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- 5. SITUATION ANALYSIS Asamiddleofthepackquick-serverestaurant,Sonicislookingtokeepandimprovetheposition intheircurrentmarkets.Theirmainfocusistocontinueemphasizingtheuniqueatmospherethat Sonichaswithitsintercom ordering,carhopdeliverysystem,andmade-to-ordermenuitems. Amongcompetitors,Sonicʼsuniquesellingpropositionistheirhighqualitydistinctivemade-to-order menuitemsandpersonalizeservicefeaturingskatingcarhops.Theirpromotionmediachannelsare TV,radio,interactivemedia,point-ofsalematerials,andothermediatoadvertisetheirlimited-time productandsignaturemenuitems.Thisyear,Sonicʼsnew businessstrategyto expandinthe “N“NorthernFront”states,wheretheyhavebeguntobuildtheirbrandinthelast5year.Withthis expansionofopening30newstoresinthenorthwesternandmid-northernstates,theirmarketing objectiveistoraiseawarenessofnewlocationsandconvincemanyofthefastfoodnaysayersthat goingtoSonicisanexperience,notjustanothercheapeatforbusypeople. 4
- 10. BRAND ANALYSIS Sonicwasfoundedin1953inOklahomaandfollowedthedrive-inrestauranttrend,usingcurbsidemicrophonestoorder foodwithoutgettingoutofthecar.In1990,thecompany wasfinallycorporatedintheStateofDelaware.Today,Sonic pridesitselfonthesuccessofitsfranchisesaswellasthecontinualnationwideexpansion.Sonicdoesnʼthavenational distributionineverystate;insteaditfocusesonopeningfranchisesinthesouthernUS,creatinghugepopularityand dedicationinthatarea.Currently,Sonicfocusesonadvertisingbothnationallyandlocally,withnationalbeing46% and locallocal53.2% .Thetotalwasmorethan136millionsadvertisingspending(2012).BasedonCFO projections,theywantto open30newstoresinthenorthwesternandmid-northernstates.Withtheiraim totarget“thenorthernfront”,LuckyLeaf OriginalMediawillfocusontheopeningofnew storesinthestatesofWashington,Oregon,partsofnorthernIdaho, Wisconsin,NorthandSouthDakota,MinnesotaandMichigan.Also,lookingatcurrentSoniclocationsandnewlocations tobebuiltthisyear,Montanaisinthelistwithseveralnewrestaurantsopening;therefore,Montanawilladdedtothelist. 9
- 11. BRAND ANALYSIS 10 Unfortunately,dataforNorthDakotaʼsBDIandCDIwasnotprovided.ThesecondcategoryisHighBDIandLowCDI: Wisconsin,MinnesotaandMichigan.InWisconsin,consumersare3% morelikelytoeatatSonicthantheaverage populationand2% lesslikelytoeatatafastfoodrestaurant.However,inMinnesotaandMichigan,thebrandhas highpotential,aspeoplelivinginMinnesotaare9% morelikelythantheaveragepopulationtoeatatSonic,but5% lesslikelytoeatatafastfoodrestaurant.InMichigan,peopleare10% morelikelytoeatatSonicthantheaverage population,butare8% lesslikelytoeatoutatafastfoodrestaurant.PeoplelivinginMontanaareequallylikelyto avaveragepopulationtoeatatSonicand11% lesslikelythantheaveragepopulationtoeatatafastfoodrestaurant.
