MANAGEMENT 478-5 - BRAND MANGEMENT – PROFESSOR AIMEE DROLET – FINAL EXAM

Long John Silver’s (LJS)

BRAND AUDIT FOR THE US MARKET

Nancy Sagar, EMBA 2011 9/24/2010

CONTENTS

I. BRAND INVENTORY ............................................................................................................. 1  

US brands ................................................................................................................................................................................................ 1  

Sub-brands ............................................................................................................................................................................................. 1  

Branded features, services, components .......................................................................................................................... 1  

II. BRAND IMAGE & STRATEGY ........................................................................................ 2  

Brand image, perceived quality, personality .................................................................................................................. 2  

Awareness .............................................................................................................................................................................................. 2  

Point of differentiation/current value proposition: ................................................................................................... 2  

Brand heritage ..................................................................................................................................................................................... 3  

Brand-building activities/ad themes .................................................................................................................................... 3  

III. COMPETITORS ...................................................................................................................... 4  

Major competitors by category ................................................................................................................................................. 4  

Competitor strengths, perceptions, positioning, strategies ................................................................................ 5  

IV. BRAND CATEGORIZATION ............................................................................................ 6  

Does the portfolio include any strategic brands with valuable leverage? ................................................. 6  

Are they exploiting any silver bullets? Do they need more? ................................................................................ 7  

Are there any appropriate endorser brands that can add value? ..................................................................... 7  

Umbrella brands: does identity work? Is there a plan? ........................................................................................... 8  

V. BRAND SYSTEM EVALUATION .................................................................................... 8  

Do they have the right number of brands? ...................................................................................................................... 8  

Are brands fully leveraged? Could they do more? ...................................................................................................... 8  

Partnering/co-branding opportunities ................................................................................................................................ 9  

Is there a clear, motivating sense of purpose to employees and partners? ............................................. 9  

Do key brands have a brand identity? Are they actively managed? ............................................................... 9  

VI. REFERENCES ....................................................................................................................... 10  

Nancy Sagar – Final Brand Audit – Long John Silver’s page 1

I. BRAND INVENTORY

US brands

Long John Silver’s (LJS), owned by YUM! Brands, a house of brands that includes KFC, Taco Bell,

A&W and Pizza Hut. LJS has co-branded about 700 LJS distribution points with other YUM!

restaurants.

Sub-brands

LJS appears to be pursuing a sub-branding strategy with Freshside Grille, a menu of light fish

platters with veggies. FG has its own website, YouTube & Twitter accounts, and it appeals to a

new segment (health-minded females) vs the traditional LJS customer.

Branded features, services, components

Like most quick serve restaurants (QSRs), LJS has trademarked some menu items, aka “branded

features:” Treasure Chest (family meals); Chicken Planks (fried chicken strips); Add-A-Piece (single

food items); Veggie Bites; Lobster Bites (handheld unit filled with bite-sized bits of fried

Langostino lobster tail); Iceflow Frozen Lemonade. However, the Treasure Chest is the only

branded feature that has meaningful imagery (packaging) to reinforce the brand identity; other

branded menu items are simply descriptive trademarks versus recognizable differentiators that

give LJS personality and relevance.

Strangely, LJS hasn’t branded any fish sandwiches.

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II. BRAND IMAGE & STRATEGY

Brand image, perceived quality, personality

It’s difficult to find published information about how consumers view the LJS brand, quality level,

and personality. Based on my research, it’s reasonable to assume that many consumers view the

brand as a product that is dated and unhealthy. And since a PRODUCT isn’t a BRAND, LJS has an

opportunity here. Perceived quality doesn’t seem to be high, and perceived personality seems to

be lacking (it’s hard to have personality when you’re tired). However, recent ad campaigns convey

a quirky, fun, and escapist personality, and new grilled food items appear to be tasty. Yet the

legacy brand / product image will take more time (and very consistent advertising & branding

execution) to change.

Awareness

The AllBusiness Franchise Directory ranks LJS 57th in brand awareness in the competitive QSR

category (unaided versus aided is unknown) – not exactly stellar performance.

