Burger King

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Executive Summary

This report is on opening a new business franchise in Pakistan. In 1991, the Canadian fast

food industry was in a period of declining sales and Burger King was being outspent

by its major competitors. McDonald's was spending seven times as much on advertising

as Burger King, Harvey's and Wendy's were both spending 25% more. Rather than try to

match the competition's multi-product advertising strategies, a counter strategy was

developed for English Canada that focused on Burger King's flagship product, the

Whopper. The campaign had several key components. Individual promotional

programmes were developed for the franchisees and a much closer relationship between

the company and its local and regional stores was put into place. Another critical

component was the media strategy. Rather than being heavily outspent on television,

Burger King decided to concentrate its spending on outdoor advertising, giving it a

medium that it could dominate. Using outdoor posters, external bus boards and transit

shelters, backed by strong promotional advertising in local newspapers and radio, Burger

King found a way to make its smaller share of voice noticed and heard. When you are

spending less than the competition and using billboards as the main media, you need

bold, dramatic, memorable advertising that clearly differentiates you from everyone else.

This case study demonstrates the value of having a focused, national strategy that

localizes promotional support with an ownable medium and then ties them together with

an outstanding, original creative campaign. The results surpassed all forecasts. The

combination of local, in-store marketing and a highly focused, dramatic advertising

campaign resulted in whopping annual sales increases (up 15% in one year) in 1992,

1993 and 1994.

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Table of Contents

Title Page

Group Members

Executive Summary

Background of the Company:

1) Introduction of the Company

2) Brief History

3) Significant Brand

IDENTIFICATION OF OPPURTUNITY

SWOT Analysis of the Company

BCG Growth Share Matrix of Existing Products of Company

Core Distinctive Competency of the Company

The Product Market Expansion Grid

Porters Five Forces Model and Solution

STRATEGY OF LAUNCHING THE PRODUCT

a) Goals & Objectives of Planned Product

b) Marketing Strategy of Planned Product

c) Action Programs

d) Projected Budget

e) Control Measures

f) Projected Market Share

g) Projected Profit Margin

h) Market Segmentation

i) Target Market

j) Positioning

k) Marketing Mix

l) Advertisement

m) Conclusion

n) References

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Background of the Burger King

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INTRODUCTION OF THE COMPANY

Burger King's first restaurant, originally called Insta Burger King, was opened on

December 4, 1954 in a suburb of Miami, Florida by James McLamore and David

Edgerton who were both alumni of the Cornell University School of Hotel

Administration. McLamore had visited the original McDonald's hamburger stand

belonging to Dick and Mac McDonald in San Bernardino, California; sensing potential in

their innovative assembly line-based production system, he decided to create a version of

his own. By 1959, BK had grown to five regional stores in and around the metropolitan

Miami area. About this time, McLamore and Edgerton decided to expand BK nationally

by using a franchising system that had become a popular method for expansion due to its

low capital cost for the parent company. They formed Burger King Corporation as the

parent and began selling territorial franchise licenses to private owners across the US.

Brief History

In 1967, after eight years of private operation, the Pillsbury Company acquired Burger

King and its parent company Burger King Corporation. At the time of the purchase, BK

had grown to 274 restaurants in the United States. While BK began its foray in to

locations outside of the continental United States in 1963 with a store in San Juan, Puerto

Rico, it did not have a large international presence. This situation changed shortly after

the acquisition when Pillsbury opened its first international restaurant in Canada in 1969.

Other international locations followed soon after. Beginning in 1982, BK and its

franchisees began operating stores in several East Asian countries, including Japan,

Taiwan, Singapore and Korea, Due to high competition, many of the Japanese locations

closed by the end of 2001. BK reentered the Japanese market in mid-2007. BK's Central

and South American operations began in Mexico in the late 1970s.

Burger King had fallen to a near tie for second place with rival Wendy's in the US market

for hamburger chain restaurants. For many years leading into the early 2000s Burger

King and its various owners plus many of its larger franchises closed many under-

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performing stores. Several of its largest franchises entered bankruptcy due to the issues

surrounding the performance of the brand.

