Rare Move Within Fast-Food Chain Creates Two Teams

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CHICAGO (AdAge.com) -- Wendy's International promoted two executives to senior vice president in a rare realignment of its marketing department.

In their new positions, Robert Levite will lead the brand, creative and media teams, and Mary Ann Pilotte will head the marketing analysis, research and field marketing teams.

"These changes allow us to better leverage our media, message and creative marketing disciplines," said Don Calhoon, executive vice president of marketing for the Dublin, Ohio-based fast-food chain. Both executives will report to Mr. Calhoon.

Mr. Wendy's
Mr. Levitte also will oversee national and local media, in addition to creative strategy and execution of national and local campaigns. He led the team that created the current "Mr. Wendy's" effort, in which a man, claiming to work for the chain "unofficially," tries to persuade people he sees to eat at Wendy's. Mr. Levite joined Wendy's in July 2000 after 11 years leading Wendy's advertising account at former agency Bates Worldwide.

Ms. Pilotte joined Wendy's in 1984. As vice president of brand and consumer insights, she most recently led a massive internal consumer trends review and brand equity study that established the marketer's strategic platform for its menu strategy. She has held a variety of marketing posts including in sales promotion, field marketing and as marketing director of Wendy's Restaurants of Canada.

"We like to stay in front from a leadership standpoint," Mr. Calhoon told AdAge.com, who acknowledged the move surprised many internally.

Tightening the relationship
"We've tightened the relationship between the worlds of media, message and creative." He said the new marketing structure would improve day-to-day communications and enhance the teams' integration, particularly for the ongoing TV upfront, when broadcast and cable networks try to sell up to 80% of their inventory of ad space to marketers.

Wendy's spent $297.5 million in measured media last year, according to TNS Media Intelligence/CMR.

"We have a razor-sharp media agenda as we enter the upfront, but I want it better and this relationship and reporting structure will get us there. I'm just never satisfied and we can't be satisfied, regardless of how well we do and we have to have it better and these kind of things will get us there."

He said the realignment also would enhance Wendy's field marketing organization, responsible for about $100 million in advertising spending.

The franchise system
"The most successful organizations in our business are those that help the franchise system invest their dollars against the right issues, the right messages and right media targets," Mr. Calhoon said. "When that is done correctly and successfully, it enhances the concept of media message and creative. As good as we are today -- and we are good, I would put our franchise system up against anyone in terms of their collective input and ability to execute anything we ask -- but all of those things can be enhanced as we go down the road."

Same-store sales at the No. 3 burger chain in May grew 6.7% at company-owned stores and 4.5% at franchised units. In April, the chain posted gains of 8.4% at company-owned stores and 6.6% at franchised units. Those results follow first-quarter gains of 9.1% at company stores and 7.6% at franchised stores.

Although Wendy's systemwide sales at $7.35 billion are still about one-third of share leader McDonald's, during 2003, Wendy's came within a half share point behind Burger King Corp., which lost eight-tenths of a share point after sales fell nearly $400 million to $7.9 million.

Sales gains for top three
All three chains posted sales gains during the first quarter, with Burger King reporting positive same-store sales for the past four months after years of decline. McDonald's Corp. has continued to surprise the category with low double-digit gains, although most analysts expect the category as a whole to see momentum begin to decline.

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