Point of differentiation/current value proposition:

The LJS value proposition and point of differentiation has shifted. In the ‘80s, LJS positioned

itself as a family meal alternative to burgers, offering a value proposition of a better product and

the emotional benefit of family togetherness. In the ‘90s, LJS shifted positions to became the

value alternative to sit-down meals, a way to compete with Red Lobster in the $8.6 billion full-

service seafood category.i

In 2007-08, LJS overhauled the brand, culling weak franchises and repositioning as an alternative

to predictable pizza, tacos and burgers. After all, in 2007, McDonald’s sold 325M Filet-O-Fish

sandwiches, a major threat to LJS’s $780M in annual sales.ii LJS’s new strategy involved naming

their fish: “No more fish without a name from Lord knows where,” said Donald Gates, director of

marketing.iii Today, the company says the brand is positioned as “an emotional escape from the

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ordinary for fun-seeking seafood cravers” with a value proposition offering fresh authentic food

(functional benefits), fun (emotional benefits) and escapism (emotional).

Brand heritage

The brand was named after the adventurer Long John Silver from the classic pirate story

“Treasure Island” by Robert Louis Stevenson (subsequently made into 50 TV shows & films). The

LJS restaurant was founded in 1969 and used pirate and nautical imagery to evoke the

adventurous spirit of the character. This pirate theme and the image of fried fish seems ingrained

in the psyche of Americans who grew up in the 1970s-80s.

Brand-building activities/ad themes

1980s: LJS built the brand with big ad campaigns featuring happy families enjoying tasty sit-

down fish dinners that cost “just a little more than a burger and fries.” A famous campaign

featured Heather O’Rourke showing us a fried “Push Huppy” and the cheerful slogan “Let Long

John Silver’s put a smile on your taste.” Then in the ‘90s, LJS’ original owner, Yorkshire Global

Restaurants, began co-branding LJS with A&W to build brand exposure and sales for units that

generated traffic for complementary day parts. YUM! has continued this strategy, cobranding

about 700 LJS units with other market leaders (KFC, Taco Bell, Pizza Hut) to build exposure for

LJS.

2000-2007: LJS spent $30-$45M on advertising annually and positioned LJS as “the only real

seafood choice offering consumers great seafood along with the value and convenience of quick-

service restaurants," said Mike Baker, VP Marketing. Campaigns included “This is Seafood

Country,” “Get Coastal” and “Y’aaar Genius,” along with quirky promotions for International Talk

Like a Pirate Day and the search for oceans on Mars. The 2007 rebranding effort brought a new

tagline, “Throw boring overboard," featuring young professionals who are tired of traditional fast

food options. After getting drenched by giant wave, they enjoy seafood samplers or the new

Freshside Grill options - “fast food you can feel better about!” These campaigns also promote

LJS’ species-named fish dishes (e.g. tilapia), a direct dig on “fish pretender” patties sold at

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McDonald’s and Burger King. Then in 2008, YUM! launched www.keepitbalanced.com, a site

offering online fitness training tools, but it gets minimal traffic.

2010: The “boring” campaign continues to promote LJS as a unique, tastier and healthier option

– the “burger alternative” for young men (the largest QSR segment) and women. Another

campaign for their “$10 Family Pack” targets moms and positions LSJ as a fresh, wholesome,

better-value family meal option than pizza. Oddly, a third campaign, “Johnny V,” moves back to

the Red Lobster positioning strategy by showcasing a debonair playboy who enjoys “sit down

quality, half the price.” And the new promotion for the Freshside Grill subbrand appears to target

women with “premium seafood selections you can feel good about.” Recently, LJS also made

news with a Discovery Channel “Shark Week” sponsorship deal that builds the

escapist/adventure identity.

III. COMPETITORS

Major competitors by category

The seafood category generates $1.4B in annual sales, a tiny share of the QSR category.iv Burgers

dominate with 55% of industry sales, followed by sandwiches (15%), pizza/pasta (10%), chicken

(10%), and Mexican (7%). Seafood and Asian are buried in the “other” category with no

estimate.v However, LSJ is the seafood category leader with 36% market share (2009)vi – almost

double the share of #2 Captain D’s, a regional chain.

As mentioned earlier, LJS has attempted to compete against full-service seafood chains including

the market leader, Red Lobster (28% share) but faces stiffer competition from fish sandwich

offerings from top burger brands including McDonald’s (selling $325 million of Filet-O-Fish) and

Burger King. With Subway in the lead, the sandwich category also offers challenges for the lunch

business, while Chick-fil-A is a quirky, beloved regional chicken brand.

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In addition, LJS competes with many major QSR brands for prospective franchisees. In the YUM!

portfolio, Pizza Hut, KFC and Taco Bell are all ranked higher in Entrepreneur’s 2010 top franchise

list. Subway has dominated the top spot for years; other brands above LJS include McDonald’s

(#2), Hardee’s (#16), Sonic (#22), Papa John’s (#26), and Carl’s Junior (#52).

