BUSI 520 MMGP Group 3 Taco Bell

Running head: MMGP GROUP 3 – TACO BELL 1

BUSI 520: MMGP Group 3 – Taco Bell

Liberty University

MMGP GROUP 3 – TACO BELL 2

Table of Contents

1. MMGP Purpose and Scope......................................................................................................5

2. Background Information..........................................................................................................5

Old 4 Ps: Product, Place, Promotion and Price..............................................................................

New 4 Ps: People, Processes, Programs and Performance............................................................

Demographic Trends

Current Economic Trends ..............................................................................................................

Technological Changes ..................................................................................................................

Consumer’s Tastes and Preferences ...............................................................................................

Social and Cultural Factors ............................................................................................................

3. Market Analysis.......................................................................................................................11

Analyzing Consumer Market..................................................................................................11

Cultural Factors.........................................................................................................................

Social Factors............................................................................................................................

Personal Factors.........................................................................................................................

Psychological Factors................................................................................................................

Aspects of Consumer Behavior.................................................................................................

Analyzing Market Segments....................................................................................................14

Variables for Segmentation .......................................................................................................

Evaluation Methods for Attractiveness.......................................................................................

Analysis for Full or Specialized Markets...................................................................................

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Target Markets Identified...........................................................................................................

Target Market Special Needs .....................................................................................................

4. Positioning, Competition & Branding..................................................................................18

Positioning in the Market........................................................................................................18

Positioning Statement................................................................................................................

Product Positioning..................................................................................................................

Understanding the Competition..............................................................................................20

Market Leaders (Strengths and Weaknesses)............................................................................

Product Branding ....................................................................................................................22

Brand Elements..........................................................................................................................

Brand Promise..........................................................................................................................

Brand Packaging and Labeling..................................................................................................

5. Services & Pricing...................................................................................................................24

Services......................................................................................................................................24

Positioning Statement................................................................................................................

Product Positioning..................................................................................................................

Pricing........................................................................................................................................27

Price Adaptations........................................................................................................................

Price Changes.............................................................................................................................

6. Promotions and Socially Responsible Marketing.................................................................29

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Promotions................................................................................................................................29

Integrated Marketing Communication Mix...............................................................................

Internet Marketing......................................................................................................................

Social Media Marketing..............................................................................................................

Promotional Efforts Delivering Value.........................................................................................

Socially Responsible Marketing (SRM).................................................................................32

Examples of Success ..................................................................................................................

Best Practice for SRM................................................................................................................

7. Strategic and Operational Recommendations......................................................................34

8. Conclusion...............................................................................................................................36

9. Reference List..........................................................................................................................37

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BUSI 520: MMGP Group 3 – Taco Bell

MMGP Purpose & Scope

The purpose of this paper through a collaborated effort by group members is to identify

and analyze a particular company’s products or services with the goal of applying various

concepts of marketing management to propose potential adjustments to its current marketing

management strategies. Upon completion of research and analysis, the group provides insight as

to how Taco Bell’s internal and external environment relate to various concepts of marketing as

presented in this course. Some of the areas specifically covered in group analysis included the

evaluation of consumer markets, the competition, market segments, product positioning, and

product branding. Additionally, insight into Taco Bell’s service initiatives and customer

satisfaction, adaption methods for product pricing, and the use of various channels for promoting

the brand and products were helpful in evaluating the company as it relates to its market peers

today. Concluding points of discussion offer suggestions and potential opportunities as to how

Taco Bell can improve its current strategic and operational methods for marketing its products or

services, both domestically and globally.

Background Information

To effectively obtain a complete understanding about how Taco Bell’s vision aligns with its

marketing strategies, gathering information about its key products, business locations,

promotional incentives and price profiles helped to define various target audiences. Additionally,

obtaining an understanding regarding the consumer groups, and how internal and external

processes and programs effectively used operational and consumer market data to address and

improve performance helped to better understand the overall success or areas to improve

performance in managing marketing strategies.

Old 4 Ps: Product, Place, Promotion & Price

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Product. Taco Bell maintains a wide variety of Mexican-style food products, including

several assortments of tacos, nachos, salads, burritos, quesadillas, and related side and desert

items. It is dedicated to expanding their menu choices to motivate increased business to its

restaurants. For example, the introduction of Freeze frozen fruit drinks, along with happy hours,

have helped increase business before and after the traditional rush hours of lunch and dinner. On

average, Taco Bell introduces a new product every five weeks, which in turn becomes about 5%

of menu sales. In addition to being very creative and consistent with developing new offerings,

the variety of menu selections at an affordable price, helps to encourage consumers to think of

Taco Bell when considering today’s fast food options.

