Denny's Strategy Plansbook by Elena Chow

TEAM VOLDEMORT

Cover Letter Y N

ADVERTISING STRATEGISTS

C O N TA C T University of Florida, 3001 Advertising Strategy St., Gainesville, FL. 32611 t: 383 784 7464 | e: teamvoldemort@adstrategy.com | w: www.teamvoldemort.com

TO: Denny’s Co. John Miller FROM: Bailey Gaul Brittany Wilem Victoria Wienke Eva Sailly Elena Chow DATE: June 18, 2015

To whom it may concern: Through much primary and secondary research, we have evaluated the information to create opportunities recommendations for Denny’s corporation as it moves to penetrate a the Millennial market segment. By understanding the fast-casual restaurant industry competition and the benefits Denny’s corporation can provide to meet current and prospective consumers’ needs, we have determined a communications strategy. This strategy will generate an increased brand awareness to persuade the purchase decision by focusing on attributes such as Denny’s Corporation socially responsible disposition, it’s healthier environment-friendly meal choices, and community outreach programs. We thank you in advance for considering our findings and recommendations, and we would very much like an opportunity to meet with you personally to discuss our strategies further and how we can contribute to its established success. Should you have any questions, we can be reached in confidence at the above telephone number or email address. Best regards,

Baily Gaul Brittany Wilem Elena Chow Eva Sailly Victoria Wienke

Table of Contents Cover Letter Executive Summary……………………………………………………………………..1 Part 1 Problem Statement………………………………………………………………………6 Situation Analysis: Industry…………………………………………………………………………………....7 Company………………………………………………………………………………….10 Brand………………………………………………………………………………………13 Competitive……………………………………………………………………………….15 Consumer…………………………………………………………………………………17 Market……………………………………………………………………………………..20 Macro-Environmental…………………………………………………………………….21 Problems & Opportunities Analysis…………………………………………………….24 Problems & Opportunities Analysis Recommendation……………………………….28 Part 2 Marketing Objectives…………………………………………………………………….31 Brand Marketing Strategy……………………………………………………………….31 Target Market Profile…………………………………………………………………….31 Brand Proposition Statement Alternatives…………………………………………….33 Brand Proposition Justification………………………………………………………….33 Communication Goals, Message Strategy, & Media Delivery Recommendation: Communication Goals……………………………………………………………………34 Communication Message Strategy……………………………………………………..34 Recommended Media Strategy Justification…………………………………………..34 IMC Tactics………………………………………………………………………………..35 Measurement & Evaluation Recommendation………………………………………...37 Bibliography………………………………………………………………………………..39

Executive Summary Situation Analysis: We have provided a detailed analysis for Denny’s Corporation. The analyses include the company analysis, industry analysis, brand analysis, competitive analysis, consumer analysis, market analysis, and macro-environmental analysis. Problem and Opportunities Analysis: Through our secondary research, our team has comprised a list of problems and opportunities that we have discovered for Denny’s Corporation. Some major problems include Denny’s restaurants do not offer a health-conscious menu items, and Denny’s has a high staff turnover rate. One of the main opportunities is tapping into the growing Latino market, global expansion in Brazil, Russia, India and China and making more an effort to be a socially conscious corporation. It is also important to note that Denny’s has strong brand awareness. Opportunities Recommendation: In this section, we highlight specific opportunities available for Denny’s Corporation to utilize. This includes focusing on publicizing their social responsible commitments and penetrating the Latino market. Target Market Strategy: For our target market profile, our team has written about David C. Smith, who is a 21years-old. He is a senior that goes Florida State University who cares about balancing his social life while living healthy.

Marketing Objectives: Denny’s Corporation can accomplish these three marketing objectives to better resonate with their target audience. Our first objective is to build traffic by 30 percent among the target market. Our second objective is to generate a 40 percent repurchase rate among the target market group within 12 months of the introduction period. Product Positioning Alternatives: We have provided two different positioning alternatives for Denny’s Corporation. The first one focuses on the convenient locations, and a different location from the norm. This emphasizes Denny’s Corporation’s goal to become a preferred location to appeal to their new target market. The second alternative focuses on the food selections and efficient service. This capitalizes on Denny’s Corporation’s involvement in the community. Positioning Statement Recommendation: After thoroughly evaluating both options, we chose alternative #2. This proposition is the better option because it highlights the highest concerns for Millennials. Any restaurant can choose to offer breakfast foods and quick service. Their effort to being socially responsible will appeal to Millennials. Communication Objectives: After examining the list of problems and opportunities, our team proposed two communication objectives for Denny’s Corporation. The first objective is to increase awareness of Denny’s Corporation by revitalizing the brand image to attract the millennial target market within 12 months of a new campaign launch. The second objective is to persuade one out of every five potential consumers that Denny’s is a

