Integrated Marketing Communication – Comparison of Two Competitors

14 Pages   |   3,696 Words
Table of Contents
Executive Summary. 3
McDonalds’ Background. 4
IMC Strategy of McDonalds. 5
Analysis of McDonalds’ IMC.. 7
Burger King’s Background. 8
Marketing Mix of Burger King. 10
Objectives of New IMC.. 12
Proposal of New IMC Campaign. 13
Conclusion. 13
Bibliography. 13
 

Executive Summary

 
Integrated Marketing Campaign is a key concept in marketing for it spells the difference between successful and unsuccessful organizations. Most effective marketing campaigns are those which combine all communication tools and communication functions into a unified whole which conveys a single message across all touch points of the organization with the external world. The paper compares two competitors – McDonalds and Burger King - and evaluated at their marketing communication campaigns. McDonalds has an effective IMC strategy and while Burger King does not have a convincing IMC strategy. The paper discusses a brief background of both organizations and presents their Marketing mix. Critical analysis of the messages of the two organizations is performed along with their relational or emotional components. Choice of media by the organizations is also evaluated. Recommendations are made for the new Integrated Marketing Strategy for both organizations and proposals are discussed for use of different media and advertising framework.
 

McDonalds’ Background

McDonalds is currently the world's largest chain of fast food restaurants. The brand originated in United States and its history dates back to as far as 1955. The brand was created by Ray Kroc, while he bought the operations from a small hamburger chain operated by two brothers. The business model of the brand is based on the concept of either franchisee or an affiliate, even though a very large number of retail outlets are owned and operated by the corporation itself (Ritzer, 1996). The primary product of McDonalds restaurants are fast food products like hamburgers, cheeseburgers, french fries, breakfast items and soft drinks. The real growth of the food chain came in mid-nineties when the company created the bench-mark of speedy service system associated with a fast-food retail outlet.
The second spurt of growth in the restaurant came with the introduction of the Drive-In Restaurant Services. These services are still popular in contemporary times and were the result of innovative speedy operative procedures of the chain. Since 1961 the log of the restaurant and its promising feature is the overlapping double arched ‘M’ symbol logo. McDonalds has penetration around the globe and has become of symbol of modern era of globalization and is frequently as the example of American way of life (Pinnino, 2006). Through different stages in the company’s history, there have been controversies about the association of the retail chain with trends in obesity and declining public health situation.
 

