WENDY’S CUSTOMERS
WENDY’S CUSTOMERS Robin Crawfor d Ly. Shandr a Holmes Bret Kemple r Adam Steele Dr. James Coleman Marketin g Strategy Adedoyin Okunrinboy e Jenny Nino
POSITIONING STATEMENT FOR WENDY’S Wendy’s provides innovative and quality upscale food in a quick-service setting at close-to fast food prices for the adult consumer.
WENDY’S TARGET SEGMENTS Baby Boomers Generation X (Ages 25 to 40) Generation M (Ages 11 to 24) Generation Z (Under Age 10)
Total US population 286, 196, 812 *data from 2000 census, Gen Z numbers obviously larger now GENERATION BIRTH DATES NUMBER OF PEOPLE % OF POPULATION Baby Boomers 1946 -1964 82, 826, 479 29. 4 Gen X 1965 -1980 58, 855, 725 20. 9 Gen M 1981 -1995 61, 297, 467 21. 8 Gen Z* after 1995 19, 175, 798* 6. 8*
Baby Boomers Between the Ages of 41 and 59 HOW THEY ARE TARGETED Baby Boomers are more interested in customizing their orders The other means may be in the name, Wendy’s Old Fashion Hamburgers, which suggests that their style is more like how things used to be done, in terms of freshness and quality.
Generation X Includes Young Families Between Ages 25 and 40 HOW THEY ARE TARGETED Increase in healthy-menu options for both the young adults and their children. Extending location hours to serve the needs of adults working late.
Generation M Mostly between the ages of 10 and 24 Includes College Students Late Nighters HOW THEY ARE TARGETED People in college and in their 20 s are the most frequent consumers of fast food. ð To better leverage her media dollars amid the media consolidation, Wendy’s in 2002 aggressively pursued cross-platform deals, including the massively successful Garden Sensations entree salad launch with AOL Time Warner, and the innovative "Road to Bristol" sports promotion with ESPN n Wendy’s has opened locations in colleges and universities. ð Wendy's has arrived at the University of Denver. ð Wendy's launched its new eatery on South University Boulevard and Harvard Avenue on, Dec. 31, 2004. ð The location is also only two blocks from fraternity and sorority row. The pick-up window , will remain open until 2 a. m, according to Goins.
Generation Z Ages 12 and Under Also referred to as “Generation D”, where “D” stands for Digital HOW THEY ARE TARGETED Meals that can be designed to satisfy kids and to align with parent’s dietary options ð Main course ü 4 -piece kids’ meal nuggets ü Cheeseburger ü Hamburger ð Side dish ü Mandarin oranges ü Kids’ meal French fries ð Beverage ü 2% reduced fat milk ü 1% low-fat chocolate milk ü Soft drinks ü Jr. Frosty
WENDY’S MARKET SEGMENTATION AND PRODUCT OFFERING Wendy’s has developed food choices to target three main market segments: ð Non-Restriction Diet: Customers who do not have any restriction in their diet ð Special Dietary Needs: Customers who “want to look and feel fit” or who “have dietary restrictions for medical reasons” or who are controlling their weight ð Kids choice: Customer group derived from Non-Restriction Diet customers and Special Dietary Needs customers
DETERMINATION OF SEGMENTS Price Service Quality Location Type of Food
Price n n n Wendy’s is known as the innovator of providing new ideas and products like the 99 cent value menu, salads and high quality chicken sandwiches. Provides upscale foods at close to fast-food prices Recently introduced new value-menu items at 1. 29 to boost profit margins.
Service High customer satisfaction and people focus ð Wendy’s has a “Build A Meal” section on its website to help customers make informed meal choices by combining any menu items and reviewing their complete nutritional make-up Wendy’s International Inc. first introduced its late-night program in 1996 A major benefit of operating late, typically from 9 p. m. to midnight or beyond, is that it's fairly cheap, analysts said. Most chains limit access during late-night hours to their drive-through windows and can run with a skeleton crew of as few as three employees, with one taking orders and the others working in the kitchen Wendy’s was 2 nd place after Yum Brands in 2003, with 11 percent of the late-night business
Quality They are the pioneers of fresh food fast. Wendy’s goal towards quality provides its customers with the option of customizing their burgers. Wendy’s strives to offer efficient service without affecting quality. Older people who would rather sit down and have a quality meal would most likely prefer to go to Wendy’s than to Mc. Donald’s. Wendy’s still beats the Golden Arches in food quality and speed of service scores.
