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Have It Your Way:

Most of us have seen the ads by now. A group of young office workers, sort of a cross between yuppies and slackers, stand around while a co-worker hands out their lunches from a big Burger King bag. They compete to see who can come up with the most outlandish and innovative sandwich, try out new catch phrases (will someone please scrub “I’m spicy!” from my memory?), and, in general, enjoy tasty BK snacks and chat each other up. The ads have eighteen to twenty-four-year-olds written all over them. And, they’re funny.

Russ Klein, Burger King’s chief marketing officer, spoke at Harvard Business School on April 26th at a talk sponsored by the HBS Marketing Club. Klein is President, Burger King Brands, Inc. & Executive Vice President, Chief Global Marketing Officer, Burger King Corporation. In this position, he oversees consumer insight and strategic branding; product research and development; product and field marketing; and all advertising and media responsibilities. Klein reports directly to Brad Blum, Chief Executive Officer, Burger King Corporation.

He arrived wearing the standard black suit and white shirt, but when an audience member asked him about his colorful tie, he showed her that it was covered with foxes. Looking slightly vulpine himself with sharp features and sandy hair, he began his talk by showing a slide. It said, simply, “When they know you more than love you.”

“It’s kind of a provocative term,” Klein said and explained that while nearly everyone knows what Burger King is, sales over the past decade indicate that they are not feeling the love. His goal as CMO is to get consumers to not know Burger King-at least, not the way they know it now. “Knowledge, in my view, is something you’re always looking to shatter,” he said. He wants to infuse the BK brand with some mystique, and that includes product innovation as well as the “restaurant experience.”

Integral to the rebranding process are four principles that “most branding experts would agree make up a brand,” said Klein.

o Relevance. How the brand fits into the consumer’s life.
o Differentiation. The brand’s point of difference.
o Esteem. How well the brand is regarded.
o Knowledge. An intimate consumer understanding of the brand.

“Just one of them is not enough,” he added.
Burger King has had many brand strategies in the past decade, and as many advertising agencies as it has CEOs, yet never found the right mix of products and message. For instance, BK tried to pay heed to obesity concerns, chasing after health-conscious consumers by offering salads and chicken baguette sandwiches, yet experienced no up-tick in sales.

However, their sales hit a spike when the $1.99 Whopper was offered (for a limited time). And then, when McDonalds and Wendy’s climbed out of their sales slumps with hamburgers and fried chicken, they finally realized that people are probably not stopping at Burger King to buy health food.
Over the last six years Burger King has been in “constant decline” said Klein. What is his strategy for BK’s comeback? “Burger King is in the middle of a broad-gauge turnaround,” he said. The company will reset its sights on core customers and core menu items. This means that not only will the advertising and packaging change, but also operations will need to step lively to keep pace with increasingly customized orders.

The crux of the whole new branding campaign is the reintroduction of the sticky 1974 slogan, “Have It Your Way.” The made-to-order specter has the guys and gals behind the grills a little jumpy, to say the least. They worry that it will affect speed of service and order accuracy. But it’s not quite the issue you’d think, said Klein. “Half of all sandwiches ordered are customized anyway,” he said. Sara Cherlin (ND) was pleased to hear the changes and remarked “I’m really glad to hear that fast food is getting back to its core – not trying to mess around with the all of the health food trends. Burger King was trying to be all things to all people, and I think their new marketing strategy will be much more successful – getting to their target audience.”

Selling customization to consumers is a driving point in Klein’s campaign. He wants BK customers to realize the value of customization and said that getting what one wants is “a powerful motivator across generations.” He’s seen a trend in a “huge exercising of empowerment,” and listed customized running shoes and Starbuck’s personalized drinks as examples.

Burger King’s latest advertising agency, Crispin Porter + Bogusky, discovered that “the market place is increasingly cynical and detached,” said Klein. So they have embarked on a ground-up branding campaign. They are going to get personal with the customer.

Come August, all packaging, design, and policies will reflect the “Have It Your Way” ethos, including the “No Make Fun Policy,” whereby customers will not be derided or laughed at by BK staff, no matter how weird or finicky their order.

Aside from going after customer “sweet spots,” and changing CEOs more frequently than Ross and Rachel break up and reunite, Burger King has been going through some pretty primal changes. For the first time in thirty years, BK is a privately owned company. This change in ownership status is “nothing but a good thing,” said Klein. It was essentially a leveraged buy-out, purchased at five times BK’s cash flow.

In addition to its consulting role, Bain and Co. is a major owner. A one-two punch that should put BK on the fast track to a turnaround. “We’re still finding our sea legs,” Klein said.

So, let’s tick off Burger King’s changes in the last year or so: 1) new ownership status, 2) operations gearing up for made-to-order demands, 3) reconceptualized brand, 4) fresh marketing campaign. That’s a lot for Russ Klein to contend with in his first eleven months on the job. Is he crazy to take on so much? Maybe. Crazy like a fox.

Overall, students were excited with the new strategies and Tarim Wasim commented, “Russ was very good at articulating the strategy and seemed to have a good handle on not just marketing, but the impact on all aspects of the company. Let’s see how these guys do!”

May 10, 2004
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