Burger King - Case
Discussion
Presented by,
Parul ,Mandal, Monika, Kharthik, Sheryn and Lakshmi.
1
History of Burger King
Pillsbury
2010
1953
1967
1989 &
1954 2002 2014
Grand Met
Birth of Burger and TPG
King Capital
3G Capital & Schwartz
• In 2018 : Acquired Popeye’s Louisianas Kitchen
2
Products and Price
PRODUCTS :
Chicken & Fish Customized(Have
Burgers Sides Salads Beverages Dessert & Sweets Others Fails
alternatives it your way)
•whooper •Sandwiches •Fries •Morning star •Sodas •Dutch apple pie •Value meals & •Options: •Satisfries
•BK chicken •Nuggets veggie salad •Smoothies •Oreo shakes kids meals •Onion rings •BK Halloween
tenders •Onion rings •Chicken Caesar •Ice teas •Caramel sundae •$1 cheese •Fries Whooper
•Hash browns salad •Juices burger •Cheese •BK Dinner
•Coffee •Premium burger •Bacon Baskets
•Frappe •Slushy drinks for •Mayonnaise •BK enormous
$1 omlette
•Lettuce
sandwich
•pickle
PRICE :
Market Oriented Pricing strategy Bundle Pricing Strategy
• Prevailing Market condition • Value meals and kids
meals at affordable
• Supply demand condition
price
• Pricing of competitive firms
3
Burger King
Intensive
Generic strategy – Strategy – Global
Competitive advantage Growth
Product • New unique
Cost leadership differentiation product at slow
rate
• Products
• Standardization of • Grilling of Patties remain on
process • Offering flexible menu for years
• Economies of scale product options to • New unique
• Error prevention the customers products
• Free drink refill at
many BK stores
In Revenues, BK stands 2nd globally. In India, BK was concerned about Indian food habits & it’s prices, as Indian consumers are Price
sensitive and Vegetarians consists of 75%. Hence in India the menu has food chain serving Indian flavors and bundle meals. 4
Why Place is Important?
• To maximize sales.
• To reach out to customers.
• Be accessible to potential customers.
5
Distribution
• 1992: Distributors used to purchase the product independently
• Early 1990’s: Creation of Restaurant Service Inc (RSI), an independent
supply chain management
• 2015: Identifying potential new distributors and also minimizing
logistic and distribution cost
6
Design and Layout
• Initially small interior for dining, uncomfortable seating arrangements
and no proper lights
• 2009: 20/20 plan for remodeling the interior featuring rotating red
flame chandeliers, TV screen menus etc. with an expected cost of
300,000 – 600,000 per restaurant.
• 2013: Under Schwartz Watch, modern seating and improved lighting
was featured with a most cost effective plan of about 300,000 per
restaurant which resulted in sales increase of 10-15%
7
Store Location
2015: Almost 50% of BK’s
Operated in United States
Rest 50 % in 85 different
Countries
Reference:
https://en.wikipedia.org/wiki/List_of_countries_with_Burger_King_franchises#/media/File:Burger_King_world_map.png
8
What Is Promotion
Communication between buyer and seller where seller tries to
convince buyer to buy product or services
Types of Promotion
Advertising Direct Marketing Sales Promotion
Personal Selling Public Relation
9
Promotion
• 1959 : They started with Television ads
• 1970 - 2002 : some successful slogans “Have it your way” , “where’s herb”
• 2008 -2012 : unsuccessful TV ads offending mental health patients,
nutriotionalist, Mexicans, Hindus etc.
• 2013 : Under Schwartz watch, many celebrities were involved for the TV
ads like Beckham, Mary J. Blinge, Jay Leno which also created some
controversies.
