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EXECUTIVE SUMMARY Marketing and Advertising Objectives Sonic Drive-In would like to expand franchises into the upper Mid West and North West regions of.

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Presentation on theme: "EXECUTIVE SUMMARY Marketing and Advertising Objectives Sonic Drive-In would like to expand franchises into the upper Mid West and North West regions of."— Presentation transcript:

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2 EXECUTIVE SUMMARY Marketing and Advertising Objectives Sonic Drive-In would like to expand franchises into the upper Mid West and North West regions of the United States. The Sonic franchise is well known in the American South East and we feel there is an opportunity to expand to these states. We plan on having Sonic capture at least 20% of the market in these regions and raise between 15 – 40% brand awareness with the target market. Target Audience Men between the ages of 18 – 50 that are up late at night looking for a quick meal or a snack are an ideal target for Sonics menu and drive-in style.

3 Scheduling Strategy and Media Mix We want to begin priming with increased advertising in the spring season which will eventually lead to peak advertising in the summer months (June, July, August). The advertising will be a mixture of Television, Outdoor (Billboard), Online (Social Media), and Radio EXECUTIVE SUMMARY

4 Background Information - Sonic Corp. operates and franchises the largest chain of drive-in restaurants (Sonic Drive-Ins) in the United States. The Sonic Drive-In restaurant chain was begun in the early 1950s. Sonic Corp. was incorporated in the State of Delaware in 1990 in connection with its 1991 public offering of common stock. SITUATION ANALYSIS

5 At a standard Sonic Drive-In restaurant, a customer drives into one of 20 to 36 covered drive-in spaces, orders through an intercom speaker system, and has the food delivered by a carhop. Many Sonic Drive-Ins also include a drive-thru lane and patio seating. Sonic Drive-Ins feature Sonic signature items, such as specialty drinks including cherry limeades, slushes, frozen desserts, made-to-order sandwiches, hamburgers, extra-long cheese coneys, hand-battered onion rings, tater tots, salads, and wraps. Sonic Drive-Ins also offer breakfast items and Drive-Ins serve the full menu all day. SONIC BRAND

6 Sonic competes in the restaurant quick serve industry, a highly competitive industry in terms of price, service, location, and food quality. The restaurant industry is often affected by changes in consumer trends, economic conditions, demographics, traffic patterns, and concerns about the nutritional content of quick- service foods. Sonic competes on the basis of speed and quality of service, method of food preparation (made-to-order), food quality and variety, signature food items, and monthly promotions. The quality of service, featuring Sonic carhops, constitutes one of our primary marketable points of difference from the competition. There are many well-established competitors with substantially greater financial and other resources. These competitors include a large number of national, regional, and local food services, including quick-service restaurants and casual dining restaurants. COMPETITIVE ENVIRONMENT

7 Competitive Store Counts 1. McDonalds 14, Burger King 7, Wendys 6, Dairy Queen 5, Sonic 3, Jack in the Box 2, Hardees 1, Carls Jr. 1, Checkers Five Guys 735 TOP 10 FAST FOOD CHAINS IN US

8 Qualitative: - Sonics' current market plan includes promotions throughout the Sonic chain, through TV, radio, and interactive media promotions, generally center on new limited time products and signature items. Competitors McDonalds- image and slogans (Im Lovin It), products, dollar menu Burger King- Image, mascot, slogan (Have it Your Way), product ADVERTISING AND MEDIA ANALYSIS

9 Sonic total spending in $ 136,584,800 - Network TV- $14,016,100, SOV= 1.3% Spot TV- $63,639,300, SOV= 5.9% SLN TV- $13,269,200, SOV= 6.1% Cable TV- $34,180,700, SOV = 3.7% Newspaper- $38,100, SOV= 0.4% Local Radio- $4,023,900, SOV= 2.0% Outdoor- $3,821,800, SOV=2.3% SOV Kantar Media Copyright 2011

