Vision Is to Be the Quality Leader in Everything We Do. Visionis To
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Vision is to be the quality leader in everything we do. Vision is to become the number one fast food restaurant in the world. Wendy’s believes the most important issue in the restaurant business is to take care of our customers. ( 1. As a global company, our goal is to provide our customers with the most enjoyable dining experience possible and be the quality leader in everything we do. (3, 7) Wendy’s has a long tradition of meeting ever-changing consumer tastes and items. As we look ahead, we will build on this tradition by bringing even greater variety, higher quality, more nutritious foods along with fresher menu choices into our restaurants. (2) Wendy’s strives to continuously produce quality foods through food science technology and research. (4) Our company is committed to expanding and growing profits in order to sustain recognition while protecting the environment. (5, 8) Our philosophy is to provide for the needs of all our customers while creating a safe workplace for all employees. (6,9) Wendy's Old Fashioned Hamburgers 1. Executive Summary Wendy's Old Fashioned Hamburgersis an international fast foodchain restaurant founded byDave Thomason November 15, 1969, inColumbus, Ohio, and moved its headquarters toDublin, Ohioon January 29, 2006. Wendy's was America's national food, and the world's third largest hamburger fast food chain with approximately 6,700 locations. On April 24, 2008, the company announced a merger withTriarc, which is the parent company ofArby's. Following the merger, Triarc came to be known asWendy's/Arby's Group. Arby's Group is the parent company of Wendy's, and is a publicly traded company. Arby's group of restaurants is a wholly owned subsidiary of Wendy's/Arby's Group, Inc. This report will be focusing on Wendy's Burgers of the Wendy's/Arby's Group. The main aim of this report is to investigate and analyze the marketing activities of Wendy's Burgers. What is the Wendy's orientation? What are the strengths, weaknesses, opportunities, and threats (SWOT) of Wendy's? What are the competitive advantages of Wendy's? What is the impact of Wendy's marketing mix? And its positive and negative effects on the market and competitors in similar segment. This report in its further course, will try to address the above questions and more. 2.INTRODUCTION Wendy's/Arby's Group is the parent company of Wendy's, and is a well known publicly traded company. Approximately 77% of Wendy's restaurants are franchised, the majority of which are located in North America. Wendy's and its affiliates, employs more than 46,000 people in its global operations. In fiscal year 2006, the firm had $9.45 billion (USD) in total sales.While Wendy's sets its standards for exterior store appearance, food quality and menu, individual owners have control over the hours of operations, interior décor/design, pricing, staff uniforms and their wages. Wendy's ended the fiscal year 2007 with just under 6000 Wendy's Old Fashioned Hamburgers restaurants in operation. Of these, 1,274 (21%) were company owned and operated by the company itself while the remaining 4,662 restaurants were franchised. In addition to Wendy's Old Fashioned Hamburgers, Wendy's has invested in the Cafe Express and Pasta Pomodoro restaurant chains, owning 70% and 29% of those chains, respectively. Until 2006 Wendy's International, Inc. also owned the ‘Tim Hortons' and ‘Baja Fresh' franchises. The chain is known for itssquareground beef patties in itshamburgers and the Frosty, a form of soft serve ice cream mixed with frozen starches contracted from potato products. The idea for Wendy's "old fashioned" hamburgers was actually inspired by Dave Thomas's trips toKewpee Hamburgersin his home town ofKalamazoo, Michigan. The Kewpee sold square hamburgers and thick malt shakes, much like the well-known restaurant that Thomas eventually founded inColumbus, Ohio, in 1969. Thomas named the restaurant after his fourth childMelinda Lou "Wendy" Thomas. 3.WENDY'S ORIENTATION Nature of demand Over the past century, market for fast food has increased drastically, time being one of the major constraints. A recession in the early 1980s, combined with high beef prices and Wendy's explosive as well as threatening growth incited the "burger wars”. Wendy's moved into the number three spot behind McDonald's and Burger King, fueled by its introduction of a chainwide salad bar, chicken breast sandwiches, fish sandwiches, and baked potatoes. Extent of demand As of December 2006, Wendy's was America's national food, and the world's third largest hamburger fast food chain with approximately 6,700 locations. Approximately 77% of Wendy's restaurants arefranchised and the majority of which are located in North America. Wendy's and its affiliates employs more than 46,000 people in its global operations. In fiscal year 2006, the firm had $9.45 billion (USD) in total sales and earned total revenue of $2.5 billion (USD) in 2007. Orientation Wendy's tries to sense the customers' needs and demands. This proves that the company is purely marketing oriented. Wendy's puts in much effort for orientation towards the marketplace and its market share. Companies have their respective beliefs concerning their marketing efforts which are usually varied from company to company. The challenging concepts beneath which companies perform their marketing activities are as follows: Wendy's Production Concept Customers are attracted to those products which are readily available and cheaper in price. Organizations following this concept targets on accomplishing the large production competence, minimal costs and bulk distribution. Wendy's Product Concept The way that Wendy's Old Fashioned Hamburgers does business and markets its products to consumers is due to the change in our society to where the consumer wants the biggest, quickest, and best product that they can get for their money. Wendy's introduced healthier options amid rising obesity levels and a general interest in healthier foods, some fast-food companies have been going in the opposite direction, introducing ever more calorific and fat-laden burgers in a bid to win customers. Wendy's Selling Concept The concept of ready-cooked food for sale is the primitive and foremost selling concept of Wendy's burgers. Wendy's uses ‘fresh, never frozen beef'/'fresh ground beef' in their hamburgers. Wendy's has moved in line with the Quick Service Restaurant or QSR industry and has been working to offer healthy food choices. Wendy's has added sandwiches and salads to its menu, and offers side dish substitutes for French fries like salads for health conscious customers. Wendy's Marketing concept Marketing is the science of actualizing the buying potentials of a market for a specific product. It in turn reflects a selling concept because it centers on promoting a product rather than meeting a defined area of consumer needs. The marketing concept sidetracks the basic conflict between the buyer and the seller. Consumers want good quantity and quality products for less prices, where as producers wants to sell at high prices. The marketing concept does not provide a solution to the classic bargaining problem which is widely prevalent. Holistic Marketing Concept This involves development, design and implementation of marketing programs, processes, and activities that recognizes organization's breadth and inter- dependencies. Precisely, this concept is an approach to marketing that tries to identify and resolve the opportunity and difficulties of marketing activities. There are 4 main elements in Holistic marketing namely (Kotler and Keller 2006: 16): * Integrated marketing involving communications, products & services, channels. * Social responsibility marketing involving Ethics, Environment, Legal and Community. * Relationship marketing involving Customers, Channel and Partners. * Internal marketing involving Marketing department, senior management and other departments. Wendy's strictly follows the above concepts as it includes most of the marketing activities. Wendy's Business Strategies Wendy's new strategy puts its food products on center stage and changes its media-buying habits to zero in more narrowly on different market segments. TV spots and print ads will focus on specific audiences instead of delivering the same message to all demographic groups, tailoring the messages to the required audiences, broadening its scope. In addition, the nearly 6,700-unit chain will advertise on the Internet to attract younger consumers and use a character named Smart Square to appeal to them in TV spots/advertisements. Globally, all the Wendy's employees work together to achieve in Driving Growth, Funding Growth and become Best Place to Work. 4.S.W.O.T Analysis “SWOT analysis is a structured approach for evaluating the strategic position of a business by indentifying its Strengths, Weaknesses, Opportunities and Threats” (Jobber 2007: 63). To get a clear idea of Wendy's/Arby's group's outlook, it is useful to analyze the restaurant's Strengths, Weaknesses, Opportunities and Threats (SWOT). Additionally, a SWOT analysis summarizes the outcome of marketing audit of the company (Jobber 2007: 61). Positive factors Internal factors Negative or potential to be negative Strengths Weaknesses Opportunities Threats External factors Strengths Positive, tangible and intangible attributes internal to an organization and within the organization's control forms the strengths of a company. * A strength in Wendy's manufacturing is that their food is known for its freshness and quality. * This quality of food is said to be one of the main reasons why Wendy's has outpaced the annual sales gain of McDonald's from 1998 to 2002 (“Industry Surveys,” 2003, p. 3). * The expert management system of Wendy's burgers adds to its much strength in time managing and store managing skills. * The pleasant atmosphere of all the Wendy's stores adds value to its strong customer oriented approach.