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2008 Outlook: Part I

Communications technology is also the sexy straw that stirs the drink with regard to marketing, although more than a few top executives bemoan the fact that sometimes all one ends up with is a cloudy drink. Increasingly fractured markets and the increasing proliferation of media make marketing strategy, tactics, and buy enormously complex undertakings that wobble mightily from vague to validating. In a contemporary business world of carefully calculated ROI and lionized efficiency, marketing is a disturbingly unwieldy necessity, and the end result in some cases just could be a little less concern with the customer “out there” and an enhanced marketing spend on the business already within one’s four walls.

Speed has always been a cornerstone of the industry, but executives are now discovering that the culture has gone a little over-the-edge time crazy”

Speaking of four walls, unit growth naturally remains a strong concern of industry executives, although there is mature market acknowledgment that one’s growth now frequently comes at the cost of someone else’s contraction. Finding new great sites and new great franchisees are difficult endeavors these days, laments one executive. And ever-burgeoning municipal regulations covering all internal and external aspects of the business are “making the development process tough.”

Small wonder that speed of service ranks so high on the executives’ list of interests, as this is an area that can be practicably engineered and reassuringly measured. Speed, of course, has always been a cornerstone of the industry, but executives are now discovering that the culture has gone a little over-the-edge time crazy and that there are opportunities for wooing an increased number of casual restaurant customers on the basis of a fast transaction. Call centers, online ordering, drive-thru modifications, kitchen flow, and much more are on tap because, as one executive puts it, “qsr starts with q.”

Facilities obviously represent major capital commitment and will always command significant attention. Strategically, industry executives are seeing ample confirmation that remodels and refurbishments are significantly impacting the bottom line and, in particular, they are enormously helpful in winning the positioning battle with casual chains. The obstacle here is for mature chains with a lot of aging buildings and similarly aging franchisees who don’t want big capital spends at this point in their personal business/life cycles.

The following individuals generously contributed to the insights expressed in this article. All opinions and conclusions that you find of value are theirs; those with which you don’t agree with are solely the responsibility of the author.

Jim Adams, Chipotle Mexican Grill

Kim Bartley, White Castle Management

Kathryn Blackwell, Kahala Corporation

Todd Coerver, Whataburger, Inc.

Brian Dixon, Taco John’s International

Philip Friedman, McAlister’s Corporation

Jim Greco, Bruegger’s

Brad Haley, CKE Restaurants, Inc.

Mark Hardison, El Pollo Loco

Dan Horan, Papaya King

Michael Keller, International Dairy Queen

John Pryor, Cousins Submarines, Inc.

Brad Wahl, The Krystal Company

Very special thanks also go to leading foodservice industry consultant Dennis Lombardi of WD Partners, who collaborated upon and suggested many of the insights expressed here. Check out his excellent industry blog.

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You can read Steve Weiss’s monthly To Market column online.