viable option for a fast, casual restaurant choice within 12 months of the new campaign launch. Communication Strategy: Summarized, our communication strategy is to convince young professionals, who seek convenient, quick, and healthy meal options, to choose Denny’s as their regular dining hangout. Media Strategy: Our team recommends Denny’s Corporation use two different platforms for their local advertising campaign. The first platform is through social media competitions on Twitter, Facebook, and Instagram. The second platform is through digital media by using product placement during television shows. IMC Tactics: Our team wants to change the mindset of Millennials in three different ways. The first of which would be to run contests and other advertising campaigns through social media. The second would be to run contests and other awareness campaigns about the benefits of being socially responsible in his or her community. The third way would be continuing to offer scholarship opportunities to students from elementary to collegeaged kids. Measurement and Evaluation: We recommend Denny’s Corporation conduct brand awareness tests through social media. This will be done by posting photos, such as, a breakfast food picture on “Waffle Wednesdays,” on Twitter, Facebook, and Instagram and offering an incentive to the person who is chosen as the winner. The intended goal is to measure the brand

perception through social media user activity of how many â&#x20AC;&#x153;likesâ&#x20AC;? and shares their posts and images receive.

Problem Statement Denny’s Corporation is branded as “America’s Diner.” In the past, their restaurants have primarily marketed themselves to American families. However, their current business model is resulting in declining sales. This is why Denny’s must shift its focus towards millennial consumers. Right now, Denny’s core business problem is declining market share and lack of appeal to millennial consumers. In order to market the millennial generation, Denny’s must make changes from their current business strategy.

Industry Analysis Denny’s Corporation competes in the full service restaurant industry, more specifically, the casual restaurants industry, which comprises more than 230,000 establishments across the United States (Hoovers). Denny’s casual dining experience provides food services in relaxed atmospheres to seated customers, whose demand is driven by personal income, consumer taste and demographics. The top industry players include Bloomin’ Brands, Brinker International, and Darden Restaurants, with 4.5 percent market share, 4.1 percent market share, and 6.8 percent market share, respectively (Alvarez). The industry is at the mature phase of its life cycle (low market share), indicating slowing growth as revenue grows at the same pace as the overall economy, company numbers start to stabilize, and profit margins are low due to price-based competition on menu items (Alvarez). To achieve growth, major franchise operators have started to consolidate by taking over small stores. Given the economic market of the U.S., most of the industry growth receives revenue growth from international expansion, particularly in Asia, the Middle East and South America (Alvarez). Within the food services category, however, the “fast casual” fast-food segment have stolen market share from full-service chain restaurants since the conditions of the recession stunted economic growth (Alvarez). Trends that have proliferated in this industry consist of healthy menu choices, social media marketing, millennial diners, fast-casual segments and small markets. Consumers are becoming more health conscious and aware of the healthier

alternatives. Eating nutritional meals have become a major concern for consumers in the U.S., and the health-eating index is predicted to rise in 2015 (Alvarez). In response, restaurant chains are offering healthy menu choices to adapt to the changing American diet. According to the National Restaurant Association, more than 70 percent of consumers prefer visiting a restaurant that offer nutritious and healthy options (Hoovers). In recent years, Millennials have gained a foothold of purchasing power. Research conducted by the Oracle states that their purchasing power is “forecast to reach $3.4 trillion by 2018” (Hoovers). According to Technomic’s 2014 Top 500 chain restaurant report, “fast casual” fast-food segment, which refers to a group of restaurant operators that promise a higher quality of food at a lower price, has grown increasingly fast in recent years with a chain growth of 11% and a store count increase of 8% in 2013 (Levy). Because of its successful outcome, it motivated businesses to renovate their services in order to compete and drive more traffic. Unlike locations in larger cities, smaller and local markets have lower costs and less competition, thereby grasping a high chance of success for restaurant operators that can establish themselves without difficulty (Hoovers). Within the industry, projected growth is estimated to be 1.8 percent in 2016 with revenue of about 99 million dollars (Alvarez). The industry is anticipating improvement over the next five years at an average rate annual rate of 2.7 percent as factors such as lower unemployment rates and rising per capita income will push consumers to increase their spending on small luxuries (Alvarez). Despite growth, competition will be fierce and declining wages is expected to continue from an average industry wage of $17,873 in 2015 to $17.349 by 2020 (Alvarez). To adapt to current macro-environmental trends,

the industry is expected to continually innovate their menus, invest in technology to capture and attract digital-savvy consumer market, and consolidate as domestic opportunities dwindle.