10 Demographics -Age Working men and women -college educated Lifestyles -HHI $45,000 or more -1-4 children in family -homeowners Media Usage -lighter TV viewers -heavy magazine readers -light newspaper readers -heavy internet users KEY CONSUMERS

11 Seasonal- Results show during Sonics' second fiscal quarter (the months of December, January and February) sales generally are lower than other quarters because of the lower temperatures in the locations of a number of Partner Drive-Ins and Franchise Drive-Ins, which tends to reduce customer visits to our drive-ins. SEASONAL FACTORS

12 Geography In terms of geographical factors, Sonics growth appeared to be determined by the economy, and due to recent troubles with the economy Sonics growth has started to slow. Choosing the right place would first have to be looking at the overall income of the area. It is shown that Sonic has higher index numbers in places where people are making at least $45,000 dollars a year, so when picking a place there should be a focus on areas with an income near or higher than that. It also seems that index numbers for Sonic are higher in areas with families with anywhere to 1-4 children, after that the numbers start to drop. By focusing more on areas with families who have at least 1-4 children and are living in the middle class or higher would be more beneficial when deciding where to spend advertising dollars and place new stores in the North. GEOGRAPHIC FACTORS

13 STORE LOCATIONS

14 Strengths Sonic Corporation operates and franchises the largest chain of drive-in restaurants in the United States. One of the only drive-ins to feature car hops which generally deliver food to cars on roller skates. Large and wide ranging menu, anything from burgers to breakfast and desserts. The full menu is available all day long. Customer loyalty is among the strongest in the food industry. One of the fastest growing and most successful franchises in the nation. Operations running from coast to coast, totaling in 3,572 locations. Franchisees are a vital part of the continued growth of the company. Quality of Service separates Sonic from the competition. Sonic is number 5 in the total of competitive store counts in the United States. SWOT ANALYSIS

15 Weaknesses Sonic experiences difficulty with sales in the winter months, especially in Northern locations. Other fast food locations that do not have drive-in style service generally experience a better turn out for obvious reasons relating to the weather. Sonic is a burger and dog restaurant which puts them against traditionally stronger competitors such as McDonalds, Burger King, and Wendys. Sonic does not boast nearly as many store locations as the above mentioned fast food giants and must drive its profits by playing up their distinct method of drive-in service. Sonic faces competition against other fast-food establishments that provide more diverse menu choices, such as pizza and health food options. SWOT ANALYSIS

16 Opportunities Health food menu options are something that Sonic has yet to fully exploit and it may help raise brand awareness. Due to low sales during the winter months, Sonic can attempt to position itself with more winter friendly products such as hot beverages. The South is already a strong region for Sonic, we can continue to build on this. Many Northern regions are not familiar with the Sonic franchise but there are many opportunities to expand and promote drive-in style fast food. SWOT ANALYSIS

17 Threats Lack of brand awareness compared to competition such as Wendys, McDonalds, Burger King. People looking for healthier food options may not want to purchase from Sonic. Seasonal factors affect the point of having a drive-in style restaurant. Low entry barriers. SWOT ANALYSIS

18 Capture 20% market share in new regions of North-Northwest. States include; Washington, Oregon, Northern Idaho, Wisconsin, North and South Dakota, Minnesota, Michigan. MARKETING OBJECTIVE

19 Distinguish Sonic from competition, primarily drive in, fast food chains and to increase brand awareness from 15% to 40% among adults ADVERTISING OBJECTIVE

20 Target audience is fast food eaters looking for a change of pace from the traditional drive-thru. The Sonic Drive-in experience is for consumers who want a more comfortable pace and a diverse menu ranging from snacks to meals to desserts. TARGET AUDIENCE

21 Target audience will be in the age range from Focusing on audience with income range of $40,000 and higher (2011 Gfk MRI Doublebase) TARGET AUDIENCE

22 Heavy Fast Food/ Drive-In Rest Any Burger Rest Sonic Drive-in (000) Vert%Horz%Index(000) Vert%Horz%Index(000) Vert%Horz%Index AGE AGE AGE MRI BY AGE