Competitor strengths, perceptions, positioning, strategies

McDonald’s: In the burger category, McDonald’s has been selling the Filet-O-Fish for 50 years; it’s

been marketed heavily to Catholics as the “Friday fish of choice” during Lent, when 25% of the

chain’s fish sandwiches are sold. McDonald’s recently launched a wildly successful, quirky TV

campaign featuring a singing Frankie the Fish. McDonald’s is clearly putting resources behind this

sandwich, which should worry LJS. Consumers seem to perceive that it’s a small sandwich and

pricey for its size; and it’s positioned as a classic, crispy fish product dripping in Americana (aka

tartar sauce).

Burger King is pursuing a similar strategy of putting marketing muscle behind its fish sandwich,

the BK Big Fish (including the new Cilantro Lime flavor), which is positioned as a premium, large

offering. This sandwich gets mixed reviews; men shy away from cilantro; bloggers claim the bun

and patty is too dry, but hey, it’s bigger and a better value than FOF.

Subway dominates the sandwich category with a huge ad budget ($375M), high brand

awareness, and mega distribution (23,000 US stores). Subway is positioned as fresh, healthy,

value-priced alternative to burgers (similar to LJS), and their highly successful “$5 Footlong”

campaign has spawned many $5 offer knockoffs. Weight-loss star Jared helped Subway firmly

claim the top “healthy” brand positioning earlier this decade.

Chick-fil-A: In the chicken category, Chick-fil-A has created a beloved, almost cult-like brand by –

like LJS – positioning against the burger category, but with oddball humor that cuts through the

clutter to build awareness despite a small ad budget (about $22.5M this year). Cows peer out

from billboards and beg consumers to “Eat More Chikin.” Consumers love the food, and new

store openings have generated frenzied roadtrips and lines. While the brand primarily represents

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“burger alternative,” it has also successfully carved out a position in “healthy” with a strong

brand personality -- a cow! A cute, spotted, desperate cow who writes but can’t spell!

Captain D’s: Led by former LJS exec Sidney Feltenstein, Captain D’s also recently rebranded and

became “Captain D’s Seafood Kitchen.” Like LJS, they upgraded tired restaurants, created new

branded menu items, named the fish, and added healthy menu items to move upscale. However,

their ad budget ($15M), regional focus and internal turmoil (the brand was recently sold; the CEO

just left). The recent “Tail Smack” campaign uses the same positioning as LJS – going after boring

burger and pizza eaters during lunch and family dinners, though with an edgier personality than

LSJ (“Snap out of it!”) This aggressiveness may turn off female customers, but YouTube fans like

it. Captain D’s also positions itself as an alternative to Red Lobster.

IV. BRAND CATEGORIZATION

Does the portfolio include any strategic brands with valuable leverage?

YUM! Brands doesn’t appear to view LJS as a true strategic priority in the portfolio; it’s the

second smallest brand, competes in a tiny category, and suffers from limited US distribution that

will hamper its growth, since LJS ranks low in the restaurant franchise ratings. A prospective

franchisee will be more attracted to Subway and its $375M ad budget versus lower-ranked LJS

and its $40M spend.

However, LJS and Freshside Grill sub-brand presents an intriguing opportunity since 58% of

restaurant-goers want more healthy menu items, and 45% of them expect healthy options to cost

more.vii While healthy options can be cost-prohibitive for younger consumers, 41% of general

restaurant-goers usually order healthy menu items. Women are particularly interested in healthy

options, as well as consumers age 25-34.viii

This report suggests that restaurants can improve by using ingredients that are perceived as

healthier (like species-named fish versus generic patties) and by offering smaller portions to keep

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prices competitive. Thus, the company should view Freshside Grille as an important point of

leverage for the parent LJS brand.

Are they exploiting any silver bullets? Do they need more?

While it isn’t being exploited properly (yet), Freshside Grille could be viewed as a silver bullet for

LJS and for YUM. Freshside could energize the dated LJS franchise by positioning it as a fresh,

healthy seafood escape (a position they don’t yet OWN thanks to inconsistency in recent

campaigns and the pirate legacy). Freshside could also attract a new target segment to the YUM!

portfolio – women 18-34 who are interested in (and will pay a premium for) healthy options

beyond sandwiches and salads.

LJS also needs to create a silver bullet sub-brand for premium, species-named fish sandwiches to

compete with Filet-O-Fish and BK Big Fish. LJS should give one or more sandwiches an

anthropomorphic name and create a personality that resonates with consumers. The fish species

should be included in the name so that consumers will view the brand as one that’s fresher and

healthier than its nameless, square patty competitors.

