Monday, October 12, 2009

Why 'Freshness' Is Wendy’s New Marketing Ingredient

Oct 9, 2009

Wendy’s has unleashed a new campaign touting its new slogan, “You know when it’s real.” Ads via The Kaplan Thaler Group, New York, show consumers smartly pointing out the “reals” and “fakes” in everyday situations. (Examples include a child pokes a woman masquerading as the Statue of Liberty; a bald man’s wig blows off.) The fast feeder is trying to get the point across that consumers can just as easily tell when restaurants use real or frozen ingredients, said Wendy’s CMO Ken Calwell in an interview with Brandweek. The campaign promoting Wendy's “real, never frozen beef” and other steps the chain is taking—including a robust product pipeline, and upgrades to its hamburgers and French fries—are  part of a larger brand overhaul. Calwell, who previously headed up new products and marketing research at Wendy’s, recalled a time when the chain was absolutely thriving compared to McDonald’s and Burger King. Over time, though, and especially after its founder, Dave Thomas, passed away, Wendy’s lost its brand positioning and now it’s in need of a major revamp. Calwell, who returned to Wendy’s in 2008, talked about some of these changes, as well how the new slogan is intended to stand out from the competition. Excerpts from that conversation are below:

Brandweek: Wendy’s campaign touting freshness is actually part of a brand turnaround plan. Why so?
Ken Calwell:
When I came back to Wendy’s [in Aug. 2008 things were different.] When I was at Wendy’s in the 1990s, I was in charge of the new products and market research…[and back then] things were rockin’ for Wendy’s. We had strong sales and growing sales, and for a long time, we were outgrowing McDonald’s and Burger King. In my view, that’s because we had a very strong sense of who we were as a brand at that time. We knew what our brand was and what our brand was not.

BW: And this is the first major advertising component in that brand turnaround plan. Why so?
When you turn a brand around, you can’t do it with an ad campaign alone. The first thing we did was we set up a group of 11 priorities. And there were four that really led to this campaign.

BW: And what were they?
No 1. was to really define what our brand vision was in a clear, fully researched way, and so, we did a ton of consumer research. We talked to more than 10,000 consumers, plus all the research we did with our franchisees and this is the most extensive and comprehensive research project we’ve done in the history of Wendy’s. And that’s because I believe that we need to get a foundational view of what our brand is and what it’s not, and what it all leverages off of and there was no lapse of positive things that people said about our brand. There are brands that have a few strong equities and some that have a lot. But when we talked to consumers, what we heard was, “Wendy’s? The food is a little better there.” “They’ve got better ingredients, fresher stuff.” “The salads are a little better.” “Don’t they have the fresh, never frozen beef?” We heard things about Dave [Thomas, Wendy’s founder and former brand spokesperson], our hot, juicy hamburgers and [all the] little better ingredients that were in there. A lot of different things people said about the brand were very positive, but what we were looking for were the unifying themes or things that tied it together. And it was this: “They use the real stuff, the real ingredients.” It’s real fresh, never frozen beef, not the frozen stuff competitors use. It’s owned by this real guy, his name was Dave and he named it after his real daughter, Wendy. And they cook it in a real kitchen, in a real oven, and how that really came together was, people, more than ever now, are really looking at ingredient labels. They care about the foods they eat and where that food comes from, where it’s sourced from—some for health reasons and some because they just want to know more…So all the brand work we did really came down to people looking for the real thing…And so, the brand positioning we came up with was people are looking for real choices in fast food.

BW: And then..where’d you take it from there?
The second thing we said was, “With that in mind, what kind of improvements do we need to make to create products that’ll show consumers we’re doing it in the real way? What are consumers looking for in our food?” We did a lot more research into our salads and chicken sandwiches to identify the things that really matter to them, and we made improvements in our hamburgers, our French fries, and consumers have noticed. We switched to a whole different cooking oil on our fries…we changed the salting process, we did all those things and bam! We didn’t expect it to happen so fast, but we [began to see feedback like] the article in Consumer Reports, which ranked us as having the best-tasting French fry out of the competition and Zagat this summer rated us as having the best food, the best facility and we were best overall in the food category.

The third thing we did was, when I first joined in August, I took a look at the new products pipeline and it was almost dry…So we went back and built a whole new discipline in the process and restructured the entire R&D team, which reports to me, and the marketing team, and we restructured them around innovation—not just any innovation, but innovation that lined up with the “real” positioning. So we’ve been working day and night to restructure and develop new products and build and [help develop] the team, and they’ve responded with an unbelievable pipeline. As of now, between May and November, we will be testing more new products in market than at any other time in Wendy’s history.

And, once you have those three things done, then all of a sudden, now you’ve got something to advertise. When I first joined in August, people said, what about the advertising? I said, “Nothing for right now. We don’t have a good story to tell.” We had to work on our brand vision, our core products, our new products pipeline and, now that we have that all going on, we have something to talk about and advertise.