10
Emerging trends and Challenges in the Fast-Food Industry
Growth:
• $6 billion in 1970 to $160 billion in 2014 (8.6% AGR)
• In 2015- 100+ Countries, 2,00,000 locations
Challenges Faced:
• Quality of Food- Unhealthy – Book Fast Food Nation and Documentary Super Size me backed in 2010
• Ricing Commodity prices- livestock,wheat,corn
• Market Saturation
• Fast-Casual Chains – Example Five Guys – In 2014 Outgrown fast food industry (10.5% and 6.1%)- Promised
Fresh foods-Offered greater customization and flexibility- Superior Pricing- Average Transaction cost was 40%
higher than fast food chains- Unique outlets.
Solutions followed:
• Healthier food choices and transparent disclosure
• Public awareness campaigns
• New Product offerings-Coffee,Lattes,Smoothies
11
What could Fast Food Industries
can come with up to counteract Reference: Fallen Arches: Can McDonald’s get its mojo back? By Beth Kowitt
the fall? November 12, 2014 https://fortune.com/2014/11/12/can-mcdonalds-get-its-mojo-back/
• Customer awareness about the
products
• New health friendly products
• Economical products
• Gift vouchers and loyalty
programmes
12
Competition
McDonald’s
• In 2015, McDonald’s was the largest food chain with ~36,000 locations in 118 countries.
• Global sales in 2013 was $89.13 billion. 400% more than the second placed Burger King.
• Product mix – upward stretching at competitive prices helped them lead the pack and sustain it.
• Regional adaptation - for example, removed beef based products in India, added Beetroot
burgers in New Zealand
• Store redesign – introduced McCafe, to attract the more affluent customers – new interiors.
• Completely outsourced supply chain – Vested Business Model.
• KPI (Key Point Indicator) – ‘No item may ever be out of stock’.
• Targeted the lower age group using iconic mascot, Ronald McDonald.
• “I’m lovin’ it” and “What we’re made of”.
13
Wendy’s
• Founded by Dave Thomas.
• In 2015, was the third largest fast-food chain with 85% of the restaurants franchised.
• ~500 locations in 30 countries.
• Never had a signature sandwich.
• Value menu - 4 for $4 bundle deal. In the deal, customers pick from one of eight entrees and
pair it with nuggets, a small fry and a drink for $4.
• Focused on high quality of products and competitive pricing.
• Breakfast menu closed - breakfast market is too competitive and costly – low margins.
• Store redesigns.
• Quality Supply Chain Co-op (QSCC) handled Wendy’s distribution in N.America.
• Following the extremely popular “Where’s the beef”, the advertisements focused on Dave
Thomas in 2002.
14
Sonic
• Had a flawed drive-in model.
• Had outlets only in the United States.
• In 2011, rolled out Sonic beach – outdoor seating and TVs but no drive-in.
• Offered new selections including beer and wine.
• First aired television advertisements in 1977.
• Aired an ad campaign in states where Sonic were yet to have a presence.
15
Fast food rivals
JACKS’S
• 1941, 2015 – 2200, Ethnic choices, Jack’s back campaign in 1995
KFC
• 1930, 2015 – 18000, Signature product, Burgers and wraps alter to satisfy local tastes.
TACO BELL
• 1946, 2015 – 6500, International markets India, Japan and Cyprus. Tex-mex food competitive pricing, 11 @ $1
PANERA BREAD
• 1981, 2015 – 1800, Best salad, best facilities, “Food as it should be”, health conscious
FIVEGUYS
• 1986, 2015 – 1000 + 27, Hamburger and Sandwich, only French fries, celebrity visits
CHIPOTLE
• 1993, 2015 – 1700, McDonalds 1998-2006, UK, France Germany, Beer and Margaritas, Cultivate food and music festival
References
https://www.supplychainmovement.com/mcdonalds-wants-to-be-assured-of-delivery/
https://www.supplychain247.com/article/mcdonalds_secret_sauce_for_supply_chain_success
https://www.c3presents.com/events/cultivate/
https://www.jackintheboxinc.com/franchising/why-jack-in-the-box/marketing-and-menu-strategies
http://www.burgervoice.com/president-obama-visits-five-guys-for-a-cheeseburger/
18
