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strategy and business
 / Summer 2012 / Issue 67(originally published by Booz & Company)


Rethinking the Product Launch

Wendy’s would next have to figure out which of its existing capabilities could be leveraged to create what customers would perceive as an enjoyable, indulgent dining experience. In addition, what capabilities did the restaurant chain lack? How would Wendy’s have to expand its capabilities system to succeed with indulgent food?

As it happens, although this analysis has been purely hypothetical, we note that Wendy’s has adopted an approach similar to what we envision. It has an active re-design of its customer value proposition under way with an apparent eye for indulgence (its Hot ‘N Juicy burger, introduced late in 2011, is one example) and a rotating menu of great-tasting side dishes: natural-cut French fries with sea salt, gourmet salads, and so on. Its new advertising campaign (including its recent “eat like a baby” television spots) emphasizes indulgent themes. It is promoting natural ingredients for taste and satisfaction. In early 2012, Wendy’s passed Burger King to become the second-largest hamburger chain in revenues in the United States.

One can imagine Wendy’s taking the approach still further to differentiate itself. For example, it could be the first QSR to carry Greek yogurt desserts or other indulgent foods. The more it focuses on this distinctive approach — difficult for competitors to replicate and consistent with its capabilities — the greater the number of people who could be drawn in, beyond the chain’s original want-it-all consumer segment. This could ultimately drive significant incremental traffic and increase average ticket size across the store network. Moreover, Darwinian competitive review might show that both the taste- and experience-focused value propositions were relevant in multiple geographic markets.

In discussing brand expansion and organic growth, many people immediately gravitate to the most dramatic examples of success in consumer goods with excellent product development processes — companies like Procter & Gamble or Toyota. Others focus on the heroic genius of innovation, recalling Steve Jobs’s famous answer when Walter Isaacson asked him what market research he had done in advance of developing the iPad tablet computer: “None. It’s not the consumer’s job to know what they want.”

If it’s your company’s job to know what your consumers want, then the three component practices of a customer value proposition represent a systematic way to accomplish this. As we’ve said, these practices are thought starters that will give you the seeds with which to formulate ideas. They are also useful idea filters for ensuring that the value proposition will succeed. A market-back approach will ensure that the market is big enough and willing to pay appropriate prices; the capabilities framework ensures that the company can be good enough to realize its intentions; and the Darwinian scan reveals competitive barriers and unseen opportunities. Together, they combine the attributes that marketing strategists need most: empathetic artistry and analytic rigor.

Reprint No. 12206

Author Profiles:

  • Max Cuellar is a principal with Booz & Company’s consumer, media, and retail market practice, and is based in San Francisco.
  • Leslie Moeller is a senior partner with Booz & Company based in Cleveland. He leads the firm’s consumer, media, and retail market practice in North America. He is the coauthor, with Edward Landry, of The Four Pillars of Profit-Driven Marketing: How to Maximize Creativity, Accountability, and ROI (McGraw-Hill, 2009).
  • Heberto Molina is a principal with Booz & Company in Mexico City. He specializes in demand-side strategy and marketing capabilities for consumer companies.
  • Also contributing to this article were Booz & Company senior executive advisor David Meer and writer Robert Hertzberg.
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  1. Ken Favaro, David Meer, and Samrat Sharma, “Creating an Organic Growth Machine,” Harvard Business Review, May 2012: Toward an expansion strategy, building on these techniques and more.
  2. David Meer, “A New Way to Gain Customer Insights,” s+b, Spring 2012: More detail on conjoint analysis and its use for organic growth.
  3. Maureen Morrison, “How Wendy’s Found Itself, Slipped Past BK Into No. 2 Spot,” Advertising Age, Jan. 9, 2012: Recent in-depth story about the chain’s revitalization.
  4. Corey Yulinsky, “Making Customer Segmentation Deliver,” s+b, Winter 2011: A four-step process for making segmentation drive improved performance using sophisticated data.
  5. For more thought leadership on this topic, see the s+b website at:
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