Company Analysis Denny’s Corporation is considered one of the leading full-service, family style diner chains in the United States. Founded in 1953, Denny’s Corporation was founded by Harold Butler and Richard Jezak in Lakewood, California (Hoovers). Originally Danny’s Donut Coffee Shops, Denny’s Coffee Shops emerged in order to reduce confusion with competitors. Denny’s Corporations are now franchises after deciding to franchise in 1963. Denny’s is one of the biggest sponsors of Save the Children (ProQuest). Denny’s Corporation boasts 1,702 locations around the globe with 1,596 locations in the United States. It is known for it’s 24-hour service (Hoovers). The company operates 160 of their restaurants while the others are under licensing agreements as franchises (Hoovers). The headquarters for Denny’s Corporation is run by its parent company Trans World Corporations in Spartanburg, South Carolina. Just last year in CEO John Miller’s 2014 annual report, Miller stated that Denny’s Corporation has “evolved their menus to accommodate the changing tastes of our guests” while still satisfying the taste for American comfort products (Marketline). Miller emphasized that their new initiatives are attempting to bring freshness to the Denny’s Corp.’s brand with new casual dining demands from the Millennial generation (Marketline). In legal dealings, John Miller, the owner of Denny’s Corporation, is being evicted of tax evasion. News of the corporation’s corruption is not the type of publicity Denny’s Corporation needs to attract (Hoovers). Since, Millennials are considered conscious

consumers, they care about political, legal issue and feel a sense of social responsibility. In order to keep up with the Millennials, Denny’s has created a brand extension into the fast casual restaurant category with The Den (Shah). According to Miller, the concept behind The Den was designed for college campuses. There are seven locations found near college campuses (Shah). The menu differs from the traditional Denny’s Corporation’s all day breakfast style, by offering breakfast combos coupled with burritos, salads and “hand smashed burgers” (Shah). The atmosphere has been described as “cave man chic meets counter service” design. Furthermore, the Den just opened its first location in Manhattan with mood lighting, a full bar serving craft cocktails, and sophisticated menus (Shah). Denny’s Corporation worldwide has experienced a decline in sales from 2007 to 2014. Each year revenue has declined with the exception of 2013 to 2014 (there was a slight increase). In 2007, Denny’s Corporation’s revenue was $939.4 million to $472.3 million in 2014 (Statista). Denny’s Corp.’s sales from 2014 were $472.30 million. This was a 2.10% growth from the previous year (Hoovers). In comparison to the industry, Denny’s Corporation is ranked third in market share. In comparison to the industry, Denny’s Corporation is ranked third in market share behind DineEquity’s IHOP and Waffle House (Hoovers). Furthermore, the table below includes the officers of the Denny’s Corporation.

Key Personnel

Chairman

President and CEO

COO and SVP

Debra Smithart-Oglesby

John Miller

Christopher Bode

SVP and Chief

VP of Concept

VP of Product

Marketing Officer

Development

John Dillon

Gregory Powell

Peter Gibbons

Brand Analysis Denny’s Corporation is best known for their slogan, the home of the Grand Slam Breakfast. Their breakfast menu is their specialization, which includes eggs, pancakes, and combination platters. Furthermore, Denny’s Corporation also serves lunch and dinner American style food (Hoovers). This restaurant chain boasts 1,702 locations around the globe. It has 1,596 locations in the United States and 106 locations in Central America. Denny’s Corporation is known distinctively for it’s 24-hour service (Hoovers). Denny’s Corporation is known for their constant promotion of the “grand slam” breakfast. This breakfast deal has continually attracted a steady flow of customers throughout the years best of its value. The headquarters for Denny’s is in Spartanburg, South Carolina where it is ran by parent company Trans World Corporation. Denny’s Corporation currently tries to appeal to families and also be accessible to those traveling, so it makes sense to have a large number of restaurants in these two states that are well known for hosting large tourist attractions such as the Walt Disney theme parks (Distribution Strategy). Denny’s Corporation restaurants are using social media campaigns as a means of advertising. Denny’s Corporation employs the advertising agency Erwin Penland to for all social media campaigns and platforms, such as Tumblr, Facebook, an app, and twitter. Also, Erwin Penland agency develops their Web films (Ad Forum). Beyond social media, Denny’s Corporation invests in advertising for television commercials, their agencies and campaigns are constantly changing. Some of their popular commercials

involve celebrity sponsorships, DreamWorks animation, and emphasis on the restaurant chain being family friendly (Ad Forum). Denny’s Corporation not only elicits a brand but also a service. It’s mission is to provide guests quality food that emphasizes everyday value and new products through our compelling limited time only offering, delivered in a warm, friendly “come as you are” atmosphere (Denny’s Annual Report). Denny’s Corporation divides its product line into four different factions: breakfast, lunch, dinner, and value menus (Marketline). These four different menus attempt to attract a wide scope of consumers. The price of each menu item differs based on the preference of the customer, but most items range from $3-$10. The manufacturing cost and profit margins. Denny’s Corporation brand personality for years has been “America’s Favorite Dinner”. Our team believes wants Denny’s Corporation wants to change the perception of this personality from unhealthy American comfort food to a fresher fast casual dining.

