Archive for the ‘Strategies’ Category

Falafel’s: The Next Great Fast Food Chain

September 8, 2010 2 comments

Every now and again I think about the next great franchise.

Will it be an electronics outlet, like Best Buy? Could it be another toy store like Toys-R-Us? Perhaps it will be a gym with a discounted-membership, such as Planet Fitness?

While these are all healthy and profitable businesses, it’s well known that the franchise model translates best to the quick-service food industry. Franchising helped corporate giants like McDonald’s, Dunkin’ Donuts and Pizza Hut grow to the gargantuan levels on which they operate today.

Although fast food franchises have the best track record of success, hasn’t this market been fully saturated for some time now? You can find a burger and fries just about anywhere. Pizza has always been readily available. Grade ‘D’ meat is accessible via Taco Bell’s Chalupas and Cheesy Gordita Crunches. Fast seafood has been refined by the appalling Long John Silver’s chain. And with the influx of “upscale” quick-service franchises like Chipotle, Fresh City and Panera Bread, there isn’t much wiggle room left to innovate within this market.

Or is there?

Introducing the next great fast food chain: “Falafel’s.”

Mediterranean food has yet to be accounted for in fast food’s industrial composition. Pita bread, grape leaves and hummus have untapped potential. Picture Subway, but with pita wraps in place of sub rolls. Chicken and steak are grilled, with fresh veggies and spices adding flavor to a limitless menu. Additionally, the health-consciousness Mediterranean food provides make the timing of a falafel chain just right. And with the relative simplicity of the cuisine, the franchising transition would be utterly seamless.

It makes sense. So why hasn’t the first “Falafel’s” location been opened yet? Perhaps the millions of redneck Americans who make up fast food’s target market associate Mediterranean food with Al Qaeda. Maybe investors are worried middle-eastern fare would not appeal to a wide enough consumer base. Or it could be that people are simply frightened by the appearance of hummus.

Whatever the case may be, it’s a shame nobody with a few million dollars to spare has experimented with the idea yet. The best part about this proposal is the relative inexpensiveness of overhead; all you need is a grill, some tongs and a frialator and you’re basically in business. Once you get a few customers in the door to try the food, the business will expand through word-of-mouth and local promotions.

Who ever thought there would be a fast food demand for international cuisines like Panda Express and Taco Bell? My point is that all franchises originated somewhere at sometime, unbeknownst to how they would perform in the long term. “Falafel’s” could be a disaster upon introduction, but how can we know for sure? We can’t until we try. So try a gyro—because they’re pretty damn good.


Domino’s and The Cardboard Crust Campaign

August 30, 2010 1 comment

Domino’s, the inventors of pizza delivery, are breaking down barriers once again.

When Domino’s boldly criticized its own pizza on national television, many believed the franchise’s demise was near. Fueled by an ad campaign which condemned their former product, Forbes reported that Domino’s has tallied a profit increase of nearly 100% since the fourth quarter of 2009.

The innovative marketing done by the pizza giant includes TV ads with “actual footage” of consumers claiming Domino’s consisted of cardboard crust as well as ketchup in lieu of tomato sauce. They go on to discuss the complete re-invention of their product’s ingredients, enhancing the crust with garlic butter and improving the sauce by adding basil. Essentially, Domino’s admitted that their product sucked for decades and indirectly insulted the taste of those customers who actually had enjoyed the pizza for that time period.

It took some serious guts to acknowledge as Domino’s was already largely successful regardless of their self-proclaimed failure of a food offering. They were a market leader yet obviously felt there was room to seriously rewrite the way they did business. I can’t think of a bigger advertising gamble in recent years than the one Domino’s took in late 2009. Can you imagine Olive Garden suddenly deciding to say “You know what? Our food is garbage and has been for years. We will now offer an entirely different menu and stop attempting to brainwash you through our unrealistic portrayals of the American consumer. For the millions of people who actually bought our food all along–and actually enjoyed it–the joke’s on you!”

