The Fast food industry is a very competitive business and only a few have made a name for themselves nationally. Among the mayor fast food franchises that we can name, Taco Bell is one of them. Taco Bell was founded in Downey, California in 1962 and it was named after its founder Glen Bell. Before Taco Bell was established Mr., Bell had his shares of experiences with the fast food industry. At age 23, Glenn Bell opened his first hot dog stand called Bell’s Drive-In located in San Bernardino, California in 1946. Four years later he decided to open a hamburger and hot dog stand in a Latino neighbor in San Bernardino, and it was then when he notice a Mexican restaurant across the street called Milta café that attracted long lines for their famous hard-shelled tacos. Mr. Bell decided to visit the restaurant and for a period of two years he attempted to reverse engineer the hard-shell taco. After visiting the restaurant so frequently he became good enough friends with the owners that they decided to show him how they made their famous hard-shell tacos. By 1967 100 Taco Bells were in business and the rest as they say is history. There are many restaurants that serve tacos, but none of them can compare to the amount of success Taco Bell has had nationally in the fast food industry. What has made taco bell thrive in such a competitive market you may ask? Many credit their unique product innovation, some say their marketing Ads and how they connect well with millennials, and other say the way that taco Bell carefully analyzes consumer trends.
A great example of product innovation is the Doritos Locos Tacos. This one product increased Taco Bell’s revenue by $1billion during its first year on the market. Taco Bells research shows that adding new food items to their menu, even those items available for a limited time, will bring consumers back to its 6,500 outlets over again. Before a new food item is launched nationally, taco bell has a process to test if the new product will become a success in other restaurants around the globe. New product process begins with brainstorming, experimentation, and discussion. Food Experts from top suppliers regularly step into taco bell’s kitchens to innovate creations based on latest food trends and consumer research. After a new product has been created it is tested in selected stores, if the product shows a successful track record and consumers accept the product it is then launched nationally. A revolutionary product that had everyone talking in social media was the waffle taco, a breakfast creation made of scramble eggs and a sausage patty tucked into a soft waffle shell. This new breakfast item had more than 40 million media impressions in the first few weeks that it was launch. The Taco waffle was not a nationwide menu addition or even a limited time offer, it was a simple new product the brand wanted to test. The excitement surrounding the waffle Taco proves how much influence the brand possess, it also demonstrates how much room they have for product innovation and growth. By changing and expanding their menu using product innovation Taco bell drives more sales and strengthen their competitive advantage.
For a business to succeed, the product or service it provides must be known to a potential buyer, this is known as Marketing. Great marketing is key. Taco bell is known for their engaging marketing advertisement campaigns and the way they communicate with their target audience. Taco bell seem to be aware that their target audience are those who are between the ages of 18 to 34. They communicate to this specific age group by television ads, radio ads and social media campaigns. One great way Taco bell connects with their target audience is by partnering with influencers in YouTube, Instagram, twitter, Facebook and snapchat and paying them to post pictures and make videos that advertise taco bells products, this helps with creating brand recognition and branding. According to a recent article published in Inc.com Taco bell has 600 million followers on Instagram, 1.86 billion likes on Facebook, 1.3 million subscribers on YouTube and finally 319 million twitter followers and everyday their social media followers keep growing, talk about making a name for themselves. In 2014 Taco bell partner with ESPN to provide college students with tickets to the first college football playoff. This move is clearly one that appeals to the franchise core demographic which are men in their late teens and early 20s. According to an article published in Adage.com Taco bell and the College Football playoff offered 3,000 seats for 500 students from each of the schools represented at all three final games. Another way Taco bell creates brand and awareness is by creating television ads that appeal to their target audience. Most of their television ads seem to introduce new items that are being offered for limited time, most of the time they do this by using humor which appeals to their target audience. For the 2013 Super bowl Taco bell launched a commercial that had many calling it the best super bowl ad of the year. The advertisement started by showing a senior citizen who was being put to bed by a caring nurse, but as soon as the nurse turned off the lights the elderly man jumped out of bed and escaped the nursing home to soon be joined with a group of friends who also escaped the nursing home. The next scenes show’s them speeding through the night in a muscle car heading to a party. After a night partying, they end the night in Taco bell enjoying their late-night menu. This super bowl commercial was full of humor that appeal to many age groups. But not all of Taco Bell’s television advertisements have been a success. In the 2017 Super Bowl, Taco bell launched a television ad with the intention of promoting a brand-new item called the naked chicken chalupa, but something happen in the commercial that had everyone talking, but not about the chalupa. The advertisement, in the style of a vintage public service announcement, featured a white male unwrapping the new naked chicken chalupa and throwing the wrapper missing a garbage can and landing inside a baby stroller that was being pushed by a black woman. It did not take long for social media to repost the television ad and call it racist. Some viewers even made a pledge to never eat taco bell again. According to AgencySpy, a broadcaster accidentally aired the wrong edition of the ad, the correct edition shows the white male throwing the paper wrapper inside the garbage can. This is not the first time Taco Bell has been criticized for its advertisements. The brand’s commercials in the late 1990’s featured a small Spanish speaking Chihuahua, a decision that was criticized at the time by the coalition of Latino group. Hopefully Taco Bell can learn from these mistakes and be more careful when launching a commercial or any advertising campaign.