Competitive Analysis Denny’s Corporation greatest competitors include IHOP, as a direct competitor, and Chipotle, as an indirect competitor, within the fast-casual dining segment. They have focused on creating socially responsible and healthier food options to attract an expanding millennial market. Denny’s Corporation’s greatest direct competitor is DineEquity worth $1.96 billion and owns IHOP (The International House of Pancakes). As one of the leading chain restaurant companies, DineEquity rates number three in family-style dining with 1,500 franchisees open 24 hours a day (Hoovers). In a more successful attempt to attract Millennials, IHOP introduced National Pancake Day, managing to raise $3 million for Children's Miracle Network and other charities (Stewart). IHOP reworked their menu to include healthy options like their new Harvest Grain ’n nut pancakes with egg whites. Denny’s Corporation’s outdated brand image presents a weakness. IHOP on the other hand has remodeled about 75% of their locations towards a more clean and contemporary look according to Julia Stewart, the chairman and CEO of DineEquity. Chipotle can be considered an indirect competitor to Denny’s Corporation. It is one of the leading quick-casual eateries within the millennial market. It claims its menu offers more than 65,000 choices with extras available (Hoovers). Millennials value cocreation, which is crucial to creating their own, customized supply chains and design products to meet their particular health goals, dietary desires and cultural values. Unlike Denny’s Corporation, Chipotle’s slogan “Food with Integrity” focuses on their

image committed to selling healthy quality foods, and they also create transparency in how its ingredients are sourced (NASDAQ).

Consumer Analysis Denny’s Corporation is ranked tenth in most popular family-dining restaurant chains and 7th in favorite breakfast restaurant chains with an average score of 43.8 percent in the United States, according to National Restaurant News’ survey respondents 18 years or older (National Restaurant News). Most of Denny’s primary consumers are located in California, Texas, and Florida in addition to Phoenix and Las Vegas with over 600 locations in these areas (Denny’s Corporation Current Report). Denny’s Corporation recently adopted a family friendly marketing method by teaming up with National Geographic in an effort to draw more families into the restaurants (Mintel). Denny’s has intentionally been targeting the millennial market for some time. Comprising one-quarter of the population, Millennials aged 18-34 are one of the largest spenders when it comes to eating out, influencing over $170 billion spending power each year. Millennials are extremely brand loyal and one in every five household dollars are spent by Millennials (Proquest). As heavy social media users, Millennials are self-expressive, liberal, confident, and open to change. Many companies are focusing their marketing on three dimensions valued by Millennials; these include social responsibility, food quality, and supporting the local community. In effort to appeal to Millennials, Denny’s has partnered with Warner Brothers’ to promote the Hobbit trilogy films (Mintel). Once again, their menu has been altered to the Millennials preference by introducing foods that this generation gravitates towards. Two examples are the use of Sriracha sauce and the addition of “real fruit” smoothies offered on their menu (Pathak and Mintel).

In addition to Millennials, Denny’s has been targeting Hispanics, which currently make up a quarter of Denny’s national customer base. TV ads in Spanish have been aired on traditional Hispanic networks like Telemundo. To further reinforce its brand amongst Hispanics, Denny’s has also become involved within the Hispanic local community by awarding scholarships in support of the Hispanic Heritage Award (Proquest). The company started a Hispanic focused Facebook page named Denny’s Latino in August 2014. Also, new menu items have been added to appeal to Hispanics, these menu additions are referred to as food with a Hispanic flair (Mintel). Prospective Consumer Analysis Today’s, marketing strategy for most businesses will involve a method for targeting Millennials. Most corporations will rely on this generation to reach further financial success. However, Millennials are not consumers that are not easily swayed. These generations are looking for a cause and are drawn towards transparent corporations. Millennials are drastically different from previous generations, this “confidant and self reliant” generation is “technologically savvy and connected.” These young adults are considered “open to change and diversity and “closely connected to family and social organizations.” Young writes this generation is “service oriented” and “expectant of immediate access to information.” All of which, will be necessary to reach them as loyal consumers and positive reinforcements. (Young) The Millennial generation is conscious of where their food comes from. For example, three in five Millennials have purchased organic food within the last three

months. In fact, a quarter of Millennials will often pay more for the food it’s organic. This study reported by Mintel Academic, claims that out of the 24 percent of Millennials, three-fourths of their food and beverage purchases are labeled organic (Mintel). Millennials can be classified as the social network native due to their understanding, familiarity, and use of technology to communicate. This why marketers approach this generation with a “profuse usage of digital media, digital marketing is an effective manner for communicating with Millennials (Smith).” In the Journal of Consumer Marketing, Smith claims, “Digital marketing is considered to be the most promising venue for reaching this generation.” Unlike any other generations, Millennials are talking about products and services online more than the general population. A recent study reveals of Millennials, 56 percent talk about products and services through social networking sites.” Marketing to Millennials will involve more action in “the promotion and advancement of products and brand.” (Smith) To summarize, Millennials are conscious consumers about the environment and other social causes. Unlike preceding generations, social responsibility highly affects their purchasing power. Studies reveal that, “Millennials care about society, the environment and favor companies, which share these concerns (Smith).”

