Taco Bell Out-Ronald’s McDonald’s

Burger King World (NYSE: BKW  ) has been beating up on McDonald's (NYSE: MCD  ) for months. So how will Yum! Brands (NYSE: YUM  ) respond? By ganging up on McDonald's and kicking it while it's down, of course. The latest marketing move from its Taco Bell chain will surely go viral and it comes at the perfect time.


Source:  Yum! Brands

What Burger King has been doing
The short version: McDonald's same-store domestic sales have steadily weakened since the third quarter of last year. At the same time, Burger King has launched Satisfries, French fries with less fat and calories than those sold by McDonald's. It has launched the Big King sandwich to compete with McDonald's Big Mac.

Burger King also has a $1 rib sandwich to compete with the McRib, a spicy chicken sandwich similar to the McChicken spicy sandwich, a similar store remodeling strategy similar to one being put forth by McDonald's, and, well, you get the idea. Burger King's same-store sales have been rising while McDonald's have been falling so it seems to be working.

Source: Yum! Brands

Yum! Brands' turn
On March 27, Yum! Brands started off a very clever marketing campaign directed at McDonald's breakfast. Coinciding with that date, Taco Bell began to serve breakfast nationally at 7 am (or later) at thousands of its locations.

Taco Bell's main message is a fresh and delicious idea, a "portable handheld breakfast on the go." McDonald's currently has 30% market share in the breakfast category which also makes up more than 20% of its domestic business. It's a huge market and Taco Bell would love to get a piece of it.

To get the message across and get you to pay attention, Yum! Brands plans to hire an army of people who have the name of "Ronald McDonald" in real life. The company will feature all of these individuals in commercials in which they talk about how much they love Taco Bell's breakfast. This obviously comes as a direct jab at McDonald's, which formerly had the Ronald McDonald clown as its mascot.

One ad says, "You will never guess who's loving Taco Bell's crunch-wrap." The camera then keys in on a number of different men, each of whom introduces himself as Ronald McDonald before he talks about the various breakfast sandwiches and how good they are.

One guy says, "It's not messy." Another McDonald standing in front of his tractor adds, "I have to eat on the run so things like this make a big difference." The commercial ends with the bell in the logo ringing like a morning alarm clock.

Another ad features a bunch of men eating waffle tacos. The ad begins, "It's not surprising that these guys are loving Taco Bell's new waffle taco." The voiceover then says, "What is surprising is who they are." The ad introduces a number of Ronald McDonalds, including one called "Ronald McDonald the Third."

The ads capture your attention, deliver their messages, leave you smiling, burn into your memory, and may even possibly tempt you to share them with friends. It's brilliant.

Source: Yum! Brands

Foolish final thoughts
The implied gag here is, of course, that Taco Bell is so good that even Ronald McDonald left McDonald's to go grab breakfast at Taco Bell. Taco Bell President Brian Niccol even said, "We like to do things with a wink and smile. We have a sense of humor." Indeed so. This campaign got certainly got me to smile and I personally plan to give Taco Bell's breakfast a try tomorrow.

Taco Bell only increased its sales by 4% at locations where it test-marketed its breakfast, but that happened before it launched this national marketing campaign. Yum! Brands' goal, of course, is to capture sales "much greater than that." It will be interesting to see how successful this clever marketing campaign will become and if it will have a lasting effect. So far, I'm lovin' it.

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