What does Krispy Kreme mean?
It is a great question, despite the obvious answer — Donuts. Yet, I wonder if the brand is leveraging all of its power with consumers? Krispy Kreme’s stock fell yesterday because the company predicted disappointing earnings for the coming year. Needless to say, we should not measure a brand’s success based upon the whims of gamblers (another name for investors). But there are other problems afoot.
I find it hard to believe that being a “donut shop” is all that Krispy Kreme should be. Donuts, for most of us, are an occasional indulgence. As a result, Krispy Kreme needs to cast a very wide net in order to grow business because there is more competition everyday.
Contrast the Krispy Kreme brand with Starbucks. Starbucks casts a wide net too, but that net is deep as well. Customers come everyday for coffee and sweets, that’s for sure. But they also breathe deeply the brand experience. Starbucks is a destination with a cultural payoff that is reinforced with every visit.
Krispy Kreme at its best is viewed as donuts “fast” (read, fast food) and as a cafeteria (read, factory) at its worst. Neither of these are an enviable brand experience. They are utilitarian and only the product drives the connection.
Don’t think that I am dissing the Krispy Kreme store design. It is thoughtful and utilitarian. But it lacks a brand focus that has permission to be anything other than a take-away donut shop. A few may stop in daily for coffee and a donut but these are not the same prospects that are immune to high prices (like the Starbucks regular).
I think that, if Krispy Kreme had thought about its brand in the light of what we know steals market share, it could have been much more. After all, starting with a great product is a terrific platform for REAL brand equity. Some brand strategists really messed up here. They obviously never understood the business of the brand rather than the business of the business.