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IMC Strategy of McDonalds

The integrated marketing communication tools at McDonalds are the outcome of the coordination and integration of all marketing communications tools and functions at the organization. The key aspect of the marketing at McDonalds has been introduction of sub-brands in the consumer markets along with uniform message which is delivered the across all the communication media of the organization (Watson, 2000). It has been noted by several business analysts that McDonalds has crafted profitable relationships with its global customers by very strategically controlling all messages which are sent out about the organization. They are referring to all business-to-business communication of McDonalds, communication through marketing channels like advertisements and public relations and communication by external people. There is unification in all communications of the organization. For instance, one of the earliest successes of the McDonalds was creating of a sub-brand termed as the Happy Meal (Hofheinz, 1990). This brand wasn’t developed out of co-incidence; rather it was the outcome of the extensive research conducted by the organization to find out the key decisions makers in selection of a retail outlet. Interestingly, it was realized that children were the single strongest influencer in the above mentioned decision making process. Hence, a widespread communication about the Happy Meal brand was initiated along with
By the late 1970s, McDonalds’s was looking for new ways to attract customers. Research indicated that children were strong influencers in the restaurant decision-making process. This lead to creation of a mass unified communication about McDonalds as a fun place featuring a play area for kids and a free toy with every meal. The most important aspect was that there was no confused positioning about the brand. McDonalds wasn’t marketed as a fun-place in one form of advertisement and an appetizing dining place in others (Love, 1986). Rather, there was uniformity in the message which was put across to the customers from all communication media. McDonalds was not afraid of losing adult customers of their brand if they focus all their communication on children. In fact, McDonalds has done an extensive analysis of the likely financial impact of its decision (Miller, 1995). The organization has strategized that it would either break-even or lose money on the Happy Meal in order to make money on the two adult meals it would gain in the process. Needless to say, that the Happy Meal marketing strategy turned out to be highly successful.
Another significant instance of the application of integrated marketing concept was the marketing communication plan of the organization during the recent financial recession. During the high era of unemployment in the Nov 2007 era, most of the fast food retailers were reducing the number of retail stores (Ohnuki-Tierney, 1997). McDonalds reasoned that people need a tasty escape from the everyday tense life and ventured into an advertising campaign involving Television spots, print ads, radio spots, and outdoor ads and spending on online medium. The cohesive marketing campaign tended to strengthen the competitive positing of McDonalds brand at the time when other major competitors like Burger King were losing ground. The only forms of communication which were found not to comply to the integrated marketing communication were the Facebook dialogue with the customers, which wasn’t in-line with the major marketing campaign of the organization (Server, 1994). In fact, of the $ 100 million campaign, the least impactful and non-congruous advertising message was the one related to social media. The official facebook group of the company lacked the connection to McCafe, which was a major element of the respective campaign.
During mid-eighties McDonalds made the strategic decision to adopt a new health-conscious sub-image which would be consistent with the latest trend of health awareness and the growing concern in obesity among children and adult alike (Yan, 1997). Even thought the strategic move was quite slow, since considerable bad publicity had already been done about McDonalds’ brand. Despite being late to catch the trend, the company didn’t act hasty to launch its health conscious image desperately. Instead the company created a three-sixty degree communication plan with the objective that the organization’s mission and vision is being highlighted in every advertisement or promotion. Each one of the above examples exhibit, that the integrated marketing communication of McDonalds has been highly successful. IMC targeted the preferred group of consumers in all each one of the above instances.

Analysis of McDonalds’ IMC

The above examples also show that McDonalds uses all three tools of Integrated Marketing Communication: advertising tools and promotional tools. Advertising tools of McDonalds used advertising design and exceptional framework in such a way that advertising media selection and message strategy reinforce a single image of the brand. Proposal tools adopted by the organizational always supported the campaign objectives by giving incentives to franchise owners to push certain products (You et al.’s, 2005). These tools were the right ones for the company since they seek to strengthen the brand identity of a well-diversified brand like McDonalds. Integrate tool does not directly have a relevance to the organization and, consequently wasn’t used by the organization.
The above analysis of IMC strategy also showed that the company put to use all forms of media ranging from traditional media to online media and from radio to social media campaigns were put to use. All forms of advertising communications are a combination of emotional and rational continuum (Kaufman et al.’s, 1994). Since, McDonalds is a mass-market brand appealing to all-income groups, the choice of media is highly appropriate. Such, brands need to be ubiquitous since they need to reach a very wide of audience segment each with their unique set habits and lifestyles.
Majority of the messages sent by McDonalds have been towards rational side of continuum rather than emotional. For example, the campaign about adoption of health consciousness in meal preparation at McDonalds and the communication about kids’ attractions at McDonalds were more of rational campaigns instead of emotional. These messages appealed to cognitive component of human brain.