Market Analysis Denny’s Corporation has been labeled as the breakfast stop when consumers are deciding where to go to eat. The first location to have a Denny’s restaurant was in Lakewood, California in 1953 (Hollesen). Since then, Denny’s has expanded to almost 1,600 locations in the United States, with California having 403 Denny’s restaurants and Florida having 140. The current population in the United States is just over 319 million people with the median age being around 37 (DemographicsNow). However, more than a quarter of the population is under the age of 20, so that begins to make Denny’s rethink their product positioning. Denny’s has been considered a “family” diner, but they are hoping to make their restaurants become more appealing to this growing population of younger consumers. To appeal to the Millennials, Denny’s has released a concept restaurant called “The Den,” which is geared towards being a laid back place to go and eat in college towns. Some of these new restaurants even have full service bars, so they are adapting to being in towns where the majority of the population is college age people. They are really trying to focus on penetrating markets where they do not hold the majority of the market share (Andersen).

Macro - Environmental Analysis Several environmental factors come into consideration when considering the casual dining restaurant industry. The United States population is increasing to nearly one percent every year (United States Census Bureau). Whereas, “the U.S. total number of households should continue to increase through the year 2019 by approximately 1.4 percent annually” predicted by a study from Number of Households. Meanwhile, it’s currently predicted that the poverty rate will decrease to 13.4 percent by 2019 (Poverty Rate). Current demographic trends indicate that diversity of consumers is expanding as more ethnic groups are growing within the nation. Racial diversity is changing how businesses and industries will have to adapt to specific cultural preferences and needs. Due to high birth rates and immigration, Hispanics are growing to an estimated 30 percent while African-Americans are expected to be about 15 percent (hoovers.com). Social trends, such as social responsibility, are also gaining momentum. A survey by Cone Communications and Echo Research found that “87 percent of consumers factor consumer social responsibility into their purchase decisions,” (vendhq.com). By launching ethical initiatives, consumers will feel more fulfilled about how and where they are spending their money. Businesses are restructuring labor practices to accommodate changing global demographics in current legal trends. Companies are starting to prioritize senior workers in the hiring process by creating new positions that tailor to senior workers’ skills (Guenther, Brackley, Bilgrami & Martini, 2014). For example, Starbucks has begun providing college funding for their younger employees. Companies in Malaysia have

given tax incentives to accommodate to mothers in the workforce (Guenther, Brackley, Bilgrami & Martini, 2014). These new tendencies act as incentives to keep employees within the company to decrease employee turnover rates. Adhere to environmentally sustainable methods is increasing rapidly in popularity amongst companies to appease target consumers. Waste currency incentivizes people to recycle and to adopt an eco-conscious mindset by accepting waste as a form of payment (Hunter & Gutsche, 2014). This example of environmental awareness can help reinforce a positive brand image for consumers. Profit margins could also be at risk as there is national debate about the nationâ&#x20AC;&#x2122;s minimum wage being raised. If labor cost rises, there may be possible industry changes. Other changes such as the number of employees, restaurant locations, or the price of food could determine the profit margin and yearly revenue for this industry. For the Millennial age group (18-34 year olds), there has been a trend towards eating healthier foods. Healthy-eating habits are expected to grow and popularize throughout the United States. This has led to an increase in learning to cook meals at home or to gravitate towards high-quality meals when dining out (Mintel). Many companies are trying to appeal to the expanding group of Millennials and to others looking for healthier options. As technological savvy users are increasing, social media sites have become an important and vital tool in casual dining industries. Social media allows restaurants to promote specials, discounts, events and menu items to obtain valuable customer data as well as foster customer loyalty through the use of websites such as Facebook and Twitter. According to the National Restaurant Association, â&#x20AC;&#x153;67 percent of consumers

use location-based mobile apps like Facebook, Foursquare and Yelp to search restaurant directions and reviews.” In a similar study by Hospitality Technology, an estimated 30 percent of restaurants use location-based marketing strategies in 2013. Younger tech-friendly generations are characterized in their increased utilization of technology in comparison to other generations. In fact, many Millennials are willing to “write reviews, provide product feedback, and promote their favorite brands”. Trends of “consumer-generated commercials, podcasts, and blogs are on the rise with the aid of web sites such as YouTube, V-Cam, and Google Video,” (Smith).

