McD's steals another toy from BK

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The rivalry between the country's top two fast-food chains is about to intensify as McDonald's Corp. gets set to snatch another lucrative licensing agreement from Burger King Corp.

"Teletubbies," the hugely popular PBS children's series, is expected to ink a promotional deal with the nation's largest restaurant chain, an executive close to the company said. An announcement on a McDonald's/Teletubbies promotion for the first half of 2000 may come as early as the week of Nov 15.

BK WAS THERE FIRST

BK was the first fast-food partner for "Teletubbies," via a kids promotion in May in which supplies of clip-on Tinky Winky, Laa-Laa, Dipsy and Po finger puppets were depleted ahead of schedule. Franchisees apparently wanted to link with the program again next year.

BK said it was pleased with this year's effort.

" 'Teletubbies' was a great promo partner," said Cindy Syracuse, manager-youth and family marketing for the chain. She termed the pact a one-time deal and declined to comment on future plans.

McDonald's declined to comment on the "Teletubbies" deal, and a spokeswoman for "Teletubbies' " marketer, itsy bitsy Entertainment Co., said Nov. 12 it was too soon to comment on new projects for next year.

The toy skirmish comes as the chains gear up for a holiday battle that pits two of the most popular kids franchises in years: "Toy Story II" at McDonald's against "Pokemon: The First Movie" at Burger King.

It was BK, the No. 2 player in the $110 billion U.S. fast-food business, that originally linked with the "Toy Story" franchise in 1995.

"Toy Story" marked the last of many successful film partnerships between BK and Walt Disney Co. The run ended when McDonald's used its marketing muscle to nab a 10-year exclusive pact with the entertainment conglomerate, sending BK and other fast-food chains to hunt for properties at other studios.

PROMOTION PLANS

McDonald's is set to announce "Toy Story II" plans Nov 15.

The "Toy Story" promotion launches Nov. 26 and runs through Dec. 23. Network TV advertising starts Nov. 24 from DDB Worldwide, Chicago, and will tout Chicken McNuggets and holiday desserts including an Egg Nog shake and a chocolate mint McFlurry ice-cream dessert.

A new item, a custard-style pie, will also be featured. The 20-piece McNugget family pack will come with a discount coupon for Toys "R" Us, a spokeswoman said.

Commercials aimed at children and teens are via Leo Burnett USA, Chicago. Minority ads will come from del Rivero Messianu, Coral Gables, Fla., and Burrell Communications Group, Chicago.

CANDY DISPENSERS

In addition to 20 Happy Meal toys, the company will sell six candy dispensers for $1.99 each that feature characters such as bumbling astronaut Buzz Lightyear.

BK's Pokemon promotion is its largest to date, and already a huge hit, according to several franchisees. It kicked off last Monday and features 57 toys offered in 56 days in Kids Meals, along with 151 trading cards. Starting today, the chain will sell one of six gold-plated trading cards for $1.99 with the purchase of any value meal. The deal joins BK with Nintendo of America.

General market advertising is from BK agency Lowe Lintas & Partners Worldwide, New York. Minority ads are being handled by UniWorld Group, New York, and Bromley, Aguilar & Associates, San Antonio.

"It's the most amazing thing I've ever seen," one longtime BK franchisee said. "We are keeping up with the demand, but demand is surpassing our expectations, which were that we would get big demand."

He said he expects business to be brisk this week when the chain stages trading nights for customers to swap toys. Night is typically the slow time for burger chains. Another franchisee said sales were up a whopping 20% in the first week.

Ms. Syracuse acknowledged that there were spot Pokemon outages last week. "Some stores will be out for a day or so, but we are shipping them [toys] every which way," she said.

SALES SLUMP

Industry observers are keeping a close watch on Pokemon at a time of declining sales at BK. Parent Diageo announced last week same-store sales were down 3% for its first fiscal quarter ended in September compared with the same period last year.

But Pokemon may change that. "By the end of this promotion that'll change to a positive number," the longtime franchisee said.

Toys have become a sensitive topic for the fast-food business this year in the wake of disappointing sales from Tricon Global Restaurants' ambitious link to the "Star Wars" prequel, "Episode I--The Phantom Menace," for its Pizza Hut, Taco Bell and KFC chains.

Youth marketing expert Irma Zandl said toys still make sense, as long as they're the right ones. "The 'Star Wars' stuff was really a bust," she said. "When they do something that people actually like, we should be applauding it to make up for all the duds."

Copyright November 1999, Crain Communications Inc.

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