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Marketing

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Feb 20, 2024

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1 Bookkeepers of Doom Nathan’s Famous, Inc vs Sonic Drive-In Strengthening Brand Loyalty Through Marketing & Advertising Nathan’s Famous, Inc vs Sonic Drive-In We can put a picture of food here. (Sandwiches of hot dogs)

INTRODUCTION Nathan's Famous hot dogs and restaurants could strengthen and increase brand loyalty from their customer base through improved marketing and advertising efforts. Nathan's customer engagement pales compared to its competitors, which can reduce brand loyalty. To remain a viable competitor in the fast-food industry, Nathan's must engage with customers through mobile technology, updated and increased advertising, improved marketing content and brand storytelling. This report intends to address underlying marketing and advertising issues, provide a plan of action, and deliver three key recommendations to give Nathan's Famous a competitive advantage over the Sonic Drive-In (Sonic) chain. We have identified three significant deficiencies in Nathan's Famous marketing and advertising process that Sonic has succeeded in. Implementation of these recommendations can lead to an increase in brand loyalty, brand equity, market share, and sales growth.  Nathan's does not have a mobile app. This absence forces customers to choose from various other food companies that offer delivery, promotions, exclusive deals, or in-store pick-up options.  Nathan's advertising footprint is not impactful, especially with only 213 brick- and- mortar restaurants. As a smaller company in the food industry, Nathan's advertising should be updated to compete against other chain companies and to gain brand recognition by spending more money and efforts on national advertising.  Nathan's lacks a strong marketing presence. A lack of customer engagement allows Nathan's brand to be placed at the back of customers' minds enabling other more appealing companies to gain more notoriety and attention. MOBILE APP Sonic has a unique concept on how customers order food. Customers pull into a stall, push the iconic red button, and place their order over the intercom. In 2018, Sonic announced that they were planning to roll out mobile ordering across the United States and since then, it has proven to be very successful.  Ranked#15in the app store for Food & Drink  1.3M ratings with an average of 4.9 stars  App only exclusives The Sonic app offers its Happy Hour deal of half-off drinks, typically available only from 2 p.m. to 4 p.m., at all hours of the day to customers who order via mobile.

Down the line, Sonic plans to offer personalized deals exclusive to the app to draw in customers. Sonic's app also offers different rewards for their customers that are only available for a limited time. For example, the app has 99cent medium chili cheese tots or fries that are only offered for a limited time for app users. Based on an article by Inspire Stories, more than 100,000 orders are placed using the mobile app every day. Nathan's Famous does not have a mobile app like Sonic's. If Nathan's were to adopt a mobile app like Sonic for their restaurants, they could potentially increase their sales by providing convenience and exclusive deals to their customers. ADVERTISING Sonic utilizes interest-based advertising for serving advertising content to customers based on information gathered on multiple media sites and other platforms. Even though Sonic is only present in 45 states currently, Sonic broadcasts advertisements nationwide. By doing this, Sonic is grasping customers' attention before the chain even opens in a region.  Sonic has had 10,544 advertising airings.  Sonic has earned an airing rank of #46  Spending ranking of #85 as compared to all other advertisers. While Nathan's restaurants only operate within 19 states, Nathan's Famous has elected to overhaul their digital technology systems and partner with ad agencies to optimize advertising and build loyalty among customers beyond just where they have stores currently. According to Nathan's most recent 10K report, stores are required to spend on local marketing activities or contribute to the local advertising fund up to just 2% of their total restaurant sales. Each location's contributions to the advertising fund for national marketing support can vary depending on store type and location, but levels tend to hover around the 2% range as well. To raise brand awareness throughout the country, not just in regions where stores are already present, Nathan's should require individual stores to contribute to national advertising funds more in the 5% percent range of total restaurant sales. It is important for the southern and western regions of the United States, where there are not as many Nathan's locations, to have exposure to an adequate number of advertisements to have the potential to spread to these areas in the future. The goal is for the advertisements to encourage consumers in these areas to start buying Nathan's products in supermarkets such as Kroger or Wal-Mart, and eventually creating demand for brick-and-mortar locations.  Targetable is a virtual ad agency that uses AI and automation to create and distribute ads for clients.  The chain reported that after one month, more than 100,000 customers within a four-mile radius of the three test locations saw the ads. The ads have tracked a lower cost-per-click

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than the brand's typical digital ads with 10 times more efficiency than traditional mailers, per the company announcement. If Nathan's were to adopt Sonic's practice of more nationwide advertisements even in areas where they do not have stores open, it would heavily increase their overall brand recognition. MARKETING Nathan's proclaimed a fresh look of their Brand Product Program to utilize in them marketing strategy from the COVID-19 Pandemic. They are also using this campaign to highlight their locations and expansion to recent sites mentioned in their 2021 10K. Nathan's restaurants only operate within 19 states, but their hot dogs are sold in market stores nationwide. Sonic uses the "positioning strategy" for their marketing tactic, which is a technique used to guide consumers to choose one company over its competitor due to brand uniqueness. They are well-known for their high-class experience of dining, skating carhops, and fresh food prepared daily. Due to their broad target market, they can be more creative with various marketing strategies. Nathan's should adopt this technique to expand their market awareness. Consumers know the brand but may not be fluently aware. They should produce a tactic that helps them stand out and be unique from their competitors. This in turn could benefit them by expanding their restaurants to new areas and market sectors to encompass more consumers. SUMMARY To remain a competitive contender against the Sonic Drive-In chain, Nathan's Famous must commit to techniques that heighten brand loyalty and recognition. The following are key recommendations to improve business operations through marketing and advertising:  Construct a mobile app to establish a competitive online food ordering system.  Increase Nathan's Famous market share by allotting more funds to national advertising, which ideally would result in the establishment of more brick-and- mortar restaurants in different markets.  Implement customer-focused advertising and marketing ads to build brand loyalty through customer engagement.

References Christie, D. (2020, April 8). Nathan's Famous Upgrades Tech, Adds Geotargeting and Digital Ordering. Marketing Dive. Retrieved April 16, 2022, From https://www.marketingdive.com/news/nathans-famous-upgrades-tech-adds-geotargeting-and- digital-ordering/575682/ ISpotTV. (n.d.). Sonic Drive-In TV Commercials. Retrieved April 18, 2022, from https://www.ispot.tv/brands/A5j/sonic-drive-in#:~:text=Sign%20up%20to %20track%20502, compared%20to%20all%20other%20advertisers. "Service at the Speed of Sound: Mobile Order Ahead a Success for Sonic." Inspire Stories, 30 July 2020, https://stories.inspirebrands.com/sonic-drive-in-mobile-order-ahead-success/ . Wilson Editor-in-Chief, M. (2022, April 12). Nathan's Famous to Pilot Tech that Incentivizes People to Visit its Restaurants. Chain Store Age. Retrieved April 15, 2022, from https://chainstoreage.com/nathans-famous-pilot-tech-incentivizes-people-visit-its-restaurants

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