Problems and Opportunities Analysis Strengths: Denny’s Corporation, “America’s Diner,” is a leading family style restaurant chain, with most locations open conveniently 24 hours a day (Hoovers). The Denny’s Corporation logo of cursive red letters surrounded by a yellow background is easily recognizable by most Americans. The brand logo and restaurant slogan, home of the Grand Slam breakfast, has created an identifiable restaurant brand. The Denny’s restaurant concept originating in 1953, capitalizes on tradition and experience in restaurant operations and management. The President and CEO of Denny’s Corporation, John Miller, were recently awarded the Annual Golden Plate Award in 2015 for exceptional restaurant management (PR Newswire). Denny’s corporation boasts a strong franchise with over 90% of Denny’s restaurants being franchised out (Hoovers). Denny’s corporation’s global presence is increasing. The company has over 1700 restaurants around the globe with a vast majority in the United States (Hoovers). As a line extension of Denny’s Corporation, The Den has opened with a dozen locations surrounding college campuses. It features a non-traditional menu, which includes Denny’s test kitchen and innovation center. This is a place where chefs as well as franchise owners can come to train. Fashionable and industrial-style design have been used to update the look and feel of traditional Denny’s into something more relatable with the Millennial segment at The Den (Mintel). This may explain the 10 percent increase in stock hold share Denny’s Corporation has experienced within this year. Denny’s Corporation is not only in the top third of the industry, but is also viewed

as an upcoming investment opportunity for investors looking to get a strong hold into the casual-dining market (Zacks Equity Research). Denny’s Corporation is working to be more socially conscious by being involved with the local community. It has started several company initiatives such as “Our Hungry for Education” scholarship program created in 2014, offers more than $200,000 for scholarships to students across the country in order to fight childhood hunger. This has been in partnership with various minority advocacy organizations. As of 2002, Denny’s Corporation also partnered with Tom Joyner of the Wilberforce Project to raise money for programs supporting various institutions such as the National Civil Rights Museum in Tennessee and the King Center Community Service Youth for Non-violence (Dennysdiversity). This year Denny’s Corporation experiences one of its highest quarterly sales in eight years thanks to Denny’s John Miller. Miller has focused on opening The Den centralized in college campuses, in order to market to a younger audience. This has been vital for Denny’s rebranding strategy. On May 18, President and CEO of Denny's Corporation, John Miller, was awarded the 2015 Gold Plate Award IFMA (the International Foodservice Manufacturers Association). Miller was nominated by The Coca-Cola Corporation and Basic American Foods to be one of seven operator executives eligible for the award for outstanding work within the industry (PR Newswire). Weakness: Denny’s Corporation has some internal weaknesses that affect the company’s performance. It is very obvious that Denny’s Corporation has outdated thinking and

problem solving methods. The leadership is over the age of fifty years old, which means the leaders of this corporation is out-of-touch with new problem solving techniques. Through our research on Denny’s Corporation, Hoovers revealed that Denny’s Corporation has a high risk prescreen score. Denny Corporation has a high-staff turnover. Hiring and training new staff constantly not only is time consuming but also expensive. Unhappy staff also reflects poorly on the company and will inevitably affect a consumer’s experience. Another weakness of Denny’s Corporation is a geographical concentration mainly in smaller town and off-highway locations. Denny’s Corporation has acquired a reputation and image of being dirty and having questionable customer visit its locations. Opportunities: Many restaurants are focusing on global opportunities, especially in BRIC (Brazil, Russia, India and China) countries because of factors like rising population, increasing purchasing power, and changing eating habits of people in international countries that can help expand their industry. Social causes also give businesses the opportunity to expand their business for Millennials who are more socially responsible. The Hispanic market is increasing as ethnic groups are entering the U.S., which can aid Denny’s Corporation business. The casual dining industry is expanding as 34 percent of the potential market is stated to move towards the industry. Thirty five percent of teens also prefer casual dining. Threats: Denny’s Corporation faces a fierce competition from DineEquity, which is the lead category leader in casual dining. In the rankings for the most popular family dining

chain restaurants, Dennyâ&#x20AC;&#x2122;s ranked 10th behind restaurants such as IHOP, Cracker Barrel and Perkins (Statista). There has also been a lot of PR crisis management for Dennyâ&#x20AC;&#x2122;s Corporation lately. Recently, articles have revealed that a child fell into an open grease pit in the parking lot, bad customer service, etc., in order to still attract customers.

