Burger king meets challenge

By Published on .

Stefan bomhard has it made.

His company is posting poor sales, he has just launched a $400 million advertising review and the company will likely be sold off within the next three years.

Despite these events, Mr. Bomhard, senior VP-marketing for Burger King Corp. is virtually bullet-proof.

He's "taken on mission impossible," says Jack Trout, president of consultancy Trout & Partners. "If it doesn't work, it's not going to hurt [Mr. Bomhard] a whole lot. He's not putting his career on the line."

Being at the marketing helm of a troubled company, the 33-year-old has lots of escape clauses in this situation, says Mr. Trout.

"He could say he couldn't get the agency to work out, he had bad prior management and uncooperative franchisees," says Mr. Trout. "He's got a lot of places to point [blame] to."

Why anyone would welcome such a snake pit of potential disasters might be viewed as brilliant or crazy. Mr. Trout likens it to climbing Mt. Everest.

"If get to the top, you would get a lot of press," he says, adding, "There's a high degree of naivete here: a young guy like that who doesn't know any better, or appreciate the difficulties in climbing that hill, in a category loaded down with players."

Naive maybe, but who could ask for a more interesting professional playground?

In July, the chain's parent Diageo announced it would float 20% of Burger King stock and eventually sell the chain by 2003.

"I feel the pressure to deliver results," says Mr. Bomhard, noting there is tremendous pressure for advertising to bring traffic to the restaurants.

He could count on the fingers of one hand the advertising meetings he hasn't attended over the last year.

BURDEN AND PLEASURE

"I feel the ultimate responsibility for all activities in marketing. I feel the burden and pleasure."

Much of that pressure is because Diageo is blaming delays for the stock float on poor sales.

"The key of success behind an IPO is strong business performance before it and showing superiority," says Mr. Bomhard. "The strategy we've chosen is one we believe is right for the brand and one that will lead to a successful IPO for us."

While the chain's poor sales are consistent with other fast-feeders, observers questioned a limited time June price promotion attached to BK's flagship Whopper. A spokeswoman defended the tactic, saying there's a big difference in offering two Whoppers for $2 vs a 99-cent single product.

"We know clearly it's dangerous to associate flagship products with the 99-cent price," says Mr. Bomhard, who noted it was a limited offer. "It's a no-win strategy for anybody in this industry long-term."

He notes franchisees, who have been critical of the direction Mr. Bomhard and other management have led the company, voted to support the promotion.

"Only when we have that support do we go forward," he says.

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