Country Kitchen cooks new marketing strategy

Nation's Restaurant News, March 24, 1986 by Richard Martin

Country Kitchen cooks new marketing strategy

MESA, Ariz. -- Country Kitchen is pressing franchisees to spend their obligatory minimum 1-1/2%-of-sales ad budgets to help launch a slick "country modern" marketing campaign that is aimed at rebuilding waning customer traffic.

"We are losing market share in the family restaurant segment, and the competition is outspending us 2 to 1," Country Kitchen International (CKI) president Rich Hohman exclaimed to attendees at the chain's recent annual convention here.

Hohman exhorted operators representing 72% of the system's 246 franchised outlets to pledge their financial support for CKI's "The Country's Calling You" campaign, which kicks off next month. CKI is trying to combat "flat" traffic and last year's 20* decline in real sales at comparable restaurants by establishing a national advertising media (NAM) fund to bankroll local-spending rebate incentives for franchisees.

Those unwilling to pledge a fully rebatable 0.5% of sales to the NAM kitty will be scrutinized for compliance with franchise-contract ad spending obligations, the company threatened. "We intend to force payment" of the local spending requirements, Hohman said, noting that company audits have uncovered widespread noncompliance.

The Minneapolis-based franchise company, which operates three company-owned units, reported that 82% of conention attendees signed pledges to back the NAM fund, an interest-bearing escrow account that would repay one-third of an operator's local ad expenditures--up to the 0.5% of sales contributed.

Hohman said Country Kitchen International would sweeten the NAM pot with its own contributions in amounts equal to the sales royalties it would theoretically derive from anticipated incremental sales brought in by the new marketing thrust.

Franchisees got their first taste here of the new multimedia pitches that will be aimed at CKI's lower-middle-class family market. Emphasizing country-style taste, value and hospitality, the print-ad, radio jingle and television spot materials will expand in June to include a "Rediscover the Country" theme and a resortvacation contest tie-in.

CKI's "The Country's Calling You" campaign shifts to high gear in July with rollout of a new menu, which will emphasize such signature items as skillet breakfasts, pancakes, cinnamon rolls, calico bean soup, and fried chicken and biscuits. CKI senior marketing vice president Allan Post is coordinating the campaign, which was devised by the Ellis Singer/Greve agency of Buffalo, N.Y.

Through its new marketing effort Country Kitchen hopes to sustain growth momentum. The company was encouraged in 1985 by the first net incease since 1980 in the number of stores operating--from 242 to 249 as 16 opened and nine closed. Systemwide sales were $153 million last year, up about 5.5% from 1984's.

But CKI's annual per-store sales average advanced only 1.5% in 1985, to $610,000, despite an overall 3.5% menuprice increase.

As part of the company's overall marketing thrust, a new, more scientifically formulated menu may hold the key to attracting and holding customers.

On old Country Kitchen menus "products were introduced because they were trendy," Joy Grawenmeyer, CKI's director of product standards and development, admitted to the franchise conference. In the future, she said, menu offerings would be added on the basis of sound marketing strategies and realistic appraisals of potential customer acceptance.

Country Kitchen patrons, typically rural families with "simple, unsophisticated tastes," would "rather have a ham and cheese on rye than a California croissant with guacamole," Grawenmeyer said. But regardless of taste trends, she added, dishes would also be evaluated at least partly on the basis of operational feasibility, given the difficulties the chain faces in balancing the demands of an increasingly complex menu with the widespread shortage of skilled cooks.

Still, some shortcuts will be avoided. Calling the attraction of breakfast bars and "harvest buffets" chiefly one of "convenience for managers," Grawenmeyer said those features, now being rolled into other family chains, hold little appeal for Country Kitchen strategists and represent the "danger of lowering our quality standards for the sake of cost."

Currently, Grawenmeyer said, the chain's menu mix and day-part contributions are reflected in these averages, stated as a percentage of total sales: breakfast items, 38% (including 25% sold during the morning daypart); lunch items, 24%; dinner items, 7%; desserts 2%; kids' items, 1%; seniors' menu items, 4%; insert specials, 9%; and beverages, 15% (including 11% of total sales--some $17 million annually--from coffee).

CKI's check average is about $3.50 over a 24-hour span and about $4.60 at dinner.

The new menu, expected to be ready for rollout July 15, would include a specific section for smaller-portioned, lower-priced seniors' items, instead of the old 10% discount system. The menu will also highlight the chain's signature breakfast fare. "We know that fast feeders are fast encroaching on our breakfast business," Grawenmeyer said.