FOX MARKETING CONSULTANTS

12/14/12

Wendy's International, Inc. One Dave Thomas

Boulevard, Dublin, OH 43017

1801 Liacouras Walk, Philadelphia, PA

1

TABLE OF CONTENTS

Section Content Pages

1Background and Objectives 3-4

2Our Approach 5-7

3Key Findings 8

4Detailed Findings 9-27

5Summary of Key Findings 28

6Implications 26

2

BACKGROUND AND OBJECTIVES

3

BACKGROUND AND OBJECTIVES

• Understand awareness trial and usage of brands in the category

• Understand factors that are driving purchase decisions

• Understand positioning opportunities relative to the competition

• Awareness and impact of television advertising campaign

4

OUR APPROACH

5

OUR APPROACH:

RESEARCH OBJECTIVES

Sampling Size 1,638

Interview Method Internet survey using Qualtrics

Screening Criteria Fast food

Time for Survey 15-20 minutes

6

AWARENESS TRIAL AND USAGEMULTIPLE CHOICE3, 5 , AND 9 POINT LIKERT SCALES

BRAND RATINGS5 POINT LIKERT SCALES

ADVERTISING EFFECTIVENESSMULTIPLE CHOICE3 POINT LIKERT SCALE

DEMOGRAPHICSMULTIPLE CHOICE

OUR APPROACH

7

KEY FINDINGS

• Few of the percentages of all of the participants in the survey were aware of Wendy’s in the “Top of Mind Unaided Awareness” question. The majority were aware of McDonalds.

• Consumers view the brand Wendy’s as a “better value for higher price” brand which is the main driver of purchase. But Wendy’s needs to reposition because the fast food market predominantly wants quick and cheap food.

• An advantage that Wendy’s has over its main competitors is that it offers healthier choices like salads.

• The “Wheres the Beef?” Ad was successful in their positioning in the consumers mind.

8

DETAILED FINDINGS

9

UNAIDED AWARENESS

McDonald's

Burger King

Wendy's

Taco Bell

KFC

Arby's

Chick-fil-A

Subway

Checkers

Popeyes

53%

6%

14%

6%

1%

1%

5%

1%

1%

1%

100%

89%

87%

63%

53%

37%

34%

28%

26%

19%

Top of Mind Awareness Total Unaided Awareness

Even though you may have already told us, please check all of the brands of Fast Food restaurants that

you may have HEARD of.Base Size:1,702

10

BRANDS CONSIDERED

Please think of your next purchase of Fast Food. Which of the following brands would you consider

when purchasing fast food?

0 Brands3%

1 Brands34%

2 Brands15%

3 Brands16%

4 Brands12%

5 Brands7%

6 Brands13%

Brands

Base Size:1,638

11

FOR THE SCATTER PLOT ON THE FOLLOWING SLIDE, RESPONDENTS WERE ASKED THE FOLLOWING QUESTIONS:

- In the next three months, how likely would you be to buy, or have someone in your household buy, the following brands of fast food?(Select one for each brand)

- Please rate your overall satisfaction with each brand below.  You may use any part of the scale below.(Select one for each brand)

12

LIKING VS FUTURE PURCHASE INTENT SCATTER PLOT

10.0

0%

15.0

0%

20.0

0%

25.0

0%

30.0

0%

35.0

0%

40.0

0%

45.0

0%

50.0

0%0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Top 2 Box Future Purchase Intent

Top 2 Box Overall Liking

Top

2 B

ox

Fu

ture

Pu

rch

ase

Inte

nt

Subway

Chick-Fil-A

Wendy’s

McDonald’s

Taco Bell

Burger King

Kentucky Fried Chicken

SonicArby’s

Popeye’sCheckers

13

FOR THE DATA ON THE CHART ON THE FOLLOWING SLIDE, RESPONDENTS WERE ASKED THE FOLLOWING QUESTIONS:

-Please think of your next purchase of fast food. Which of the following brands would you consider when purchasing fast food?

-Which of the following brands you be most likely to choose when you next purchase fast food?

-And which of the following brands would be your second choice when you next buy fast food? That is, if your first choice were not available.

14

CONSIDERATION, FIRST/SECOND CHOICE BRANDS

Checkers

Arby's

Kentucky Fried Chicken

Taco Bell

Wendy's

Subway

0% 10% 20% 30% 40% 50% 60%

9%

10%

14%

15%

18%

23%

30%

35%

41%

41%

48%

First/Second Choice in Consideration Set

ConsiderationFirst or Second Choice

Please think of your next purchase of fast food. Which of the following brands would you consider when purchasing fast food?

