Taco
Bell Marketing Plan
Company
Description
Taco Bell leads the Mexican-style
fast food industry. Taco Bell’s 7000 locations allow the company to complete
their mission to supply, “ The best
Mexican style fast food providing fast, friendly, & accurate service” (Taco
Bell, n.d.). Aside from the United States, Taco Bell has 450
locations in 28 other countries including recent expansion into China,
Australia, Brazil, Finland, the Netherlands, Scotland, Sri Lanka, Romania, and
Peru (Michaels, 2018). Taco Bell plans to expand to 1000 stores internationally
by 2020 (Business Wire, 2016). As of July 2019, Taco Bell reported 2.1 billion
dollars in revenue (Owler, n.d.).
Core
Products and Services
Taco Bell serves Tex-Mex fast food
which includes tacos, burritos, quesadillas, nachos, and salads (MarketLine,
2017). Taco Bell also offers various specialty items such as high protein power
bowls and limited-time promotional items like nacho fries. Taco Bell expanded
its menu to include breakfast items in 2012 and a full vegetarian menu in 2019.
A
Brief History
Glen
Bell opened the first Taco Bell location in 1962 in Downey, California. The
first franchise store opened in 1964. Glen Bell sold his 868 restaurants to
PepsiCo in 1978, which after a few company name changes became Yum! Brands
Incorporated. Yum! Brands Inc. is Taco Bell’s parent company along with KFC and
Pizza Hut. Taco Bell accounts for 31.8%
of Yum! Brands Incorporated’s revenue (MarketLine, 2017). Within the last
decade the company launched the first online website with Tacobell.com in 2010
and a mobile payment and ordering App in 2014 (Taco Bell, n.d.).
Key
Current Competitors
Other fast food
restaurants are major competition for Taco Bell. McDonald’s is Taco Bell’s top
competitor, followed by Burger King, and Jack in the Box. Chipotle is a
Mexican-style restaurant chain that is a strong contender (Owler, n.d.).
A
SWOT Analysis
A SWOT analysis examines internal
and external factors that impact a company negatively and positively (White,
2019). The SWOT analysis considers strengths, weaknesses, opportunities, and
threats that will help build a strategic marketing plan.
Strengths
An
engaging social media presence with 1.94 million
followers on Twitter, over 9 million followers on Facebook, and 1.3 million
followers on Instagram.
The
healthiest fast food restaurant. Taco Bell removed all
artificial colors and flavors from the menu (Taco Bell, n.d.). The company
started using all white meat, fresh Pico de Gallo, cage-free eggs, and lowering
the sodium amounts by 15 percent (Taylor, 2016). The company is aiming for a 25
percent sodium reduction by 2025 (Taco Bell, n.d.).
Green efforts. Taco
Bell currently uses recyclable cups and lids for cold beverages in all its U.S.
restaurants, with a goal to make 100 percent of its restaurant cups recyclable
by 2021 (Taco
Bell, n.d.).
Quick Service. Consumers
can avoid lines by ordering ahead online or on the free Taco Bell App (Taco
Bell, n.d.).
Availability.
Taco Bell operates 7072 restaurants globally, with 450 locations across 28 countries
outside of the United States (Taco Bell Opens…, 2019).
Open
late. For consumer who crave Taco Bell late at night, Taco
Bell locations are open anywhere from 11pm to 3am depending on the location.
Customization.
Besides snack food, Taco Bells caters to a
variety of food preferences. Taco Bell offers
more than 8 million vegetarian combinations and 28 certified vegan
ingredients including sauce packets (McDowell, 2019). For consumers who prefer
extra protein, consumers can try a Power Bowl made with meat or beans.
Value.
Taco Bell offers consumers a value menu with
more than 20 menu items priced around $1.49.
Taco Bell offers a full meal box at $5 (Taco Bell, n.d.).
Increased employment opportunities. As a result of expansion, Taco Bell will create 100,000 new
U.S. jobs by 2022 (Taco Bell, n.d.).
Charitable contributions.
The Taco Bell Foundation will award $21 million in scholarships by 2021. Cashiers ask customer if they would like to
contribute to these efforts by rounding-up their order to the nearest dollar (Taco
Bell, n.d.).
Weaknesses
Outdated
restaurants and design.
Many stores need upgrades from seating to electronic additions such as
USB chargers and televisions to appeal to tech-savvy consumers.
The Taco Bell App.
The
Taco Bell App offers very minimal coupons. The App can encourage more consumer
engagement.
