2. Introduction
Type Public
(NYSE: KKD)
Industry Restaurant
Founded 1937
Headquarters Winston-
Salem, North
Carolina, United
States
Products Doughnuts
Sausage Rolls
Soft drinks
Hot Drinks
Employees 3,700 (2011)
Website krispykreme.com
4. • The parent company of Krispy Kreme is Krispy Kreme
Doughnuts, Inc. that is based in Winston-Salem, North
Carolina, United States.
• Though there are another similar companies in the market
but Krispy Kreme's signature item is a glazed doughnut that
is traditionally served warm.
• Beside the store their products are sold in supermarkets,
grocery stores, convenience stores, gas stations, Wal-
Mart and Target stores in the United States.
•The company's growth was steady prior to its initial public
offering which was in 2000.
5. History
Key Dates
1933- Vernon Rudolph and his uncle bought a Doughnut shop
in Paducah, Kentucky from a French chef from New Oreans
who had developed a secret recipe for yeast-raised doughnut
1935- The partners moved the operation to Nashville,
Tennessee; their initial focus was selling doughnuts wholesale
to Grocery stores
6. 1937
Doors opened on July, 13 1937
Vernon rudolph bought a secrete yeast-doughnut recipe from a
new Orleans French chef,rented a building in what is now
historic Old Salem in Winston-salem,NC, and began selling
Krispy Kreme doughnuts to local grocery stores.
7. 40s & 50s
Improvement in the process
• By now there was a small chain of stores mostly family
owned. They all use the Krispy Kreme recipe, but each
store made its doughnuts from scratch. But after some time
they developed a distribution system that delivered the
perfect dry doughnut mix to each Krispy Kreme store
• After some time Rudolph and his equipment engineers
invented and built Krispy Kreme‟s owen doughnut making
equipment
8. 60s & 70s
Hot-spot for gatherings
• Due to its past steady growth in 60s the organization decided
to expand their business beyond its traditional boundaries.
• Vernon Rudolph (founder) died in 1973, and due to this the
growth slowed in next few years
9. 80s & 90s
Few takeovers
• After few years of the death of the founder, a company
called Beatrice Foods takeover the Krispy Kreme, but they
could not successfully run the organization. So in 1982 a
small group of Krispy Kreme‟s early franchisees bought
Krispy Kreme back
• In 1996 they opened their first store in New York city
• And in 1999 first store in California
10. Today
Growth story
• 2000- Krispy Kreme held an initial public offering of common
stock at NASDAQ
• 2001- Opened the first international store in Canada, just
outside the Toronto
• 2003- First store out side north America opened in Sydney,
Australia and in London
• Its stores have opened in Asia, Mexico, the middle east,
Puerto Rico and Turkey. Its international expansion is continuing
and in addition they are working on new tasty products
11. Latest Update
“As of November 1, 2010 the entire Australian division went
into voluntary administration, and what media says is that
this was the result of poor sales.
They have since come out of administration as of
December 2010, and continued trading, with fewer stores.”
Krispy Kreme International is looking for its franchises in
the following countries:
• India
• China
• Taiwan
• Singapore
12. Q1.
a) Krispy Kreme was often said to be ‘America’s most loved
doughnut’. Trace the expansion of the company.
b) Also discuss the company’s plans for expansion and the
viability of the company’s main product in foreign
markets.
Ans a).
Vernon Rudolph and his uncle, Ishmael
Armstrong, purchased Joseph LeBeouf's donut shop on
Broad Street in Paducah, Kentucky along with a secret
recipe for yeast-raised doughnuts in 1933 acquired from a
Buffalo NY businessman.
In 1937 Rudolph open first store at Winston- Salem in
North Carolina and named it “Krispy Kreme Doughnuts”
In 1960 company added coffee house to its stores
13. In 1982 Joseph McAleer acquired the company in a $24
million leveraged buyout
In 1995 krispy Kreme opened its first store in Indianapolis,
Indiana.
In 1996 company foray into northern american markets.
In 2001, Krispy Kreme opened its first store outside the U.S.
in Mississauga, Ontario, Canada.
Also started looking at markets of New zealand, Britain,
Spain, Japan, South korea.
b) Expansion Plans
Moved to north US after establishing well in southern US
Paid more attention towards their Beverages by
introducing new variety of coffee
Started to diversify into other breakfast and snack food
Planning to open their franchise in India, China, Taiwan,
14. Viability of the company’s main product in foreign
markets
“Krispy Kreme talks a lot about its international
ambitions, but I haven't seen any evidence that people
outside the US and Canada will eat Doughnuts”- Mr.
Greg(of an equity research firm)
Consumption pattern of people of different countries is
different.
So response of customer may not be same as in US.
15. Q2.
a) Although Krispy Kreme did not have a well-defined
advertising budget , it was one of the most well-known
brands in the US. Discuss the components of the company’s
marketing strategy, and how they contributed to the brand
equity of Krispy Kreme.
b) Also dicuss the marketing bottlenecks the company may face
in the future.
Ans a).
Innovative Publicity
Mobiles or temporary store before opening a new store
Small posters in the locality announcing the opening of
new store
Free samples to localities
Free samples to newspapers and media
Displayed Krispy kreme doughnuts in tv shows &
Movies
16. Generating Impulse Purchase by sign signalled “Hot
Doughnuts Now”.
The Doughnut Theatre
b) Marketing Bottlenecks
Selling of doughnuts through stores and supermarkets
Variable taste and preferences
17. Q3.
a) What operational strategies distinguished the company
from its competitors and accelerated its growth?
b) Which of the strategies have contributed to its unique
success and brand equity?
Ans a).
Krispy Kreme focus on all age group irrespective of age,
social status
They highlights „secret recipe‟ as now product is
perceived as something exclusive and special. Different
from every other Doughnut
Display of there manufacturing process
Hot and fresh Doughnuts
High Quality control
b)
Societal marketing
18. Q4.
a) Discuss the nature of the competition faced by Krispy
Kreme and how the company was positioned vis-à-vis its
main competitor.
b) Comment on the extension of the krispy kreme’s move to
increase its emphasis on coffee and the increased emphasis
being placed on doughnuts by concurrent move by Dunkin
Donut to place more importance on its doughnuts.
c) How in this convergence in business interests likely to
affect the competitive equilibrium between the two
companies?
19. a)
Krispy Kreme Dunken’s Donuts
Positioning Positioning
South US. North US
285 outlets 4000 stores
$608 mn revenue $3 bn revenue
Strengths Strengths
Strong brand name Large in size
Premium brand Affordable brand
20. b)
Krispy Kreme Dunken’s Donuts
It moved to fill the gap Placed more importance
in there service by to the Doughnut as a
paying more attention product
to the beverages & Experimented with new
coffee by introducing Doughnut flavors eg.
new verity of coffee & Strawberry-kiwi, passion
fruit etc
appointed a specialist to
Opened number of new
look after that side of
stores
business
Changed its packing
Acquired a coffee from a shoe-box style
roasting business & cartoon to the Krispy
build its new roasting Kreme style flat box
factory
21. c)
Earlier both companies had different customer
segment as Dunkins were known for their coffee and
break fast and krispy kreme was totally focused on
doughnuts.
Krispy Kreme use to generate 90%
of it revenue from Doughnuts, where as Dunkin use
to generate 20% from the doughnuts, 50% from
coffee and 30% from its Breakfast and snakes
Krispy Kreme has better brand equity and they can
be the premium brand in this segment where as
Dunkins Donut will remain as affordable brand
This convergence in business interests (if proves to
be a success) will help both the companies to bridge