The TP Group has continued BK's international expansion by announcing plans to open

new franchise locations in Eastern Europe, 180 stores in the Africa and the Middle East,

Brazil, and over 250 stores in new Asian territories such as Macao and China by the end

of 2012.

Today, Burger King is the second largest chain of hamburger fast food restaurants in the

world behind industry bellwether McDonald's (31,000 locations) and the fourth largest

chain overall after Yum! Brands (34,000 locations), McDonald's and Subway (28,400

locations).

Significant Brand

Burger King Corporation is a leader in developing exceptional brands, from the world-

famous BURGER KING brand itself to the consumer-preferred WHOPPER brand,

resulting in a stable platform for our ongoing global growth.

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IDENTIFICATION OF OPPORTUNITY

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SWOT ANALYSIS

1. STRENGHTS

The main strength of Burger King is its brand equity world wide. Burger King operates in

65 countries world wide and it is the second largest operator of Fast Food restaurant

chain in the world. So most of people are loyal to Burger King and also in Pakistan

people are fully aware of this brand.

Strength of Burger King is its consistency of food. Burger king is providing same quality

and taste since it is launched all over the world.

There are a lot of successful items of Burger King available which comes under its

strengths. These items are as follows

o Whopper

o Double Whopper

o Triple Whopper

o Hamburger

o Cheese Burger

o Tender Crisp Chicken Sandwich

o French Fries

Another Strength of Burger King is its overseas market. It has a valuable market share all

over the world because of the quality products and services.

2. WEAKNESSES

As there are very rare chances of product development of Burger King. Only a few

products are launched later. Most of the products are the same since it is launched. People

might get bored of eating same products. So it is the main weakness of Burger King.

The prices of Burger King are considered higher as compared to McDonalds or other Fast

Food restaurants in the minds of customers.

3. OPPURTUNITIES

As the Fast Food market is expanding internationally day by day. And there are a lot

opportunities for Burger King to be launched in new countries and capture the

market.

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Dining out market is growing vastly with the time. As now a days people are more

want to dine out. So there is opportunity for Burger King to grow further and further.

4. THREATS

The biggest threat to Burger King is its strong competitors like KFC and McDonalds.

So there is always a threat to Burger King if its competitors launch some new

products or give offers which will attract people and its market share will be

disturbed.

Another threat to Burger King is that now a day’s people are becoming more health

conscious. They think that Fast Food will affect their health. So they might switch to

other restaurants rather than fast food restaurants.

BCG Growth Share Matrix of Existing Products of Company

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We are launching a new fast food chain in existing fast food market. So all of our

products we will come in the question mark category. With the passage of time when our

sales will increase they will be classified into further categories (Star, Question Marks,

Cash Cows, and Dogs). According to Burger King existing market its Stars, Question

Marks, Cash Cows & Dogs are as follow:

Stars Cash Cows

Single Whopper Hamburger

Double Whopper Chicken Cheese Burger

Triple Whopper

Question Marks Dogs

Veggie Burger Apple Pie

Core Distinctive Competency of the Company

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Burger king is widely popular around the world. It will now be introduced in Pakistan as

it is also present in many Middle East countries. Burger King has several advantages that

differentiate it from other fast food brands. The first core distinctive advantage is that

burger king has a larger product line than its competitors. BK offers a variety of more

products then McDonalds, KFC and other fast food chains. BK offers a variety of burgers

and also sells juices apart from Cold drinks and this is one of the advantages that

differentiate BK from their competitors. Second core distinctive advantage and one of the

biggest advantages is that BK broils their chicken and beef rather than grilled them. This

is a huge factor since a grilled chicken or beef pâté has more fats in it as compared to

broiled pâté. Due to this BK’s burgers are not as fattening as McDonalds and other fast

food restaurants burgers. Third and the last advantage Burger King has over its

competitor is that just like McDonalds Happy meal and Wendy’s Kids meal, BK offers

Kids Club Meal. Burger King has divided it into three segments toddler, kids and pre-

teens. The only difference between the first two groups is the prize offering, the toddler

will receive an age appropriate toy. The pre-teen offering includes a larger entrée and

beverage and is called the Big Kids Meal. Burger King’s competitors do not offer

different segments for the kids meal and here BK has another bigger advantage then its

competitors.

