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Great Moments in Kiddie Marketing

Fast-Food Toys

Fast-food restaurants have used premiums to attract impulse buyers for decades; however, the reliance on toys as premiums started in the late 1980s. The phenomenon was attributed to several related factors:

1) Too many hamburger chains

2) Low inflation had put a ceiling on price increases

3) Health-conscious "thirtysomethings" started to avoid fast-food.

More important, chains' marketing departments had discovered that kids accounted for much of their sales. For instance, a Wendy's study revealed that 83 percent of parents are influenced by their children in deciding where to eat, and premiums heavily influenced their choices. Accordingly, the company more than quadrupled its budget for toy premiums. Other chains were thinking along the same lines and the strategy appeared to be working. According to Newsweek (12/12/88):

Selling about 40 million California Raisins helped boost Hardee's revenues to an expected $3.3 billion [in 1988], up from about $2.7 in 1986. Led by Jack Laughery and William Prather, the company has become the third biggest selling chain, behind McDonald's and Burger King but ahead of Wendy's. Despite its problems, Wendy's has also benefited from the toy strategy: after losing $4.9 million in 1986, the chain earned $22 million in the first nine months of 1988.

Toy marketers, in turn, realized that restaurants were becoming one of the best places to sell toys. Some even started selling goods via vending machines in restaurants. Brandweek reported that several Burger King and Pizza Hut restaurants in the South installed machines to vend trading cards and stickers.

Of course, one of the most assured ways of turning a profit was to tie in to popular movies, TV shows, and other licensed properties, e.g. Toy Story and Pocahontas. These deals were cut any number of ways; movie studios even offered product placements in return for large-scale promotions. For example, in Fox's Bye, Bye Love, 20 percent of the film took place in a McDonald's.

(adapted from Fashion and Merchandising Fads and Brandweek, "Toys," Feb 14, 1994)