Down Home Doughnuts Win Hearts

May 03, 2002

Krispy Kreme opened its first outlet in Minneapolis last week. Strong media
support helped lure some 600 devotees, who waited in line for hours, many overnight,
according to a Chicago Tribune report.

“They set out to create a brand mythology, and they’ve been remarkably successful,”
says Neil Morgan, assistant professor of marketing at the University of North
Carolina at Chapel Hill. “They cultivate people who eulogize over it (Krispy
Kreme as a better doughnut). They target these consumers and turn them into
what they call Krispy Kreme ambassadors, through Web sites, chat rooms and regular
mail. Before they enter a market, they’ll send packets of memorabilia to these
people, T-shirts and hats and such, and they form an unpaid loyalty base,” Mr.
Morgan says.

The chain pursues an unusual marketing approach admits Stan Parker, senior
vice president of marketing at Krispy Kreme. “We don’t do a lot of traditional
things, like advertising,” he says. “We want to be involved in the local community…
We helped raise some $27 million for various causes in our last fiscal year,”
he says.

In line with their grass roots image, the company will trade doughnuts for
ads, but not buy them. “Their old-fashioned attachment to barter is a badge
of honor,” Mr. Morgan explains. “They’re proud of the fact that they’ve got
their equipment into the Smithsonian. There’s no question they’re trying to
make their brand a cultural icon.”

Moderator Comment: How has Krispy Kreme created “Raving
Fans”? How can managers create and have associates buy in to a culture of customer

Kenneth Blanchard and Sheldon Bowles write in their book,
Raving Fans A Revolutionary Approach to Customer Service from William
Morrow & Company, “If you really want to ‘own’ a customer, if you want a booming
business, you have to go beyond satisfied customers and create Raving Fans.”

Krispy Kreme has accomplished this with a great many
of its customers. We do not count ourselves among them but we know numerous
trendy types from Manhattan and elsewhere that do. [George
Anderson – Moderator

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