Is there a flaw in Burger King’s promotion strategy?

by Nigel Hollis | February 10, 2020

I really wonder about the long-term effectiveness of Burger King’s promotions, including the famous Whopper Detour promotion. I don’t care that Detour won the Titanium Grand Prix at Cannes, I cannot help but feel that this sort of marketing is a recipe for weakness, not strength.

Don’t get me wrong, the Whopper Detour, which offered Burger King’s best-known burger for a cent if the customer ordered food on the BK app within 600 feet of a McDonald’s, is a great example of brand activation. It is clever, it’s buzzy, and there is little doubt it works at getting people into Burger King’s stores. 1.5 million people downloaded the app for a start (a minimum acquisition cost per person of roughly $4 if they followed through on the promotion).

What worries me is that Detour is one more promotion that trolls McDonald’s by giving away cheap burgers. That strategy only works in the long-term if people come back to buy more burgers at full price, and I’m guessing the promotion appealed to existing users or people who love the idea of getting something for nothing. Will the latter really come back to Burger King when its meals are not on deal?

tasty-burger646x366

Leading on from my previous point, I really wonder how effectively these promotions are at extending Burger King’s customer footprint. Could these promotions be targeting the same people all the time, not unlike previous campaigns that only targeted meat lovers? The biggest challenge that faces brands that want to grow is to expand their footprint beyond existing customers, because nine times out of 10 growth comes from increasing penetration. When penetration increases, frequency of purchase usually follows, and very few brands manage to grow based on improving frequency of purchase without a penetration gain.

Last, but not least, what long-term brand associations are these promotions building among potential Burger King buyers? I would love to test the difference in implicit associations between McDonald’s and Burger King. Might one be ‘good value’ and the other simply ‘cheap’? What might this do to Burger King’s ability to sustain a realistic price point for its meals? What might it mean for kids who grow up only knowing that Burger King is the place that gives away its signature food item for a cent? Of course, an association with cheap food will always drive volume, but will it drive profits?

I have no doubt that Burger King has improved its performance compared to a decade ago, the question is, how much of that improvement came from the fundamental business improvements and how much from marketing? You can only slash overhead, streamline food preparation and sell off company-owned stores to franchisees once. You can only mimic the leading brand’s product portfolio once. After that, you have to get back into the real growth game: bringing in more customers willing to pay a profitable price for your food.

Many reading this post will be thinking that I am wrong to have doubts about the efficacy of the Whopper Detour and similar promotions. However, from what I can find out online, the average McDonald’s store realises twice the sales of a Burger King, and a recent comparison of the two brands in The Motley Fool finds McDonald’s still outgrew Burger King based on comparable store sales. So, is Burger King really doing so well? I believe that to be truly successful marketing activities must build sales now and for the future, I can see that promotions like the Whopper Detour do the former, I am just not so sure about the latter. I may well be wrong, but what do you think? Please share your thoughts.

2 comments

Leave a comment
  1. Nigel, February 25, 2020

    Hi Neil, obviously I do not have access to the detailed analysis but the emphasis  on loyalty feels a little over-stated to me. There is no doubt that higher penetration brings significant structural advantages that lead to higher repeat rates.

    A more separate analysis (from Europanel which is a joint venture between Kantar Worldpanel and GFK) found that 9 out of 10 brands which grew market share by more than 0.5% points did so by growing penetration. 6 out of 10 grew both penetration and repeat. 1 in 10 grew only repeat purchase. However, the really interesting thing is that the bigger the brand the more it relies on increasing repeat rate and gaining more than its fair share of category entrants. To me this suggests that growing penetration is a good strategy for most brands but that they cannot take it for granted that loyalty will follow, nor will the same strategy benefit different brands equally.

    And if that sounds like I am hedging my bets, I am! Empirical generalizations are just that, generalizations, and brands need to be specific when it comes to their growth strategy.

  2. Neil Hopkins, February 19, 2020

    Seth Godin regularly talks about the race to the bottom, and at first glance, this from BK seems to be part of that move.

    However, I think that it fits into their general narrative of trolling McDonalds, using any form of media grabbing attention to do it.  Are they playing a direct growth game, or a much longer "sniper" war to chip away at the incumbent over time.  After all, it's not like we're seeing McDonald's reacting in interesting or novel ways.

    I also wanted to query the "growth comes from increasing penetration" statement.  There's new research out which challenges Byron Sharp's findings - https://www.warc.com/NewsAndOpinion/News/37350?. Or do you feel that this doesn't necessarily apply in the fast food market as a person can, realistically, only eat so much product a day?

    Leave a comment

    Share