In the summer of 2012 Taco Bell launched the Cantina menu, which featured a higher quality of ingredients and offered a healthier food option. Taco bell recognized the global trend of preference for more health-conscious foods, and the need to go after this demographic of consumers to expand its customer base. Eating clean and healthy has been a trend that many agree is here to stay. I belief that this was a smart choice from Taco bell. But can Taco Bell compete with other restaurants like Chipotle that have established their brand around healthy and nutritious food? Taco Bells’ Cantina menu features the same concept as Chipotle but for half the price. This Taco bell food item was created with the intentions to knock out the fast-casual competition. Taco bell even hired a celebrity chef to create the cantina menu and work on offering fresh ingredients at a lower price than chipotle. Although Taco bell and Chipotle both categories them self as a Mexican cuisine they have different customers that are not likely to change their eatery of choice. Although this may be true we cannot not fail to ignore that they are both offering food items that are similar and that both are competing to expand their customer reach.
Competition is an inevitable part of the business world, no matter how big or small a business might be, Taco bell being among the biggest restaurant chains in the world has competitors and big ones. In 2014 Taco bell made a huge announcement that it will start serving breakfast nationwide. McDonald’s has long been the fast-food leader in the mornings, with its famous Sausage Biscuits, Hotcakes and other popular items pulling in roughly 20 percent of the company’s sales. But after the announcement from Taco Bell tensions in the breakfast business between the two companies have risen. In 2015 MacDonald launched a promotion that some described it as an ugly war between Taco bell and McDonald. Participating McDonald’s locations in northeast Pennsylvania announced that anyone who will bring a Taco Bell breakfast receipt will receive a free Egg McGuffins, this promotion was not launched nationwide but it was enough to have people talking about this business tactic or as others called it a war tactic on Taco Bell. Taco Bell recognizing that McDonalds will be one of their biggest breakfast competitors, have announced that breakfast will be available until 11:00am that is half an hour longer than McDonalds’s breakfast. McDonald officially fired back by announcing some major breakfast items will be available all day. In the never-ending war on breakfast Taco Bell launched a 1 dollar breakfast menu, with the intentions of attracting more customers. Other major food chains have decided to jump in the breakfast business, one of these chain is Chick-fil-A. Although this food chain has 2,100 restaurants across the United States compered to Taco bell which has more than 7,000 U.S restaurants and another 250 around the world it is still consider a competition. Breakfast continues to be a growth opportunity for many restaurants. Taco Bell also announced that it will only use cage-free eggs in all their product. Major restaurants chains have promise to do the same but not as fast as Taco Bell. Taco Bell has promise that it will take them 5 years to have all their restaurants using cage-free-eggs. McDonalds’ has talked about the switching to cage-free-eggs but as a 10-year goal. Taco Bell Plans to attract new and existing customers to their breakfast menu by offering unique and savory breakfast items. One of their popular breakfast item is called the Breakfast Quesalupa, it features bacon and sausage plus eggs, crispy potatoes, nacho cheese sauce, and shredded cheddar cheese on a chalupa stuffed with melted pepper jack cheese. Another breakfast item taco bell has launched is the Breakfast Crunchwrap, a whole hash brown stuffed into a hexagonal quesadilla with cheese, eggs and bacon. Taco Bell has also added to their breakfast menu a cheesy burrito, like a grilled breakfast burrito, but with twice as many eggs. These are only a few of the breakfast items that Taco bell offers in their breakfast menu. I have always pictured Taco bell as a late night fast food place, not as a breakfast place. I belief that it will take time for consumers to see taco bell as a place to get breakfast, but with constant marketing things will change. I think this a great move for Taco Bell and with the amount of constant followers’ Taco bell will profit greatly from this business decision. It will be interesting to see how other competitors will continue to respond to Taco Bell’s breakfast menu.
