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Sid Feltenstein Is Having It His Way


Marketing

SID FELTENSTEIN IS HAVING IT HIS WAY

In his 23 years as a Burger King Corp. franchisee, Manny Garcia figures he has seen a dozen or so marketing executives come and go at the fast-food chain's headquarters. But he noticed a difference when Burger King's new marketing chief, Sidney J. Feltenstein, visited Garcia's 41 Orlando-area restaurants in January. Feltenstein spent so much time talking with workers and customers that he didn't reach Garcia's office until almost midnight. A long day's work, to be sure, but it won over a skeptical Garcia, who says of Feltenstein: "He listens."

Listening is a singular achievement in the world of Burger King, where advertising flops and franchisee revolts have been as much a company trademark as flame-broiled burgers. Feltenstein, 51, is the 9th marketing chief in 10 years at the Miami-based fast-food chain. But since he came over from Dunkin' Donuts Inc. in October, 1991, Feltenstein has successfully avoided the noisy feuding that usually marks a Burger King marketer's tenure. Instead, he has quietly launched a sweeping reorganization of marketing strategy, pushed fast into table service at dinner, and overseen the first ad campaign in almost a decade that franchisees actually like.

`TO THE EDGE.' Feltenstein's low-key style contrasts sharply with the approach of his predecessor, Gary L. Langstaff, who left Burger King in March, 1991, on what executives say were friendly terms. Langstaff introduced such successful promotions as a Kids Club, to build brand loyalty among children, and tie-ins with the Ninja Turtles. But franchisees resented his blustering style and aggressive tactics. Says Memphis-based franchisee Joe Mirabile: "Gary wanted to take us to the edge and beyond."

Langstaff defends his tough-guy act. "I didn't have the luxury of getting everyone on board," he says. "We had a powerful brand that had been tarnished for five years." But he admits the short-lived "Sometimes you gotta break the rules" ad campaign he sponsored united franchisees against him. They caught flak from parents who felt the tag line sent the wrong message to their kids.

Enter Feltenstein, who once did a stint as a marketer at Procter & Gamble Co. before putting in 19 years at Dunkin' Donuts. As head of marketing, Feltenstein had earned the respect of the doughnut vendor's numerous franchisees. He cooked up such new products as "mini" doughnuts and expanded distribution to such unorthodox outlets as 7-Eleven Stores. But he also knew his doughnut days didn't count for much in the home of the Whopper. "The franchisees felt I didn't know the hamburger business," he says.

To allay fears, he spent several months visiting stores. And with Chief Executive Barry J. Gibbons' backing, Feltenstein completely rewrote his job description. While marketing at Burger King historically meant solely advertising and promotion, now store design, product development, and other functions report to him. Food research, a key area that used to report to the quality-control office, now answers to Feltenstein. And borrowing from p&g's playbook, which assigns management teams to each brand, Feltenstein has created three teams to handle breakfast, lunch, and dinner as three different segments to market separately.

AT YOUR SERVICE. The goal is to speed up Burger King's rollout of new products and services. It seems to have worked with dinner service, an idea first suggested by franchisees. Feltenstein pushed for a formal test of dinner service in January, then quickly went national in October to 5,700 U.S. locations, where a waiter will now serve evening customers such dishes as chicken breasts and fried shrimp at their table. In contrast, McDonald's Corp. has been testing various dinner formats for more than a year.

Burger King's move has promoted a spurt of publicity, much of it tongue-in-cheek. Even Jay Leno paid a visit to Burger King as part of a Tonight Show segment. Feltenstein is unruffled. "It has piqued people's interest," he says, noting that dinner sales are above projections--though he won't be specific. Costs are low, too, involving $500 in new equipment per store and one extra staffer.

Backing the dinner rollout is a new national ad campaign by agency D'Arcy, Masius Benton & Bowles Inc. that first aired during the World Series. Called bk teevee and featuring mtv star Dan Cortese, the 30-second spots are filmed in Burger King restaurants with Cortese interviewing customers and crew members in a frenetic, ad-libbed teenspeak. The ad plays off the "Your Way Right Away" tagline and highlights broiling, long a Burger King marketing staple. The quick camera angles and format were designed to attract the 18-to-34-year-old crowd, the biggest fast-food market segment.

Results won't be known until early next year. But some critics already say the new campaign won't do the trick. The Cortese ads "don't drive the brand into the mind," says Al Ries, a marketing consultant based in Greenwich, Conn., who has done work for Burger King.

In his view, the chain has yet to solve its longstanding problem: It is perceived as a runner-up to McDonald's, but it has done little to capitalize on its second-place position, as Pepsi-Cola and Avis Inc. have done in their industries. Burger King's share of fast-food burger sales slid from 21.3% in 1986 to 19.1% in 1991, according to restaurant consultant Technomic Inc. Slower-moving table service, Ries adds, can only dilute a chain's image as a fast-food restaurant. Dinner service is also an operational problem: It's not designed to reach drive-through customers, who make up 50% of Burger King's business.

APPLAUSE. But Feltenstein's approach is quelling complaints from some of Burger King's staunchest critics--its own franchisees. Tom Walsh, a franchisee in Sioux Falls, S.D., liked the speed of the dinner rollout and applauds the Cortese ad campaign. "It's in the restaurant, it's product-focused, it positively enhances our people," he says. And he's even feeling upbeat about overall prospects: "A lot of us believe we are moving northbound on sales." Burger King won't release numbers, but look for revenues, profits, and same-store sales to be up over last year, says Burger King chief Gibbons.

The new confidence among franchisees heartens Edouard DeBoisgelin, an analyst with Merrill Lynch Europe who covers Grand Metropolitan plc, Burger King's British parent. He expects Burger King operating profits of $267 million on sales of $2.47 billion for 1992, compared with 1991 profits of $247 million and sales of $2.3 billion. Not a sudden surge, but it reverses the disheartening slide for Burger King, whose annual sales per restaurant have slipped in recent years (chart, page 64).

Meanwhile, Feltenstein is eager to test his skills on other projects, such as selling burgers in kiosks in airports and truck stops, and an experiment in stripped-down, two-lane, drive-through restaurants catering to motorists only. He has also launched a program to clean up the landscapes and exteriors of Burger King locations. After listening hard to franchisees, he thinks they're ready for the new initiatives. And for once, Burger King franchisees think their marketing boss is right.


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