Problems and Opportunities Recommendations Problems: The following problems have been identified via secondary research on Denny’s Corporation’s attempt to target the millennial market: 1. Denny Corporation’s does not offer a health-conscious menu, which presents an issue because Millennials value their health. Millennials are becoming more concerned with environmentally conscious ingredients and socially responsible products. 2. The company has a high-risk pre-screening score, which results in a high staff turnover rate. This could affect the service to the consumer, the brand image, and annual cost. 3. Denny’s Corporation is coined as a family diner, which could derail Millennials from becoming brand loyalists. Millennials are frequenting restaurants that have modern and trendy atmosphere. 4. Denny’s Corporation’s outdated promotional messages have failed to penetrate their new intended target market: Millennials. Their media planning strategy has been misdirected because of their heavy reliance on traditional media outlets. Opportunities: 1. The Latino market is increasing as Hispanic immigrants are entering the United States, which is a positive addition to their National Hispanic Marketing campaign. 2. An opportunity of Denny’s Corporation lies with its current migration towards global expansion in the BRIC countries (Brazil, Russia, India, and China), as well

as, Central and South America. Denny’s Corporation has found success by expanding outside the United States. 3. The Denny’s corporation name, logo, and slogan create an identifiable restaurant brand recognized by most Americans. Additionally, this could be beneficial for their new product extension of The Den. 4. Denny’s Corporation has been making an effort to be a socially conscious corporation. This business model attracts Millennials who value community outreach programs and organizations.

Marketing Objectives •

To build traffic by 30% among the target market within 12 months of the campaign period.

•

To generate a 40% repurchase rate among the target market group within 12 months of the introduction period.

Brand Marketing Strategy: Based on the problems and opportunities identified from the situational analyses, Denny’s Corporation should restructure their outdated brand image to target younger consumers. Denny’s Corporation can achieve this by responding to the macroenvironmental trends among Millennials. Such trends within the fast casual industry include the importance this generation places on socially responsible business practices, healthy and customizable meal options as well as environmentally conscious ingredients. Focusing on social media marketing should also be used to improve Denny’s Corporation’s promotional messages to be more engaging and representative of the new brand image they wish to portray.

Target Market Profile Hey, my name is David C. Smith. I am 21 years old, a senior at Florida State University, and I am Finance major who hopes to become an investment banker on Wall Street someday. I’m a very laid-back, down-to-earth, Florida boy who enjoys wakeboarding on the lake in my spare time.

I’m not only preoccupied by my business internship, classes and lacrosse practice; I’m also really involved in my fraternity. Currently, I’m the New Member Educator at Delta Tau Delta. It’s been a struggle for me to juggle my social life, good grades and my commitments to the fraternity. Since, I came back from my Habitat for Humanity trip in Guatemala this summer, I have piled on the workload to finish out my senior year at FSU. Honestly, the two things that relieve my stress is kicking back with my friends and going to the gym. My boys and I hit up Steak ‘N’ Shake when it’s the only place we know of that’s open late at night. After a night of drinking, nothing sounds better than fries and burgers at three o’clock in the morning. I hardly buy groceries, who has time for that? I eat out four times a week. I want somewhere that’s good, cheap, and I can hang out with my friends. Living on a college budget is essential. That’s why one of my favorite restaurants is Chipotle because I know the food I’m getting is quality food that is also environmentally friendly with GMO free chicken.

Brand Proposition Statement: Alternatives Proposition Alternative 1: To 18-24 year-old socialites who need reasonably priced late-night food from a restaurant with convenient locations and a relaxed atmosphere, Denny’s is the brand of casual fast food dining that offers a wide selection for all meals at accessible hours. The reason why is because Denny’s Corporation provides a center where friends and food can meet. The brand character is traditional, friendly, and accepting. The value-based payoff is convenience. Proposition Alternative 2: To busy, 18-24 year old socialites who are looking for a restaurant that offers efficient service, quality food, and a focus on socially responsibility. Denny’s is the brand that offers healthy options for the expanding market seeking healthier environment-friendly meal choices. The reason why is because Denny’s Corporation provides consumers with organically grown food with profits donated to non-profit organizations. The brand character is informed, selfless and ambitious. The value-based payoff is fulfillment. Justification for Proposition Alternative #2 is the most marketable option. This proposition will be the better option for Denny’s Corporation because it emphasizes the values that Millennials deem important. In addition to health-conscious lifestyles, Millennials appreciate restaurants with low prices, quality food and contemporary ambiance. The future of Denny’s success will depend on their dedication to being socially responsible. This will draw their target market, Millennials, because it creates a sense of gratification. Any restaurant can choose to offer breakfast foods and quick service, but Denny’s Corporation can

incorporate all of these services into their consumers’ visit. Ultimately, consumers will feel good about their purchasing power because dining at Denny’s benefits the greater good. Communication Goals, Message Strategy, and Media Delivery Recommendation Communication Goals Communications Objective 1: To increase awareness of Denny’s Corporation by revitalizing the brand image to attract the Millennial target market within 12 months of a new campaign launch. Communication Objective 2: To persuade one out of every five potential consumers that Denny’s is a viable option for a fast, casual restaurant choice within 12 months of the new campaign launch. Communication Strategy 3: Convince young professionals who seek a convenient, quick, and healthy meal to choose Denny’s as their breakfast, lunch, and dinner hangout location.