In doing this, Domino’s risked alienation of its loyal consumer base who liked things the way they were. The truth is, Americans hate change. They’re most comfortable in doing what they know best, as evidenced by the millions of U.S. citizens who annually return to Disney World for vacation or the many blue-collar workers who enjoy a Big Mac on their daily lunch break like clockwork. We don’t often step outside the box and try new things, Which is what makes Domino’s recent success such a surprise.

The most intriguing part is that the pizza really doesn’t taste that different. Many people will tell you otherwise because they’ve been made to believe the product now tastes better and are psychologically unable to form an unrestricted opinion. The fact of the matter is Domino’s was never made with the highest quality ingredients, and it still isn’t. A hint of basil here and there isn’t enough to convince me that a significant change has taken place. From my perspective, the company’s past achievements were a direct outcome of product convenience (delivery and price) rather than the quality of the pizza.

Regardless, the campaign has been an unmistakable success. Patrons who never liked the pizza will now give it a second chance while loyal customers will be happy to discover it hasn’t changed all that drastically. The key question going forward is whether or not these new customers will be retained as future buyers. Are these profits a product of one-time purchases or are they a legitimate result of the new and improved Domino’s Pizza?

We will soon find out. But for now, the crust is no longer cardboard. So that’s a start.

Got “X?”:The Lazy Man’s Advertisement

August 26, 2010 1 comment

The “Got Milk?” slogan was first used to promote the healthy consumption of fresh dairy 17 years ago, in October of 1993.

A widespread and critical success, “Got Milk?” boosted the sale of milk nationwide (particularly in California), as the campaign today enjoys 90% awareness among American consumers. Through effective TV spots like the Alexander Hamilton $10,000 radio question and influential print advertisements featuring the milk mustache, “Got Milk?” has solidified itself a spot in the pop culture hall of fame.

Due to the campaign’s sensational results, parodies and spin-offs of the “Got Milk?” slogan have corrupted local and national advertising channels. The motto’s proneness to word substitution–as in ‘Got X?’ where x equals any given product–has paved the way for countless rip-offs and lazy attempts at creating witty advertising. Frustrated at the thought of actually having to produce an original slogan or catchphrase, small business owners simply borrow and ‘customize’ the two-word ad-line in hopes that its promotional prowess will attract potential customers.

Now, I understand that small businesses have other interests in mind and cannot focus their immediate attention on marketing. However, there are thousands of unique slogan possibilities for the many different business types–all of which take perhaps a few hours of brainstorming to generate. Besides, when a farm stand, for instance, advertises with the motto “Got Corn?,” the entire premise of the original “Got Milk?” campaign becomes irrational; the whole concept of those famous milk ads was to show characters in situations where they desperately needed a glass of milk in order to avoid some sort of catastrophe. By altering the motto, this concept becomes completely illogical. Consumers will not be able to wash down their peanut butter sandwiches with an ice cold glass of corn.

On top of all this, the “Got Milk?” campaign has unofficially become stale and overused. It is no longer cutting-edge, innovative or sharp. We don’t continue to hear variations of “where’s the beef?” or “the other white meat” yet simple-minded marketers insist on beating the “Got Milk?” mantra to a slow and painful death. It’s like an internet meme that will never die,  the ‘Charlie Bit my Finger’ of large-scale advertising campaigns. Almost to a fault, its simple but poignant two-word structure has allowed for massive duplication.

“Got Milk?” has become a staple of American society. It has become bigger than milk itself, to the point where no subsequent dairy catchphrase can possibly topple it. And for this reason, “Got Milk?” and its unimaginative variations will never go away.

Blockbuster Video: A Relic of Modern Business

August 20, 2010 1 comment

Where did Blockbuster go wrong?

Were their advertising campaigns no longer sufficient? Were promotions like “Life After Late Fees” not enough to pique consumer interest? Did people just stop watching movies altogether?

Blockbuster Video, as we knew it twenty years ago, was an innovative and groundbreaking franchise. Its profit model was simple and successful: buy videos and other media in bulk and rent to customers for a flat rate. If customers failed to make a return on time, they were charged a late fee. If a video was given back damaged, the customer paid full price to replace it. It allowed consumers the flexibility of watching both new and old movies without having to compromise and pay full price for ownership. In essence, Blockbuster’s unique business design operated as a for-profit library. Inventory was cyclical; movies went out, and soon came right back in. Margins were low, business was booming.

