A&W's 1/3 Burger Debacle: Understand the Client
Summary:
Just because you are offering a better product, does not mean the market agrees.
When competing against an established brand, don't try to out-compete them. Find a different niche.
Introduction:
A&W attempted to disrupt the fast food industry with a 1/3 pound burger. In 1984, A&W unleashed the 1/3 pound burger as part of an effort to compete with McDonald's Quarter Pounder. However, what ensued was not the triumph they envisioned.
A&W's strategy was anchored on the promise of superior value to capture market share. The 1/3 burger had a larger patty and a price point roughly equal to the Quarter Pounder.
Consumer Perception:
A&W found themselves grappling with this question as consumers were confused. One major reason for the failure was consumer misunderstanding; many customers mistakenly thought that 1/3-pound was smaller than 1/4-pound, misinterpreting the fraction. 3 is smaller than 4. Therefore, A&W, the three, offers less value and McDonalds, the four. This poor reception led to lacklustre sales, and the 1/3-pound burger was eventually discontinued.
Applying These Lesions:
Brand Loyalty: McDonald’s strong brand recognition and established customer base for the Quarter Pounder made it difficult for A&W to shift consumer preferences. For all businesses, brand loyalty is critical.
Effective Communication & Education: Clear messaging is crucial to ensure that marketing messages are clear and address potential misunderstandings. A&W could have used visuals or simple explanations to demonstrate that 1/3-pound is larger than 1/4-pound. Businesses must communicate and educate their clients on the value they bring. Communication and education must be done using a variability of mediums; in store, videos, photos, social media, website, emails, phone calls, etc.
Adapting to Feedback: Monitoring the initial feedback and being agile in adapting the marketing strategy could have mitigated the issue. All projects in business are iterative. Quick adjustments to the campaign to clarify the size might have salvaged the product launch.
