Has Jack in the Box Lost Brand Focus?

Compared with the same quarter last year, profits at Jack in the Box are down 62% and sales are below pre-recession levels. That is enough to wipe the painted red smile off Jack's ping-pong-ball face. Reasons given for this bad news are the usual culprits - the economy, escalating food costs, severe weather, energy price increases, increased competition, expansion and refurbishing costs. Given the success of competitors under the same conditions, some believe these are just excuses. Could the real reason be ineffective marketing?

Looking at their competitors.
According to Hoovers, the three top competitors of Jack in the Box are Burger King, McDonald's, and Yum Brands. Burger King announced a first quarter increase in EBITDA of 14% over the same period last year. McDonald's reported an 11% increase in net income. Yum Brands had a 9.5% increase in profit over the same quarter last year and a 7% increase in earnings per share.

Has Jack in the Box lost its brand focus?
When it started in 1951, Jack in the Box was known for hamburgers. The Company has since expanded into tacos, egg rolls, sandwiches, and other fast-food items. In a Los Angeles Times article by Sharon Bernstein restaurant analyst Darren Tristan says, "They need to find a way to differentiate themselves... If you think of Jack in the Box, I'm not sure what you think of anymore." When companies lose their brand focus to the extent that restaurant analysts are not sure what they represent, they are going to have greater problems planting their brand image in the minds of potential buyers.

Product and other issues
There are product and related problems too. Mary Lou Britton, a home healthcare nurse that has very little time on her lunch hour told me, "Two problems that I see when I go to Jack in the Box are (1) the lines for the drive-up are always slower than McDonald's, Taco Bell, etc., and (2) senior discounts are not as good as the others." There are many comments on various blogs that agree with, and add to, what Mary Lou said.

Communications focus on Jack rather than the products.
Another problem is that, since 1995, the Company's marketing communications have focused on the Jack in the Box mascot - a human body with a ping-pong ball head - that is the fictional founder, CEO, and ad spokesclown. Many like the commercials because they are amusing and entertaining. However, when asked to recall the content of the commercials, too many remember Jack, but forget the specific products being advertised. Some of these commercials have even won Effie awards for creativity. In his book, Ogilvy on Advertising, here's what David Ogilvy says about creativity awards, "Of 81 TV ad classics picked by the Clio festival, 36 of the agencies had either lost the account or gone out of business, and the Benton and Bowles agency holds that if it doesn't sell, it isn't creative."

Entertaining but increasingly "creepy" commercials.
In the past few years, the commercials have taken a sexual turn that many viewers have labeled "creepy." A commercial for breakfast croissants has since been called the Jack in the Box Viagra commercial. Here is what mom and blogger Christie Haskell said in her Café mom blog post, "...the latest ad has me confused and slightly disturbed -- and I'm not the only one. The blogs are abuzz with befuddlement and laughter over the recent one for breakfast croissants." The following is a sample of the comments at the end of her post.

• jsnzmom on Dec 6, 2010 at 4:24 PM Ummmm....EWWWWWW. There's no connection whatsoever (at least in my world) between breakfast croissants and an erection that lasts more than 4 hours. Not funny or appetizing in the very least.
• gentlehands on Dec 6, 2010 at 4:34 PM THAT is so horrible. I'm actually shocked and I don't think I want to eat there as long as that is their idea of a joke.
• tazdvl on Dec 6, 2010 at 7:29 PM No reason for that to be in the commercial.

What Jack in the Box should do and what marketers can learn.
With declining sales and profits and increasing competition in the fast food space, Jack and the Box should do on the following:

• Make sure they have the right target audience (Is 18 to 24 year old working class men the audience or only part of it?).
• Find out what that audience needs (and wants) that they are not getting.
• Create a brand image that clearly fills that need better than competitors.
• Create products that deliver on the promise of the brand image created.
• Communicate clear (and unique) benefits to the target audience through commercials that differentiate Jack in the Box and its products from competitors.
• Focus on the product benefits rather than Jack but continue to use his spokesclown character in a humorous and clever way.
• Drop the sexual innuendos that may cause some to chuckle but that have caused many others to be confused and turned off from buying.

Related:

Taco Bell's "Meatless" Defense: A Lesson in What Not To Do
Anti-Product Marketing Is Just Nonsense

Marketing Lessons from the NCAA's March Madness
Time to Change The Logo? Not So Fast

Ira Kalb is president of Kalb & Associates, an international consulting and training firm, and professor of marketing at the Marshall School of Business at University of Southern California (USC). Follow him on Twitter.
image courtesy of flickr user, me and the sysop