operations began in Mexico in the late 1970s. particularly in the Asia-Pacific and Indian subcontinent regional markets. China and Japan. Today. India. BK hopes to use it recent non-beef products. as well as other countries such as Macao. it has managed to become the largest chain in several countries including Mexico and Spain. Over the ten year period starting in 2008. Burger King is the second largest chain of hamburger fast food restaurants in the world behind industry bellwether McDonald's .competition. To assist in its international expansion. While the TPGlead group has continued BK's international expansion by announcing plans to open new franchise locations in Eastern Europe. Burger King's subsidiary Burger King Europe GmbH is responsible for the licensing and development of BK franchises in the that market. Burger King has established several subsidiaries to develop strategic partnerships and alliances to expand into new territories. business unit handles franchising for East Asia. such as it's TenderCrisp and TenderGrill sandwiches. Burger King sees 80% of its market share to be driven by foreign expansion. In Asia. The company plans to add over 250 stores in these Asian territories. Africa and the Middle East. all of the Japanese locations closed by the end of 2001. BK reentered the Japanese market in mid-2007. by the end of 2012. the Asian subcontinent and all territories Oceanic territories except Australia. the BK AsiaPac.000 stores. PTE. Ltd. and Brazil. While Burger King lags behind McDonald's in international locations by over 12. Africa and Western Asia. in Europe. the company plans to focus on the three largest markets.

‡ The food is also one of the tangible elements. In Burger King the tables and chairs are made up of plastic. This attracts the customers to the counters. NATURE OF THE PRODUCT Tangible Elements: The tangible elements are those elements. These include: ‡ The ambience. etc. F.400 locations). So this is an intangible element. Intangible Elements: Intangible elements are classified as those elements. which you can see and feel. McDonald's and Subway (28. ‡ The service counters are also one of the tangible elements. is an intangible element.000 locations). which cannot be sensed or imagined by the customer. The service in Burger King is single point . chips. 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. These include: ‡ The chairs and tables on which the customer eats. ‡ Lighting is yet another type of tangible element which the customer can see and experience. It is specially designed with pictures alongside the food listings so that it attracts the customers. which we cannot feel or which cannot be touched.000 locations) and the fourth largest fast food restaurant chain overall after Yum! Brands (34. ‡ The customer also cannot judge the service of the restaurant.(31. E. which the customers can feel by tasting The room décor is another tangible element. ‡ The menu of Burger King is also a tangible element.

6% of the total business. ‡ Take-Away: It is a type of service where the customer orders and is served from a single point. payment and collection points. which if kept for too long can get spoilt and eventually perish. is µuse and throw. Perishable Products:. It is a form of takeaway where the customer drives vehicle past order. hatch or snack stand. ‡ 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. The perishable products of Burger King include: ‡ Raw materials. H. which they serve on.8% of the company¶s total business.service. The service is related to . customer consumes off the premises. OTHER SERVICES PROVIDED BY BURGER KING ‡ Drive-Thru: It was introduced in Burger King in 1975. at counter. It represents about 19. are also perishable because they are also use and throw. ‡ Room heaters or AC¶s are also intangible elements because they cannot be seen or touched.¶ ‡ The plates. PRODUCTION STYLE The production style of Burger King is ³cook-serve´. This type of service accounts around 58. because the cutlery which they use. I.

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. J. ‡ Old people: Old people like to have light food so they like to 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. SWOT ANALYSIS ON Burger King . so they prefer Burger King.the production in the outlet. ‡ 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. They mostly prefer drive-thru or takeaway. 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. Also they prefer fast food more than heavy food. the food is being cooked and then immediately served to him. When the customer orders. So young children with their parents visit Burger King. . No sooner the food is produced than it is served to the customers. is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County. ‡ 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. 2010 Burger King. ‡ Also customers who are in a hurry come to burger king just to satisfy their basic needs of eating and drinking.November 29th. often abbreviated as BK.