Base Size Consideration= 1,776Base Size First Choice= 1,721Base Size Second Choice= 1,103

39%

33%

31%

29%

22%

12%

7%

7%

7%

4%

4%

15

RESPONDENTS WERE ASKED THE FOLLOWING QUESTIONS WHICH ALLOWED US TO CREATE A BRAND FUNNEL ON THE NEXT PAGE…

• Even though you may have already told us, please check all of the brands of Fast Food that you have HEARD of.

• Which of the following brands have you used in the past year?

• Which of the following brands have you used in the past 3 months?

• Which of the brands that we've discussed today do you eat REGULARLY?

16

BRAND FUNNEL

AWARENESS 97% 99% 98% 91% 97% 97%

USAGE: PAST YEAR 71% 81% 56% 50% 55% 72%

USAGE: PAST 3 MONTHS 41% 59% 22% 26% 26% 45%

USAGE: REGULARLY 12% 16% 11% 14% 17% 19%

73%

58%

29%

82% 57% 55% 57% 74%

73% 39% 52% 47% 63%

27% 50% 54% 65% 42%

17

WENDY’S ADVERTISEMENT

18

“WHERE’S THE BEEF” AD AWARENESS AND EFFECTIVENESS.

•First, participants in the survey were shown the “Where’s the Beef” advertisement on the previous page. They were asked if they recall seeing the ad. If they did not recall the ad, then they were screened out to the end of the survey.

• The participants who recalled the ad were then asked what commercial the brand was for.

•Then they were asked to answer the following questions using a likert scale:

• The ad said something important to me• The ad was enjoyable to watch• The ad made me more interested in the brand• I'm getting tired of seeing the ad• The ad made me more likely to consider buying the brand

•The following slide contains our results

19

Wendy’s TV Ad

Advertising Effectiveness (1653)

Brand Linkage 76%

Advertising Diagnostics (921)

Persuasion

Said something important to me 15.20%

Made me more interested in the brand 22.26%

Getting tired of seeing this ad 46.8%

Was enjoyable to watch 48.10%

Breakthrough 56%

20

THE PERCEPTUAL MAP WAS BASED OFF OF HOW INDIVIDUALS RATED BRAND ATTRIBUTES BASED OFF A FIVE POINT LIKERT SCALE.

THE INDIVIDUALS WERE ASKED 20 QUESTIONS IN WHICH THEY HAD TO AGREE OR DISAGREE WITH THE STATEMENT

THE DATA WAS CONVERTED INTO A PERCENTAGE AND THEN PUT INTO A T-TEST MODEL TO TEST FOR SIGNIFICANCE.

MAP DIAGRAM: WENDY’S ADVANTAGES ARE ON THE RIGHTCOMPETITOR’S ADVANTAGES ARE ON THE LEFT

PERCEPTUAL MAP

21

Maintain CompetitiveAdvantage

Serious Weakness:Try Fixing

Potential Opportunity to improve.

Potential Opportunity to improve

WENDY’S V. MCDONALDS

No Differences

Is good for breakfastOffers a good variety of dessertsHas the best french friesHas a good selection of coffee based drinksHas appropriate meals for young children

Is good for lunchIs a brand I trustHas combo meals I likeIs different than other brandsIs good for dinnerTheir food is always freshHas the best chicken sandwichesIs good value for the moneyIs good for a late night snack

Always has a friendly atmosphereHas the best hamburgersIs a high quality brandOffers a good variety of salad optionsThe restaurant is always clean

Always lets me customize my order to make it larger or smallerHas a quick drive-thru serviceIs competitively pricedIs environmentally responsibleIs good for an afternoon snack

Has a good value menu ($1 or 99 cent menu items)The service is always fast

22

WENDY’S V. SUBWAYMaintain

CompetitiveAdvantage

Serious Weakness:Try Fixing

Potential Opportunity to improve.

Potential Opportunity to improve

Is good for lunchIs a brand I trustIs different than other brandsIs good for dinnerTheir food is always freshIs good for breakfast

Is good value for the money

Has combo meals that I likeHas the best chicken sandwichesOffers a good variety of dessertsIs good for a late night snackHas the best french friesHas a good selection of coffee based drinksHas appropriate meals for young children

Has a friendly atmosphereIs a high quality brandIs environmentally responsibleThe service is always fastThe restaurants always clean

Always lets me customize my order to make it larger or smallerIs competitively priced

Has a good value menu ($1 or 99 cent menu items)Has quick drive thru serviceIs good for an afternoon snackOffers a good variety of salad options

No Differences

23

WENDY’S V. CHICK-FIL-AMaintain

CompetitiveAdvantage

Serious Weakness:Try Fixing

Potential Opportunity to improve.

