Wednesday, November 7, 2012

Taco Bell's Attempt at Changing its Brand Image

As part of this week’s readings for the Strategy Development class, I was reading the Bloomberg BusinessWeek article – Dell Strategy Shift, that talked about Dell’s efforts to diversify its business and its efforts to change its brand image of a low-cost vendor. This article made me think about Taco Bell’s recent efforts in changing its brand image. So, this week, I want to share my thoughts on this.

Taco Bell, known for selling low cost Mexican inspired American fast food, has had to face numerous attacks on the quality of its food in the last few years – from links to a salmonella attack, to claims that they use fillers in their beef. These have not really worked well for the business, and people for whom quality is more important than price have preferred Chipotle. Chipotle prized itself for providing meals made from high quality ingredients and that can be customized by the user. So, Chipotle had a loyal customer base on its own, while Taco Bell’s image was taking a hit.

Since early 2012, Taco Bell has been making an attempt to change its image of a low cost fast food place to a chain that provides meals made from quality products at cheaper prices and provides high value to its customers. It has now introduced new and higher priced items in its menu, the most popular of which is the Cantina Bowl. It even got a celebrity chef – Lorena Garcia to create this bowl and help in its publicity. It no more just focuses on providing very low cost fast food, but now has focused on providing quality and value.

But changing a well rooted image is not easy; and looks like Taco Bell has understood this well. Other than introducing new and pricier menu, it has even changed its slogan from “Think outside the bun” to “Live Mas” (i.e. Live More). While the food chain does not lose its old customers as it still has its old flagship tacos, but due to new and better products, now gets a new segments of customers as well.

Moreover, Taco Bell is utilizing different channels for reaching out to the public very effectively. From traditional TV advertisements to social media and offers at the chain, it is making sure that people are exposed to the changes at Taco Bell and now identify with its new message. And going by sales numbers and reviews, it looks like their strategy is working. While the Cantina Bowl is getting good reviews, Chipotle fell short of its projected growth last quarter. Some people are attributing this to Taco Bell’s Cantina Bowl which is similar to Chipotle’s Burrito bowl, but cheaper. Chipotle has denied losing its customers to Taco Bell and instead attributes the fall in growth to the economy. But then we can’t help but think that Taco Bell might have been successful in accessing some of Chipotle’s customers, especially since they now offer similar items but at a cheaper price.

In my opinion, Taco Bell is doing all the right things to change its brand image. The change in company slogan is a very important move as it identifies with the brand image. This when tied up with the new menu and the aggressive marketing conveying the new company ideology might together be successful in changing the company’s image among the public. Maybe something Chipotle might want to watch out for.

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