At The Beginning Of 2009 - It’s All About Price Price Price
Hello, thanks for returning to my Restaurant Trade Area Research (RTAR) website - I’m back and ready to comment on the utterly new marketing situation all businesses are facing during this economic downturn. This blog decided to `wait’ during the last 10 weeks - rather than comment `daily’ on the possibility of financial meltdown and market disruptions. Knowing that you, a franchisee - knew the real business situation better than the commentators on Tv or in-print.
But, seeing now that 10 weeks after the end of the first cash crisis, that we seem to be facing, again, the solvency of the very banking system — it at least seems prudent to update the on-going strategies being employed with marketing and ad dollars - by various fast food, casual, and sit-down restaurants in 2009 – and that strategy - not surprisingly — has one focus — PRICE. (Ad language for `cost’ — the perception of the consumer.)
As you may know, when we left off in Nov. it was about price too - various price points - and now - we have the same only ratcheted up a degree. I can only comment about the local Atlanta media marketing and local store market close to Woodstock, Ga. That said, I’m pretty sure that each is generally reflective of the nation as a whole.
Perhaps most noteworthy and of immediate concern to the competitive marketplace is Quiznos advertising campaign about `reducing prices’ on food. Period. Not, come in for a reduced price combo or similar deal or bounceback coupon value — no - the actual phrase positioning `reducing prices’. Their local couponing has a 2.00 off any regular sub and buy any sub and get a chips and regular drink FREE. Combine the everyday reduced prices with an additional 2.00 coupon — and the price for loyalty and new trial customers - has just been increased.
And, as you know, - for years - Sonic - has offered reduced drink prices during the afternoon. And, as you know, since Chick-Fil-A (and Hardee’s) started selling quality milkshakes - those that previously sold shakes (especially Dairy Queen and Steak and Shake) - have probably been under some pressure on a signature item. The response - an aggressive coupon campaign by Steak and Shake and not only that, locally, in Woodstock, Ga at least — reduced price shakes from 2-4 in the afternoon. A very good aggressive response and making true dayparting of pricing a strategy that deserves a second look. (Such as reduced coffee pricing after 4 PM.) Not only that, recently, Steak and Shake had a special of those small burgers that are now favorites of Casual Restaurants too - attack on all fronts.
Fortunately, the above examples are the only ones talking about reducing prices (although - O’Charlies has pushed the casual market with the 7.99 price point advertising - instead of the usual 9.99) and, ultimately, your customer ticket total. But, all the others are doing the same in their own manner. Here’s just a re-cap:
McDonalds - To soften the price INCREASE for the double cheeseburger from the old price of 99cents to 1.19 - the `old’ price of the double cheeseburger Combo for 2.99 is retained. (Only those cheapies will face that 20 cent increase.)
Wendy’s - Pure price positioning - 3conomics — with the focus on 99 cent choices of only Wendy’s quality and variety. (McDonald’s has countered with ads supporting their 3 - 2.99 combos too.)
Arby’s - From 1.99 Chicken Sandwich choices to 3.99 specific combo choices — low price positionings for Arby’s.
Taco Bell — Ads geared to products BELOW 99 cents each.
Checkers - New `99cent’ offerings.
IHOP - All you can eat pancakes.
Zaxby’s - 5.25 (or about) Combo’s.
About the only ones holding to a non price strategy at the moment are the potentially `low priced’ Krystal (hard to reduce the price on a burger of that size) and `high quality’ brands - such as Chick-Fil-A. And, Burger King - continues to do what the King does best - be edgy.
The RTAR will get back to regular postings, with weekly links, with more opinions, and more updating of the sidebar (and more) for this webpage - hope you like the changes to come in 2009. I want to suggest looking at the full 2008 postings of merit by hitting the link in my sidebar review of 2008.
Continue down the page for much more. See you next week.
