One of the first things taught in GCSE business class is the marketing mix, also known as the Four P’s; Price, Place, Product and Promotion. It is a valuable lesson that has stood the test of time, but the 4P’s seem to have fallen out of favour. This article will look at the importance of getting the balance right and how the imbalance is affecting Burger King's sales. More importantly, how you can apply this thinking to your business, especially if your advertising is not delivering the expected sales levels.

The Four P’s are so interlinked that when one is misaligned, the others become irrelevant. For example, you have developed the best product, you're selling it at a fair price on Amazon, but you don't promote it. The chances are the product won't be found, and you will have zero sales.

Likewise, trying to sell a new Lamborghini on Amazon may prove difficult. Even with a solid promotional campaign, extended warranties, and a fantastic price, it will create a disconnect in consumers’ minds; they don’t expect to purchase the product on that platform.

You are required to either sell a different product on Amazon or sell your Lamborghini somewhere else.

Alternatively, selling a product at the wrong price can mitigate the effectiveness of the other Ps. For example, selling the Lamborghini at £500 would seem too low or too good to be true. Also, if you tried to sell it for £1bn, it would be overpriced compared to other cars or dealers.

So why Burger King? They have created numerous award-winning campaigns, but they have declining sales. The lessons can easily be applied to businesses of all sizes and across almost all industries. When they address their key issues, they will turn their weakness into strengths and perhaps a sustainable competitive advantage.

Burger King Wins on Advertising but loses sales.

Burger King's award-winning adverts receive criticism from academics and professionals alike. The critics claim that Burger King has missed the mark, they create the wrong impression for the consumer, and that sales have declined compared to their key competitors.

Burger King has never been the global market leader and has battled with Wendy’s in the USA for several years. Like every other industry, there have been winners and losers during the pandemic. Starbucks and Subway were the two biggest losers, whereas Chick-a-Fill, Dominos, Sonic and Popeyes were the winners. Perhaps worryingly for Burger Kings is that Wendys has surpassed them, and sales have been stagnant at McDonald's. Demonstrating the issues at Burger King are not due solely to COVID and that other companies have been able to buck the trend.

Why Wendys is successful

They have been more successful on Twitch with Fortnite, implemented excellent customer loyalty programmes, and also raided Dominos of their CIO [1]

Burger King is following historically beneficial habits.

There is significant evidence that a firm should continue to advertise their business during a downturn; unfortunately (from a learning perspective), the lessons are specific towards financial downturns and not pandemics. It is perhaps inconvenient for the sales figures to note that Burger King has continued to advertise and has won numerous awards over the last few years. They have been successful in both their advertising campaigns and social media.

Winning Awards  - Cannes Lions

Under the guidance of Fernando Machado, Burger King has won numerous Cannes Lions. Many marketers will decry that awards such as these are irrelevant and perhaps even vanity; however, they are awards given based on the campaign and its results. Naturally, awards do not increase the top or bottom line, but they are a solid testimony of effectiveness usually based on a Return on Investment (ROI) Calculation or similar.

Here is a selection of award-winning campaigns from Burger King:

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1. Mouldy Whopper. (Link)

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2. Whopper Detour (Link)

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3. Stevenage Challenge (LINK)

There is a strong argument that the mouldy burger will leave a nasty taste in the consumers' minds and mouths. However, given the negativity that McDonald's everlasting food was receiving at the time, it was an effective way to gain publicity for the brand and perhaps achieved some of Burger King's long term goals.

Winning Social Media Wars

The social media team at Burger King have often had humorous Twitter posts and significant amounts of User Generated Content, which have helped to humanise the brand and generate more sales. However, even with the social media success, Wendy’s has had better sales and increased consumer perception.  

They are winning but still losing.

Even though Burger King is producing award-winning campaigns regularly, their sales are still declining.

The Place Problem

For many years Burger King has chosen to either avoid direct physical competition with McDonald's or remove themselves from it, which has been detrimental to their sales [2]. It has also been found that Burger King would increase sales if they were located more conveniently to their consumers .

A concerning observation is that they are closing more stores than ever [3] in a clear strategic choice. They have developed a new “store platform” that generates 33% more revenue, but they have closed all stores where the franchise agreement has ended.

