Burger King's chief marketing officer, Russ Klein, thinks he knows what's bagging the burger maker's sales growth. Addressing a group of Harvard Business School marketing students, Klein put up a slide.
It read, "When they know you more than love you."
"It's kind of a provocative term," Klein said, explaining that while nearly everyone knows what Burger King is, sales over the past decade indicate that they are not feeling the love. His goal: get consumers to not know Burger King—at least, not the way they know it now.
"Knowledge, in my view, is something you're always looking to shatter," he said. He wants to infuse the BK brand with mystique, both in product innovation as well what consumers see and feel in the "restaurant experience."
Klein (HBS AMP '98) is president of Burger King Brands, and executive vice president and chief global marketing officer. He oversees consumer insight and strategic branding; product research and development; product and field marketing; and all advertising and media responsibilities. Klein reports directly to CEO Brad Blum.
He arrived wearing a black suit and white shirt, accented by a colorful tie covered with foxes. Looking slightly vulpine himself with sharp features and sandy hair, Klein outlined a number of changes at BK he has overseen in just eleven months on the job.
Integral to the rebranding process are four principles that "most branding experts would agree make up a brand," said Klein.
- Relevance. How the brand fits into the consumer's life.
- Differentiation. The brand's point of difference.
- Esteem. How well the brand is regarded.
- Knowledge. An intimate consumer understanding of the brand.
"Just one of them is not enough," he added.
Fast-food landscape
It may need all four to catch up to market leader McDonald's and keep onrushing Wendy's back at No. 3 on the burger battlefield. According to one estimate, Burger King's U.S. sales in 2003 dropped to $7.9 billion from $8.3 billion a year earlier. But in the same period, McDonald's sales rose to $22.1 billion from $20.3 billion, and Wendy's climbed to $7.4 billion from $6.8 billion.
One problem: Burger King has had seemingly as many brand strategies and advertising agencies in the past decade as CEOs. Yet it never found the right mix of products and message. For instance, BK tried to pay heed to obesity concerns, chasing after health-conscious consumers by offering salads and chicken baguette sandwiches, yet experienced no uptick in sales. However, sales did spike when the $1.99 Whopper was offered (for a limited time). And then, when McDonalds and Wendy's climbed out of their sales slumps with hamburgers and fried chicken, Burger King leadership realized that people are probably not stopping in to buy health food.
Over the last six years Burger King has been in "constant decline," acknowledged Klein, but now is in the middle of a broad-gauge turnaround. The company will reset its sights on core customers and core menu items. This means that not only will the advertising and packaging change, but also that operations will need to step lively to keep pace with increasingly customized orders.
The crux of the new branding campaign is the reintroduction of the sticky 1974 slogan, "Have It Your Way." The made-to-order challenge has the guys and gals behind the grills a little jumpy, to say the least. They worry that it will affect speed of service and order accuracy. But it's not quite the issue you'd think, said Klein. "Half of all sandwiches ordered are customized anyway," he said.
You want fries with that consumer empowerment?
Selling customization to consumers in a driving point in Klein's campaign. He wants BK customers to realize the value of customization and said that getting what one wants is "a powerful motivator across generations." He's seen a trend in a "huge exercising of empowerment," listing customized running shoes and Starbuck's personalized drinks as examples.
Burger King's latest advertising agency, Crispin Porter + Bogusky, discovered that "the marketplace is increasingly cynical and detached," said Klein. So BK has embarked on a ground-up branding campaign to get personal with the customer.
The first wave of ads has already hit TV screens. A group of young office workers, a cross between yuppies and slackers, stand around while a coworker hands out lunches from a big Burger King bag. Testing their rights to "have it their way," they compete to see who can come up with the most outlandish and innovative sandwich, enjoy tasty BK snacks, and chat each other up. The ads have eighteen- to twenty-four-year-olds written all over them. And, they're funny.
| What's good about adolescence transcends age. |
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— Russ Klein, Burger King |
An edgy Web campaign is also drawing attention, not all of it positive. Burger King's http://www.subservientchicken.com/ site features a disturbing chicken in a garter belt that responds to commands typed by the viewer, part of the "have it your way" theme. Clearly, this is not your father's BK.
Come August, all packaging, design, and policies will reflect the "Have It Your Way" ethos, including the "No Make Fun Policy," whereby customers will not be derided or laughed at by BK staff, no matter how weird or finicky their order.
You may also see, as a print insert or tray placemat, the "Have It Your Way Contract," which customers will be encouraged to sign to ensure that they become empowered consumers. Drink cups and sandwich wrappers will showcase a sniglet-like glossary of terms such as "Potentater," which is the largest french fry in the container, and "Lap Seed," a bun seed that falls in your lap.
The idea, said Klein, is to appeal to the adolescent in all of us. And that's no accident.
Trying to discern where they fit in the fast food ecosystem, Burger King hired a cultural anthropologist to map the way. The findings were interesting, if not completely unsurprising. McDonalds is perceived as childhood's oasis, ripe with playful innocence. Wendy's is the realm of the adult, signifying quality, peace, and being cared for. So, the only place left for Burger King was surly adolescence.
Actually, adolescence and the eighteen- to twenty-four-year old demographic align nicely. From now on, Burger King would like consumers to associate their brand with excitement and power. Adolescence (for some of us, anyway) was a time when power and control was wrested from our parents to our own pimply selves. Think control, freedom of emotions, and rights of passage.
This is not to say that Burger King is targeting adolescents specifically. After all, paper route and babysitting salaries can only buy so many Whopper Juniors. BK just wants to bring out the skate rat in all of us. When adults partake of the Burger King experience, they can hearken back to the days of roller disco and "Laverne and Shirley" (or rollerblading and "Saved by the Bell," as was the case for the mostly-under-thirty student audience).
When adults have it their way at Burger King they can say to themselves, "My life is unfair, but now I'm in control. I'm the boss, if only for a few minutes." And if real, live adolescents convince their parents to drive them to BK and buy them stuff, all the better. "What's good about adolescence transcends age," said Klein.
Growing up
In addition to executive and strategy upheavals over the last few years, Burger King has recently become a privately owned company, accomplished essentially via a leveraged buy-out, purchased at five times BK's cash flow. This change in ownership status is "nothing but a good thing," said Klein.
In addition to its consulting role, Bain and Co. is a major owner, a one-two punch that could put BK on the fast track to a turnaround. "We're still finding our sea legs," Klein said.
He spoke April 26 at a talk sponsored by the HBS Marketing Club. 