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.