Lack of bite-sized
product options. While Taco Bells products are portable,
there are no snack- sized options that are consumed easily with one hand.
Opportunities
International
growth. Expansion of international locations to match Taco
Bell’s sister companies KFC and Pizza
Hut. Taco Bell currently has 450 stores
internationally compared to KFC’s 18,000 locations and Pizza Hut’s 9000
restaurants (Geeter, 2019).
Millennial
marketing. Millennials have an annual buying power of
approximately $200 billion dollars and make up 25 percent of the population
(ChefsBest.com, n.d.).
Menu revamp. Introducing
new products will pull in the segment that likes to try new foods and create a
buzz.
Threats
Competitor
products. Other fast food restaurants are shifting to
healthier menus for example, Chipotle removed preservatives from its queso.
Burger King is offering a taco now.
International
challenges. Economic issues in other countries may decrease the
demand for fast food, such as Brexit in United Kingdom or the U.S. – China
trade war.
Bad
publicity. While the company is eliminating
several controversial ingredients from its products, Taco Bell is
still recovering from a lawsuit filed in 2011 claiming that the beef used
cannot legally be labeled beef.
Food delivery
companies. New delivery companies such as Door Dash and Uber
Eats offer food from many dine-in restaurants, reducing the need for fast food.
Meal delivery
services. Companies like Hello Fresh and Home Chef offer
prepped meals that can be cooked in 30 minutes or less.
Marketing Plan Focus
Millennials have
an annual buying power of approximately $200 billion dollars and make up 25
percent of the population (ChefsBest.com, n.d.). The marketing plan focus is to
pull Millennials with a product,
environment, and promotion that will appeal to the segment’s unique and
preferences.
Segmentation
Approach and Rationale
The primary focus for this marketing
plan is demographic. The Millennial segment refers to the 18 to 34 age
group. Marketing efforts are most
effective when marketers consider demographic data combined with consumer
behavior (White, 2019). Millennials are unlike other generational segments, so
one must consider these differences to create a successful marketing plan.
Target
Market(s) Description
At 73 million,
Millennials are the second-largest generation (Fry, 2018). Compared to other
generations, Millennials are marrying later in life and slower to create
households of their own (Bialik & Fry, 2019). Most Millennials do not have
children, but this will likely increase as the group ages and transitions
through different life stages. Currently only 15 percent have one or multiple children (ChefsBest.com,
n.d.). Millennials are better educated than other generations as thirty-nine
percent have a bachelor’s degree or higher (Bialik & Fry, 2019). The median
income for a Millennial Household is around $71,400, however, there is a
significant difference between educated and non-college Millennials. The former
earns around $56,000 while the latter earns roughly $36,000 (Bialik & Fry,
2019).
Millennial
have different food preferences from other generations. In 2017, 43% of
millennials surveyed ranked convenience as an important
factor. To explain millennials definition of convenience further, 40% of survey
participants rated breakfast cereal as inconvenient (Coughlin, 2019). While
simplicity is a priority, Millennials also like the novelty of trying new foods
and authentic recipes, which explains why ready-to-cook meal delivery services,
grocery delivery food trucks, and oven-ready meals continue to gain popularity
(Rosenbloom, 2018). Millennials are more likely to dine-in restaurants over
other generations. This segment is also more likely to photograph the meal and
post to a variety of social media site (Markman, 2018).
Health is another important factor
in Millennials’ food choices. Millennials are health-conscious, but with less
of a focus on low-fat or low calories like previous generations. For
Millennials, “healthy” means pesticide-free or organic, while also considering
the environmental and economic impact. This value drives many within this segment to seek greener,
reusable, locally sourced, and sustainable products (Rosenbloom, 2019).
Positioning
Statement
For five dollars or less, friends
can sample a combo meal featuring Chilaquiles Nachos and Chimichanga Bites.
Millennials can brunch or dine on these items together in a comfortable and
casual dining area complete with free Wi-Fi and phone-charging stations.
Chimichanga Bites will appeal to a broader segment of individuals that prefer
portable, snack-sized portions.
Marketing
Mix Details
Product
Both
Chilaquiles Chimichanga Bites will appeal to food enthusiasts who like to try
new dishes. Chilaquiles are a traditional Mexican dish. The ingredients of
Chilaquiles are layered. Lightly fried tortilla pieces are placed on the bottom
of the dish. The tortillas are topped with red salsa, salsa verde, or mole
sauce. The chips are topped with chicken, beef, beans, eggs, or a meatless
substitute then lightly baked. After the dish comes out of the oven, it is
garnished with raw onion rings, slices of avocado, and queso fresco crumbles
(Chilaquiles, 2019). Consumers could dine on this dish for breakfast, lunch, or
dinner.