Burger King’s Background

Burger King is a global chain of restaurants which originated in US state, Florida. The origin of the company dates back to an era close to McDonalds, the year 1953.  Interestingly, the idea of Burger King was inspired by the early success of McDonalds itself, and the two companies still stand today as rivals brands. The company history is similar to its rival McDonalds quite remarkably. The brand name Burger King was initiated by two businessmen - David Edgerton and James McLamore. The ownership of Burger King, however, changed hands several times in its history (Preble, 1992). The retail outlets of Burger King operate in more than seventy three countries of the world, with around two-thirds of them within United States, while the other ones are distributed throughout the world. The key mode of growth for Burger King chains have been franchising of the brand name with the objective to expand its operations. The operating conditions of the franchises are not uniform across the globe, rather the legal terms depends on the region and the size of the franchisee (Agrawal et al.’s, 1995). Some of the regional franchises are even known as master franchises; that is this function to sell franchise sub-licenses on behalf of Burger King. These aspects of the company’s operational history are important since they will play a key role in the discussion regarding marketing communication of Burger King. Even more so, when the relationship of Burger King has not always been harmonious with their franchisees and that tended to hurt the brand equity of the firm in the market. The court settlements of the franchising issues were not viewed favorably by the consumers.
The product offerings of Burger King are also in sharp contrast with McDonalds’s, with the key revenue earning components being burgers, french fries, sodas and milkshakes. The one aspect which particularly standout against McDonalds is that seldom of the products of the company were both international and local success. Rather many of the failures in the US were highly successful in foreign markets. This is owing to the fact that Burger King has always been more regional focused in creation of its menu as compared to McDonalds. McDonalds had mostly chosen to take its US success abroad, rather than seeking to discover local successes (Agrawal et al’s, 1995). The food of Burger King has also been criticized for being highly unhealthy for the consumers that often carried correspondingly large amounts of unhealthy fats. It is worth a mention that the marketing strategy of Burger King is said to be highly unstable and definitely less successful. In the global financial crisis era of 2007-10, the financial prospects of the company deteriorated while they improved for McDonalds during the same period. The most recent shocks in the history of the company is delisting of the company from stock exchange. The company is right now under the process of repairing its business structure.

