Tuesday, August 07, 2012

Marketing Chick-fil-A to Yankee heathens

Drake Bennett has an informative report about Chick-fil-A in which he reports on how "the culture wars, which make for ugly politics, can make for good business." (Chick-fil-A: Deep Fried Civil War Bloomberg Businessweek 08/02/2012)

He describes how Truett Cathy, Chick-fil-A 's founder, has always made an appeal to conservative evangelicals part of his company's core brand. Now that Cathy's company is trying to extend its franchise beyond the South and Southwest, that branding is presenting new challenges. Bennet points out that the company's mission statement says its purpose is "To glorify God by being a faithful steward of all that is entrusted to us." And in its actual marketing practices, that includes:

... explicitly courting evangelicals as customers. Some Chick-fil-A locations host what is known as Church Bulletin Night: Anyone who brings in a church bulletin on Monday from the previous Sunday morning’s service gets a free chicken sandwich. "They do have very tightly knit relations often with local evangelical churches," says Darren Grem, a historian at the University of Mississippi who has studied the role religion plays in Chick-fil-A’s popularity. "Evangelical churches will load the kids up in the van, take them down to Chick-fil-A on a Saturday night after a soccer match or a retreat or a revival. It’s the first stop for a lot of evangelical churches for their own catering."

Chick-fil-A isn’t a monolith, and there’s no requirement that individual franchisees share the Cathy family’s Southern Baptist faith. But certain rules are nonnegotiable. For example, all Chick-fil-A restaurants are closed on Sundays. The chain surely gives up millions of dollars by forgoing that Sabbath business, but the fact that it makes that sacrifice—something every regular Chick-fil-A customer knows—inspires the sort of loyalty that causes people to turn a chicken chain into a touchstone. The Cathy family has created a business perfectly suited not only to the palate of the Sunbelt South, but to its culture. Huckabee spoke for many Chick-fil-A fans when he described the Cathys in his Facebook post as "a wonderful Christian family who are committed to operating the company with Biblical principles and whose story is the true American success story." The chain might even have more to lose by opening on Sundays than it would gain.
This means that Chick-fil-A's branding problem goes considerably beyond its top management's political contributions and outspoken opinions on same-sex marriage.

This is an interesting variation on the problem of brand dilution. That can happen in several different ways. A common one can be a side-effect of brand extension. If the Colgate brand were extended from toothpaste to some product not obviously closely related to dental health, like sponsoring a soft drink or mustard, it could compromise the positive associations that the successful brand has established over decades.

In Chick-fil-A's case, their brand has relied heavily on targeting a religious market niche. It has been a successful marketing strategy. Cathy started his first restaurant in 1946, and now he has a widespread franchise business:

Cathy was a cautious franchiser, but the chain nonetheless spread quickly. In the mid-1980s, the chain started opening stand-alone restaurants. Today it has 1,000, plus hundreds in food courts at malls, airports, and college campuses. Total sales last year reached $4.1 billion.
But now the chain is looking to expand into areas where the profitability of a brand targeted to conservative evangelicals may prove harder to achieve:

When it has ventured North, the chain has mostly stuck to the suburbs, generally more conservative territory than the downtowns.

In recent years, however, the chain’s ambitions have changed. Dan Cathy has talked about opening more restaurants in Chicago, expanding in New York, moving into Tokyo and London. As the chicken wars have made clear, these are places where the cultural landscape is very different from Hapeville [Georgia]. To succeed in those markets, Chick-fil-A will need to find a way to keep the aspects of its biblical principles that appeal more broadly — the constant graciousness, the sense of community — and play down those that could be construed as intolerant.
But if they do dilute their conservative Christian brand for marketing in the North and Northeast, that risks undercutting their successful brand that they currently have. The restaurants don't open on Sunday, as noted in the Bennett quote above. What if profitability in the North and Northeast turns out to require being open on Sundays? Will that risk their brand identify in the South?

In addition to the political and moral issues, the branding problem itself is fascinating from a business point of view.

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