Wendy's Targets Younger Crowd in $25 Million Push

Wendy's International is shifting its marketing attention to younger consumers with fresh TV spots and new menu items in an effort to turn around declining sales.

As part of a new three-year, $25 million plan, the QSR is rolling out new TV spots tied to music to entertain viewers, focusing on 18- to 28-year-old consumers who moved away from the chain, in part, after it raised the price of one of its popular burgers, Wendy's said yesterday.

Two of the 30-second TV spots feature customers complaining at a generic fast food restaurant that their burgers aren't made the way they want them. Employees respond by singing and dancing to distract the customers. Wendy's follows up with an announcement that its customers can personalize the burgers the way they want, with its signature Do What Tastes Right tagline. TV spots are available online at Wendy.com.

"For us, one size doesn't fit all," Wendy's spokesman Bob Bertini said. "We said we need to increase our relationship with the (18- to 28-year-old) group. We've taken steps to do that."

The company did not disclose its promotional marketing strategy under the plan. Wendy's last major promotion, conducted in November with AirTran, awarded frequent-flyer awards to consumers who bought 20- or 32-ounce soft drinks. About 3,200 Wendy's restaurants nationwide participated. (PROMO P&I Dec. 21)

In addition to the new TV spots, Wendy's last month returned its junior bacon cheeseburger (a favorite among the younger crowd) back to its Super Value Menu, which sells 12 menu items for 99 cents each. The company removed the item from the line-up in June after increasing the price to $1.29 to keep in line with high beef costs.

But that move "cost us transactions among young customers," Bertini said. "Younger customers who are college students or who are starting work and raising a family...are budget conscious and very budget sensitive."

In addition to the new plan, Wendy's will continue to focus it messaging across its other key audiences—Baby Boomers and consumers 16 and under—Bertini said.

"We have...to make sure our messages are relevant in a way that is fresh and connects to each of our target audiences," Bertini said. "We just want to make sure we are [matching] the right product with the right audience." In this case, Bertini said, that means linking younger consumers with Wendy's signature junior bacon cheeseburger and older adults to its line of salad products.

On Monday, Wendy's outlined its the three-year plan called the 3-Tiered, 3-Year Combo Plan. This year, the company plans to beef up its menu with new items, including Frescata deli sandwiches, new salads, a 10-piece chicken combo and two Kids' Meal deli sandwiches. Also in 2006, the QSR will test double melt cheeseburgers, 99-cent chicken sandwiches, new beverages, a Vanilla frosty and combo size meals, the company said.

Wendy's will also open its doors earlier to offer a full breakfast menu in 2007. Testing will begin this year, the company said. In addition, Wendy's plans to reduce costs by $40 million to $60 million annually, improve restaurant profit margins and increase service to customers.

The new plan comes as Wendy's reported weak quarterly results and the QSR's worst sales record in 18 years, news reports said. Sales at Wendy's locations fell 3.7% in 2005, according to news reports. The company attributes part of that decline to competition and a hoax orchestrated by a Las Vegas woman claimed she found a severed finger in a bowl of Wendy's chili in San Jose, CA, in March 2005.

California police arrested the woman, Anna Ayala, 40 after discovering she carried out the hoax before she threatened to sue the restaurant chain. Last month, Ayala was sentence to nine years in prison; her husband, Jamie Plascencia, 44, was sentenced to more than 12 years.

Though the company has not placed a figure on the amount of sales lost to the hoax, it is estimated to be in the millions, news reports said.