1.The decision facing Burger King is how to generate revenue out of the appealin
ID: 372905 • Letter: 1
Question
1.The decision facing Burger King is how to generate revenue out of the appealing reputation they have achieved through social media. The company has less advertising budget based on the competitors and its budget is only one fourth of the budget of McDonalds. Hence they tried to improve reputation by creating buzz on social media as they believed good content travels powerfully over the budget size. But they should decide on how to make effective utilization of this gained customer attention to revenue.
2. The main factors in understanding this decision situation is that the advertising budget of the company is low and Burger King is going to continue to be limited by its smaller promotion budget. Hence the decision should be made for a limited budget. Another factor is that the decision should focus on increasing revenue utilizing the company reputation. The company has increased its reputation by using social media and role of social media is an important factor while understanding the current situation. Another factor is the belief of Burger King that good content travels powerfully. They used social media to promote them through spreading good image on its efforts to help poor. This promotional strategy involves public relations where they tried to make a favorable presentation of their image through social media.
3. Burger King may adopt promotional strategies including advertising in the media, personal selling, sales promotion, public relations, or digital marketing. Advertising involves promotion of Burger King through an identified sponsor and it can be through television, newspaper, brochures and catalogues etc. Personal selling process can be adopted where the sales person persuade the customer through oral representation. It can adopt sales promotion also through contests, giving product samples and its presence in exhibitions. Another important alternative is direct marketing by playing ads online, email communication, sending messages and through consumer websites.
4. I would recommend the promotional strategies through sales promotion, direct marketing with public relations for promoting the Burger King products. I do not recommend advertising on media since it will increase the cost and personal selling does not required for a reputed company like Burger King.
5. To implement sales promotion, Burger King can ensure their presence at major events and exhibitions where more customers are likely to buy the product. They can also provide free samples to target customer so that once they understand the benefits they continue buying the product. Direct marketing can be adopted utilizing the internet for sending emails to customer, utilizing the consumer websites to compare its features and benefits with its competitors and they can also send messages to the customers whenever sale of a new product or any offers starts. Customers are more likely to make use of the opportunities to avail discounted benefits which increase the sale. Public relations are already practiced through social media and Burger King can utilize the new papers and television also for public relations by making a favorable presentation of its image which attracts more customers. They can also adopt strategies like environment protection through eliminating plastic usage for improving their opportunities through public relations.
Explanation / Answer
Marketing in Action Case:
Just because you’re the biggest contender doesn’t mean you’ll win every fight. Burger King as the “little guy” compared to market leader McDonald’s has established an appealing reputation through social media marketing.
In 1954, James McLamore and David Edgerton founded the Burger King Corporation in Miami, Florida. From its beginnings, the burger chain followed a simple concept of providing “reasonably-priced, broiled burgers served quickly.” After early challenges, the entrepreneurs were able to expand their five-store chain into a national success story of more than 250 locations making it the third-largest fast-food company in the U.S. This achievement brought the company to the attention of Pillsbury, who in 19647 purchased the company. In all, the company has changed ownership five times. In 2014, in a $12.5 billion deal, Burger King merged with Tim Hortons, a Canadian-based donut coffee chain, to form Restaurant Brands International.
Burger King has an advertising budget only one-fourth the size of McDonald’s. As a result, BK has followed the advice of Allen Adamso, of branding firm Landor Associates, who believes that social media can minimize the advantage of size. Adamso says, “Good content travels so powerfully that every year the playing field gets more level.” And that’s exactly what Burger King has done.
As you read in the vignette of Sara Bamossy at The Pitch Agency at the beginning of Chapter 13, there was a surprise for the record 4.4 million pay-per-view audience for the Floyd Mayweather-Manny Pacquiao fight in 2015. Entering with the Mayweather entourage was the King, the Burger King chain’s robed mascot. The millions of people who viewed the fight (and the King) turned to social media and created a huge buzz on Twitter and Facebook. The $1 million that Burger King paid for the stunt was minuscule compared to what the company would have had to spend for a 30 second Super Bowl ad and much more effective in terms of publicity. The King’s busy schedule was not complete. He was seen at the Belmont Stakes horse race with the famous racing trainer Bob Baffert. Bob’s horse, American Pharoah, became the first Triple Crown winner in almost 40 years. The appearance fee was $200,000 and once again put Burger King in the spotlight of pop culture.
Recently, Burger King gained the attention of the media by asking its rival McDonald’s to join together to make a McWhopper in support of World Peace Day. The new hamburger would consist of six ingredients from each burger and be sold exclusively for one day at a pop-up shop in Atlanta. Proceeds would go to charity and the thteme of the event would have been: “What does peace taste like?” Television outlets focused on the proposal and the story went viral on social media. However the offer was not warmly received by McDonald’s and the event never took place. Nevertheless, the McWhopper buzz generated $182 million in earned media exposure and 8.9 billion media impressions for Burger King.
Although gaining customer’s attention is vital to brand success, the success can be fleeting. Burger King will continue to be limited by its smaller promotion budget. Competition for customer’s thoughts in the world of social media is fierce. And there’s no guarantee of buzz turning into revenue growth.
Questions:
1.) What is the decision facing Burger King?
2.) What factors are important in understanding this decision situation?
3.) What are the alternatives?
4.) What decisions do you recommend?
5.) What are some ways to implement your recommendation?
This is for a Marketing Class.
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