- 12. BRAND ANALYSIS 11 AccordingtoaStatistareport,theU.S.fastfoodindustryisonasteadyrisewithajumpincompetition.The revenueofallfastfoodrestaurantshasbeenincreasingfrom approximately$160billiontoapredicted $220billionby2019.Price,quantity,quality,andexperiencevaluethatQSRsoffertocustomers,alongwith apositiveeconomicsituationoftheindustry,iscontributingtotheseprojections,andSonicisprimedtoreap thebenefits. AsocietaltrendthatcreatespotentialforSonicʼsgrowthisdiningoutasasocialexperience.With44% ofU.Scustomers visitingaQSRatleastonceperweekandthehighcompetitionamongbrandsas10,000new QSRfranchiseshave openedsince2015,theyexpectrestaurantstoinfusetheirservicewithmoreconvenienceandtechnologyinordering andentertainment.Therefore,Sonicasayoungdevelopingbrandwillhaveroomtogrow,improveandinnovatetheir drive-inexperienceforcustomers.Healthandlifestyletrendshavebeeninfluencingnotonlythefastfoodindustrybut allallindustriesdrastically.MillennialsandiGEN generationsaremorecautiousandawareaboutwhatgointotheirdaily foodconsumption.Consumerattitudestowardslow-calorieandhealthyoptionspushfastfoodrestaurantstochangeand advertisedifferentlytomeettheirneedsandwants.ArbyʼshasbeenknownfortheirBeefʻnCheddarsandwicheswith highcaloriesbutlowfat.Asacompetitor,Sonichastheopportunitytointroducetheirhealthyalternativestocustomers. OneeconomictrendthatwillpotentiallyhaveaneffectonSonicisconsumersleaningtowardshomedelivery ortakeoutinsteadofdininginrestaurants.AlthoughSonichasamobileapporder,therapiddevelopment ofthird-partydeliveryapplicationsgivecustomersavarietyofhealthierandbetteroptionscomparingto Sonicʼsofferings.Inasurveyconductedin2016,85% ofU.Sconsumerschosequalityofthefoodasthe mainreasonfortheirdine-inandtakeoutdecision.Also,in2016,NationalRestaurantAssociationreports thatof1,009respondents,45% ofthemwerenoteatingonthepremiseatrestaurantsandfastfoodplaces. ConsumerswillConsumerswillreactaccordinglytoeverystrategicmoveofthecorporation.
- 15. COMPETITIVEANALYSIS A&W Restaurantsspentatotalof$1,421,900onadvertising in2012.AlargemajorityofthatwasadvertisingonspotTV, around83.4%.OthermarginalspendingincludesNational SpotRadio,newspaper,andoutdoor.Outdooradvertising compromised11.9% oftheoverallbudget,thesecondhighest amountforA&W. Asanotherhistoricalquick-serverestaurant,A&W restaurantsthriveonnostalgiaand asingularuniqueaspect.Establishedoriginallyin1919asarootbeerstand,ithas sinceexpandedtoover600restaurantsnationwideandover300internationalstores. Asrootbeercreators,theyareknownfortheirin-housemaderecipe,alwaysservedin afrostycoldglass,astandardthattheirfanshavecometoexpect.Asarestaurant, theydobestinlowerpopulation,small-townareas,indexingthehighestincountysizes CandD.TheA&W Restaurantidentityrevolvesaroundthe“AllAmericanFood”slogan andandservesburgers,chicken,hotdogs,anddessertsthatrepresentthatideal.Although notfoundeverywhere,theydoindexhighintheplacestheyaremostconcentrated (164inWestCentraland138inPacific). 14
- 16. COMPETITIVEANALYSIS 15 Theyhaveactivesocialmediaprofilesthattheybolsterwithan“A&W Ambassadors” program aimedatsocialmediainfluencersonInstagram andTwitterwithapenchant for“hipnostalgia.”Muchoftheirmarketinghasacreativeandplayfulfeel,including theAWcademyAwards,#MenuMadnessandheavyuseoftheir“spokesbear”Rooty theRootBear.
- 17. COMPETITIVEANALYSIS 16 DairyQueen(DQ)isachainofsoftserveicecream andfast-foodrestaurantsownedby InternationalDairyQueen,Inc.,asubsidiaryofBerkshireHathaway.InternationalDairy Queen,Inc.,alsoownsOrangeJuliusandKarmelkorn.ThefirstDQ restaurantwaslocated inJoliet,Illinois.ItwasoperatedbySherbNobleandopenedforbusinessonJune22,1940. Itservedavarietyoffrozenproducts,suchassoftserveicecream.Thecompany'scorporate officesarelocatedintheMinneapolissuburbofEdina,Minnesota.WechoseDairyQueen asacompetitorbecauseDQ andSonichaveverysimilarmenuoptions,qualityoffood,and ararelocatedinsimilarareasofthecountry. DairyQueenspentatotalof$87,861,200onadvertisingin2012. Televisiondominatestheiradspending,with33% onSpotTV, 39% onCableTV,and17% onNetworkTV.Othermarginal spendingincludesSyndication,whichamountsto10% ofDQʼs overalladspending.Theyalsoadvertiseinnewspapers,onlocal andnationalradio,USInt-Display,andoutdoor,butthesemedia onlyamounttoabout1% ofDairyQueenʼstotalspending.