The Product Market Expansion Grid

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We are launching Burger King in Pakistan for the first time. Fast food market in Pakistan

has a large amount of customers. As we are launching Burger King in Pakistan for the

first time which means that a new product is going to be launched in the existing market

so according to market expansion grid it will be product development.

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Porters Five Forces Model and Solution

Bargaining Power of Buyers

It is the ability of customers to put the firm under pressure and it also affects the

customer's sensitivity to price changes. The bargaining power of buyers in the food

industry is extremely high and the reason behind it is, because there are over 10000 fast

food chains all around the world and due to that, consumers have several options to

choose among brands. Fast food has become so common among people since it’s

inexpensive and the availability of high competition among brands in the food industry.

Therefore buyers have money to spend and many brands to choose from.

Bargaining power of Suppliers:

It is the ability of suppliers to raise prices, reduce quality and quantity of inputs.

Bargaining power of suppliers is high since suppliers are the concentrated industry

because they provide the raw material and in order to reach to the output you need to

have input. Fast food suppliers also do not have the shortage of buyers due to high

availability of fast food chains around the world. The suppliers also do not have any

substitutes.

Threats of Substitutes:

Products or services that perform the same function, but are in different industries. The

threat of substitutes is pretty low. The reason is that a person who likes burgers will try

McDonalds or Burger king but there is a less chance that he will buy a sub or a taco.

Threat of new entrants:

It is the ability of new firms to successfully enter the industry. The threat of new

entrants is pretty low since there are many levels of barriers to entry. The barriers include

capital requirements, cost & distribution advantages (International Food Chains), product

or service differentiation (Happy Meals) and Psychological factors (Brand Loyal). It is

very hard to break all these barriers and enter the industry full of competition.

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Rivalry:

Our rivals in the fast food market in Pakistan are McDonalds and KFC. Since they have

been operating in Pakistan for years and they have created a better brand image in the

mind of the customers. They also have more contacts with suppliers and they will try to

create barriers for us so we cannot succeed as much as them in the market.

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STRATEGY FOR LAUNCHING THE PRODUCT

Goals & Objectives of Planned Product

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GOALS

There is a very big fast food market in Pakistan. We have strong competitors in this field

in the shape of McDonalds and KFC. So we will have to achieve the following goals in

scheduled time to get a good name in the market.

Our first goal is to gain at least 20% market share in this fast food market with in

two years.

Our second goal is to open 1 more franchise of burger king in same city in the

next 3 years.

OBJECTIVES

We will promote or advertise our product on larger scale.

We will maintain the quality of our product to get a good reputation in short time.

We will work quickly and impressively to get a good market reputation in short

time.

We will give our employees incentives and bonuses if they will work

impressively. Through this they will work more hardly and it will improve our

customer service which will be a positive point for our business.

By performing such activities we will be able to achieve our goal in the scheduled

time.

We will increase our sales by satisfying our customer needs and by providing

quality food. By increasing our sales we will get more profit and that will give us

more finances to open a new franchise.

Marketing Strategy of Planned Products

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We have planned several Marketing strategies to promote our products. These strategies

are as follow:

1. Advertisement: We will promote our business through different medium which

will include T.V ads, billboards, and newspaper ads and by sponsoring concerts.

2. Special Offers: Every kid meal will include a toy. After the collection of total six

toys you will receive a free happy meal. Free refill of soft drinks for the first six

months.

3. Corporate Social Responsibility: We will perform social services to gain the

wide consumer acceptance. Social services will include planting of trees, building

benches with shades in parks and on bus stands and build recycle bins all around

the city to keep it clean.

