Nation's Restaurant News focuses on BrandIndex's burger QSR research

Study: Perceptions of burger chains improve

NEW YORK (Sept. 4, 2009) Whether it’s because consumers are “trading down” from casual dining or due to aggressive value promotions and advertising, quick-service burger restaurants have improved their standing in the eyes of customers in the past 12 months, according to a new study by BrandIndex.

The New York-based consumer perception research firm tracked several indicators of brand health from August 2008 to August 2009 for McDonald’s, Burger King, Wendy’s, Carl’s Jr. and Hardee’s. All five chains logged steady improvements in their overall brand health scores, as determined by BrandIndex’s method of surveying 5,000 consumers every weekday from an online panel of more than 1 million people who have opted to participate.

Ted Marzilli, senior vice president and global managing director for BrandIndex, said the chains studied not only benefited from value-seeking consumers trading down to quick service, but also through their value- and quality-focused marketing.

“It’s actually a little bit of both,” Marzilli said. “A lot of casual customers are now open to eating at a quick-service restaurant. I also think [the brands] have been doing heavy advertising on the value side, and folks like McDonald’s are promoting McCafé and targeting Starbucks, trying to improve their quality.”

The best-perceived brand overall remains Wendy’s, the data revealed. Its brand health score was consistently in the mid-30s for the 12 months ended in August, compared with averages in the high teens for Burger King, a range from low single digits to a high around 10 for McDonald’s, and scores that went from slightly negative to slightly positive for Carl’s Jr. and Hardee’s.

Scores can range from 100 to negative 100 and are compiled by subtracting negative ratings from positive, meaning that more positive feedback from consumers surveyed yields higher scores for the brands.

Wendy’s also had a commanding lead in consumer perception scores on several factors, including its “quality” scores in the mid-30s, “value” scores trending flat around 40, and scores in the mid-40s for “satisfaction.” It also was the only chain with a positive score for “reputation,” which measures whether respondents would be proud or embarrassed to work for the brand.

Marzilli said Wendy’s scores reflect not only good branding and execution, but also the tendency for its larger rivals to take most of the heat for quick service’s negative perceptions.

“McDonald’s and Burger King have taken the brunt of the backlash at times among different government groups or consumer groups saying fast food contributes to obesity,” he said. “Wendy’s, being the No. 3 player, escapes that spotlight, and it also has a history of differentiating itself from QSR.”

Wendy’s restructured its brand strategy following its September 2008 merger with Arby’s parent Triarc Cos., and its subsequent “Waaaay Better” ad campaign focused on food quality. Its latest round of commercials, featuring its boneless wings, encourages customers to pay for flavor, not flair, in a jab at casual-dining brands.

McDonald’s made significant improvements in overall brand perception, distancing itself from Carl’s Jr. and Hardee’s in the rankings and narrowing its gap with No. 2 brand Burger King.

McDonald’s widening the gap in overall scores from Carl’s Jr. and Hardee’s — its August 2009 scores hovered around a value of 10, while scores for both CKE-owned chains were just above a neutral score of zero — comes as the two regional chains have escalated a premium-burger war with the segment’s sales leader.

Carl’s Jr. unveiled in August the Big Carl, a burger with twice the beef and cheese as a Big Mac but meant to be sold for less than McDonald’s iconic sandwich. CKE Restaurants also unveiled an ad campaign urging consumers not to believe the “McHype” surrounding McDonald’s July rollout of its Angus Third Pounder line of burgers. The marketing efforts include a money-back guarantee, beginning this month, where CKE will give consumers refunds if they don’t think the Six Dollar Burger at Carl’s Jr. or the Thickburger at Hardee’s tastes better than McDonald’s new premium burger.

Carl’s Jr. and Hardee’s lag behind the three main burger brands in overall brand health in part because they’re regionally focused, Marzilli said, with Carl’s Jr. primarily in the West and Hardee’s in the Midwest and Southeast.

“Even if Hardee’s and Carl’s Jr. make an impact, on a national scale it’s hard for them to gain ground,” Marzilli said. “There’s an advantage of scale in this industry. There are lots of folks driven by their stomachs and time of day when they decide they’re going to eat, and they’re more likely to be in the proximity of a Burger King or McDonald’s.”

Burger King benefits from its branding advertising, Marzilli added, as its commercials starring mascot The King, developed by agency of record Crispin Porter + Bogusky, keep the brand top of mind.

“Burger King takes a different path, working with Crispin Porter, which is known to be a more creative shop,” Marzilli said. “But when you look at the BrandIndex numbers, Burger King’s made improvements steadily and they’ve been generating really positive buzz. ‘Whopper Virgins’ rubbed some people the wrong way and got some negative press, and that’s one of the dangers of a creative shop, but in general that approach is working for Burger King. It’s a little more risky, but over time it reinforces this message that Burger King is cool.”