To compete with these super-regional chains, the market leaders are improving food quality, diversifying menus and offering deep discounts. They're also catering to regional market nuances, providing more localized messages and media buys made by local ad agencies.
Among the top four -- McDonald's Corp., Burger King Corp., Wendy's International and Hardee's Food Systems -- only Wendy's has gained share since last year, while the other three have fallen. The remaining top 10 chains either held or gained slightly in share as the burger market grew 5.5% to $44.1 billion in 1999.
Culminating its three-year revitalization effort, McDonald's unveiled its $500 million "We love to see you smile" campaign in June reinforcing the chain's new ability to make sandwiches to order.
This made-to-order concept is one that most regional chains have been touting for years. A burger flipper in recent TV spots for Consolidated Products' Steak n Shake chain brags about how he custom-makes steakburgers that are never premade or warmed under heatlamps.
Taking the fresh theme a step further, Texas-based Whataburger reinforced its advertising tagline, "Real food. Real fresh. For real folks. Since 1950," with action shots of vegetables being cut and giant burgers being assembled.
"We like to say, `You can get a cheaper burger, but then you'd have to eat it,' " says Todd Coerver, director marketing services of Whataburger.
Carl's Jr. employed a similar but edgier tack by showing men and women unabashedly wolfing down juice-dripping burgers.
Jack in the Box is more narrowly focused on the burger demographic -- men 18 to 34 -- than its larger competitors, allowing it to maintain a consistent message. It also enables the chain to limit its menu and thus hold down costs. "They [this population segment] want big, good burgers with good fries and shakes made with real ice cream," says Greg Joumas, VP-marketing of the chain. Quirky TV spots follow the chain's Jack icon as he vacations in Italy associating landmarks like the Trevi Fountain with restaurant fare.
Not to be outdone, Burger King launched in April its "Got the Urge?" campaign using extreme close-ups of sandwiches in contrast to the lusty voice-over by Kathleen Turner.
The idea of yearning has been long-employed by Columbus, Ohio-based White Castle Systems for its little square burgers with the long-running "What you crave" campaign.
Fast-feeders also tried this year to outdo each other with aggressive discounting. Burger King wowed the burger industry this summer by offering its signature Whopper at a "Two for $2" deal, which boosted sales to the disadvantage of other chains.
"We felt it at Hardee's but not at Carl's," says Bob Wiseley, exec VP-marketing, CKE Enterprises, parent company of both Hardee's and Carl's Jr. Carl's tighter focus on juicy, dripping burgers insulates it from such promos by competitors. Hardee'sis more broad-based. Despite soft sales, neither chain is planning to engage in the price wars because of the addictive circle discounting creates, says Mr. Wiseley. The discounters "can't get off the dope, so you get the price promotion of the week," he says, noting price promotions cut into margins despite temporary share gains.
McDonald's reply to Burger King was to wage its own price attack, most notably through regional co-ops which offered burgers as low as 29 cents. Wendy's and Jack in the Box came out with 99-cent menus.
The low-price offer is one-half of an uptrade tactic many chains are now using. Customers "come in for a 99-cent burger, then upgrade to a [premium priced] Big Xtra," says Steve Morris, a McDonald's operator in Aurora, Colo., with six restaurants.
Burger King began offering a special campaign for Western region customers called "See the West for $1 a day" to promote its 99-cent offers. BK's recent hiring of San Francisco agency Ordione, Wilde, Narraway & Partners for the regional project "speaks volumes," says Jack in the Box's Mr. Joumas. To him, the action showed the importance of the market to BK which obviously felt a local agency's feel for the nuances of the market better served it under those circumstances than its national agency.
Chains also are tapping into local flavor preferences. Jack in the Box launched a Western-style cheeseburger in Texas called the Barbecue Burger that will be rolled out into the entire system next year.
Last month, 550 McDonald's units in Southern California introduced Fiesta Menu, including breakfast burritos and torta sandwiches to cater to Southern Californians' taste for Latin food. McDonald's support of regional tastes was enhanced by decentralization in 1997 that created five divisions comprising 40 regions. Other regions offer such items as buffalo wings and Cajun chicken sandwiches.
A chain's success has more to do with its adherence to a consistent focus on a salient and differentiated brand positioning than whether it has regional or national coverage, saysMr. Wiseley. "It's all about consistency," he says, conceding that such steadiness at the company's Hardee's is yet to be attained.