Principle of marketing FB5601 Newborn Burger King Principle of marketing FB5601 by AMICA Team Member: Chan Ching Yuen, Candy (52449869) Fong Hoi Yin, Fluorine (52152644) Fung Kwok Leung, Bobby (52283306) Li Man Ching, Alison (52469820) Lok Ka Yan, Mary (50426086) Tsang Wai Yue, Woodie (50593430) 1

Table of Content Company Overview Situation Analysis SWOT Analysis Competitors Analysis Market Segmentation Recommendations Implementations Q & A Section

Company Overview Product market History Flame-broiled Burgers: beef, chicken, fish fillet, pork, mushroom, etc. Common fast food beverages & hot sides History Founded in Miami since 1954 A franchise store of Insta-Burger King (1953-1955) 3

Company Overview Business failures Poor marketing management & operating performance FOUR ownership transfers during 1967-2010 Many franchisees closed down before reaching new acquirers Hong Kong franchisees closed in 1980s-1990s 1954-1967 McLamore & David R. Edgerton 1967-1989 Phillsbury Company 1989-2002 Grand Metropolitan (Diageo) 2002-2010 TPG Capital & partners Since late 2010 3G Capital of Brazil 4

Company Overview Current situations Global ranking (No. of outlets) >12,300 outlets in 76 countries & territories >50% are located in the U.S. ≈90% are run by independent franchisees Global ranking (No. of outlets) Fast Food Hamburger Restaurant (FFHR) Chain: 2nd Quick Service Restaurant (QSR) Chain: 4th 5

Company Overview Mission Philosophy & Slogan “We will prepare and sell quick service food to fulfill our guest‘s needs more accurately, quickly, courteously, and in a cleaner environment than our competitors.” Philosophy & Slogan “Have it Your Way®” 6

Company Overview BK Asia Pac Private Limited Franchising operations in Asia Hong Kong: SPPHK Perfect Combo Ltd SPPHK: 3 outlets in the HK Airport & the Peak since 2003 Perfect Combo Ltd: 15 outlets in KLN, HK, New Territories, since 2007 7

Company Overview Perfect Combo Limited Portfolio company of NAS Holdings Ltd (#8080) Continuous deficit: ≈ HK$29 million Goals: Turnover : Increasing >20% in ticket number Exploring new marketing locations Introducing new products Reducing supply chain cost Skill and staff enhancement 8

Environmental Analysis Consumer Behavior Analysis Situation Analysis Environmental Analysis Consumer Behavior Analysis

Environmental Analysis Multi-cultural society Historical background 95% Chinese ; 5% from other countries Mixed Western and Chinese culture Economy GDP : + 7.8% (2009 vs 2010) Forecast growth in 2011 : 4.5% Inflation rises from 2% to 5% between 2009 to 2011

Environmental Analysis Demographics Population size : 7 millions in 2010 ≈52% Labor Force Aging Age 2001 2010 15 or below 16.5% 12.1% 16 – 34 30.2% 28% 35 – 64 42.1% 47% 65 or above 11.1% 12.9% 2023: 19.4%

Consumer Behavior Analysis Dining habit Frequency of eating out increases Dining atmosphere : More social and entertaining experience Consumers’ requirements of Fast Food Restaurant Taste : Delicious Fresh : must be HOT when serving for hot food Service : “Fast” meal delivery time Tangibles facilities : Enjoyable atmosphere

Consumer Behavior Analysis Price sensitive Closely related to quality Love special offer Always attract by special offers Less brand loyalty in fast food industries Health consciousness Eating habit affect the health Recent food safety incidents Trend on having health food

SWOT Analysis

SWOT Analysis - Strengths Unique cooking method Cooked by grilling over fire Differ from other burger restaurants Global recognized brand Over 12,300 outlets in over 76 countries & territories Foreign customers feel cultural bonding Hong Kongers spending behaviors sticks to branding 15

SWOT Analysis - Strengths American style catering Strong image of American style fast food restaurant (FFR) which differs from the exiting competitors in Hong Kong Customized recipes Customers can choose their own burgers 16

SWOT Analysis - Weaknesses Corporate Slogan: “Have it your way®” Hardly tie with company image and known by others Advertising vehicle not effective Small-size MTR display board Cannot draw customers’ attention Located wrongly in some outlets Outlet locations prevent reaching to our target groups Improper dinning environment Cold lighting and decorations 17