- 18. COMPETITIVEANALYSIS 17 In2012,DQ wasfacingsevenyearsofnegativesame-storetransactiongrowth.DQ focused theoperationsteamsettoworkdefendingthekeybrandstrengthsandfocusingadvertising onmakingthebrandcontemporaryandrelevant.AnagencyreviewbroughtonBarkleyout ofKansasCitytoleverageakeyandgamechangingconsumerinsightithaddiscovered: thatitʼscustomersarenotcustomers,butfansofthebrand.InJune2013,DairyQueen launched theirʻFan Food,notFastFoodʼcampaign.In the kickoffTV spot,DQ first addressedafundamentalconcern;DQ rankedlastinaffordabilityagainstitscompetitors, whiwhichincludedMcDonaldʼsandBurgerKing,accordingtoNPD.Theconcept,“$5Buck Lunch,”wasdevelopedofferingconsumersanentrée,fries,beverageand,ofcourse,and icecreamsundae,allfor$5.Commercialsencouragedtheuseofthehashtagforthebrand, #LOVEmyDQ.
- 19. COMPETITIVEANALYSIS Arbyʼs,foundedinBoardman,Ohio,isAmericaʼssecondlargestsandwichchainwith around3,300restaurantsintheU.Sandworldwide.ArbyʼsisownedbyInspireBrands, thesameparentcompanyasSonic.Therestaurantpioneeredinnovativemenuofferings aheadofitscompetitors;forexample,chickennuggets,porkbelly,andpancetta.Arbyʼs iswellknownfortheirclassicRoastBeef,BeefʻnCheddarsandwiches,andcurlyfries. In2011,Arbyʼsspent$104.6millionontheiradvertising,with51% on spotTVand39% onNetworkandCableTVtoadvertisetheirnew products.Theiradvertisingschedulingispulsing,withmoreadvertising moneyspendingduringApril,July,August,andOctober.Forexample, in2011,Arbyʼsspent49% ofthetotal$104.6millionbudgetduring4 peaksellingperiods,butonly51% fortheother8months. Arbyʼshasanactivesocialmediapresenceondifferentplatforms,especiallyFacebook.Theyhave3.2 millionpagelikesonFacebook,only273KfollowersonInstagram,831konTwitterand19konYoutube. Currently,theyarerunning#MakeMySandwichtomakeandcustomizesandwichportraitsbyrequest from Facebookusers.Thehashtagiscurrentlygeneratingalotofimpressionsandreach.Theirsocial mediaʼsconsistentconceptisillustratedcartooncharactersusingketchupandsandwichingredients. 718
- 20. COMPETITIVEANALYSIS AccordingtoSpinXDigital,Arbyʼsmarketingstrategyfellshortcomparedtoall othercompetitors.Thecompanysuffered“$150,000salesloss”overthecourseof fouryears.However,aftertime,Arbyʼshavebeenchangingtheirpresencefrom “Iʼm ThinkingArbyʼs”to“WeHaveTheMeats”.Thenew tagline“Wehavethe meats...forsandwiches”withtheappearanceoftheexecutivechef“HeadofSand- wich”acrossallArbyʼscommercialcampaignhighlightsthevarietyofmeatoffer- ingsintherestaurant.Withthenew approachtryingdifferenttypesofadvertising toengagecustomers(socialmediagame,humoradvertising,”honest”advertising, etc…),Arbyʼshasseenalotofsuccess,likethecustomerbaseincreaseof43% with people35yearsoldandolderin2015. 19
- 21. In2011,Hardeeʼsspentatotalof $34,033,000onadvertising.A large majorityoftheirspendingwasfocusedonSpotTV,around88%.Therestof theirspendingwasminimal.Thespent8% onOutdoor,3% onlocalradio, 1% onNationalSpotRadio,.6% ondisplay,and.03% onNewspaper. HardeeʼsisactiveonsocialmediaandanewcomertoInstagramasofApril ofthisyear.Theseplatformsareusedtoshowcasegatheringsofpeopleat Hardeeʼsacrossthecountryaswellasan“All-American”feel.Plentyoftheir mamarketingfocusesondisplayingtheAmerican,family-orientedfeelthatthe brandpridesthemselvesonincludingadvertisementsatstatefairs,bowling alleys,andopenfields,andtakesonacasual,sometimessarcastictone. CKERestaurantsInc.,ownsandoperatesbothHardeeʼsandCarlJr.,bothofwhich areadvertisedinsimilarways.Thechainwasfoundedin1960byWilburHardeein Greenville,NorthCarolinaasahamburgerrestaurant.Afteritʼsopening,itquickly expandedtothesoutheasternandmidwesternpartsofthecountry.Hardeeʼsis knownfortheirbiscuitsand“thickburgers”.Alongwiththesemenuitems,theyalso sellchickensandwiches,breakfastburritos,fries,andshakes.Hardeeʼspridesthem- selvesontheirhand-cuttomatoesandlettuceasopposedtootherquick-service rrestaurants. 20 COMPETITIVEANALYSIS