Taco bell grows by allowing entrepreneurs to be part of the taco bell dream. With an initial investment of $45,000 dollars an entrepreneur with the right experience a willingness to thrive can enjoy a certain level of independence, benefit from a built-in customer base and a wide spread brand recognition. Taco Bell demands all its franchise owners to pay a monthly service fee of 5.5 percent of the store gross sales and an additional 4.25 percent for marketing contributions. By offering franchise opportunities to investors, Taco bell fulfills its vision statement which is to be the largest fast food provider of Mexican style cuisine in emerging markets.
Taco Bell is planning to open between 300 to 350 new locations in big cities across the United States like New York, Nashville, Pittsburg and Detroit. These new locations will not be like the Taco bell’s we are used to, these new locations will not have drive-thrus and will serve alcohol. This nee move has surprised everyone considering that between 55% and 70% of Taco Bell revenues come from its drive-thru.This is all part of the new and refocused brand called the Taco Bell cantina restaurants. What are some pros and cons this new business model can have on the company’s image? I would like to start by saying that I would have never pictured Taco Bell as a place that serves alcohol, I have always pictured Taco Bell as a fast food family restaurant with similarities like McDonald, Wendy’s and Burger King and I am certain that many of Taco Bells costumers see the fast food chain as a family oriented business and not a place that serves alcohol. It will take some time to get used to, but the fact that the company has decided to brand these new locations with a completely different look from the traditional Taco Bell fast food restaurant will help customer differentiate the two brands. I have had the privilege to travel to Mexico and dine at authentic Mexican restaurant and I can say that alcohol is part of the Mexican cuisine experience. Beer or Cerveza as Mexicans call It is a must have when enjoying a good Mexican dish. I can see how Taco bell is wanting to present its customer with an authentic Mexican experience by offering alcohol in their menu. With these new cantina restaurants Taco Bell will expand their target audience which will help them compete with other established restaurants that are offer similar services. Chipotle as we have mentioned before is a competitor of Taco Bell and by Taco Bell presenting this new restaurant model is leveling the playing field to compete with chipotle. Chipotle restaurants have no drive-thru they serve Mexican food and offer alcohol in their menu. Although they sound similar and very difficult to distinguish, Taco Bell cantina restaurants will present its customers with a different experience. The new cantina restaurants feature artwork, open kitchens and digital menu boards. They also feature trendy decor, DJs on site playing music and tapas style appetizers. The alcohol that is served at these cantinas locations consist of at least one local beer, wine, sangria and twisted freezes, translation slushies with tequila, rum or vodka. One of the great things about these new cantina restaurants location is that the menu will not be completely new, Cantina restaurants will also display their traditional Taco Bell Menu. There are currently only seven Taco Bell cantina locations in the United States alone. Taco Bell plans to open four more locations by the end of 2017. As a Teen with a part time job and little to no income Taco bell was a place where I could spend time with my friends without hurting my pocket, a place where after school we met to talk, eat and have a good time. It is great to see companies like Taco Bell that decides to grow with its consumers. What I mean by this is a company that does not stay the same but reinvents itself and offers products that will satisfy a growing generation. Now that I am 27 years of age, married with a carrier I can see myself having a date night with my wife or enjoying a night out with friends in a new Taco Bell Cantina restaurant. Something that before I would have not pictured myself doing at a Regular Taco Bell drive-thru location.
Taco Bell has demonstrated that is here to stay and that is not afraid of change. One of the great things that sets apart Taco Bell from all its competitors is the way is constantly innovating its products to satisfy the demand of consumers. This shows that Taco Bell is not willing to settle with past victories but instead is thinking of ways to attract new customers. This innovative spirit is demonstrated throughout their social media and television campaigns. Not all their products have succeeded and not all their ad campaigns have been perfect but if there is one thing we can agree with, is that taco bell never stop working. As technology is changing and the way we do business changes, is important for a business to do the same. The old quote that says, “if something is not broken don’t fix” Is a mentality of the past. The truth is that if something is working we should look for other ways to make it better and that is exactly what Taco Bell is doing. Through their years of business Taco bell has established a strong brand presence and many are the followers that love the brand and its products. This has been shown by their growing numbers, sales rose 8 percent at Taco Bell restaurants open for more than a year. For an aspiring business entrepreneur learning bout Taco Bell and its humble beginnings is truly motivating. It will be exciting to see what other product innovations and business models Taco Bell will come up with in the future.
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