Burger King (NYSE: BKC) has never had a problem taking chances in its marketing campaigns.
- Transforming its iconic mascot into a creepy pop-culture figurehead? Check. It even brokered a deal with Microsoft (Nasdaq: MSFT) for a series of Xbox games featuring the King and his cohorts.
- Launching a viral marketing campaign with a fictional death-metal band to promote its chicken fries? Check. And Slipknot even sued the burger chain.
- Going with a "Whopper Freakout" hidden camera campaign, where it shocks patrons by telling them that the signature burger has been discontinued? Check. Please.
However, its new Whopper Virgins campaign may have bitten off more than the company can chew. Over the next few weeks, you'll see ads featuring Burger King taste tests. The company went all over the world, seeking out rural villages in faraway places like Thailand, Greenland, and Romania, where the locals have never sampled a burger. Then it asked those folks to taste-test its Whopper against the Big Mac.
As you can imagine, the blogosphere isn't taking kindly to the campaign. Some are calling BK's push exploitation, while others criticize Burger King for introducing new foodstuffs that are outside the native cultures' dietary norms.
In response, BK issued a press release this morning, detailing how it has gone on to invest in the communities featured in the campaigns, donating educational supplies, toys, and even restoring a 17th century church in one case. The company may have to trumpet these goodwill moves a little louder; it's hard to watch impoverished citizens of this planet bite into a burger for the first time without wondering what the fatty burgers will do to their dietary habits. That's assuming that the taste-test doesn't simply tease them with a treat that may be unattainable in the future.
Before you get indigestion ...
BK has been a successful gambler in the past. Leading burger chains like McDonald's (NYSE: MCD) and BK are on a (sesame-seed) roll, with or without controversial marketing. Unlike the struggling casual-dining chains, only a few fast-food laggards like Wendy's/Arby's (NYSE: WEN) are feeling scorched. Others, like Jack in the Box (NYSE: JBX) and CKE Restaurants (NYSE: CKR), are enjoying the luxury of peddling value-priced eats in a soft economy. Mickey D's and BK are most prominently leading this pack, scoring huge comp gains.
Burger King has certainly delivered on the bottom line since going public.
|
Period
|
EPS est.
|
EPS actual
|
|
Q1 2007
|
$0.26
|
$0.30
|
|
Q2 2007
|
$0.26
|
$0.28
|
|
Q3 2007
|
$0.22
|
$0.25
|
|
Q4 2007
|
$0.27
|
$0.29
|
|
Q1 2008
|
$0.33
|
$0.35
|
|
Q2 2008
|
$0.32
|
$0.36
|
|
Q3 2008
|
$0.28
|
$0.30
|
|
Q4 2008
|
$0.34
|
$0.37
|
|
Q1 2009
|
$0.39
|
$0.38
|
Source: Thomson.
BK consistently beat Wall Street's profit expectations for two fiscal years, before narrowly missing out in its latest quarter.
Maybe that weakness proves Burger King isn't invulnerable. If a backlash over the Whopper Virgins campaign grows, expect the recent stumble to cause investors even greater heartburn.
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