Possible Disaster: Time to Save the Donuts or How to Pull Krispy Kreme From the Brink

Possible Disaster is a new section of the blog where a specific real world problem is considered and a new marketing solution is offered. The advice is presented in an easily parseable format: First a summary of concept is described, then an elementary problem is presented followed by a solution, this repeats till a full advertising campaign/web strategy/branding initiative/media plan has been hashed out. Neither Adverting Disaster nor it’s writers make any guarantees that these solutions are foolproof or steadfast. These solutions are educated suggestions. We greatly appreciate your comments regarding their efficacy.

15 steps, then a shoe drops (Summary of Concept): 
Last Friday Yahoo Finance dropped a pretty serious article on us, titled ”15 companies that might not survive 2009". The article was a dire prognostication, citing crushing debt, consumer fear, and all the other sturm and drang we’ve come to expect from today’s business world. For this, the very first article in the Possible Disaster series, I’m going to examine one of those panicked brands and offer what I think are some good strategies for pulling them out of the lurch. That brand... Krispy Kreme donuts.

2009 is going to be a rough year for just about everyone. There are some notable exceptions but for the most part retail is crawling to the bunker, hoping it can weather the storm. Krispy Kreme is no exception. The pastry chain over-expanded in the nineties and earlier half of this decade, and now they’re stuck with a big sticky cruller full of debt. As a matter of basic survival they’ll have to dig their way out of the hole one saccharine circle at a time.

Deconstructing the Donut (Problems/Solutions):
As I already mentioned, the glazed one is facing down a lot of debt. It’s suffered a loss the past three years running, and it’s stock has been tanking (due in no small part to the publishing of Yahoo’s article of ill omen). That’s going to mean that whatever solutions we come up with have to be as easy on Krispy’s budget as possible. There isn’t going to be a multi billion dollar Pepsi style re-branding in Krispy Kreme’s future –fortunately that isn’t really the answer. Rather than re-branding, Krispy needs to reevaluate it’s prime demographic and find new ways to utilize it’s customer/fan base. 10 years ago this would have been a technological and cultural impossibility, but that was 10 years ago. 


Krispy is a family company, it’s web presence, it’s commercials, it’s entire corporate outlook is very “mom safe.” Very middle america, very middle of the road. However, moms are probably the last people in the world Krispy should be targeting right now. Mom’s are the family bankers, the budget tighteners, they do the food shopping and they decide what’s getting cut. Additionally we’re seeing a lot of consumer drive towards healthier, lower fat foods. Moms are becoming the spearpoint of that movement. I doubt it will be long before NYC’s mandatory calorie listings on menus becomes a national initiative. And honestly, you don’t want to know how big that little donut really is.

It’s time to refocus Krispy’s message on two groups: college kids and office workers. Perhaps not at the exclusion of other groups, but with a very directed marketing effort. Fortunately these are two of the easiest (and cheapest) demographics to market to in this modern age. 

There’s already a great love of junk food in general and Krispy Kreme specifically in the 18-25 crowd. In some regions the love of the product borders on fanaticism:






Before the above video did you know about the Krispy Kreme challenge? I sure didn’t, I only learned about it researching this article. Stuff like this is marketing gold if you can push it to new regions. 

Imagine a World Krispy Kreme Competition of Champions campaign that focused on locally organized donut-centric sporting events. By leveraging pre-existing social networking sites Krispy could sponsor/host/brand any number of ad-hoc event/gatherings all over the world, document them on the web, perhaps even award prizes. 

This all takes very little in the way of actual output on Krispy’s part: a central website that gathers user output and possibly ranks it, some game instructions and advice on logistical support, a few employees managing a facebook group. Seriously, this is in your budget, Krispy. Hell, this is in MY budget, and I’m an underemployed blogger, not a pastry giant.

This kind of crowd sourcing, semi-competitive, community organized culture is rapidly becoming the hallmark of a generation –its already elected a president. And the college kids that are bearing this flag are one of the few groups in America that has some discretionary cash (stipends, allowance from parents, jobs but not many bills) to burn on sweets and treats. And let us not neglect the power of hungry college stoners. If there ever was a movie where Seth Rogan huffs airplane glue for 2 hours then NEEDS a donut, Krispy is made in the shade. Harold and Kumar didn’t go to White Castle, they saved it (and that Doogie kid) along the way.

The second half of this marketing initiative is directed at office workers. The office drone is rapidly becoming a coveted US job. With so many people out of work lots of overqualified folks are clamoring for anything with a desk and a paycheck. The wage slaves constantly need new ways to melt off the boredom of a long dull work day. Krispy Kreme should be there to help.

Offices love donuts. They’re a cheep way to boost morale, create a temporary spike in energy, and they provide a simple prop to socialize around. If Krispy can get it’s donuts into more break rooms nation wide it’s going to create more weekend customers. So how do we do that? By pushing the brand and by giving away donuts.

Giveaways have become sort of commonplace lately. It seems that every major national event is being celebrated with a cup of comped coffee or a freebee french fries. And with good reason, people show up to get a free treat will often buy something else along with whatever they’ve been given, AND they are more likely to come back as a regular customer. It’s not throwing out stock, it’s investing in your customers. Krispy needs to start doing more giveaways (they did one on inauguration day), and they ought to do so shamelessly. Let’s say one a month. More than that, let your fans decide when they get their free donut, this can be accomplished two ways:

• Let everyone vote online for next months free donut day. This is a pretty cheep and easy bit of web tech to set up on your existing site, shouldn’t cost all that much, and it creates an exciting coordination between web presence and brick and mortar stores.

• Start a frequent user card initiative (much like starbucks). People put money on the card, and every couple bucks they spend they get some swag (like a free donut or coffee). These cards are doing great at Starbucks; learn from the competition, and build on their example. These cards can open up a slew of other “member” benefits as well. This might be a bit more pricey on the front end, but I think it’s a direction we’re going to see a lot of chains going in, and not something you want to be behind the curve on.

So that’s some ways to make sure people are getting your donuts. But how do we get those office folks interested in the Kreme in the first place? Well, it all ties back to the work those grassroots kids are doing. See all those videos and events and such, that’s the promo. That’s the advertising. The office guys find the crowd-sourced content, and they wile away the workday hours watching people interact with donuts. What do you think they are going to want to eat when they get home?

Summing up
It’s been 62 years that Krispy Kreme has been feeding us donuts. If the company is going to survive another 62 (or 2 for that matter) it has to realign its targets and learn how to leverage free modern technology to get its marketing across. It might be a hard lesson to learn, but it's a necessary one. This isn’t the future of marketing we’re talking about anymore, it’s present day. Long live the donut.