Carl's Jr.

• Author: Rayna Bailey
• Pages: 289-292

Page 289

6307 Carpinteria Ave., Ste. A

Carpinteria, California 93013

USA

Telephone: (805) 745-7500

Fax: (714) 780-6315

Web site: www.carlsjr.com

SIX DOLLAR BURGER CAMPAIGN

OVERVIEW

As Carl's Jr., one of the country's leading fast-food burger chains, prepared to celebrate its 60th anniversary in 2001, the brand was feeling the pains of an aging icon. Despite its reputation for serving quality burgers and for introducing innovative options not usually found at early fast-food establishments, such as self-serve beverage counters, the company was losing customers to a new niche: fast-casual restaurants. These restaurants had higher prices and better-quality food than found at fast-food places. Carl's Jr. was hurt further by the deep discounts on products that competing fast-food chains, such as Burger King and McDonald's, were offering customers. A Carl's Jr. press release stated that the company's practice of offering a small but quality selection of menu items and limiting discounts had contributed to a continuing weakness in same-store sales.

To remedy the situation, Carl's Jr. took a closer look at the fast-casual niche and saw it as an opportunity to expand its business. The business-lunch crowd was typically in a hurry but hungry for a quality meal. To entice these customers, Carl's Jr. began offering a new product, the Six Dollar Burger. The burger gave customers the best of both worlds: a restaurant-style burger that was as convenient as fast food. To support the burger's introduction, a campaign was created by Los Angeles-based Mendelsohn/Zein Advertising, at an estimated cost of $50 million. It kicked off with a series of television spots that not only praised the Six Dollar Burger but also spoofed casual-dining businesses such as T.G.I. Friday's. One TV commercial showed hapless customers who were forced to join the birthday celebration of a diner at a nearby table, and another showed an overenthusiastic waiter pushing dessert on diners before the main course was served. Radio spots also promoted the product.

Consumers ultimately bought the concept. The company reported that, following the launch of the "Six Dollar Burger" campaign, same-store sales took a positive turn and reversed the downward slide Carl's Jr. had experienced for the previous three periods. In addition the campaign won a bronze EFFIE award and was presented a Silver Skillet award by Restaurant Business magazine.

HISTORICAL CONTEXT

In 1941 Carl Karcher went into business for himself by setting up a hot-dog cart in Los Angeles. By 1946 his business had grown into a drive-in restaurant with hamburgers as one of the featured menu items. As Carl's Jr. continued to expand, it earned a reputation for serving delicious charbroiled hamburgers. In 1997 CKE Restaurants, owner of Carl's Jr., purchased a floundering

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HISTORICAL CONTEXT © Kim Kulish/Corbis. Midwestern burger chain, Hardee's. Rather than proceeding with CKE's initial plans to convert Hardee's to Carl's Jr. shops, the two sister chains maintained separate but similar identities and menus, which confused consumers. In addition, as the core customers of Carl's Jr.—baby boomers—aged, their tastes changed. Although these baby boomers had grown up with fast food, they also possessed significant disposable income and were looking for higher quality food like the kind served in casual-dining restaurants. Carl's Jr. went into a slump as customers fled...