CLOSE-UP: LIVE ISSUE/BURGER KING - Can DLKW give Burger King a new edge in the UK? Camilla Palmer reports on the issues facing fast food and DLKW in the UK market

Whether the senior executives at Burger King began this week with a spring in their step or a feeling of dread is hard to guess. The previous seven days had been tumultuous for the fast-food company on both sides of the Atlantic.

Along with McDonald's, KFC and others, it faces legal action from overweight Americans who claim the companies have knowingly marketed products that cause obesity. Meanwhile, Burger King has been sold by its parent company, Diageo, and, here in the UK, the brand is working with a new ad agency after ditching Lowe for Delaney Lund Knox Warren.

Neither of the last two events qualifies as a bombshell, exactly. Diageo took the decision to focus on its core drinks brands two years ago and has been negotiating a sale of Burger King ever since. Lowe's grip on the account has been shaky for some time, following the network's loss of the £280 million US account to McCann-Erickson in January 2001. McCann lost the business barely a year later, although the account is handled by a variety of Interpublic agencies in the US.

In the UK, Lowe narrowly escaped losing its £10 million business last year when it emerged that Burger King had invited Bates UK and DLKW to pitch for the account amid concerns the brand was losing further ground to McDonald's. Things appeared to have been patched up, some claim by the intervention of Lowe's then chief executive, Paul Hammersley, when the pitch process dissolved and Lowe went on to create the current "OK BK campaign.

The campaign features Burger King staff demonstrating, through a series of vignettes focusing on ingredient procurement, how far the company goes to make its products the best.

However, DLKW kept close to the scent of fast food, and is thought to have been in negotiation with Burger King executives almost continually since the abandoned pitch.

The situation heated up again in June when news broke that Burger King had parachuted in John Valentine, the head of its US interactive agency, VML, to lead a six-month brand strategy review in the UK. His arrival came hot on the heels of an international marketing shake-up, which saw the arrival of Chris Clauser as the global chief marketing officer and executive vice-president.

Barely two months into Valentine's task, and Lowe has lost the account, leaving DLKW to work on a brand relaunch in the UK. What that will mean in the long term is uncertain, although it's clear that Lowe's strategy of building brand awareness through consistent quality messages has not gone down well with senior Burger King executives.

Lowe's managing director, Jeremy Bowles, agrees that there had been some difficulty in reconciling a challenger company's natural desire for price promotions with the necessity of building a brand in the minds of consumers.

"The agency believes that building a brand for the company as it competes is an important part of a challenger strategy, he says.

"We wanted to rebuild the brand's credentials rather than focusing too heavily on a promotional strategy, but our ambitions were different in this case, he concedes.

In addition to its challenger brand dilemmas, Burger King must contend with market conditions that have turned against fast food in recent years.

The prospect of the US lawsuit is merely the tip of the iceberg as far as consumer attitudes are concerned. In the UK the success of chains such as Pret a Manger, part-owned by McDonald's, points to a growing interest in healthy eating that throws up plenty of challenges for fast-food advertisers.

It's perhaps no coincidence that the accounts of KFC and McDonald's have been the subject of review speculation in the past 12 months.

Despite such underlying trends, most who've worked on the Burger King account claim a combination of branding, plus a drip-feed of tactical work, will form a good basis upon which to stake out territory of the brand's own.

Both Burger King and DLKW are keeping tight-lipped about what any new strategy will involve, although the company is widely tipped to roll out its new US "At BK You Got It ads in the UK, with DLKW working on adaptations for the local market.

The choice of DLKW as Burger King's lead agency doesn't come as a great surprise, according to several people close to the business.

"The agency has demonstrated, with the relaunch of Halifax, that it can cope with big brand accounts, one senior executive working on a rival brand to Burger King says. "Halifax was a tired, dreary, challenger brand to the high-street banks - now look at it. However, others might question whether DLKW has the creative muscle to move its role beyond the handling of US-originated campaigns.

Either way, Burger King's performance as a challenger to McDonald's clearly needs to improve. "It needs to innovate faster, working at the kind of speed McDonald's does, one executive who's worked on the account says.

Perhaps new ownership can trigger the fresh marketing strategy that will help Burger King to build its differences into strengths.

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