Despite its reliance on its franchisees for the majority of its revenue. and performing standards oversight of all restaurant locations in these countries. with its third set of owners. After the company ran into financial difficulties in 1955.800 employees serving approximately 11. and in . licensing new third party operators. taking the company public in 2002. which exclusively owns. purchased the company and rechristened it Burger King. in the United States it operates under the Burger King Brands title while internationally it operates under the Burger King Corporation banner. In North America. franchises are licensed on a per store basis. Occasional spats between the two have caused numerous issues. The current ownership group. a partnership of TPG Capital. and are responsible for opening new restaurants.200 outlets in 73 countries. Burger King reported it has more than 12. United States.26 billion (bn) in late 2010. the largest example of a master franchise is Hungry Jack's.Florida. Burger King's relationship with its franchises has not always been harmonious. Bain Capital. Burger King Holdings is the parent company of Burger King. 3G Capital of Brazil. Over the next half century the company would trade hands four times. Over the course of its history the company has used several variations of franchising to expand its operations. At the end of fiscal year 2010. David Edgerton and James McLamore.4 million customers daily. The company began as a Jacksonville. 66% are in the United States and 90% are privately owned and operated. These regional franchises are known as master franchises. and Goldman Sachs Capital Partners. operates or sub-licenses over 300 restaurants in Australia. acquired a majority stake in the company in a deal valued at $3. Originally called Insta-Burger King. Florida-based restaurant chain in 1953. The company has more than 38. its two Miami-based franchisees. while in several international locations licenses are sold on a regional basis with franchises owning exclusive development rights for the region or country.

. food costs are rising higher than standard inflation. Burger King recently announced that starting in June it will significantly increase its price message. less distribution than McDonald's. like its BK Shots and $1 Whopper Jr. which allows it to be placed on the already corporate-mandated and corporate-priced Value Menu.e. but after a ruling in 2008 that opened the door for more pricing mandates by corporations. ... special advertising and appeal. Burger King will be spending two thirds of its ad budget on value meal products. etc etc PRICING. less of an international appeal. Cheap.several instances the company's and its licensees' relations have degenerated into precedent setting court cases. different taste profile. Burger King and several other companies have decided that pricing is their concern and should be under their control. Burger King says that the double cheeseburger should be no more than a dollar. flame broiled. the same menu item that caused McDonald¶s and its franchises issues in 2008).the King and the commercials. Cheap. less cash on hand Opportunities: it's all about product improvement and brand improvement Threats: Higher priced products during down times get crushed. product differentiations. larger burgers. Cheap. The current argument between Burger King and its franchise chains is the price of a double cheeseburger (strangely. Strengths: International distribution. health concerns among general public.i. possible weaker association with pre-teens. different rapidly growing (18-34) consumer segment Weaknesses: weaker over sales appeal.. Franchises have long held the power when it comes to pricing. croissanwhich. branding weaker overall than competitors.

crispy puffed snack with a zesty onion flavor. McDonald¶s is boosting its support for higher priced/higher margin products Product distribution.´ said Russ Klein. ³We know that the Onion Rings will add excitement and a great tasting product to the snack line up. president. Onion Rings.´ Russ Klein.´ Sales promotion. global marketing. a round. senior vice president marketing. All three branded snacks are currently available in a variety of sizes and price points in vending machines. which manufactures the line of snacks. Mexico. strategy and innovation. is expanding distribution of the Burger King Snacks to the Caribbean. warehouse clubs. Burger King Corp. Hong Kong. drug and grocery stores. The familiar flavor profile of Onion Rings rounds out the snack line as we begin to distribute the snacks internationally. Burger King Corp. India. the legendary flame broiled flavor of Burger King burgers. 2-ounce bags are available in convenience stores. said in an email. The Inventure Group.³The current marketplace is demanding value and the company is being responsive to that consumer-driven demand. The Inventure Group. Burger King¶s president of global marketing strategy and innovation.125-ounce bags in vending machines. joins the potato snack flavors of Ketchup & Fries. announced today the addition of Onion Rings to the existing line of branded Burger King Snacks. convenience stores.´ ³We are thrilled with the initial success of the Burger King Snack launch. Central America. will also be available in club stores and additional outlets this fall. But is low cost and low quality really what Americans are looking for? McDonald¶s has taken the exact opposite approach. South America. Nine and 12-ounce bags. . ³During concept testing. as well as variety packs. Onion Rings continually received high ratings from consumers. Taiwan and the Philippines. and 3ounce bags are available in grocery stores. ³The popularity of our Onion Rings menu item translated to this new snack product. Thailand.75-ounce bags and 1.´ said Steve Sklar. a beloved American taste combination and Flame Broiled. Onion Rings are available in single serving sizes of .

