Troubles for Burger King

By 2000, the $45 billion burger market began to mature.

Burger King, McDonalds and Wendys were facing tough competition from non-burger chains like Kentucky Fried Chicken (KFC).
McDonalds and Burger King witnessed falling sales due to foot-and-mouth disease and the growing negative attitude among
consumers against fast food.
To recover from the crisis,
McDonalds, the largest hamburger chain, deployed price reduction and discounts launched a value menu, an assortment of
eight items, two sandwiches and other side items and desserts at $1.
To compete, Burger King came out with a 11-item menu (hamburgers, tacos, chili, and other side dishes) for 99 cents.
Premium product Whopper price were also reduced from $2.99 to 99 cents.
By the end of 2000, Burger Kings share in the hamburger market fell from 19.6% in 1999 to 18.8%. McDonalds, its major
competitor had a market share of 43.1 % .
Wendys reporting an increase in its share from 12.2% in 1999 to 13.2% in 2000.
Other smaller players like Jack-In-The-Box and the Rallys started gaining sales.
Burger King spend a huge amount of money on advertising which promoted only its product and its competition with Mc
Donalds due to which could not establish unique brand.
This led to Burger King constantly changing its advertising agencies but could not deliver as per the what costumer expected.
Franchisees also expressed dissatisfaction over the initiatives taken by the company. National Franchisee Association (NFA)
proposed a split of Burger King from Diageo for increased control.
Burger King appointed John Dasburg from Northwest Airlines, as its new CEO and chairman in April 2001.
 Dasburg identified that revival of the brand was essential for the planned separation.

Under his leadership, Burger King added sixteen new products to its menu to add to the product variety.

Chicken Whopper was launched, which was the first ever line extension of Burger King.

A new ad campaign was launched, @ Burger King You got it! replacing the Have it your Way campaign. The new
positioning was expected to support the falling brand image by emphasising on the brands commitment to quality and
service.

Similarly, a campaign called Burger King rewards in association with AOL Time Warner was launched, as part of which,
customers who purchased at Burger King outlets could win rewards with the codes on their food packs.

Dasburg aimed at elevating average sales at the outlet by 23%, achieving a market share of 22.8% by 2005.

New product development, marketing and operations were the key areas that Dasburg focused on.

His first major task was to obtain the franchisees approval for new marketing initiatives and was successful in obtaining
franchisee support as the franchisees expressed confidence over the centralised marketing initiatives, contrary to the
decentralised and cluttered approach in which the franchisees independently took decisions.