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Chains flex marketing muscles to get customers back

Since the start of the new year, several restaurant companies have begun to change their marketing strategies, with new campaigns or new advertising agencies, to counteract what has been plaguing the industry for more than a year — the lapsed consumer.

Renewed attention toward one of the most customer-facing aspects of the business, marketing and advertising, has been seen from heavyweights Chipotle, Boston Market, Denny’s, KFC, Pizza Hut and others. They are all battling what operators have called the largest challenge of 2009, which is capturing enough customer traffic to improve profit margins and generate cash to spur expansion.

On Tuesday, Chipotle Inc. said it named San Francisco-based Butler, Shine, Stern & Partners its advertising agency of record as the fast-casual chain of more than 800 burrito restaurants plans to expand its marketing outreach. Steve Ells, Chipotle’s founder, chairman and co-chief executive, charged BSSP with finding ways to augment the chain’s efforts to market its commitment to using naturally raised meats and locally sourced produce, or its “Food With Integrity” mission.

“Our marketing strategy has not kept pace with developments in our food culture or our unique people culture,” Ells said.

The Denver-based company said during an investor conference last week that it would use customer research to begin a new and more sophisticated marketing strategy. Up to now, the Denver-based chain had advertised its “Food With Integrity” message chiefly through billboards, radio spots and in-store marketing. Spokesman Chris Arnold said Tuesday that television advertising has never been part of the chain’s traditional advertising mix, and that it was “too soon to say whether it will be or not” under BSSP’s guidance.

Most recently, Chipotle has faced a slight slowdown in traffic and some industry experts have said that the chain’s 6-percent menu price increase taken late last year could affect consumer goodwill toward the brand. In its latest quarter, Chipotle’s same-store sales rose 3.1 percent, which was down from previous highs in the double digits.

BSSP’s creative duties will include traditional and nontraditional executions, in-store communications, and media planning and buying. Chipotle began the agency review late last year, Arnold said, narrowing the field from 27 agencies to six, and then choosing three finalists to work on the same 10-week project. Mark Crumpacker, who was hired as the chain’s first-ever chief marketing officer on Jan. 5, led the search while working with his former brand consulting firm, San Francisco-based Sequence.

Other restaurant brands, including Boston Market, Bob Evans and Denny’s also have looked to tweak their respective marketing messages. Boston Market said earlier this month it named Fallon Minneapolis its advertising agency to help “reconnect with lapsed customers and attract a new generation” of patrons to the 550-unit chicken chain. Denny’s, which is battling negative same-store sales at its 1,541-unit family chain, replaced advertising agency Publicis Mid America with Goodby, Silverstein & Partners and said last week it would make a first-ever Super Bowl ad buy. And Bob Evans, a 570-unit family-dining chain, last week launched a new online campaign aimed at younger diners.

KFC and Pizza Hut, both Yum! Brands Inc. chains, also are looking at varied marketing efforts to spark sales. At KFC, a new advertising campaign that focuses on the brand’s fresh ingredients, hand-breaded chicken and the chefs within each unit will begin in the United States after a successful run in Australia, the company said during its December investor meeting. Pizza Hut is testing new branding — The Hut — to broaden its consumer appeal as a restaurant with both its well-known pizzas and its new Tuscani Pastas. Louisville, Ky.-based Yum also has said that Pizza Hut’s sister brand, WingStreet, will introduce a national advertising campaign this year for the first time.

Contact Sarah E. Lockyer at [email protected]

Contact Mark Brandau at [email protected]

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