To compete effectively, these sub-brands will need budget and internal resources within YUM.

They also need a visual identity and stronger presence in the stores. Like Wing Street at Pizza

Hut, Freshside Grill should be prominently featured on all building exteriors and interiors, some

of which need further updating to create a fresh, premium, fun vibe.

Are there any appropriate endorser brands that can add value?

Today, LJS doesn’t have a real endorser brand for consumers, but YUM! serves as an endorser for

franchisees. As one of the largest QSR brands in the world, YUM! provides a powerful

endorsement thanks to the strength of KFC, Taco Bell and Pizza Hut. Since the company doesn’t

promote YUM! to consumers, those consumers don’t realize that these brands are family. If YUM!

becomes as an endorser brand for the entire house, it could energize the portfolio and help the

company take on McDonald’s, Burger King and Subway. Instead of just thinking about pizza or

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burritos or chicken, hungry consumers could think YUM! first, then decide what menu(s) sound

most delicious.

Umbrella brands: does identity work? Is there a plan?

Neither LJS nor YUM! is a true umbrella brand, and I couldn’t find evidence that they’re

considering expansion into other product classes. However, LJS could become an umbrella by

moving into the fresh and frozen grocery food categories, energizing LJS and raising brand

awareness thanks to distribution in grocery chains. YUM! could also put its name on grocery

products, serving as an endorser / umbrella over the restaurant brand, creating a powerful

branded house.

V. BRAND SYSTEM EVALUATION

Do they have the right number of brands?

The LJS system isn’t stretched too far. Instead, it needs vigor that could come from building

Freshside Grille into an energizer sub-brand and creating anthropomorphic-named fish sandwich

subbrands to compete with the Filet-O-Fish and BK Big Fish. LJS should also create another family

meal brand beyond the fried-food Treasure Chest, e.g. a family meal with grilled shrimp, rice,

beans, corn and rolls.

Are brands fully leveraged? Could they do more?

Since consumers understand and are willing to pay higher prices for healthy options, Freshside

Grille could help LJS move to a premium position that hasn’t been definitively claimed in the

seafood QSR category. LJS could lure lunchers from Subway and dinner from the pizza/chicken

categories. Premium branded sandwiches will also help. Freshside Grille could also do more via a

line of grocery seafood products.

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Partnering/co-branding opportunities

LJS has opportunities beyond existing co-branded YUM! stores. First, LJS could build on the 2008

effort to create health-oriented service programs by partnering with brands that reinforce LJS’s

healthy, fresh brand identity and help the LJS shed its tired, fried image. For example, LJS could

partner with 24 Hour Fitness on marathon/triathlon training programs with prizes that include

trips to races in exotic lands. (The program would be cobranded versus a modifier.) LJS could also

do a better job of promoting existing health programs by allocating budget to communications

and cross-promoting in other YUM! stores.

Is there a clear, motivating sense of purpose to employees and partners?

The LJS system isn’t confusing, but it doesn’t deliver a clear, motivating sense of purpose, since it

hasn’t yet chosen a specific position and executed it consistently. My sub-brand

recommendations would deliver more clarity to prospective franchisees (a major priority) while

helping customers and employees clearly understand what LJS (and Freshside Grill) offer versus

other QSR brands.

Do key brands have a brand identity? Are they actively managed?

YUM! is considered a master QSR marketer and LJS is actively managed by Marty Schnurr, the

brand manager since 2007.ix Yet LJS, Freshside Grille and the branded features have no simple,

clear, unique identity, an inconsistent image and personality. They’re simply products or

trademarked names, and they represent substantial growth opportunity as discussed throughout

this audit.

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VI. REFERENCES

i “What you can learn,” Advertising Age, February 19, 2007

ii Ibid.

iii Kenneth Hein,“Strategy: Long John Silver’s Scales Up Budget, Moves Upstream,” Brandweek, February 7, 2007.

iv “Fast Food and Quickservice Restaurants,” First Research Industry Focus, 2008.

v Kate Macarthur, “Long John Silver’s Eyes New Booty: McDonald’s,” Advertising Age, February 19, 2007.

vi Anthony Crupi, “Long John Silver’s Bites on Discovery’s Shark Week,” MediaWeek.com, July 29, 2010.

vii “Healthy Dining Trends - US – May 2010,” Mintel Oxygen, May 2010.

viii Ibid.

ix http://www.linkedin.com/profile/view?id=23378106