Important Marketing and Branding Takeaways From Krispy Kreme and a Youthful Entrepreneur

by Justin Grensing, Esq., MBA

Every once in a while, a real-life situation comes up that lends itself nicely to some core marketing concepts. These serve as great teaching tools and discussion points because they actually happened, and they’re relatable. Here’s a recent example involving Krispy Kreme and an entrepreneurial college student.

Krispy Kreme Protects Its Brand

Jayson Gonzalez “launched a Facebook page called Krispy Kreme Run Minnesota and began to take orders” after the last Krispy Kreme store closed in Minnesota in 2008, writes Allen Kim in an article for CNN. “He would use the page to communicate with customers, and update followers on quantities and pickup locations. The account has amassed more than 5,000 followers. A box of a dozen original glazed doughnuts from Krispy Kreme starts at $9.49, according to its website. The Pioneer Press said that Gonzalez resells them from $17 to $20 per box, depending on the variety.”

After nearly 20 runs in which he would haul up to 100 boxes of donuts along a 250 mile route from Iowa to the Twin Cities, Gonzalez announced via Facebook that Krispy Kreme had ordered him to shut down his operation, which was not formally affiliated with the product he was reselling.

“The company tells CNN that it was concerned that the doughnuts were not meeting its quality standards due to the long drive from Iowa to Minnesota,” Kim writes. “However, after an outpouring of support, the company is now working on a deal with Gonzalez to allow him to become an independent operator.”

Brand Management and PR Takeaways for 21st Century Marketers

A number of marketing lessons can be taken from just a few short paragraphs describing this real-life situation. Let’s look at some:

  • Supply and Demand. People sure love Krispy Kreme donuts. Just look at the markup Jayson was able to command – a 100 percent profit margin – by being the only source of the coveted treats.
  • Power of Social Media. Just 15 years ago, a college kid with a car full of donuts couldn’t hope to leverage any meaningful advertising. Today, though, Jayson’s Facebook page was able to attract and engage thousands of followers.
  • Importance of the Brand (Part I). Regardless of Krispy Kreme’s true motives for shutting down Jayson’s operation, their stated justification is certainly valid and represents a concern of franchises from McDonald’s to Best Western. Companies need to balance the sales growth opportunities presented by franchising against the risks of inconsistent standards and quality.
  • Power of a Good Story. Who can’t get behind the idea of a young person paying their way through college with hard work, initiative and creativity? Jayson’s story resonated with and inspired enough people to make a splash with Krispy Kreme.
  • Importance of the Brand (Part II). Krispy Kreme didn’t want to look like the bad guy in this feel-good story. Instead, they turned a potential negative into a positive by finding a way to work with Jayson to help him continue his operation in a corporate-sanctioned and brand-supportive fashion.

Marketing and economic theories and concepts can be a bit difficult to comprehend in the abstract. Or sometimes they may just seem a bit dry. But when applied to a real-life situation, they can really resonate.

What would you do if an eager entrepreneur decided to start selling your products?

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