Actions Programs

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The actions that we will take to make our brand successful are as follow:

1. We will provide our sales force with cars and bikes in order to deliver products to

consumers who do not wish to dine out. We will also provide them with cell

phone so if they face a problem during the delivery they can contact us and we

can solve their problems and deliver the customers their product. Cars will be

provided so during rain or in any other condition when our sales force is not

available to deliver the product on motor bikes they can use the cars.

2. We will have our mobile vans available on special occasions such as cricket

matches, concerts, and mailas so our consumers can enjoy our quality of food

while enjoying themselves.

Projected Budget

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Our projected budget is as follow

Marketing expense 4000000 R.S

Salaries1500000 R.S

Raw materials8000000 R.S

Machinery15000000 R.S

Expenses3000000 R.S

Furniture and Decorations3000000 R.S

Land and Building40000000 R.S

Total projected Budget79000,000 R.S

Control Measures

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As Pakistan faces many electricity problems, in order to ensure that it will not dissatisfy

our customers and to avoid bad reputation in mind of our consumers we will have

generators available for backup. Since we want our customers to be fully satisfied with

our products and service, we will make sure that there is never a shortage of raw

materials and the quality is always satisfying. In order to avoid these major problems that

can cause major problems for us and also a bad image of our product in the mind of the

customers, we will have more then one supplier. If one has the shortage of raw materials,

the backup supplier can provide us with the raw material and we can avoid the shortage

through this strategy. There are many problems that we can’t even expect and

unfortunately we have to face them. For problems such as damage has been done to the

building, we will have our franchise insured by an insurance company since we are

investing a lot of money in it and if it faces a major breakage it will be really difficult for

us to deal with it. Our Franchise will also be insured so if unfortunately we face a major

breakage we will have resources to fix up that damage. There will be fire extinguishers

available in the franchise to put off the fire on small scale.

Projected Market Share

McDonald has market share of 45% where as KFC has a market share of 35% and the

remaining 20% fast food market has been captured by the local fast food restaurants. Our

projected market share is around 20%. We are looking to capture 20% market share out

of this 100% market share by providing quality food and services.

Projected Profit Margin

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We will have 40% profit margin on our sandwiches and burger and on drinks we will

keep it a little bit low. Our projected profit margin will be as follow for our products:

1. Our product “Whopper” sale price will be 150 Rupees, from which it will cost us

90 Rupees and gives us a profit of 60 Rupees.

2. “Double Whopper” will cost us 130 Rupees and will gives us a profit of 90

Rupees on each burger and the sale price of this product will be 210 Rupees.

3. “Triple Whopper” will cost us 150 Rupees and will give us a profit of 100

Rupees and the sale price of this product will be 250 Rupees.

4. The sandwiches, Spicy Chicken, Crisp Chicken, and Tender Grill Chicken

Sandwich will cost us 95 rupees and will give us a profit of 65 Rupees and the

final price of both products will be 160 Rupees.

5. “Original Chicken Sandwich” will cost us 75 Rupees and will give us a profit

of 50 Rupees and the sales price of this product will be 125 Rupees.

6. “Whoop Meal” will costs us 150 Rupees and will give us a profit of 70 Rupees

and the sales price of our product will 220 Rupees.

7. “Big Whoop Meal” will costs us 160 Rupees and will give us a profit of 110

Rupees and the final sales price of the product will be 270 Rupees.

8. “King Whoop Meal” will cost us 185 Rupees and will give us a profit of 125

Rupees. Therefore the sales price of this product will be 310 Rupees.