Chimichanga
Bites are a miniature version of a stuffed Chimichanga. Tortillas are stuffed with a seasoned protein option and
fried. The Chimichanga Bites are tasty with any of Taco Bell’s currently
available sauces, but foodies will enjoy a complex traditional chimichurri
sauce. There are variations of chimichurri sauce, but the common ingredients
are parsley, vinegar, olive oil, chili pepper, and parsley. The Bites will
appeal to consumers who want a snack that is easy to eat on-the-go.
Marketing
Mix: The Four P’s
Place
Taco
Bell will first launch the products in all its locations within United States.
Before the release, Taco Bell will update the dining areas of each
establishment to create an inviting space. The first Taco Bell location in São Paulo, Brazil is an excellent
model to follow. This location has a
relaxed lounge atmosphere where customers can use the free Wi-Fi and charging
stations throughout the restaurant (Business Wire, 2016).
Price
Taco
Bell currently runs several promotions that allow consumers to enjoy a full
meal for under five dollars. Taco Bell offers a value menu for individual
products for $1.49 each. The five-dollar combo box includes five different,
frequently changing items. The pricing strategy for Chilaquiles and Chimichanga
Bites is to sell the items together as a
five-dollar combo box upon release. Individually, a six-count pack of Chimichanga Bites is a
deal for $1.49 on the value menu, while Chilaquiles will cost $3.99.
Promotion
Upon
release of the products, Taco Bell will run a social media contest in which
users who upload pictures of themselves dining in the updated restaurants with
a promotional hashtag, can win Taco Bell gift cards or free product offers.
Choosing daily winners will increase the amount of social media posts and
generate buzz regarding the updated locations. The hashtag could be something
simple like “Live Mas” or a less serious approach can spin off of a popular current phrase or meme.
As
each store is updated, the location should host a grand reopening immediately
after. The location will distribute promotional items like t-shirts with the
hashtag, product coupons, gift cards, and have customers check-in on social
media for a chance to win bigger prizes
like free tacos for a year. In areas with many restaurants, it is easy for a
historical store to go unnoticed. These events will generate fanfare and gain
attention in the stores’ individual neighborhoods. A funny song to use for
commercial promotions of the restaurants new look is “Feels Like the First
Time” by Foreigner. It is an old song, but recognizable enough for most
segments to find it humorous.
Primarily
this promotion is targeted to adventurous Millennial foodies without children,
but as more Millennials age into a family-oriented life stage, the Chimichanga
Bites will appeal to parents. Taco Bell discontinued kid’s meals in 2013
because the item was not extremely successful (Taco Bell, 2019). Perhaps it is time to release a new kids
meal featuring new bite-sized options possibly paired with the recently popular
Nacho Fries. Chimichanga Bites are small enough for children to eat, but
flavorful enough for adults to enjoy.
To reach Millennials who prefer food
delivery, Taco Bell can pair with delivery services such as Uber Eats and Door
Dash to offer free delivery to any customer who orders the new products.
Success Metrics
The
marketing campaign’s success is measurable is several ways. The first is
calculating the sales and revenue generated for each product. Next, to measure
social media engagement, the company can track website and ad clicks. Another
way to gauge engagement is to track how many times a hashtag is posted and
reposted on social media sites like Twitter. To measure customer satisfaction
with the product, Taco Bell can offer a survey for consumers who purchase the
new products to complete in exchange for free items. Lastly, another
measurement to consider is the change in the number of registered App and
website users. While the App is not completely integrated with this marketing
plan, the company will likely see an increase in members.
International
Considerations
Taco
Bell will need to consider if there are any language barriers that would
require a product name change for that segment to understand the product. It is
important to understand the culture of each area as different countries may
have different eating habits and dietary
restrictions. Specific ingredients may not be available in all areas
outside of the U.S. so the recipes may require substitutions. If international
stores must use local suppliers, then Taco Bell should select suppliers that
abide by set regulations and expectations , to ensure the product is
acceptable.
