Burger King

Résumé du document

Burger King is a global chain of fast food restaurants serving hamburgers, with a turnover which amounted to $102.5 billion in 2009 when they sold 524 million units. It owns 12,000 franchisees in 74 countries around the world. Two out of three restaurants are established in the U.S. It has set up franchises in Europe but all the French restaurants have closed down since 1997. That is why this analysis will be based on the reasons why Burger King failed in France. To solve this case, we will present the company along with its marketing strategy. Then we will analyze the problems and finally we will make recommendations which would help the company return to France.

The company was founded in 1954 by two students, James McLamore and David Edgerton, who were inspired by their visit to a McDonald's restaurant in California. Originally the first Burger King fast-food was based in Jacksonville, Florida and was called Insta-Burker King.

Due to financial difficulties Burger King was purchased by Pillsbury Company, one of the largest producers of grain and other foodstuffs, in 1967.
In the late 70s and early 80s, the Pillsbury management attempted to reorganize and restructure the chain restaurants. In 1978, Burger King hired McDonald's executive Donald N. Smith to help revamp the company. This plan was called "Operation Phoenix", and the aim was to restructure all franchising agreements. It brought about prominent changes in the menu and design.

In spite of all these efforts made by Pillsbury, Burger King still faced financial problems for many years. This crisis continued even after the company was acquired by the British entertainment conglomerate Grand Metropolitan and its successor Diageo in 1989, which did not succeed in saving the company. Thus Burger King was sold in 2000 to TPG Capital for $1.5bn.

Burger King's customers suffered from this crisis, and thus, Burger King needed an infusion because it was in decline compared to its direct competitor McDonald's, which saw its turnover growing thanks to a larger target and lower prices. Thus, in 2010, the company was acquired by 3G+ for $4 billion.

Burger King benefits from some strengths, which enable it to be one of the leaders on the fast food market. Indeed, it is the second largest fast-food chain in the world, behind McDonald's and before Wendy's, thanks to a strong brand recognition ensured very attractive advertisements (especially on television), among other factors. Besides the quick service which is increasingly appreciated by customers, and very competitive prices (its cheaper hamburger costs $0.99), Burger King has a lot of reasons to benefit from such a good place in the fast-food market. Moreover, it distinguishes itself particularly by numerous new menus, a guide of nutrition intended for the customers, and national and international expansion.

Extraits

[...] Moreover Burger King's failure was due to its small size and its poor profits which did not allow them to be competitive. Indeed, it did not manage to exceed a Frs300 million turnover i.e around million after 1995. In addition, the turnover fell from million in 1995 to million in 1996 i.e a decrease. Nevertheless, McDonald's and Quick set up at the same period and succeeded in increasing the number of their restaurants. According to a study about the fast-food market, a brand cannot exist without a network of at least 150 to 200 restaurants which enables it to make economies of scale and huge advertising investments. [...]

[...] They sold 524 million units. It owns 12,000 franchises in 74 countries around the world. Two out of three restaurants are established in the U.S. It has set up franchises in Europe but all the French restaurants have closed down since 1997. That's why this analysis will be based on the reasons why Burger King failed to meet success in France. To solve this case, we will present the company along with its marketing strategy, then we will analyze the problems and finally we will make recommendations which would help the company to come back to France. [...]

[...] Last year, hamburger consumption in France stagnated after years of growth. Burger King's turnover fell from 325 million francs in 1995 32.5 million) to 300 million francs last year. Even McDonald's, the market-leader - found recently in a British court to be exploitative of children and cruel to animals - lost 10 per cent of its French customers, half of them. Burger King said yesterday that the French withdrawal was not because of a popular revolt against hamburgers. A spokesman said: "It's simply that we are not making an acceptable profit. [...]

[...] The fast food market can be segmented with several criterion : Geographic: it consists in focusing on the place where the restaurants are located Demographic: it deals with the age, the gender or the income of the customers Behavioral: it focuses on the habits and the lifestyle of the customers Burger King uses the demographic criterion such as the gender (male or female), the age and also the income to target its customers. Target Burger King has chosen two targets. [...]

[...] Marketing Mix Product The first-off product of Burger King is the WHOPPER. With this burger, the brand has a brand recognition like McDonald's and its Big Mac. Burger King sells more than 20 burgers composed of different meats such as beef, chicken, fish or vegetarian burgers, enough to delight all the consumers. Customers can choose the size of the burger i.e one, two, three or four steaks. To accompany this burger, clients have the choice between French fries and salads. [...]