23 Heavy Fast Food/ Drive-In Rest Any Burger Rest Sonic Drive-in (000) Vert%Horz%Index(000) Vert%Horz%Index(000) Vert%Horz%Index HHI $40000-$ HHI $50000-$ HHI $75000-$ HHI $ MRI BY INCOME

24 Sonic Drive-In wants to give its customers a convenient, personalized experience that has the feel of a classic American drive-in while offering a diverse menu of snacks and other delicious treats. Sonic is, Americas Drive-In CREATIVE POSITIONING

25 Sonic Drive-In provides a one of a kind fast food experience to the consumer. We are the largest chain of drive-in restaurants in the United States and we take pride in providing a unique menu with intimate car-hop service. POSITION STATEMENT

26 Style of service Restaurant treatment for fast food prices Convenience CONNECTION OPPORTUNITY

27 Achieve 40% reach of target audience of adults and frequency of 4.2. MEDIA OBJECTIVES

28 Established brand? Yes +.1 High Market Share? +.1 Dominant Brand? -.1 High Brand Loyalty? +.1 Long Purchase Cycle? -.1 Product Used Occasionally? +.1 Need To Beat Competition? +.2 Advertising To Older Consumers/Children? +.2 Total=.6 OSTROW MODEL PART 1:MARKETING FACTORS

29 Simple Copy? -.1 Copy More Unique? +.1 New Campaign? +.2 Product Sell Copy? +.1 Single Message? -.1 New Or Old Messages? +.1 Larger Ad Units? -.1 Total=.2 OSTROW MODEL PART 2: COPY FACTORS

30 Low Ad Clutter? +.2 Compatible Editorial? +.1 Attentiveness? +.1 Continuous Advertising? -.1 Few Media Used? +.2 Opportunities For Media Repetition? -.1 Total=+.4 OSTROW MODEL PART 3:MEDIA FACTORS

31 Spot advertising (regional) Washington, Oregon, Northern Idaho, Wisconsin, North and South Dakota, Minnesota, Michigan. GEOGRAPHIC COVERAGE

32 Map shows locations of individual markets involved and to increase brand awareness in these states REGIONS Seattle- Tacoma, WA Bend, OR Portland, OR Medford- Klamath Falls Eugene, OR Great Falls, MT Spokane, WA Yakima, et al, WA Missoula, MT Helena, MT Billings, MT Butte- Bozeman, MT Glendive, MT Rapid CIty, SD Minot et. al, ND Sioux Falls, SD Fargo- Valley CIty, ND Great Falls, MN La Crosse, Eau Claire, WI Marquette, MI Traverse City, MI Mankato, MN Flint, et. al, MI Alpena, MI Detroit, MI Grand Rapids, et. al, MI Lansing, MI Marquette, MI Green Bay, Appleton Wausau- Rhinelander Madison, WI Milwaukee, WI

33 Table shows number of stores in market area. GEOGRAPHIC COVERAGE Market CurrentNew Alpena, MI 01 Bend, OR 20 Billings, MT 05 Detroit, MI 80 Duluth-Supierior, MN-WI 04 Eugene, OR 20 Madison, WI 11 Milwaukee, WI 30 Minot et al, ND 01 Rapid City, SD 14 Spokane, WA 23 (Sonic.com)

34 SCHEDULING

35 Ad Spending in 2008 and 2009 by Market Leaders.

36 SONICS AD CONTENT VS. COMPETITION Data from Nielsen Co. Food was featured most prominently (i.e. appearing on screen for more than 50% of the time) in approximately one quarter of general audience ads, including 35% of Sonic Ads and almost one-third of Pizza Hut, Dunkin Donuts, KFC, Dairy Queen, and Taco Bell ads. Food was shown being consumed in nearly half of ads.

37 CURRENT AD CONTENT The Majority of Sonic ads (54%) showed customers eating in their cars. Wendys (28%) and Pizza Hut (24%) showed eating at the table more than any other restaurants. Taco Bell (28%) Sonic (11%) and Burger King (9%) promoted late night menus and eating late at night in their ads.

