Chicago McDonald's offers $1 breakfast items

By Lisa Baertlein and Brad Dorfman

LOS ANGELES/CHICAGO (Reuters) - McDonald's Corp restaurants around Chicago are offering a new breakfast Dollar Menu promotion as morning visits to fast-food chains decline and competition intensifies.

The breakfast promotion, a first for Chicago-area restaurants, is not intended to become permanent on U.S. menus, and comes on the heels of similar promotions in other markets, a McDonald's spokeswoman said.

Analysts said McDonald's new Chicago promotion illustrates how breakfast pricing is becoming more aggressive as unemployment rises.

Chicago restaurants participating in the "Build Your Breakfast" offer six $1 items: two hot cakes, a fruit 'n yogurt parfait, a sausage biscuit, a sausage McMuffin, two hash browns or medium coffee.

U.S. McDonald's restaurants, which get roughly a quarter of their sales from morning meals, have long had the option of selling a variety of breakfast items for $1.

"Markets choose what offerings make sense to suit their customers' needs. The promotion is going to vary from market to market," the McDonald's spokeswoman said.

The breakfast promotion and other efforts could suggest that McDonald's is feeling the breakfast pinch, said Telsey Advisory Group analyst Tom Forte.

"Nothing is sacred for them. Breakfast is one of their more profitable day parts. They'll push the envelope with price to generate sales," Forte said.

Burger King already has a breakfast value menu, Yum Brands Inc's Taco Bell is expanding into breakfast and focusing on keeping prices low, and privately held Dunkin' Donuts has rolled out a 99-cent breakfast sandwich.

The renewed value push also reflects lower costs for meat, cheese and paper, which make selling $1 items more attractive.

McDonald's has been outperforming many of its peers in the weak economy. It gets about 10 percent of sales from its Dollar Menu that features lunch and dinner items.

McDonald's has had the Dollar Menu since 2002. While sales of Dollar Menu items can lower profits for franchisees, the low-price menu attracts customers who often buy other high-profit items like soft drinks.

Shares of McDonald's closed up 55 cents at $57 on the New York Stock Exchange on Wednesday, while shares of Burger King closed down 2.35 percent at $18.31 after Wedbush Morgan downgraded the stock.

Reference Article at: http://www.reuters.com/article/domesticNews/idUSTRE57P5QC20090826

Marketing Veteran Resigns From PepsiCo

By VALERIE BAUERLEIN and SUZANNE VRANICA

"PepsiCo Inc.'s North American beverage marketing chief, Dave Burwick, resigned Friday, becoming the latest of a number of marketers to leave the food and beverage giant over the past year.

Mr. Burwick, who is 47 years old, had worked his way up over two decades from an entry-level position to oversee marketing of Pepsi-Cola, Gatorade and other beverages at the Purchase, N.Y., company. He was in charge of implementing its high-profile "Refresh Everything" campaign, changing the look of PepsiCo's biggest beverage brands.

He told colleagues in an email Friday that he planned to search for a "general management role" elsewhere. Quoting the late Michael Jackson, Pepsi's onetime pitchman, he said he had looked at "the man in the mirror" and decided it was "time for me to make a change and chart a new course."

Since last summer, several marketing executives have departed the company, including Rick Gomez, a vice president in the North American beverage unit, who is now at brewer MillerCoors LLC, and Jeff Urban, senior vice president of sports marketing for Gatorade. Cie Nicholson, Mr. Burwick's predecessor, resigned a year ago, and Russell Weiner, former vice president of marketing of colas for North America, left last fall for Domino's Pizza Inc.

PepsiCo spokeswoman Julie Hamp said some turnover is to be expected as Chief Executive Indra Nooyi, who took over in late 2006, has streamlined operating units. "There haven't just been marketing changes," Ms. Hamp said. "There's been a dramatic remake of the entire beverage business."

That includes hiring new talent, such as Tom Silk, a former marketing director for Activision Blizzard Inc.'s Guitar Hero videogame franchise who is now vice president of hydration at PepsiCo, Ms. Hamp said. The company also hired Sarah Robb O'Hagan, formerly Nike Inc.'s Western Region brand manager, as the chief marketing officer of Gatorade.

The changes have come as PepsiCo has been trying to reinvigorate sales of some of its top beverage brands. The company has said it is pleased with makeovers introduced this year of the Pepsi-Cola, Gatorade, and Tropicana brands, which have included new packaging and advertising.

But it also acknowledges bumps in the road. In February, Pepsi dropped new packaging for Tropicana juice after consumers complained about the generic-looking carton that replaced the familiar picture of an orange with a straw. Gatorade sales slid 17.5% in the first six months of this year despite a new campaign branding the sports drink "G."

PepsiCo also shook up its relationships on Madison Avenue. After decades of service, it dumped Omnicom Group Inc.'s BBDO from the Pepsi brand business and Omnicom's Element 79 from Gatorade, among others. BBDO's work with the beverage and snack food giant was considered one of the ad industry's longest and most-prolific relationships, spawning successful ad pitches like the catchy 1980s slogan: "Pepsi. The Choice of a New Generation."

Reference Full Article at:  http://online.wsj.com/article/SB124905751015397221.html

Looking for Viewers. No Need to Pardon the Puns.

"CW begins an ambitious campaign this week to promote a new series for the 2009-10 TV season, “The Vampire Diaries.” The campaign includes offbeat elements intended to attract attention, which include a blood drive, giveaways of mock products like “fang floss” and online games.

“The Vampire Diaries,” scheduled to make its debut on CW stations on Sept. 10, is tailored to appeal to the network’s target audience: younger women who dote on its shows like “One Tree Hill” and “Supernatural” and were fans of series like “Dawson’s Creek” and “Buffy the Vampire Slayer,” which were from its predecessor, WB.

Perhaps the most unusual aspect of the promotions is the blood drive, sponsored with the American Red Cross. It is to take place on more than 230 high school and college campuses around the country, said Stephanie Millian, director for biomedical communications at the Red Cross in Washington.

Posters feature the three principal cast members of “The Vampire Diaries” — Paul Wesley, Nina Dobrev and Ian Somerhalder — sprawled languidly under this headline: “Starve a vampire. Donate blood.”

The Red Cross is working with CW “to produce a public service announcement that will feature members of the cast,” Ms. Millian said, and there will be commercials promoting the blood drive on the Channel One high school TV network owned by Alloy Inc.

The partnership is “an opportunity to engage the younger members of our communities,” she added, noting that Americans ages 16 to 22 represent “25 percent of our donors.”

Reference full article at: http://www.nytimes.com/2009/08/25/business/media/25adco.html?ref=business

Airlines Are Sweetening Frequent-Flier Programs

"After years of shrinking benefits and increasing fees, frequent-flier programs are courting their most loyal customers again.  

In recent weeks, American Airlinesintroduced new awards for one-way flights; United dropped its $75 to $100 fees for booking an award within three weeks of travel; and Delta Air Linesmade it easier for elite frequent fliers to retain their V.I.P. status.

Carriers have also been dangling mileage offers, including double-mile promotions, and have even resurrected bonuses for booking online.

Those who follow the programs describe the changes as a slight shift in a more consumer-friendly direction, giving customers more ways to earn and redeem miles.

“What we’re seeing is a bit of a resurgence on the airlines’ part in focusing on their frequent-flier programs,” said Tim Winship, who tracks loyalty programs forSmarterTravel.com. But he added that the issue members care about most — being able to use their miles for free tickets — remains a challenge, especially with planes flying nearly full."

Reference original article: http://www.nytimes.com/2009/08/25/business/25frequent.html?_r=1&ref=business