Conclusion
Millennials are adventurous eaters. Chilaquiles are a
more authentic Mexican dish that will appeal to consumers enjoy trying new
foods. A major problem with the current Taco Bell products is that travelers do
not have many small foods options to eat on the go. Chimichanga Bites are the
perfect solution for those who need a flavorful, easy-snacking option. Taco
Bell appeals to consumer who like Tex-Mex style foods and value, but this
marketing plan will reach out to consumers with more selective tastes. The
updated dining areas and technological additions will pull Millennials in to
dine and return. These new products and additions will not only increase
profits, but they will keep Taco Bell relevant.
References
Bialik,
K. & Fry, R. (2019, February 14). Millennial life: How young adulthood
today compares with prior generations. Pew Research Center. Retrieved
from
https://www.pewsocialtrends.org/essay/millennial-life-how-young-adulthood-today-compares-with-prior-generations/
Business Wire. (2016, September 29). Taco Bell fuels
international expansion with first restaurant in Brazil. Retrieved from https://www.businesswire.com/news/home/20160929005325/en/Taco-Bell-Fuels-International-Expansion-Restaurant-Brazil
ChefsBest.com (n.d.). Millennials carry a diverse
range of food preferences. Retrieved from http://www.chefsbest.com/millennials-food-preferences/
Chilaquiles. (2019). In Wikipedia. Retrieved [August
23, 2019] from https://en.wikipedia.org/wiki/Chilaquiles
Coughlin, J. (2019, June 9). Three food trends
inspired by millennials that older consumers are eating up. Forbes.
Retrieved from https://www.forbes.com/sites/josephcoughlin/2019/06/09/3-food-trends-inspired-by-millennials-that-older-consumers-are-eating-up/#78ee731f7b96
Fry, R. (2018, March 1). Millennials projected to
overtake Boomers as America’s largest generation. Pew Research Center.
Retrieved from
https://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/
Geeter, D. (2019, February 1). Taco Bell failed in
Dubai – here’s why [Video file]. CNBC. Retrieved from
https://www.cnbc.com/2019/02/01/taco-bell-yum-brands-dubai-uae-fast-food.html
MarketLine
Company Profile: Yum! Brands, Inc. (2017). MarketLine, 1–20. Retrieved
from http://search.ebscohost.com.proxy-library.ashford.edu/login.aspx?direct=true&db=bsh&AN=124716033&site=eds-live&scope=site
Markman, J. (32018, July 30). Feast on millennials’
love of restaurants. Forbes. Retrieved from https://www.forbes.com/sites/jonmarkman/2018/07/30/feast-on-millennials-love-of-restaurants/#4cdfdbf0368f
McDowell,
M. (2019, June 21). Taco Bell is testing a vegetarian menu, and the vegetarian
quesarito looks so good. Delish. Retrieved from https://www.delish.com/food-news/a25858386/taco-bell-testing-vegetarian-vegan-menu/
Michaels,
L. (2018, June 28). Taco bell signs deals for 400-plus restaurants in Brazil,
Spain. Franchise Times. Retrieved
from https://www.franchisetimes.com/news/June-2018/Taco-Bell-Signs-Deals-for-400-plus-Restaurants-in-Brazil-Spain/
Owler.
(n.d.). Taco Bells competitors, revenue, number of employees, funding, and
acquisitions. Retrieved from https://www.owler.com/company/tacobell
Rosenbloom,
C. (2018, February 21). 9 ways millennials are changing the way we eat. Washington
Post. Retrieved from
https://www.washingtonpost.com/lifestyle/wellness/9-ways-millennials-are-changing-the-way-we-eat/2018/02/20/6bb2fe60-11eb-11e8-8ea1-c1d91fcec3fe_story.html?noredirect=on
Taco
Bell. (2019). In Wikipedia. Retrieved [August 3, 2019]
https://en.wikipedia.org/wiki/Taco_Bell
Taco Bell History. (n.d.).
Retrieved from https://www.tacobell.com/history
Taco
Bell Opens its First Restaurant in Thailand. (2019, January 30). TacoBell.com.
Retrieved from
https://www.tacobell.com/news/first-restaurant-in-thailand-2019?selectedTag=Business&selectYear=2019
Taylor,
K. (2016, February 23). Taco Bell has subtly become one of the healthiest
fast-food chains. Business Insider. Retrieved from
https://www.businessinsider.com/taco-bell-as-a-healthy-fast-food-chain-2016-2
White, S. (2019). Principles
of marketing (2nd ed.). Retrieved from https://ashford.content.edu
No comments:
Post a Comment