BW: Wendy’s is promoting its Bacon Deluxe burger as part of its “You know when it’s real” campaign on Monday. How’s this product—which is also part of the new product pipeline you talked about—intended to stand out in the ever intensifying burger wars category?
In this category—McDonald’s, Burger King, Wendy’s—there are a lot of things consumers perceive that we do that are all the same. So, what makes our bacon different? Our competition largely uses bacon that is pre-cooked and it is just reheated when you order it—[via a] microwave or whatever it is to get it reheated—and it’s a cheaper bacon. We’ve got a premium, higher cost bacon that’s center cut, thicker and it’s applewood-smoked and we went one step further: It’s natural applewood-smoked bacon. It’s a premium, applewood-smoked bacon that we cook up fresh in the restaurant in our ovens. Real bacon shouldn’t “ding” in the microwave. It should sizzle in an oven. We cook it in the right temperature oven and we’ve invested a lot in this bacon to really make it a point of difference. If you think about it, we’re the ones who use real fresh, never frozen beef, so we should also be the ones that serve real, fresh, premium, applewood-smoked bacon. It fits.

BW: Who’s your target consumer? Has it evolved?
[A lot of people in this category say] you need to focus on the heavy, frequent user—the young male target—and I agree with part of that statement, but not all of it, at least as it pertains to Wendy’s. I’m sure McDonalds and Burger King have done research which tells them the right target for them, but for Wendy’s the research shows we need to go after this heavy, frequent user who is very important to our category, but those heavy, frequent users aren’t always just young males.

For instance, there are moms whom I call soccer moms, who are busy and involved in their kids’ lives, taking them where they need to be and these moms are trying to make the right decisions for their kids. It’s moms and primary caregivers for kids, folks who are looking for the right kind of food in this on-the-go world they are in. Those folks like Wendy’s, they are label readers, they do care where the food comes from, they are smart shoppers, they’re going to places like Whole Foods and they care about where their food is sourced. They attract real, they desire real, they are looking for real in their lives and I think real is a very powerful idea. I say to people, “You’re not just looking for a job. You’re looking for a real job.” “You’re not just looking for a friend in tough times, you’re looking for a real friend.” The same thing goes here. It’s a powerful concept we feel we’ve leveraged off of.

BW: Is that how you came up with the slogan, “You know when it’s real?”
We did that purposefully. When we talked to consumers, we thought of a really neat insight, which was, “Consumers themselves know when it’s real and they know when it’s not.” We wanted to give them that credibility, so [in the advertising] we don’t have to tell them: “We’re Wendy’s. We’re the real ones.” This challenges them to ask questions and look at [the issue deeper] because the more questions you ask, the more you know. So, when they ask questions about where we source our beef, how we cook or serve it, the better we look as brand and the better we look versus our competitors. That was the insight behind the line.

BW: You’re dialing back on value advertising to promote the new “freshness” message. Category experts have pointed out that’s a risky move, especially in a recession. How are you balancing the two?
Wendy’s pretty much created the 99-cent value menu for the category back in 1989 and since then, we’ve had a value menu of some kind in our restaurants...We have a number of items on that 99-cent menu that we keep all year long, We might not have it on TV all the time, but [we do have it all year round] for consumers who are looking for value options.

BW: How important is “real/freshness” versus other drivers like taste and value?
I’ve worked in the fast food part of the category for over 20 years now and what I’ve seen among different brands is that there are some primary drivers of consumer behaviors that you cannot avoid and you pointed out a couple of the ones: Convenience is one, value is one, cleanliness is another, speed of service. I will tell you when you talk about value, there are two different consumer groups that are both incredibly important from a value perspective. One group is folks that define value by what they get, by what they pay…The second group starts at the price but doesn’t end there. Price is important to them, but it’s also, “What am I gonna get for that price?” Wendy’s has done a nice job of balancing those two over the years.

BW: But “freshness” is a common category positioning. How is this different?
Wendy’s already, versus some of our competitors, has a leg up in being known for that. We have some credibility in a world where fresh is something everyone talks about. We are the ones that deliver on that, we’ve stood for that for a long time with our “fresh, never frozen beef” proposition. But I think that tying it to “real” is the key. That holds you to a higher standard and we have to make sure everything we do—product-wise, sourcing, purchasing, operations, etc.—links to that overall strategy. My experience is when you stay that focused as a brand and you focus everything against that you can distinguish yourself.

BW: Since we’ve been talking about food this whole time, what’s your favorite item on the Wendy’s menu and why?
The Frosty. There is nothing like it. First of all, I have no self-control. I can’t stop eating it. It’s thick. It’s got this taste that only the Frosty has and it’s…you  just can’t describe it. It’s like chocolate. It’s like a malt. It’s not really a malt. It’s just this thing…a Frosty. And, since 1977—which was the first time I went to a Wendy’s, [I’ve always] ordered a double with cheese. I love a double with cheese, nothing else on it, just a double cheese and a Frosty and that’s my favorite Wendy’s  meal.