The lesson for Wendys: Don’t spend your money foolishly

Tom Dougherty, CEO – Stealing Share

18 June 2013

An increased media spend is not the answer

The earnings results for Wendys had a big dark spot on its announcement recently, saying its Right Price Right Size menu has been losing market share to competitors such as McDonalds in attracting the value-conscious customer.

Wendys is planning to up its media spend to compete, saying it’s a must “to address the price-value consumer.”

“If all of the fast food restaurants, including McDonalds, says they have friendly service, hot food and cheap prices, where do you think consumers will go? To the one with the most locations and is the safest choice (because it’s the most known).”

 

WendysIt’s true that, in the fast food industry, you have to address that audience. Especially when you are one of the largest chains in the nation. Because, after all, fast food means you get it quickly and cheaply.

But simply pouring money into the process won’t by itself fix the problem. Right now, Wendys seems to believe that McDonalds’ key is the size of its media budget.

That helps, of course, but McDonalds is the preferred choice because, as the market leader, it becomes the default choice in the face of similar messaging among its competition.

Think of it this way. If all of the fast food restaurants, including McDonalds, says they have friendly service, hot food and cheap prices, where do you think consumers will go? To the one with the most locations and is the safest choice (because it’s the most known).

Upping the media spend isn’t a share-stealing strategy unless it has a more meaningful message than Wendys primary brand promise of “quality.” The people who go to McDonalds already think they are getting quality, otherwise they wouldn’t be going there. It’s not a reason to choose. You only switch for things you don’t believe you already have.

Be different and better, Wendys, then your marketing dollars will be better spent.

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