"We expect to complete our store renovations by the next two to three years. "We plan to open 10 additional restaurants in Thailand in the next three years.at Silom." said Nongchanok. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX "We also plan to open two to three new Burger King restaurants this year." she said." Nongchanok said. the company expects its sales to increase by 10 per cent this year. "We don't want to compete in the mass market." Nongchanok said the company would not be "aggressive" in expanding Burger King restaurants in Thailand. She said the company would spend Bt60 million this year on the renovations. two of which will be in Bangkok and one upcountry. . "Twenty Twenty". The company currently operates 15 Burger King restaurants in Bangkok. but look for strategic traffic-generated locations. and that will require up to Bt200 million in investment. "We are positioning ourselves as 'burger expertise'. the new store concept has been launched already in some major markets such as Beijing and Singapore. and CentralWorld in the Ratchaprasong area. such as at office buildings. shopping malls and tourist destinations. which caused many foreigners to cancel their trips to Thailand.The new decoration concept. driven by newly opened restaurants and the improving economic and political environments. assistant vice president of Burger (Thailand). "Many of our restaurants are in key tourist destinations and were hit by the local political problems. at Central Festival Phuket. focusing on two niche groups of customers university students and working people aged between 22 and 39." she said. will be applied to all Burger King restaurants all over the world. Each restaurant will require about Bt15 million of investment. "We have renovated four major Burger King stores in Bangkok to be under the new 'Twenty Twenty' decoration concept . In Asia. She said the new decor would make Burger King restaurants more contemporary and would be used until 2020. Nongchanok said Burger King's sales were stagnant last year because of the political unrest. focused primarily on Bangkok stores. Khao San Road. local franchisee of the US-based Burger King chain." said Nongchanok Stananonth. including three stores at Suvarnabhumi Airport and one at Don Mueang Airport. which has used pricing as its major fighting tool. the Paradise Park shopping complex on Srinakarin Road. and another 11 upcountry. However.

What¶s going on here? Well. This also shows that Burger King is generous because they give away free things. but this is a great PR tactic. This generates buzz for the company. Titled "Buy 1 Meal Get 1 Burger". Last week. they were pleasantly surprised to find money. The fast food chain dropped wallets in busy places and told people to keep them. people will talk about Burger King. 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. These weren¶t typical wallets that people lose and others often find. Public relation. "Under the new 45-day campaign. Burger King gift cards and other random Burger King items. 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. I¶ve found multiple blogs written by people who¶ve heard about this tactic or found a wallet themselves. These wallets were purposely left around cities for people to find and keep. we want to double our client base in Thailand. which is a signature product of Burger King. I¶m not a big fan of fast food. When people opened the wallets. By doing something different. to about 50 per cent by the end of this year. . people discovered wallets all over cities like Chicago and Orlando. Burger (Thailand) yesterday announced the launch of its first promotional campaign for 2011. which now stands at 40 per cent of sales. by highlighting Whopper. this was a creative PR tactic that Burger King put into action.Nongchanok said it wanted to increase the ratio of Thai customers as opposed to foreigners." Nongchanok said.

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 first reason is because the tactic was unexpected.Isaacs PR Blog discusses three reasons why this PR tactic worked for Burger King. this tactic grabbed the audience¶s attention faster than any other tactic. If I found a wallet. and nutritional data on the restaurant's offerings. . The site comes equipped with a Burger King restaurant finder. You also don¶t hear much about companies dropping free items around town. I wish I could have found one of these wallets and been a part of Burger King¶s PR tactic! Direct marketing. I¶d be pretty excited. This part of direct marketing focuses a great deal on actionable and measurable outcomes that produce positive responses from consumers. Finally. product catalogues. People are more likely to notice this tactic than the usual commercial or billboard. The second reason why this tactic worked was because the timing was perfect. So. sales letters and the Internet to reach customers. Hoping to sell more burgers. my first instinct would be to return it to the owner." which is a core principle of successful advertising. A $5 Burger King gift card and a few bucks could really benefit someone. which uses maps and zip code. but they don¶t usually do it on purpose. Direct marketing is a type of advertising that allowsbusinesses to be able to speak directly to the consumer and receive a fairly quick response. Because of the poor economy. especially without making an announcement. newspapers or radio. 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. People drop wallets all the time. Unlike formal channels of advertising such as television. Burger King's internal research outcomes show that customers welcome this option. Direct marketing techniques for advertising are usually marked by driving a particular "call to action. if somebody told me to keep it. direct marketing utilizes fliers. people could use a little help.