Market Segmentation

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As Burger King is being launched for the first time in Pakistan, we will form three

segments which will include a segment that will consists of Family, Kids and further

segmentation in kids which will include toddlers, kids and pre-teens. The third and the

last segment will focus on Youngsters. The basis that we have established the family

segment is that a new trend of dinning out has been started in our society. Since families

go out to eat not only traditional food but also fast food and that is why we have form a

segment that will focus on families. Second segment will focus on kids since kids are

always insisting about going to fast food restaurants and they enjoy themselves by

playing in the play place or the toy that comes with happy meal while eating. Our third

and the last segment will be of youngsters. Youngsters usually include universities and

college students. This is also an important segment that should be highly paid attention

to. Universities and College students often go to fast food restaurants for lunch. Mostly

students eat their food from cafeteria, obviously they will get bored from eating the same

food over and over again and they would need a change. We will offer a variety of

products and deals to satisfy their hunger.

Target Market

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The segment we have chosen as our target market is the youngsters and the Students

segment. In this segment we will target the students between the ages of 14 and 22. The

main reason behind setting the student segment as our target market is that according to

stats the teenagers eat fast food more then any other age groups. Most universities and

college students rather eat at their institute’s cafeteria or they go to other restaurants to

remove their hunger. As a person always wants a change in his/her life, they want to try

new products from new companies that will offer them more satisfaction.

Positioning

Image is one of the most important factors and we will focus on it to the extent until it is

considered a satisfying product in the mind of our consumers. For this we will have to

focus on our foods quality and quantity. We will ensure that our food quality is always

the best among all and the quantity is always enough. According to this our customers

will never be dissatisfied from the quantity and the quality of our products. Second

important thing is that research has proven since fast food contains a lot of fats in burgers

and fries. In order to reduce the fat, we will adopt the broil cooking method for our

burgers in order to reduce as much fat as we could from our products. Third effort that we

will do is to make our food a little spicier than that which is available in western

countries since people in Pakistan prefer spicy food.

Marketing Mix

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PRODUCT

PRICE

PROMOTION

PLACEMENT

PRODUCT

Burger king is focusing on the fast food industry of Pakistan. We will offer burgers, fries,

drinks, shakes, deserts. Our main product is burgers. We will offer many different

burgers with different taste. Our secondary products are fries, drinks, shakes, deserts. In

deserts we will provide our customers with ice-cream, donuts, strawberry cheesecake.

PRICE

Our product has the following prices.

Promotion

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We will promote our business by advertising through bill board, news papers, radio ads,

TV ads and by sponsoring CSR programs we will give offers to our customers like buy

one get one free, buy two get one free, etc. This will help us in making good relations

with our customers and by doing this we will be able to promote our business through

pubic relations as well.

PLACEMENT

We will open our Franchise on M. M. Alam Road; we are opening our Franchise in this

area because there is a very big food market on M. M. Alam Road. And it will have us in

attracting more valuable customers moreover around M. M. Alam Road there are many

schools, colleges and universities and the students of these institutes are our target market

as well.

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Conclusion

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In order to open a Burger King franchise we have to go through a long process and there

are certain things that we need to take care of. As burger king is the second world largest

fast food brand it has a lot of competition now. By launching it in Pakistan for the first

time and having major competitors such as McDonalds and KFC it will be really hard for

us to establish a name of our product in this country. We have major competitors in the

industry and they will try their best that we will not enter the market or even if we do, we

should not be able to be successful in order for them to stay dominant. Our product has

weaknesses but there are also some greater advantages over our competitors which they

find a threat for themselves and that is why several barriers has to be faced by us in order

to enter the business. We have set long term goals and short-term goals and objectives in

order to be successful. We want to beat our competitors in their weaknesses. After

preparing the projected budget it has shown that we are investing a lot in this business

and no matter what we have to be successful in the market. We have carried over the

same target market as Burger King Uses in other different countries and its country of

origin United States of America. Advertisement will be done through a high level of

communication medium and that’s how we will be able to gain customer satisfaction,

build a market standing, earn a higher market share and be successful in our business.

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References

1. http://company.monster.com/burgerking/

2. http://en.wikipedia.org/wiki/Burger_King

3. http://en.wikipedia.org/wiki/Burger_King_products

4. http://en.wikipedia.org/wiki/Porter_5_forces_analysis

5. http://www.cassies.ca/caselibrary/winners/BurgerKing.pdf

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