Wednesday, November 7, 2012

Taco Bell's Plan to Attract Younger Customers

American’s love fast food. And its not just us, but markets across the globe have begun embracing fast food, with emerging markets being the fastest growing areas in the industry. Fast food industry is facing number of challenges, especially in the United States. Economic recession, rising food costs and changing perceptions about health, have forced number of fast food chains to experiment unique strategies on their customers. With globalization, chains have started experimenting their new strategies in low-cost emerging markets to test their performance before implementing them in mature markets.

Increasing low-cost competitors within the fast food industry has led to number of franchises to implement strategies to attract customers at all hours of the day because chains have to pay for fixed costs such as electricity and labor anyway. After McDonald’s successfully strategy to begun offering specialty coffee drinks and fruit smoothies, Taco Bell, Burger King and Wendy’s quickly followed the trend of offering coffees and smoothies to attract customers who tend to frequently drink fluids throughout the day. Similarly Taco Bell has begun testing breakfast menus at few locations to attract customers during the morning hours. Currently Taco Bell is planning to roll out a new strategy to become a destination for snack-starved younger people, by expanding their sweet treats menu offerings.

With the expansion of its sweet treat menu with the addition of churros and cookie sandwiches, Taco Bell is trying to attract young customers who tend to snack around the clock. This strategy is relevant for Taco Bell because its younger customer base tends to snack around the clock. As said by Brian Niccol, Taco Bell’s chief marketing officer, “They are on a timeless eating schedule”.

Currently, Taco Bell’s customers are ordering cinnamon twists and caramel apple empanadas more as a desert to with meals. Beginning early next year, Taco Bell plans to launch a “Happier Hour” TV ad campaign flaunting its snack offerings. This campaign will market the sweet treats as snacks for any time of day to go with its specialty drinks.

Will this strategy be sustainable for a long-term growth? Is January the right time of the year to launch this strategy, or would it have been much effective if launched during summer? It will be interesting to see how this strategy performs in 2013, considering the high possibility of other chains quickly adopting similar strategies. 


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