38 RATIONALE FOR TARGETING TEEN TO ADULT MALES.

39 SCHEDULING RATIONALE- CATEGORY & COMPETITOR SPENDING Primary competition is McDonalds, the Market leader. McDonald's Delivers A January Comparable Sales Increase Of 6.7% in February 2012, McDonalds does well in winter months, we plan to heavy up our advertising expenditures during summer months Sonic cannot afford to try to compete with McDonalds, Subway and Burger King in focusing advertising to children.

40 MEDIA MIX We have chosen four media classes. 1.TV-Regional Spot ads 2.Radio 3.Internet-Social Media 4.Outdoor-Billboards

41 TV-SPOT ADS TV is the most important medium to advertisers and consumers. 2008, watching TV ranked third among all of lifes activities, Average person=2.6 hours a day. TV ranks second in consumer perception of influence on purchase decisions. Buying time spots for individual programs or cable channels will best reach the target audience. Selective Reach- targeting possible with correct program selection, for Sonic, Sports and News networks will most likely reach target. Flexibility- Spots available from :10 to :90+ that allow us to remind quickly or persuade easily. High Cost- to achieve effective reach, requires large amounts of out of pocket investment. Intrusiveness Zapping-DVRs have made it possible to skip right past commercials. StrengthsDisadvantages

42 RADIO Strengths Radio is excellent for local businesses 80% of total radio spending is local businesses Targeting- certain demographics and lifestyles, from teens to older adults, more precisely than most other media. Cost Efficient, less than 50% of TVs CPP. Tighter Geographic Targeting Affordable Creative Impact Disadvantages Ad Exposure- has a lot of clutter, audience may not be paying full attention Non Visual Older Medium

43 RADIO SELECTION We have Chosen 2 Radio Stations to advertise on: KCLK- 1430AM- ESPN Sports Radio Our target listens to sports radio, this is a regional station. KAVZ-LP FM Community Radio Local Radio Station, directly targeting consumers within areas, that have a sonic restaurant.

44 SOCIAL MEDIA Strengths Engagement: Customer Engagement Direct Consumer Communication: Quick information about consumer and customer preferences and issues in real time and regularly. Low Cost: It can almost be free, except for it is labor intensive. Brand Building: Engaging consumers and building long term relationships contributes to brand equity and brand loyalty. Disadvantages Out of Pocket expenses are minimal, but time spent managing social media campaigns can be extensive. It is hard to assess value received side of social media marketing.

45 SOCIAL MEDIA

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47 BILLBOARD Strengths : Large format gives them tremendous impact in outdoor marketplace. Locating on major highways and expressways, placed in areas of high density vehicle traffic. Excellent visibility, they allow for creative customizing via extensions and embellishments. Directional: along the highway that tell passerby where to exit for Sonic. Can include Digital components, to be managed from a central location.

48 Social Media Promotions Foster customer interaction via Facebook and Twitter Garner attention in North West region through updates and customer interaction Late Night Adventures with Sonic where consumers post and/or tweet experiences Billboard Drive-In Sonic Billboard advertisement with rotary visuals Over the road to create the effect of driving-in Will be eye-catching and exciting This is a bold medium that cannot be missed on the highway NON-TRADITIONAL ADVERTISING

49 MEDIA MIX ANALYSIS TV: Index of 105. Sonic= 5,756,000/18,908,000 (fast food customers in region) x 100= 30.4% of target views spot TV advertisements. Radio: Index 105. Sonic=5,697,000/19,544,000(fast food customers in region, using radio) x 100= 29.1% of target. Outdoor-Billboard: Index 122. Sonic=6,637,000/20,878,000(100)= 31.7% Internet-Social Media: Index 111. Sonic=6,062,000/19,993,000(100)=30.3%

50 BUDGET ALLOCATION-$28 MILLION

51 COST


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