BK TOPS MCD'S IN NAT'L TV AS AD STRATEGIES DIVERGE: NEW PRODUCTS, SUPERIOR-TASTE CLAIMS REMAIN ON FRONT BURNER FOR NO. 2 CHAIN

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Amid stiff competition in fast-food, Burger King Corp. is using virtually the opposite strategy of archrival McDonald's Corp.

Paul Clayton, president of Burger King's North American operation, said last week the company remains committed to spending the bulk of its advertising arsenal on national TV. This comes as industry leader McDonald's tries to recover from marketing missteps and continues to shift funds from national to local ads, with spending increases in spot TV, radio and outdoor.

McD's STILL TOPS OVERALL

Although McDonald's overall outspends Burger King, the No. 2 burger chain is now outspending the leader on national TV, Mr. Clayton said.

According to Competitive Media Reporting, McDonald's spent $578 million on all measured media in 1997, while Burger King spent $423 million. The brands ranked first and second in measured spending overall for all individual brands tracked by CMR last year.

Mr. Clayton -- speaking at the chain's Miami headquarters at a meeting for financial analysts who track the chain's London-based parent, Diageo -- said Burger King is increasing its commitment to new-product development.

NEW R&D EXEC

It has hired an executive from Sara Lee Corp. for the position of senior VP-research and development and chief technology officer. Tulin Tuzel will join the chain next month from the Sara Lee bakery unit, where she was VP-research and development, grocery division.

"I passionately believe in innovation, not just new brands," said Burger King CEO Dennis Malamatinas.

Burger King has introduced three major new products in short order: last fall's Big King, a rival to McDonald's Big Mac; new french fries; and Cini Minis, a breakfast item developed with sister Diageo unit Pillsbury Co. and launched with TV spots that featured the Pillsbury Doughboy.

Mr. Malamatinas said more such Pillsbury-linked products are in development.

Mr. Clayton said he is mindful of the power of McDonald's and the new cooking system that chain is rolling into stores designed to improve the taste of its products. But he said Burger King's key marketing strategy will continue to focus on the superior taste of its products.

"We will stake Burger King's future on taste," he said.

Mr. Clayton said the chain is steering away from selling its signature Whopper for 99 cents, but occasionally will feature the burger at that price as a defensive weapon. The chain has been doing that in recent weeks as McDonald's has been involved in its wildly popular Teenie Beanie Babies promotion.

COMMUNICATING GLOBAL IMAGE

Mr. Malamatinas said agency Ammirati Puris Lintas, New York, is working on more global projects for the brand, and that efforts are being made -- such as using the same food photography around the world -- to communicate a global image.

Burger King has increased its assignments at Ammirati from three to 15 countries, adding creative duties for Canada on June 1.

Steve Lewis, president of the chain's powerful franchisee group, said franchisees back the national vs. local ad spending strategy.

"We are a national brand and that's the way we look at it today," he said.

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