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PepsiCo's restaurants are readying big kids marketing programs for the new year, vying for some of the family traffic now flowing into McDonald's and Burger King.

Taco Bell next month bolsters its fledgling kids meal program with Nacho & Dog, an animated cat and dog that will serve as the chain's signature kids characters. Pizza Hut, meanwhile, resurrects Pizza Head next month for a yearlong ad and promotion effort, while KFC Corp. begins a permanent kids meal program with a tie-in to the cartoon cat Garfield and then to cartoon ghost Casper.

The kids push is one more building block in PepsiCo's plan to re-energize its restaurants with new products and sharper brand positioning. While the strategy boosted overall restaurant earnings 16% in the third quarter and continues to drive strong sales at KFC and Pizza Hut, new products haven't worked the same magic on Taco Bell, whose same-store sales were down 4%.

The PepsiCo units can't match the marketing budgets of McDonald's Corp. and Burger King Corp., both of which spend $40 million to $50 million on a single movie promotion targeting kids. Yet the lure of the market is too strong to ignore. Children visiting fast-food restaurants typically bring adults, doubling or tripling the meal ticket, said Janice Meyer, restaurant analyst with Prudential Securities, New York.

Pizza Hut is avoiding head-to-head competition with the burger giants by focusing on the dinner hour. The chain next year doubles its kids marketing budget in part to support "Tuesday Kids Night," a program tested in four markets this year that will roll nationwide.

Value-price kids meals and in-store entertainment will be used to draw traffic on what's normally a slow sales night, said Bill Cobb, senior VP-marketing.

Pizza Head is the star of kids night, appearing on place mats, kids meal toys and other promotional materials from Ryan Partnership, Westport, Conn. The trembling, 'fraidy cat slice of pepperoni-and-cheese from Goodby, Silverstein & Partners, San Francisco, first appeared in TV spots in the second half of 1994 but will play a larger role going forward.

Pizza Hut will spend $15 million on Pizza Head TV spots next year to support kids night and other child-targeted efforts. In one spot breaking next month, Pizza Head discovers Stuffed Crust pizza.

The chain also plans to use Pizza Head to begin developing a database of children's names, much like Burger King's "Kids Club." Names could be collected from in-store materials or through Pizza Hut's delivery service, Mr. Cobb said.

Taco Bell next month introduces Nacho & Dog, two proprietary characters who will lend continuity to the kids meal program, begun last summer. Taco Bell introduces the fat cat and tiny dog Jan. 8 in 30- and 60-second animated spots from Bozell/Salvati Montgomery Sakoda, Costa Mesa, Calif.

Strottman International, Irvine, Calif., designed the characters and four kids meal toys available in January and February. The duo will appear in kids meal promotions throughout the year. Taco Bell spent $3 million in media on each monthly kids promotions last year; Nacho & Dog spending is expected to exceed that.

At KFC, building a kids program fits the goal of feeding every U.S. family at least once a week, a strategy franchisees confirm will take center stage next year. Each two-month promotion will tie to various licensed properties.

Alice Z. Cuneo contributed to this story.

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