The Price Problem

Part of the reluctance of Burger King to embrace location wars is that their burgers are around 30% more expensive than McDonald’s. Many customers who are hungry without allegiance to the Burger King franchise struggle to move past the price. With that in mind, they either have to engage in a price war as best as they can or relocate to a quieter location to achieve a local monopoly.

The Product Problem

Burger King's sales are down almost 5%, but not for the Whopper; its sales are up 7% over competitors. Having a flagship product that is promoted well can carry the rest of the brand sales. However, the Whopper hasn't been able to do so, and it may even be cannibalising its sales.

Can one product carry an entire company?

Solving the Problems  - The Long Game

Perhaps Burger King is playing the long game; they know that they have not competed with McDonald's or Wendy’s regarding locations and have been working on a business model change to surprise both in due time.  

Strategy

"Many people may look from the outside and feel that we are just doing crazy stuff or cool stuff. But the reality is there is a method and a strategy behind the madness, Moldy Whopper was the cherry on the cake. It crowned a strategy around improving the quality of our food - that was just how we communicated it. We had been working for years to get to that point." Machado [4]

Aligning Business, Marketing and Marketing Communications Objectives

We understand the cherry, but what is the overall strategy according to the APG

"Business objective:

Stop the steady decline and increase year on year sales.

Marketing objective:

Get more category buyers to choose Burger King.

Get those buyers to go more frequently.

Communication’s objective:

Launch a new Burger King brand positioning that drives relevancy and consideration amongst younger fast-food fans.

Long or short term

In the short term, the campaigns have gained publicity and have increased their share of voice". [5]

Burger Kings Advertisements Achievements

The campaigns not only won numerous awards they also helped Burger King achieve some of its business goals. Each campaign listed below had its own set of achievements:

The Whopper Detour

The ROMI of 96%, meaning for every £1 Burger King spent on the Whopper campaign, had a return of £1.96.

The Mouldy Burger

Consumer Sentiment is 88% positive/neutral vs 12% negative, and YouTube likes to dislikes are 9:1. It changed perception and improved the perceived quality of the burger's ingredients.

The Stevenage Challenge

They have targeted Fifa users, the younger crowd, achieving their marketing communications goal.

What is next for Burger King?

Burger King has bought Dominos in Brazil; they have also hired former Dominos executives. In essence, they have purchased some insight into the drivers for growth.

The Location Solution

They can learn numerous lessons from Dominos; ’The delivery in 30 minutes company’ who repositioned themselves as a tech company that delivers food, strives to simplify delivery on their app and utilises dark kitchens. Dominoes offers at least a 40% discount for students in the UK, helping the brand become associated with the memories that the current generation will make. The focus here parallels some of the emotional benefits Coca Cola has achieved.

Moving into dark kitchens will allow the continued perception that they are not competing locally and avoid retaliation from McDonald's or others. Burger King will also operate from lower-cost premises ensuring each franchise has more price discounting capabilities.

The App

Burger King is currently on UberEats, Deliveroo, and Just Eat, whereas Dominoes is not. Dominos doesn't have to compete on these apps and be compared to local competitors. Also, being on these platforms will continue the pricing quandary Burger King faces, and they will be forced to offer perpetual discounts to compete. Moving away from the platforms will give them more pricing freedom and deliver more targeted discounts based on the data they obtain.

Adding the raw sales data to consumers in-app behaviour with external advertising campaigns will give them a more robust platform for analysis.

What we expect to see from BK

1. More of the same high-quality advertising
2. Continued challenger attitude
3. "Dark Franchises", kitchens closer to McDonald's, maybe even with delivery in their car park.
4. A switch to a digital focus, becoming a tech leader in their space.
5. Learn more from their subsidiaries. What can Burger King's fast-growing businesses show them that they have been missing?

What you can do for your business

1. Develop short, medium and long term goals to aid in the development of strategies with appropriate Key Performance Indicators (KPI's).

1. The short term should be each quarter.
2. Medium is 2-5 years.
3. Long term 5-10 years.

2. Align your corporate, marketing, and communications strategies to ensure a) a good fit and b) your team can implement your plan effectively.
3. If you have a long term strategic objective, stay true to it and develop new marketing and communications plans to ensure you are getting closer to it.
4. Develop your voice across and stay consistent on your chosen platforms, social or other.