SWOT Analysis - Weaknesses Location of Burger King outlets in Hong Kong 18

SWOT Analysis - Opportunities More people meal out Increasing population with a busy working life style Emerging the niche market for giant burger Triple Stacker (Burger King) V.S. Double Quarter Pounder w/ cheese (Mc Donald's) More popular in using electronic social network (E.g. Facebook, 微博) Effective and Low cost communication channels 19

SWOT Analysis - Threats Changing eating habit in Hong Kong Emphasize more on healthy diet meal Aging Hong Kong population Reduced demand on fast food hamburgers New entrants to same market segment E.g. Freshness Burger, MOS Burger Increase operating cost High inflation in Hong Kong Minimum wage law 20

Competitors Analysis

Competitors Analysis McDonald’s Mos Burger Triple O’s Freshness Burger Burger King No. of Outlets 225 16 6 4 15 Countries of origin America Japan Canada Entry year in HK 1975 2006 2003 2007 Re-entry :2007 Positioning Be customer’s favorite food and place to eat “I’m lovin’ it” Fresh & healthy ; Premium raw material “Making people happy through food” Canadian styles ; delicious burger “Juicy – Make to Order” Fresh “Be Fresh” Prepare and sell quick food in a cleaner environment “Have it your way” Price Range for Meal Set HK$ 20 – 30 HK$ 33 – 40 HK$ 58 – 68 HK$ 50 – 82 HK$ 27 – 40 Target Customer Families with kids which are not spending much money on dining Working class and people (especially female) who would like to have healthy food Families with kids who are willing to spend money on higher quality of food. Young working class who is willing to spend money on higher quality of food. Working class which is not spending much money on dining

Problems Identification Unclear Positioning Ineffective Promotion Very few advertisements in multi-media Fail to show its unique characteristics

Market Segmentation Socioeconomic Characteristics Behavioral Variables Target Market Segments Upcoming Trend Forecast & Positioning

Socioeconomic Characteristics

Socioeconomic Characteristics

Socioeconomic Characteristics 27

Behavioral Variables Per week Male Female Eating Out - Breakfast At Least Once 59.70% 46.80% Others 40.30% 53.20% Eating - Out Lunch 80.20% 63.90% 19.80% 36.10% Eating - Out Dinner 55.20% 50.10% 44.80% 49.90%

Behavioral Variables Males Female Place for Eating Out Breakfast Chinese Restaurant 63.20% 60.50% Fast Food 29.30% 31.60% Others 7.50% 7.90% Place for Eating Out Lunch 63.40% 63.60% 24.40% 23.10% 12.20% 13.30% Place for Eating Out Dinner 68.40% 65.80% 10.20% 8.80% 21.40% 25.40%

Behavioral Variables

Target Market Segments THREE Target Segments: Students Male Working Class Female Working Class

Upcoming Trend Population Life Style Aging Expanding workforce   Life Style Busy life style, consumers look for fast-casual meals Eating-out becomes more and more popular Health Overweight and Heart Diseases Healthier fast food Calories and nutrition information

Forecast & Positioning The demand will be increased. OUR POSITIONING 1) MEDIUM POSITION 2) RESONABLE PRICE 3) GOOD QUALITY

Recommendations

Recommendations Marketing Mix (4Ps) Price Provide the best deserved value to customers Product Expand product differentiation and innovation Improve product & service quality Place Improve the environment of all restaurants Promotion Improve public brand awareness and perception Reinforce our positioning Marketing Mix (4Ps) To increase year-on-year sales and traffic ! 35

Recommendations Phase 1 -- Brand Awareness & Driving Sales Product differentiation Promotion enhancement Phase 2 -- Operation Improvement Product quality control Shops renovation and Express expansion Phase 3 - Expansion & Customers Loyalty Enhancement Product innovation Expansion of shops Promotion diversification 1st layer: 27, second layer: 23 36

Recommendations Phase 1 Phase 2 Phase 3 Menu with existing price King of Burger King Health Lovers Sections 1=2 Mini-burger campaign Festival combo & promotion Premium coffee Closing some of the “out-of-focus” outlets Low cost promotion (e.g. Online Marketing) Phase 2 Burger King Mascot Renovation on existing outlets Favorite Burger King outlets Most Burger Giant Burger Burger King Express Road shows Phase 3 “New Shop, New Hop” campaign Larger scale advertising Membership scheme (Loyalty Promotion) New shops open in business districts or sight-seeing spots Mass media advertising (e.g. TVC) Charitable events 37