Recommended Media Strategy Justification 1. We recommend that Denny’s advertise to Millennials primarily through social media specifically in the most highly used apps among Millennials. Millennials identified Facebook with 75.6 percent, as their primary social media vehicle, with Instagram following at 43.1 percent (Lipsman). Social media will increase brand awareness and push the purchase decision process amongst Millennials. It will capture Denny’s Corporation’s transition to a more contemporary atmosphere,

focusing on healthier and environmentally responsible meal options as well as community outreach programs. 2. We also recommend Denny’s Corporation use product placement on television shows whose viewership consists of mostly Millennials such as the Jimmy Kimmel Show. The Jimmy Kimmel Show has created some of the most shareable TV promo for the millennial audience (Flomenbaum). IMC Tactics 1. We recommend developing an active social media campaign with contests and fundraising for community projects. This will increase awareness and brand interaction between Denny’s Corporation and Millennials. Millennials, as a generation, abide by the idea of FOMO or the Fear of Missing Out. This can be characterized as social angst or the desire to stay constantly connected and aware of what others are doing. Sixty-eight percent of Millennials will make a reactive purchase, often within 24 hours of the emotional experience (ProQuest). Customization is also an important factor to this target group. An active Twitter, Snapchat, Tumblr, Facebook, and Instagram account will allow Millennials to feel included and part of the conversation generators. They will feel like Denny’s Corporation is listening to them and incorporating their desires into the food they eat. Social media posts should be brand heavy to illustrate Denny’s Corporation’s values as fun, contemporary and convenient. a. As an interactive target market with more than 71 percent of Millennials checking social media sites at least once per day (Bennett). Using social media to institute contests with various rewards, such as gift card, will

engage consumers. For example, customers can follow Denny’s Corporation on Instagram and post pictures of their favorite meals on specified days such as Waffle Wednesdays. b. Followers will then be asked to “like” the best Insta-posts; customers choose the winners based on most likes. This creates an interactive a personal experience that is more than just a quick meal in and out. Denny’s will be a part of the customer’s brand loyal experience. This can be done with Twitter and Facebook using picture and video contests. 2. Millennials are very socially conscious when it comes to choosing their brands. a. We recommend Denny’s create a contest each year asking its consumers to create a video that talks about a cause they are passionate about. The best 50 organizations or social causes for change will be selected. From that other followers can then vote on the most “worthy cause”. Denny’s will then create a new menu item in which a percentage of the profits, for a limited period, will go to fund that selected social cause, chosen by Denny’s corporations brand loyal customers. This adheres to Millennials need to be community oriented, engages the target audience, and creates a call to action by building a relationship with its consumers. b. As a creative generation, Millennials, we recommend creating another social media prominent campaign adhering to this creativity. Asking consumers to create new menu options that can be voted upon by followers is another interactive way to engage the target audience.

3. Denny’s Corporation’s “Hungry for Education” initiative is a multicultural scholarship program targeting students from elementary through college and is designed to recognize and encourage academic accomplishments. They have provided more than $200,000 to students of all ages for their ideas to help Denny’s Corporation fight children hunger (DennysHungryforEducation). a. To adhere to their attributes of familiarity and brand awareness amongst consumers, Denny’s Sunday brunch would be created. b. A new health conscious limited time menu created monthly would be released with all or a percentage of the proceeds going towards the “Hungry for Education” scholarships.

Measurement and Evaluation To track pre-testing efforts, Denny’s Corporation may consider measuring how their brand image changes in the consumer’s mindset. Our advertising efforts are expected to change how Millennials view their brand image and engage the consumers to incorporate Denny’s Corporation into their casual dining lifestyle. We think Denny’s Corporation’s healthier menu option and socially responsible practices will resonate with the target audience. By using social media tools such as Twitter, Facebook and Instagram, we can use concept tests to evaluate the impressions and “likes” of promotional materials, such as photos and videos, as well as determine trending topics relevant to the campaign. This can be pre-tested to a select group of social media users that identifies with our target market. Thus, we can identify the most important benefits and features that appeal to the target market. We can also measure the audience

response in popular millennial television shows by measuring audience visitation and reactions. In addition to performing concurrent tests for the receptiveness of the product placement and social media campaigns, we also recommend that there be a post-test for both these media vehicles to measure the target audience’s receptiveness. This testing would evaluate the intent to purchase as well as the before and after transition of brand attitudes. We could measure the participant’s involvement in the social media contests, their responsiveness and even “likes” or shares of the advertising materials posted. We would compare these results to the traffic experienced at Denny’s Corporation’s restaurants after the campaign has gone into effect (within a period of 12 months).

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