- 27. 26 TARGETAUDIENCEANALYSIS 65.7% ofoursurveyrespondentssaidthattheyateatrestaurantsoratepreparedfoodsatleastonceaweekand66.6% ofrespondentssaidthatcookingamealfortheirfamilywasapriority.Thisindicatesthatintentiontoeatfamilymealsis present,thoughnotalwaysachievable.Qualityandpricewerealsothemostimportantaspectsofarestaurantwith54.3% ofsurveyrespondentsindicatedthatqualitywasthemostimportantpartoftheirdiningexperienceand20% saidthatprice wasthemostimportant,while100% ofthosewhohadheardofSonicsaidtheyhadanextremelypositiveassociationwith itsitspriceandvalue.ThiswasalsoreflectedinthepersonalinterviewsconductedonSonicpatrons,manycitingpriceand taste(oraspecificproduct)asthereasontheywereatSonic.IntervieweesalsohighlightedSonicʼsmilkshakesasbeinga drivingfactorintheirdecisiontovisit,with60% oftheintervieweesspecificallymentioningaproductthatSonicserves,one evendeclaringthattheirmilkshakeswere“thebest,”andanothercomingtoSonicbasedonthemilkshakesintelevision commercials.71.4% ofsurveyrespondentsalsoindicatedthattheydofavornostalgicexperienceswhichisalargepartof Sonicʼsidentity. UsingNielsenMRIdataandSimmonsOneview,weestablishedthespecificlifestyleandmediaconsumptionofourtarget audience.Ourprimarytargetaudienceishard-workingparentsfrom35-44yearsoldlivinginthenorthernarea(specifically “northernfront”)andtheyhaveatleast1-2children.Themajorityofthemareworkinginofficeandadministrativesupport occupationsandproductionoccupations.Theirannualincomerangingfrom75kto100k;however,theydonʼtthinkmoney isthemostimportantconcernintheirlife.Forourtargetaudience,familyistheirbiggestpriority,astheywanttospendtheir timetimewiththeirlovedones.Theyalwayswantthebestfortheirfamily.Eventhoughtheyarebusywithwork,theyalwaystry tomakeorenjoydelicioushomecookedmealswiththeirfamilymembers.However,sometimes,fastfoodistheirgo-toas treatsfortheirchildrenandasquickmealsduringworkinghours.Intheirleisuretime,theyconsumealotofinternet,TV, andradio.Interestingly,Internetforthistargetaudienceisusedforbasicneeds:communicatewiththeirfriends,receivethe latestnews,listentotheradioandengageinonlineforum blogs.Also,theyspendtimealotoftimeoutdoorswiththeir ffamilymembers.Throughsecondaryresearch,weareabletotailorspecificdemographic,psychographicandbehavioral profilesthatsupportSonicʼsmarketingstrategies.
- 30. SW OTANALYSIS 29
- 34. MEDIA OBJECTIVESAND STRATEGIES Forpurchasingadvertisementsonnetworktelevision,webudgeted$9,142,300whichis52.3% ofourtotalbudget of$17,292,200withatotalof1520GRPS.Weplannedonbuying30-secondspotstoadvertiseonnetworktelevision foreverymonthintheyear,withincreasedadvertisingduringtheheavy-upmonthsonprimetimepopulartelevision showsthatindexedwellwithouraudience.Althoughnetworktelevisionisexpensive,wehadroominthebudgetto spendandfeltthatitwasaneffectivewaytoreachouttarget. 33
- 36. 35 MEDIA OBJECTIVESAND STRATEGIES Fortheinternet,weallocated2.5% ofourtotalbudgetof$17,292,200to advertisethroughouttheyear.Becauseofthelowcostofthismediumand highreachtoourtargetaudience,wedecidedtokeepinternetadvertising fortheentireyear,butheavyupduringsummertimefrom MaytoSept. The internetbudgetallocation ismostly fortargeted sites(Groupon, ExpediaandAllrecipes)becauseofthehighindexnumber.Then,we bought1,500,000impressionsonYouTubeduringpre-rollandmid-roll,as ourourtargetaudienceare24% morelikelyto watchYouTubethanthe averagepopulation.Webought1,000,000impressionwiththecostof $3000throughSearchEngineMarketingtoobtainourreachgoal.
