As sales slip, Wendy's revamps brand team

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Wendy's chief marketing officer, Ian Rowden, has restructured his department and taken over responsibility for the new-product pipeline as part of the No. 3 fast-food chain's bid to escape a sales slump.

"Ian is putting together the team he wants to lead the department," said Bob Bertini, director of communications at Wendy's. "There's more autonomy, and he thinks it will add some nimbleness and help us be more effective at doing what we've got to do."

The moves come ahead of what could be a contentious Wendy's franchisee convention in Las Vegas that begins today.

Senior VPs Mary Ann Pilotte and Bob Levite exited Wendy's after an internal evaluation of the marketing department. In addition, Casey Minton, VP-marketing research and analysis, and Bob Holtcamp, VP-brand management, were elevated to report directly to Mr. Rowden.

"These promotions are a continuation of our strategy to create a marketing team that is more streamlined ... to address key strategic and tactical initiatives," Mr. Rowden wrote in an internal memo.

Major changes

The shifts come amid a decline in sales and just weeks after the departure of Tom Mueller, Wendy's president and chief operating officer. Ms. Pilotte declined to comment, and Mr. Levite didn't return calls.

Wendy's also shifted its research and development unit from operations to marketing. Mr. Bertini said the re-alignment "allows us to increase the number of products in the pipeline."

Wendy's in May unveiled a new advertising campaign, via Interpublic Group of Cos.' McCann Erickson Worldwide, New York, using the tagline, "Do Wendy's. Do what tastes right."

But Larry Miller, restaurant analyst for Prudential Equity Group, has been critical of the chain's marketing strategy, saying that it "lacks definition" and that "competitive offerings from McDonald's aimed at the heart of Wendy's business, its spicy chicken sandwich," could cut into market share. "Wendy's recent marketing campaigns have failed to drive customer traffic," he wrote in an Oct. 5 note.

Facing the franchises

At its convention in Las Vegas, the company likely will face its most contentious audience after years of sunny franchisee relations. But Mr. Bertini said the management team won the support of Wendy's franchisee advertising committee at a recent meeting.

"They were very supportive of the decisive steps we're taking to move our business forward," Bertini said. "You're seeing a lot of things beginning to come together. Are we there yet? No, but certainly things are moving forward."

Some owner-operators, though, have voiced concerns about the edgier, youth-oriented advertising created under Mr. Rowden, and complained that there aren't enough new products in development. That pipeline currently includes an upscale ciabatta-bread sandwich line, a new salad due in early 2006 and a breakfast menu slated for 2007.

Wendy's recently backed off a test of a higher-priced Value Choices menu and returned to promoting 99¢ items. The chain is also said to be considering a sandwich-customization program modeled on Burger King's that would add more options on toppings.

"We won't talk about what we may or may not be doing," Mr. Bertini said in regards to new products. On a broader front, he said, "We've acknowledged the challenges we've had in the past and we're moving forward."

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