Location In addition to the U. S. and Canada, Wendy's operates about 7% of its restaurants in some 25 other countries and territories. ð During the late 1990's the company exited the U. K. and Argentina markets to concentrate on more profitable markets in Latin America and the Caribbean, the Far East and Europe. The contribution of Wendy's international operations to systemwide sales in 2000 was about 2%. n Wendy’s does not have a particular pattern of determining store locations but it tends to use the following criteria: High people-concentrated areas such as malls, airports, colleges and universities. ð Areas close to primary competition such as Mc. Donalds and Burger King. ð
Type of Food Diverse variety of food choices. Wendy’s caters to those in a hurry and the “healthconscious”. According to the General Guide to Calories (per serving): ü Low: less than 40 ü Moderate: between 100 and 400 ü High: more than 400 ð The total fat intake should be between 20% to 35% of calories ü For a diet based on 2, 000 calories , the total fat intake should be no more than 65 grams
Healthy Food Options Meals with less than 510 calories and containing less than 15 grams of fat or less: ð Grilled chicken sandwich with a side salad and fat free dressing or cup of fruit ð Junior hamburger with side salad and fat free dressing or cup of fruit ð Large chili with side salad and fat free dressing or cup of fruit ð Plain baked potato and small chili ð Mandarin Chicken Salad with half serving of dressing ð Fresh Fruit Bowl with small chili or 5 -piece nuggets
Medical Restriction Diets Wendy’s diabetic exchange list: ð In order to serve a wide variety of customers, Wendy’s provides a diabetic exchange list of its products to help customers select items for their medical needs Wendy’s gluten-free list: ð Wendy’s provides a list of all its gluten-free items in order to help gluten intolerant customers identify safe options in its menu Wendy’s ingredient list: ð A list of the specific ingredients used in Wendy’s is available for customers inquiring about specific food allergies or sensitivities
MAJOR CUSTOMER TRENDS New health-conscious diets ð Obesity Impact ü Two-thirds of U. S. adults are officially overweight ü One-third of U. S. children and teens eat fast food on a typical day ü This problem increased the awareness of society to the obesity issue. ð Started by Wendy’s in 1999 ü Built a reputation of having a healthier option and diverse menu options to attract grownups and teens. ü Implementation of the “Build-A-Meal” section on Wendy’s website ü Mandarin chicken salad is the healthiest option on Wendy’s garden salad menu
MAJOR CUSTOMER TRENDS (Contd. ) New health-conscious diets (Contd. ) ð Development of carcinogen acryl amide in potatoes ð Chemical that tends to form during the cooking process of potatoes ð The actual danger level of carcinogen acryl amide is not yet determined, therefore not yet a major concern for customer ð Companies, for instance Mc. Donald’s, are already reacting to the possibility of a negative effect of this problem ð Highlighting salad offerings ð Displaying the benefits of walking in commercials and incentives such as the step-o-meter provided with the purchase of selected meals.
MAJOR CUSTOMER TRENDS (Contd. ) Demographic Impact ð People in college and in their 20 s are the most frequent consumers of fast food. They have also contributed to the growth of Wendy’s late-night business. ð Family Size ü In recent times, family sizes have shrunk to an average of 3 members per households, which increases the likelihood of such families to frequently indulge in eating outside the home.
MAJOR CUSTOMER TRENDS (Contd. ) Most families eat main meals at home ðSeventy-seven percent at dinnertime ðHas increased competition among fast food versus fast casual or fine dining versus casual dining ü Led to KFC’s campaign for home meal replacement to induce families to consume fast food rather than homecooked meals.
MAJOR CUSTOMER TRENDS (Contd. ) Perhaps the most important influence on future revenue growth for Wendy's (and all other firms in the fast-food business) is the continuing trend to purchasing meals and casual food rather than preparing them - at all times of the day and night. ð This trend is evident among all age and geographic segments of the market. ð The roots of this phenomenon are generally traced to a new life style where people are too busy to prepare food for themselves and increasingly less inclined to do so. ð This situation is in turn attributed to the emergence of the two-career family which limits the availability of time to prepare meals while providing the money to purchase them.
MAJOR CUSTOMER TRENDS (Contd. ) Shift toward an urban outlook generation ð Mc. Donald’s “I’m lovin’ it” campaign ð Mc. Donald’s new initiative towards fashion by soliciting Sean John and Tommy Hilfiger to create uniforms for employees. ð Wendy's launched its new "Do What Tastes Right" advertising campaign, featuring a variety of ads that target distinct demographics. ð Wendy’s is attempting to reach the “MTV generation” with it’s new marketing campaign featuring twentysomethings on the move—racing for a train, riding a skateboard, cavorting in a Laundromat—with a Wendy’s product in hand. ð "Eat Great, Even Late!" campaign with national advertising. ð Wendy’s has also just launched a new advertising campaign that combines some youth-oriented national commercials with targeted radio, print and Internet ads.
MAJOR PRODUCT TRENDS New Products and Innovation ð Wendy’s was the first to introduce their fruit salad in February of 2005. ð They will be introducing new Frescata cold sandwiches, featuring high-quality meat and focaccia bread. ð Wendy’s will experiment with breakfast again after twenty years, using baked goods from Tim Horton’s. These items will appear, at the earliest, in 2007.
