Games people play: Looking for lift, Taco Bell stakes $70 mil on Xbox

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To get consumers to "think outside the bun," Taco Bell is turning to the box. Xbox, that is.

The Tricon Global Restaurants chain is making the approaching launch of Microsoft Corp.'s Xbox the centerpiece of its holiday marketing program-backed by an anticipated $70 million multimedia campaign-in hopes that the tech industry's reputation for innovation will put a much-needed topspin on the taco brand's flagging image. Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, San Francisco, is handling the massive push, which begins Oct. 18.

The partners have already broken a teaser ad in the November issue of Imagine Media's Xbox magazine with the line, "The Xbox era begins at Taco Bell, 10.18.01." Xbox goes on sale Nov. 15.

Taco Bell's national Xbox program involves a multi-tiered sweepstakes with various prize pools that enable gamers to enter to win the console, software titles and other prizes. Taco Bell will support the five-week program with a bevy of primetime TV ad buys, in-store materials, window displays, tray liners, bags and print ads. "It's a very heavily supported program," according to a person familiar with the effort, who declined to offer specific figures. Taco Bell at deadline hadn't returned calls. Although the original plan called for placing Xbox consoles in Taco Bell stores for sampling, that idea has since been abandoned.

Taco Bell's tech turn began last month with a new branding effort starring Amazon.com CEO Jeff Bezos discussing the latest handheld with staffers. The handheld he was shilling wasn't a Palm, though, but a Taco Bell chicken quesadilla. The tag line: "Think outside the bun." (FCB and Mr. Bezos have a history: FCB was Amazon.com's agency till last December.)

In another spot for the grilled quesadillas, a voice-over uses technobabble like "gooey interface" and "ergonomic design for easy downloading" to describe the flat, cheese-and-meat-filled tortillas.

"We really want consumers to think differently about their eating habits, differently about their food choices," said a spokeswoman, in explaining the effort. To boost sales, Emil Brolick, the chain's president, has broadened the target demographic from teens and young adults to include older consumers with deeper pockets and higher food quality expectations.

As part of the transformation, Taco Bell installed grills to upgrade its menu to better compete against such "fresh Mexican" chains as Burrito Beach and McDonald Corp.'s Chipotle. Like the Silicon Valley set the chain is emulating, many of the new products Taco Bell is introducing have been in test for several years and some were originally rejected, according to one executive close to the brand.

When franchisees met in Orlando last week for its annual convention, Taco Bell executives said the new spots have driven double-digit sales increases. Time will tell, however, whether the new campaign has a lasting effect.

Despite a string of new products and tie-ins with the film, "Tomb Raider," the chain has lagged in same-store sales for six straight quarters behind sibling chains Pizza Hut and KFC. For the quarter ended Sept. 8, Taco Bell same-store sales fell 2%. In the four-week period ended that same date, the fall was worse, at 4%. Pizza Hut and KFC, meanwhile, reported flat same-store sales in the quarter. For the four-week period, KFC's same-store sales were up 2% while and Pizza Hut's same-store sales rose 1%.

Contributing: Tobi Elkin

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