For a 60-year-old company based on one principal product—pancakes—to rebrand itself took marketing guts. Social media buzzed when the International House of Pancakes (the long-recognized IHOP) tweeted that a big change was coming, based on one letter (“B”) they teased weeks in advance.
The breakfast giant, with 1,650 restaurants, called itself (IHOB), revealing that the “B” stood for burgers. The move to focus on a formerly ignored menu item is geared to expand its reach into the lunch and dinner market.
Marketing pundits weighed in on the effectiveness of the strategy. Most credited the company; even the stock of its parent company, Dine Brands Global, Inc., increased 30% to $80. Others cited the decline of sit-down casual food restaurants and cautioned that the initial social media buzz, once it died down, would not be enough to ensure long-term success of the campaign.
Wharton marketing professor Americus Reed says it’s too early to tell, and reminds critics that other brands that changed their products did build long-term success. “Remember the purchase funnel,” he states in the Knowledge@Wharton online article, “awareness, consideration, evaluation, liking, intent to buy, actual purchase, and post-purchase loyalty.” Continued word-of-mouth chatter about the company and its burgers may engender lagged sales, according to Reed. Repositioning a brand takes “time, effort, and message discipline,” he continues.
The timing for IHOB’s foray into the lunch and dinner markets might be right. The category of fast-casual is growing, setting IHOB up for growth. IHOP had been stuck in the casual dining sector, where the customer sits down and orders. That category is on the decline, so the rebranding has come at a good time.
Wharton marketing lecturer Jason Riis says it makes sense for IHOB to compete with others in this category. “They don’t have to win,” he says. “They just need a basic level of parity [with the other brands] that gives people another reason to go in there.”
According to Riis, rebranding generally brings positive results. How the burgers fare in the rebranded IHOB is yet to be determined. But it will still have its core business of pancakes, which should remain unaffected.
For an in-depth analysis of IHOB’s campaign, go to:
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