And then, several decades later, the competition came.

Consumers became able to order movies directly through their cable box, saving the hassle of having to leave the house. Netflix, the media by mail provider, was founded on the premise of unlimited rentals for $9.99/month. Libraries of free movies were offered through online services like Hulu. RedBox, the $1 movie vending machine, flooded supermarkets and convenience stores. Apple made the concept of transportable media via iPod and iPad a reality.

And Blockbuster…well, they still rented single items at $5/night. People began to notice the asterisk next to the “no more late fees” claim. And worst of all, people actually had to leave the house to rent a movie.

Blockbuster sat back and watched in horror as their market share plummeted. They failed to react. And once they finally did something about it by founding Blockbuster Total Access, it was too late. Blockbuster had become an afterthought, a dinosaur of modern business. Stores closed, stocks free-fell, and revenues dropped by a staggering $4 billion a year. The franchise became the prototype of poor response time, a firsthand example of what happens when a company fails to evolve.

It’s funny, but I find myself on nights with nothing to do wishing the Blockbuster in town hadn’t closed its doors. Sometimes the selection at RedBox is minimal and the only choices on Comcast are “Hot Tub Time Machine” and “Cop Out.” I miss Blockbuster’s enormous selection and walls upon walls of new releases. I loved the fact that it was usually a safe bet they’d have some obscure movie like “Killer Clowns from Outer Space” in stock at any given time.

Visiting an active Blockbuster store is like a time warp to 2001, when PlayStation 2 was cutting edge and Russell Crowe was still relevant. Now, however, employees are like zombies, aisles are devoid of customers and spider webs grow inside each and every DVD case. The way it looks today leads me to wonder whether the Blockbuster franchise will be remembered for its innovations at the dawn of the rental age or more for its epic meltdown at the end of it. It’s truly a depressing sight.

Next in line: Barnes & Noble.

Categories: Strategies Tags: , , ,

American Runs on Munchkins

As the ad campaign goes, “America Runs on Dunkin’.” And that’s probably not a good thing.

If we’re relying on jelly doughnuts, bacon, egg and cheese bagel sandwiches and sugar-laden fruit Coolattas to get us through each day, then that doesn’t say much about America.

We know we’re obese. Of course we love fat, lard, processed cheese and carbohydrates. But why must Dunkin’ Donuts mock us with such an asinine and downright insulting slogan? In a way, it’s all part of Dunkin’s psychological mind game; Make them think they can’t function without our product, and pretty soon they won’t.

Coffee is like a pack of cigarettes or a stick of chewing gum–without them, America’s addictive nature will render it uncomfortable and unable to accomplish everyday tasks. We must have these products in order to operate. Coffee runs through our veins. Cream cheese oozes from our pores.

But because it’s not McDonald’s or Burger King feeding us, we see no qualms about consuming it on a daily basis. Society tell us that fast food and cigarettes are hurtful but it jovially welcomes an addiction to breakfast pastries and coffee with open arms. Dunkin’ Donuts is rarely held accountable in obesity headlines, although it technically is fast food. But since there are no cheeseburgers on the menu, feel free to indulge, America.

Coffee has become the trendy, unofficial consumer product of white collar America. Iced coffee, blueberry-raspberry coffee, coffee coolattas, faux-coffee shakes, and coffee with whipped cream and flavor shots all provide an endless stream of income to franchises like Dunkin’s. Many Americans don’t even enjoy the taste of coffee. Because they are apart of white collar America, however, society deems it a crucial product to consume in order to remain productive. And if all of your co-workers are drinking it, you might as well drink it too.

What if the home of the Big Mac changed its slogan to “America Runs on McDonald’s?” It probably wouldn’t go over too well with the media or special interest groups. Morgan Spurlock would be forced to come out from beneath his rock to make another documentary.

Yet, the America Runs on Dunkin’ tag remains–and the nation continues to ask itself: “Why can’t I lose any weight?”

P.S. Speaking of documentaries and fatness, I wish Michael Moore would do a film on American obesity. Irony at its finest.