Executive Summary
Americans love their doughnuts. There’s no doubt about this fact. Among the leaders of the retail doughnut industry in the United States, Krispy Kreme Doughnuts, Inc. offers a wide variety of doughnuts at select markets nationwide, including the signature “Original Glazed.” Add a bright neon-light sign indicating “Hot Doughnuts Now” at every Krispy Kreme store, the appeal of their doughnuts is more enhanced.
Since 1937, Krispy Kreme has relied on a tried-and-true marketing strategy that has worked for the American market. Recently in 2001, management expanded the franchise into Canada. But this expansion wasn’t without problems. Sales have slowed down, prompting management to scrap plans for new stores in new markets. There are two major reasons contributing to this sluggish sales growth:
1. A failure to understand the market trend towards low-fat and low-carbohydrates products; and
2. A failure to understand that the retail doughnut industry in Canada is much more competitive and distinct than what management has been used to in the United States.
Currently, there are six stores in operation within the City of Toronto. We believe this number can grow, but only with a marketing plan appropriate to the Canadian market. We thus propose suggestions to enhance sales specific to the Toronto market, including an emphasis on positioning the company as a producer and retailer of premium foods, which will lead to strong brand recognition from area consumers.
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Situation Analysis
The retail doughnut market in Toronto is much different than what Krispy Kreme management has been used to in the United States. Below the 49th parallel, Krispy Kreme has strong brand recognition since its inception, famous for the “Original Glazed,” “Hot Doughnut Now” signs and doughnut-making theatres. In Toronto, however, there are already- established businesses, with