Michael Keller knows a sweet deal when he sees one. That’s why, after watching his competitors grow sales with low-priced items, Dairy Queen International’s chief brand officer decided to debut a value menu this week. Called “Sweet Deals,” the nine-item combination brings together offerings from DQ’s frozen treats and fast food menu list for $5 or less. While many are cutting back on other discretionary purchases, Keller said consumers will always allow themselves the simple treat of some ice cream. This includes its Girl Scout Thin Mint Cookie Blizzard, which it is bringing back due to popular demand. The company, which spent close to $90 million on media last year (excluding online, per Nielsen Monitor-Plus), isn’t just looking to cheaper eats and big media spends to keep sales for its cold treats hot, it is placing greater emphasis on its “collective brand experience.” Here’s what Keller had to say:
Brandweek: How’s the new fast-food video game venture coming along? Have you gotten most of America addicted to it yet?
Michael Keller: The game is doing very nicely. There is no doubt that for time management games like this one, once you get into it, you get completely sucked in. A lot of people dream about the idea of owning their own Dairy Queen, and this gets you a little bit closer to your dream. Once you get [to own] two or three or four of them, though, it can get to be a bit on the stressful side, which is why I think people like these games, because they can be a bit challenging.
BW: Who’s playing DQ Tycoon? Is it (as originally anticipated) moms?
MK: From what we understand, the casual gaming segment tends to skew a bit more female. And time management games do tend to center around female head of households…[It’s a game that] could appeal to all. It’s just fun, colorful, friendly and accessible. It seems like a really nice fit with the target audiences of [both] casual and time management gamers.
BW: How are frozen treat sales faring in a recession?
MK: We’re finding the treats business to be a little soft. But just barely. With Blizzard, our flagship brand, we are looking at sales that were equal to 2007. That’s key bellwether for us. Blizzard is a $700 million dollar brand. In many people’s minds, it’s a super premium treat, with a price point of $3 to $4. For a brand that big to be basically flat in a recession when people view frozen treats as a very discretionary purchase is very encouraging.
BW: Dairy Queen recently came out with its first value menu, Sweet Deals. What prompted that?
MK: One of the challenges for Dairy Queen is for the longest period of time, for the past 10 to 15 years, we have not had a value menu. McDonald’s, Burger King and Wendy’s all have value menus, and you argue that to be a competitive quick service restaurant, you need to appeal to a certain segment of the population that is driven by everyday value. And so, we created our first ever value menu. Sweet Deals is a cool name. It ties into our Dairy Queen treat heritage of sweet. When you get a great deal, you might be inclined to say, “That’s a sweet deal.” There’s a lot of double entendres at play there.
BW: The pricing structure is interesting: Get any two items for $3, any three items for $4 and any four items for $5. How did you come up with that strategy?
MK: We literally asked our customers if they prefer a $1 menu where everything is priced at a buck or if they prefer this menu, and they chose this. Part of the reason why is because they like the idea of being in control and deciding how much they can eat, pay and save. There is something about being in control in this day and age when everything seems out of control. That really struck a chord with people, and women in particular like to exert control over their food choices.
BW: At DQ, there’s something called the brand touch point wheel, which includes everything from “menu/products” to “customer service” to “product quality.” How does advertising fit in with the chain’s marketing mix?
MK: The quality of the product we serve to you across our counter is the moment of truth. That has nothing to do at all with advertising or marketing. Those products are made by our franchisees in our stores. It’s customized for every customer who orders them. Is it as cold as it should be? Does it have lots of chocolate chunks? Do you take your first bite and go “mm-hmm?” It’s not that marketing is no longer as relevant as it’s once been. Marketing is much larger than it used to be. It is about the collective brand experience and it’s not just driven by the marketing mix. It’s driven by so many other things that the consumer experiences and that’s a fresh place to think about how to build your brand.