Potential Opportunity to improve

Is good for lunchIs a brand I trustHas combo meals that I likeIs different than other brandsIs good for dinnerTheir food is always freshIs good for breakfastHas the best chicken sandwichesOffers a good variety of dessertsHas the best french friesHas appropriate meals for young children

Is a good value for the moneyHas a good selection of coffee based

drinks

Is good for a late night snack

Always has a friendly atmosphereIs a high quality brandIs environmentally responsibleThe service is always fastThe restaurants always cleanIs good for an afternoon snack

Always lets me customize my order to make it larger or smaller

Has quick drive thru serviceOffers a good variety of salad options

Has a good value menu ($1 or 99 cent menu items)Has the best hamburgersIs good for an afternoon snackIs competitively priced

No Differences

24

WHICH OF THE FOLLOWING BRANDS HAVE YOU USED IN THE PAST YEAR?

WHICH OF THE FOLLOWING BRANDS HAVE YOU USED IN THE PAST 3 MONTHS?

PLEASE RATE YOUR OVERALL PRODUCT SATISFACTION WITH EACH BRAND BELOW- 5 POINT LIKERT SCALE, VERY SATISFIED TO VERY DISSATISFIED

TO FIGURE OUT THE TOP 2 BOX PERCENTAGE WE USED STATISTICAL PROCESS SOFTWARE. WE USED 3 QUESTIONS TO GET FIND OUT RESULTS:

25

TOP 2 BOX SATISFACTION

Chick-Fil-A

Subway

Wendy's

Taco Bell

Burger King

McDonald's

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

85.50%

80.20%

74.60%

70.40%

63.70%

62.80%

92%

87%

82%

81%

77%

70%

Past 3 months Users Past Year Users

Base size year= 1,755Base size 3 months= 1,753

26

DEMOGRAPHICS

(Past 3 Months) (Past 3 Months) (Past 3 Months) (Past 3 Months) (Past 3 Months) (Past 3 Months)

Gender:MaleFemale

Race/Ethnicity:HispanicWhiteBlackAsianOther

Employment:Full-timePart-timeOther

% % % % % %

45.454.6

McDonald’sWendy’s Burger King Subway Chick-Fil-A Taco Bell

45.154.9

51.948.1

46.353.7

41.958.1

54.545.5

675

12.57.55.4

6.473.911.58.94.8

6.671.812.88.86.3

5.275.1

9105.1

4.879.510.86.73.9

5.577.98.39.75.1

24.343.532.3

25.143.531.3

31.942.725.4

23.443.433.2

28.443.128.4

24.144.631.3

27

SUMMARY OF KEY FINDINGS

• 14% of the participants in the survey were aware of Wendy’s in the “Top of Mind Unaided Awareness” question.

• Consumers view the brand Wendy’s as a “better value for higher price” brand which is the main driver of purchase

• An advantage that Wendy’s has over its main competitors is that it offers healthier choices like salads. A disadvantage that Wendy’s has in relevance to their competitors is their breakfast selection.

• “Where’s the Beef” was a success because consumers associated the commercial with Wendy’s, however a strong portion of the consumers got tired of this ad very quickly

28

IMPLICATIONS

• Wendy’s should try a different technique to position themselves in the consumer’s mind. They need to create brand equity so they can be remembered even when they aren’t showing advertisements.

• Wendy’s needs to take advantage of their position of “high value for a higher price.” They need to find an incentive for consumers to be willing to spend that extra dollar.

• A large reason why Wendy’s wins consumers over other brands is their healthy menu. Their advertisements need to make the healthy menu appeal to the target market.

• Although “Where’s the Beef” was successful, Wendy’s needs to keep up on their innovation and have more of a variety of advertising so that consumers don’t get annoyed with the brand.

29

IF YOU HAVE ANY QUESTIONS REGARDING OUR ANALYSIS, PLEASE FEEL FREE TO CONTACT ALEX GRIMBLE, CHRISTIE

SEITZ, OR MOLLY MCGOWAN FROM FOX MARKETING CONSULTANTS FOR A FURTHER EXPLANATION.

THANK YOU FOR YOUR TIME