At McDonald's Corp. this has meant a new primary advertising agency for its estimated $500 million account and a new theme line, "Did somebody say McDonald's?" reminding consumers what the fast-feeder is all about.
Burger King Corp. is redirecting the spotlight at its basic business-burgers-via advertising and promotion.
PepsiCo will combine its Taco Bell, KFC and Pizza Hut restaurants into a new $10 billion spinoff operation called Tricon Global Restaurants.
PepsiCo's restaurant spinoff will become reality next week, a move specifically aimed at allowing the restaurant business to respond immediately to new product developments and changes in advertising and marketing campaigns.
The spinoff also creates organizational changes requiring fewer levels of approval. It allows Tricon to operate more like an independent restaurant company than a snacks and soft-drink marketer.
The strongest evidence of that: Franchisees will be able to choose what they pour in Tricon restaurants-Pepsi or Coke.
"Cola drinks will become an important part of the menu, not the most important part of the menu," says Keith Chambers, a KFC franchisee in Ohio and a member of the company's advertising board. "There's been an unspoken wish to do things in cooperation with Pepsi-Cola that won't be as overwhelming now."
The Pepsi spinoff is in sharp contrast to the brand moves at Burger King, the chain which operates as a unit of Grand Metropolitan.
BK is showing no outward signs of parting from a parent who is beefing up its liquor side with the acquisition of Guinness. It remains one of the most focused chains, sticking to its strategy of promoting hamburgers.
The most recent example is the grand introduction of the Big King sandwich as a direct competitor to McDonald's Big Mac.
BK, long an ad agency graveyard, has had one of the more stable agency relationships of late, sticking with Ammirati Puris Lintas, New York. International Dairy Queen, Domino's Pizza, McDonald's, Red Lobster and Taco Bell have all reviewed agencies.
The fact that restaurants are king at Tricon is underscored by the choice of management. David Novak, vice chairman and president of Tricon, is a veteran Pepsi restaurant executive at KFC and Pizza Hut. Mr. Novak, currently appearing in a $50 million Pizza Hut ad campaign, made his commitment to marketing clear immediately, naming a trio of president-chief concept officers for Tricon's three restaurants.
McDonald's also introduced changes in its corporate ranks to make it more nimble. In July, the company created five regions, displacing its eight former zones and named individual presidents for the regions. The company will add marketing teams for each of the regions, allowing Big Mac to focus in on local strategies and competitors which change on a region-by-region basis.
McDonald's local regions and Tricon's spinoff are both strategies designed to ultimately attain the same thing. At McDonald's, the local regions can execute programs quickly and the Pepsi spinoff "takes out a whole layer of approval," says Ron Paul, president of Technomic, a restaurant consultancy. "I would suspect there won't be as many people involved in decisions like expansion plans and the magnitude of advertising spending."
In a mid-1995 restaurant spinoff at General Mills, Darden Restaurants stripped away layers of approval that also allowed the new company to "focus more clearly on our business," says a Darden spokesman. Darden, owner of Olive Garden Italian Restaurants and Red Lobster, is the country's seventh-largest restaurant chain, according to Technomic.
As an example of the quick change that can now take place at Darden, the spokesman noted the overhaul at Red Lobster within the past year.
Radical changes there included a complete menu shift, a new creative direction and reassignment of the $80 million account to Euro RSCG Tatham, Chicago, from