MAJOR PRODUCT TRENDS (Contd. ) Increase in Technology ð Use of a satellite data network for fast processing of credit and debit cards, data handling and other functions by Burger King. ð The adding of wireless Internet service in fast-food restaurants by Mc. Donald’s and Krystal. ð Hardee's restaurants have been testing a new technology where workers in a call center process fast-food orders. They then shuttle the information. ü "The advantage of it is it frees the person who would normally punch that stuff up to assemble food faster, " Hardee's spokesman Jeff Mochal said. "They can still listen on the headset and hear what's being ordered. "
MAJOR PRODUCT TRENDS (Contd. ) ð Use of a quick-cooking technology, which will cut the time it takes to cook a four-ounce beef patty to 85 seconds from about five minutes. ð Use of swipe-free payment cards to induce efficiency in fast -food delivery ü Proponents of the technology also say the cards are quickly becoming fashionable among younger consumers and have additional appeal for security reasons. ð Credit and debit cards bearing radio frequency identification, or RFID, chips. ü Mc. Donald’s, KFC and Taco Bell among those that have already adopted the use of RFID chips. ü It is predicted that this would cut up to 20 seconds from a typical transaction at a fast-food restaurant's drive-through window
TYPE OF CONTACTLESS CARD WITH RFID CHIPS COMPANIES ACCEPTING THEM Mastercard’s Pay. Pass Mc. Donald’s Subway JPMorgan Chase’s Blink Arby’s KFC American Express’ Express. Pay Carl’s Jr.
Should Wendy’s make Changes to its Current Target Markets or Product Line Offerings? Wendy’s should not make changes to their existing target market segments. As the presentation data explains, Wendy’s is already covering approximately 90% of existing consumer targets: young adults, children, young families and baby boomers. Consumer market research says that there is one group Wendy’s has not targeted, women. Harry Blazer of NPD Group says, “Where is the burger directed toward women? ” Wendy’s should be very careful about marketing aimed specifically at women. After all, hamburgers, not salads, are the most popular entrée ordered by both men and women. There is no immediate need for Wendy’s to change it’s product offering. They are innovators of new products, and have a couple of new sandwiches being researched now. The company is also looking to re-introduce breakfast, which is the only product area they are lacking in.
REFERENCES n n n n http: //www. cfsan. fda. gov/~dms/qa-lab 15. html http: //www. clarionledger. com/apps/pbcs. dll/article? AID=/20050807/COL 0101/508070401/11 46 http: //www. duclarion. com/media/paper 481/news/2005/01/11/Business/Wendys. Offers. Late. Ni ght. Snacks-832316. shtml http: //www. findarticles. com/p/articles/mi_qa 3642/is_200109/ai_n 8958167 http: //www. health. gov/dietaryguidelines/dga 2005/document/html/brochure. htm#b 7 http: //msnbc. msn. com/id/5437151/ http: //www. wendys. com/food/index. jsp Fast-Food Face-Off, June 06, 2005, www. time. com/insidebiz Boyle, Matthew, “Can you really make fast food healthy? ”, Fortune, 8/9/2004 Galuszka, Peter, “Can Wendy’s Sizzle Again? ” Business. Week Online. http: //www. businessweek. com/1999/99_44/b 3653150. htm [Accessed September 05, 2005] Gorman, Brian, “Mc. Donald’s New Duds” [Accessed September 06, 2005] Hein, Kenneth, “Fast Food”, Media Week, 04/25/2005 Horovitz, Bruce, “Fast food could soon mean fast fruit as chains test…”, USA Today, 11/8/2004 Houghton, Shannon, “Fast Food” The Florida Times – Union, June 26, 2005 Kuykendall, Lavonne, “Key. Bank Touting Paypass Debit for Small Buys” American Banker, 8/18/2005 Liddle, Alan J. , “BK franchise supports card processing, betters data handling using satellite” Nation’s Restaurant News. September 12, 2005. [Accessed September 14, 2005]
REFERENCES n n n n n Lindenmayer, Isabelle, “Fast Food Embraces, Hesitant on Contactless”, American Banker, 8/4/2005 Lockyer, Sarah E. , “Food fight: Battle for Consumer Dollars Rages On”, Nation’s Restaurant News. [Accessed on September 05, 2005] Ma. Carthur Kate, “Michelle Fedurek”, Advertising Age, 9/29/2003 Ma. Carthur Kate, “Rowden grabs Wendy’s collar, yanks it forward”, Advertising Age, , 6/27/2005 Mallas, Steven, “Oh, Not the Fries” Yahoo Finance. August 30, 2005 http: //biz. yahoo. com/fool/05/08/30/112541817208. html? . v=1&printer=1 [Accessed September 06, 2005] Mc. Donald, Soraya, “GA Credit-Card Holders ‘Blink’ Cards”, Business News, 05/25/2005 Mc. Donaldization, www. goldernessays. com/free_essays/mcdonaldization O’Hern, Emily, “Trends in U. S. Retail Food and Food Service Industry”, International Strategic Marketing Group, Processed Products Division, Foreign Agricultural Service Newsletter [Accessed September 05, 2005] Tatge, Mark, “Where is the Beef? ”, Forbes, 9/20/2004 Wendy’s Finds Its Voice After Dave, March 18, 2002, www. forbes. com/2002/03/18
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