Implementations

Implementation - Product More emphasize on American style giant size burger for niche markets Create ‘Health Lovers Selections’ Include several salad selections Sweet corn cup Mixed-fruit box Enhance students’ meal set 39

Implementation - Product Offer decent coffee with higher prices Target on mid-class customers in commercial districts Increase the amount of each bill  increase sales 40

Implementation - Price Keep its existing price Good quality at reasonable price: Food, Services and Environment Increase customer satisfaction  positive word-of-mouth 41

Implementation - Place Relocate some of the exiting branches in order to fit the company image Close outlets in out-of-focus districts (e.g. Wong Tai Sin) Open new outlets in commercial districts and sight-seeing spots Suggested locations: Central, Stanley Market, SOHO East, etc. 42

Implementation - Place Renovate the shop with warmer style Offer a better dinning environment Open Burger Express Takeaway service only Target to capture potential sales during lunch hours Located in commercial districts 43

Implementation - Promotion Campaigns Pilot trial Seasonal Long-term Public Relations Product / Feature release (on product) Corporate release (on brand) 44

Implementation - Promotion Advertising Printed ads focusing on brand awareness and festival product promotions Barter advertising, Joint promotion advertising Online Marketing Online media: Facebook, 微博, Youtube, etc. Sales Promotion & Direct Marketing Coupon distribution on seasonal promotions Free tasting Group sales Seasonal / Festival special (+$5 get a premium coffee) 45

Implementation - Phase 1 Brand-building Campaign Series “Every Day is Burger Day” Q1 to Q4 Theme song iBurger “CHEF OF THE BURGER KING” Printed ads and advertorial on Viral video (youtube) Facebook , 微博 Online games / Apps 46

Implementation - Phase 1 1=2 Mini-burgers Campaign Q2-Q3 “1份變2份，1人食2人分，滋味爆FUN” Advertising Print ads & advertorials on free newspapers & food magazines Online Marketing Share your favorite combo on fb PR – product features Free line up with media Sales Promotion Free tasting Coupon distribution Group sales + = Less is More Choose your favorite combination Mini Burger 47

Implementation - Phase 1-3 Seasonal / Festival Campaigns Halloween “爆趣哈囉喂” Q4 every year Advertising Printed, Online Online Marketing Contests in making funny and scary Halloween burgers Public Relations Sales Promotion 48

Implementation - Phase 2 Your Favorite Burger King Outlet Campaign Series Mascot design contest Renovating existing outlets Most-LIKE burger set Advertising TVC ; Printed Online Marketing Mascot vote Shop Decoration game Most-like burger set vote Public Relations Roadshow with Burger King Buddy Sales Promotion 49

Implementation - Phase 3 “New Shop, New Hop” Campaign Series Membership Scheme Customized EDM or personal video Membership special Free coupons for purchasing in new shops Favorite Burger King outlet Charitable Event Donate $1 to Elderly Care Associations upon every purchase PR & Advertising TVC, Outdoor/Transportation Celebrity tasting Online Marketing Apps (order, promotion, game) FB / online voting 50

Implementation - Timeline 51 51

Promotion Timeline 52 52

Budgeting Target revenue increment: 16% in 2012, 20% in 2014, 25% in 2016 Budgeting in 2012 (Phase 1): HK$ 3M Online marketing – 15 % Printed media – 50% Sales promotion – 25%　　　　　　　　  Public Relations – 10% Budgeting in 2013 -2014 (Phase 2): HK$ 10M Express expansion & renovation – 40%　　  Sales promotion – 5% TV commercial – 20%　　　　　　　　　　 Online marketing – 10% Printed media – 15%　　　 　　　　　  Public Relations – 10% Budgeting in 2015-2016 (Phase 3) : HK$ 25M Expansion on outlets – 50 %　　　　　　　 Sales promotion – 10% Printed media – 10%　　　 　　　　　  Public Relations – 10% Fiscal Year (approx.) (end as of June) 2011 2010 Sales volume 144M 124M % increased 16.13%   Targeting profit 42M 53

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Q & A Section