- 37. MEDIA OBJECTIVESAND STRATEGIES 36 Forourmovietheaterbuy,weplannedonspending20.7% ofourtotal budgetand to advertisecontinuallythroughoutthecampaign,adding moretheatersduringthesummermonthstocorrespondwithouroverall campaignheavy-up.Movietheateradvertisementsarerelativelycheap andaregoodforreach,withthemorepopularfilmsaveragingaCPM of $25.Weplannedtoadvertiseyear-roundinmovietheatersbecausenew filmsareconstantlybeingreleasedandourtargetdemographicindexes highhighforseeingmultiplemoviesamonth.Becausemostofthosemoviesthey seearechildrenʼsmovies,wecaninferthattheyarebringingtheirchildren and willsee the advertisementsforSonicevery time.Totalspending amountedto$3,616,000,withapproximately133,120,000impressions. Thoughnotconsideredatraditionaladvertisingmedium,thisagedemographicindexeshighforgoingtothemovies,and goingtomultiplemoviesamonth.Adults35-44indexedat123forhavingattendedamovietheateronceinthelast30days and131forhavingseen6ormoremoviesinatheaterinthepast30days.Thisagegroupalsoindexedthehighestforseeing animation(148)andfamily/children-orientedmovies(192),indicatedthattheyaremostlikelyattendingthemovietheaters asafamilyactivity.Anadvantagetomovietheateradvertisingistheinabilitytoskipormutetheadvertisements,andthelarge displdisplaycapturesaudienceattention.Ourtargetdemographicagreedthatoftendopayattentiontothesecommercialsthat playwiththemoviepreviews(121)andthatadvertisinghelpsthem buyproductsfortheirchildren(127).ForSonic,the conceptofbeingabreakforthewholefamilytiesintothemovietheaterexperience,asthesetypesofoutingsareconsidered somethingspecialandawayforparentstokeeptheirchildrenentertainedforacoupleofhours.Movietheateradvertising canalsoberegion-specificornationallydistributed,whichmakesitcustomizableforourNorthernFrontcampaign.The mmoviesinwhichwewouldplaythe advertisementwouldbethekindof“family-oriented”moviesthatindexedwellwithour demographic.Upcomingmovieswouldincludethelive-actionDisneyAladdinremakeinMay,ToyStory4inJune,TheLion KinginJuly,andPlaymobil:TheMovieinAugust.Wearedecidingtoairinthefirstmonthofeachofthese,asourtargetde- mographicseesmoviestheopeningweekend(130)andwithinthefirsttwoweeks(123)morethananyothertime.
- 38. 37 MEDIA OBJECTIVESAND STRATEGIES Radioprogrammingcomesinsomanydifferentformats,eachattractingaparticulardemographicorlifestyle listener.Radioalsoaddsimpactthroughmessagefrequency.Radioistheleadingreachplatformaccording toNielsen,drawingahigherweeklyaudiencethantelevision.Astaggering93% ofadultslistentotheradio weekly,madepossiblethroughnotonlytraditionalmethodsbutalsothroughSiriusXM anddigitalstreaming platformslikeSpotify,Pandora,andiHeartRadio.Radiohascarveditsownnicheofferinguniqueformsof entertainmentthroughbothdigitalandtraditionalchannels.Tosurvive,radio,oraudiocontenthasexpanded totoofferexclusiveshows,podcastseries,newsnetworks,andcustomizedstationsthroughdigitalstreaming. Thisevolutionhaspositionedradiotoretainitspopularity,offeringentertainmentthatʼsdifferentfromvideo content.Radiolistenershipindexedwellwithourtargetaudience(135),primarilyduringMorningDrive(146) andDaytime(127)hours.Wespent$2,469,700,or14.1% ofourtotalbudgetonradioadvertising,and plannedonadvertisingtherecontinuouslythroughoutthecampaign.
- 39. MEDIA OBJECTIVESAND STRATEGIES 38 Wespent$172,000,1.0% ofourtotalbudgettobuyPinternetadvertisingspace andplannedonadvertisingtherecontinuouslythroughoutthecampaign.Our targetaudiencechecksPinternet6-15timesperday(140),whichmakesitanideal socialmediaopportunityforSonic,asfood-relatedpinsarethedominantusefor thewebsite.Wewillplanonusingitasatraditionalsocialmediapresencealong withthemediabuyonAllrecipesʼwebsiteaswellaspayingforpromotedcontent. Combined,(Allrecipehas10m+monthlyviewers)thistacticwilldrivesignificant trtrafficfromourtargetaudience.