Marketing Mix of Burger King

The marketing mix of Burger King is quite unique as a whole, even though the product component of the marketing mix is very much similar to McDonalds. The product menu of Burger King originally consisted of hamburgers, french fries, soft drinks, milkshakes, and some forms of desserts. The first expansion to the product offering was the sandwich and then non-beef varieties like chicken and fish based products were added to it. The most important differentiating point of the product component of marketing mix is the localized versions of products which conform to regional tastes. This element of product mix sets the company distinct from its competitors like McDonalds and Subway. It is worth a mention that the company has sought to bring about a significantly high level of product diversification, majority of them failed. For instance, Burger King also introduced dining services at a number of its retail chains which were not perceived well by the target market. Contemporary product offering of Burger King is quite wide for it contains hamburgers, cheeseburgers, fries, salads, hash browns, onion rings, coffee, juice, shakes, cookies and pies. Even though such a wide product mix does act as an attraction for the customers, yet the operational costs of the food retail increases to a very significant degree. Another very key differentiating point of Burger King’s product offering can be highly customized according to tastes and preferences of the client. Options in the make up of burger include options in onion rings, cheese, bacon, mustard, ketchup, mayonnaise, lettuce, tomato, pickles, and onion. Starbuck’s coffee has also been included in the menu even though the penetration of Starbuck’s own retail outlets is extremely high (Agrawal et al.s’, 1995). As regards to placement, Burger King has proved to be one of the hardest pushing brands as well. Apart from its ubiquitous retail network, Burger King entered into a licensing deal with several retailers to create a line of of microwaveable Burger King Brand French fries at select retailers in the United States, including Wal-Mart (Williams, 1999).
In terms of price also, Burger King has been ruthlessly competitive. The chain offered a $1 double cheese burger, which was highly unpopular amongst the franchise owners, and couldn’t be sustained. During summers, Burger King also reduced the price of slushy drinks to $ 1. The promotion mix of the company is heavily tilted towards television advertisements. For instance, the premium burger of the chain Steakhouse XT, was launched with a national television ad campaign, while there was little support from other media for the campaign.
Ever since its foundation, Burger King has believed very strongly in the influence of television communication much to the alienation of other communication medium. This strategy did pay off quite well during seventies. Jingles of campaign like ‘Have it Your Way’ and ‘It Takes Two Hands to Hold a Whopper’ became quite famous, yet the company lost on account of the lack of proactively in adoption of emerging powerful media like online and social media.  Also, due to lack of coherence of communication from different media, the positioning of the brand became quite confused. During the time, when the premium burger Stakehouse XT was launched through television at a price of $3.95, some print communication continued to depict the $1 deals of the retail chain (Bowman et al.’s, 2004). Also, demarcation of a clear cut target market could not occur. At the time when McDonalds had a much focused positioning on its food offerings belonging to to value-focused consumers, Burger King needlessly remained stuck with its approach of targeting young males with sexy, quirky ads. At the time when all that consumers wanted was value-priced fast food meal, all that Burger King managed to achieve was to stir controversy through its sex-based advertisements. Several business publications reported that while revenue at McDonalds's was up 7%, Burger King's remained weak in several of the consumer segments.
The visible sign of the lack of consumer focus was another outcome of oblivion towards integrated marketing communication. Burger King was far late in recognizing changing consumer needs and re-evaluating the relative importance of different market segments. The brand spend far too much resources on continuing to bet on young males and remained oblivious to the wisdom of selling value at a time when value is what most consumers seek. McDonald partook of the maximum share of the key market segments and decision influences in due time as a result (Boynton-Jarrett, 2003). The case imparts another key lesson to the theory of marketing – it far more important to have a strategy and cohesiveness in communication rather having most entertaining and visible television advertisements of its time.
It was as late as 2003, when the company realized the mistake and initiated a nationwide online campaign of ‘The King’, when the King is photoshopped into unusual situations that were comical (Naik et al.’s, 2003). The campaign contained the viral appeal due its comical nature. During the same period, the company released a series of viral web-based advertisements to compliment the various televisions and print promotional campaigns on social media sites, for instance MySpace. The campaign drew positive reactions and was the first instance, when the campaigns of Burger King came closer to integrated marketing campaigns (The Gazette, 2009). Burger King does deserve the credit to be a pioneer in product tie-in’s by partnering with George Lucas to promote the 1977 movie Star Wars. The practice promptly was catch on the by the fast food industry.  The recent foray of Burger King in the digital media is the Burger King's Whopper Sacrifice Facebook application attracted significant attention from the media and created buzz amongst young users of social media (Nielsen, et al.’s, 2002). Burger King very clearly demonstrated its digital and viral savvy and regained some of the market share it had lost previously. This only strengthens the hypothesis that the challenging times which the brand had faced in the market place was mainly due to lack of integrated marketing communication. Moving out of traditional television media, the brand’s new found audience was YouTube. Burger King’s latest SpongeBob television ad has been viewed a whopping 500,000 times on YouTube.

Objectives of New IMC

There are three objectives of the new IMC:
  • To attain the marketing message recall of Burger King’s new campaign recall of at least fifty percent
  • To increase the market share of the fast food industry by ten percent
  • To augment the profitability of the brand by thirty percent
Each one of the above mentioned objectives are specific on the goal, measurable in terms of quantitative number and relevant to the goals of marketing function.

Proposal of New IMC Campaign

The new IMC campaign of Burger King should convey the message that the brand is a value-based offering for fast foods as well as the healthiest option in the particular food category, since the product is grilled rather than fried. The advertising tools of IMC should incorporate more rationale based components rather than emotional based appeal. There ought to be uniformity across all advertising medium to convey the same positioning of customer value in each one of the promotional tool used. The advertising framework should be based around niche market segments rather going for high-spent mass market. Segmentation should be based around psychographics, and targeting of the segments should be done through smart placement of advertisement around consumer lifestyle.

Conclusion

The concept of Integrated Marketing Communication is indeed an important one. The paper compared two competitors which started out nearly at the same point in time and their product offering was also highly similar. Yet, one organization – McDonalds – thrived even in the face of financial recession and low purchasing power, while the other one struggled to maintain its market share. The key difference was the implementation of integrated marketing communication in the communication of the organization with external world. Recommendations are made for Burger King to reverse the declining trend.

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