Price. Because the main target market today is the Millennials, pricing is a significant

strategical aspect for Taco Bell. The marketing executives understand very well the importance of

using pricing strategies in marketing promotions to Millennials as many are just entering the new

workplace with limited cash resources at their disposal. Low cost and perceived value is

important to this demographic.

Promotion. Taco Bell is incredibly active in promotions; the company was awarded the

Advertising Age Marketer of the year for 2013. The current promotion is called a Big Box Meal

that includes an assortment of items and a drink. In strategically marketing to the Millennials, the

marketing executives have incorporated the use of technology and targeting demographic groups

in using social media engines such as Twitter, Vine, Snapchat, and Facebook.

Place. In general, the discipline of site selection for strategically placing product involves

understanding factors that impact consumer behavior such as traffic flow, population density, local

demographics, per capita income, location, and visibility (Killifer, 2013, p. 25). Although the

place where product for sell is important, having a logistical system that manages both internal

and external factors is very important to the success of moving goods. Taco Bell’s logistical

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system helps it successfully maintain supply and demand of its products by maintaining two-way

communication with delivery partners and ensuring on-time deliveries (YUM! Brands 10-K, 2017,

p. 5). Rather than being constrained by physical location, the logistical system provides a

centralized network system for retrieving timely and easy access information for supplier

discounts and delivery methods with lower freight costs, in addition to providing leverage with

dedicated and collaborative suppliers.

New 4 Ps: People, Processes, Programs & Performance

People. Taco Bell is a people driven business, both internally and externally. Unlike the

majority of fast food industries moving to cut labor costs and eliminate jobs, Taco Bell embraces

technology, but not job cuts. The consensus of the Taco Bell C-level is “As a business that’s

fueled by the energy and passion of people serving people, our team members are our front line

and biggest brand ambassadors” (Spyrou, 2017, para. 7). This leads the company to build the

company from within and enhance corporate acceptance within the community to ensure that

processes are operating effectively.

Processes. The Taco Bell team takes the marketing process seriously. Their cutting edge

social media data collection system allows Taco Bell to anticipate change, design and implement

effective marketing programs to help them maintain a proactive competitive position in the

marketplace.

Programs. Taco Bell utilizes various traditional and social media tools to implement and

drive its strategic marketing activities. Although traditional TV and radio ads are used, the central

focus is on social media as it is most effective in reaching and communicating with consumers.

Marketing programs also consist of the use of YouTube through which Taco Bell has published a

series called “Taco Tales” which has had almost 2 million views within the last 3 months. Some

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promotional programs that target the consumer that are likely to participate in contests have

proven to positively boost sales and generate positive publicity in the marketplace.

Performance. In regards to measuring how well marketing strategies are performing,

Taco Bell adheres to the corporate standard to monitor and ensure that business activities

conform to ethical, social, and environmental standards and corporate objectives, as overseen by

the parent company YUM! Brands. Ethical standards include a code of conduct and employee

practices. The social aspects relate to food quality and safety, lower calorie offerings, and

nutritional improvement. The environmental attributes consist of Leadership in Energy and

Environmental Design (LEED) certification for new facilities, reductions in energy and water

consumption, and an increase in recyclable content (YUM! Brands CSR, 2015). Understanding

how well various store locations and products are performing helps management to make better

decisions as to which markets invest in.

Scanning the Market Environment

Based on a recent survey of 10,000 U.S. consumers, covering 20 different consumer

industries, Taco Bell scored 71 percent for overall customer experience and satisfaction compared

to its peers, with the average for the fast food industry in whole at 76 percent (PR Newswire,

2017). In addition to employees embracing the corporate vision, understanding how technology,

culture, demographic and economic trends can impact consumer tastes and preferences provides

vital information for predicting consumer purchasing behavior.

Demographic Trends. According to InfoScout Taco Bell, the consumer demographic is

mostly low-income families and adolescents ages. Africans Americans make up a good majority of

Taco Bells consumer. They mostly followed by Caucasians, and they are followed by Asians. The

last group is Hispanic who prefers authentic Mexican food to fast food Mexican (Taco Bell,

Consumer, 2016). Amongst the sexes males consume more Taco Bell than their female

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counterparts. The target age groups range from 24-34-year-old. These tend to be your non-

college young adult's age ranges. InfoScout projects that many of Taco Bells consumers purchase

the product through food stamps or government assistance (Taco Bell, Consumer, 2016). Data

also reveals that Taco Bell’s consumers between ages 18-34 years old value eating healthy, but

continue to enjoy having a taco or two.

Current Economic Trends. United State consumers spend an average of 48% on their

total food expenses outside of the home. Taco Bell came up with a “value pricing” strategy to sell

menu items for $1 (Muller, 1999). By doing this, Taco Bell made it possible for consumers to

save money while enjoying consumption of a range of menu items, from a variety of breakfast to

dinner options. Specifically, in regards to Taco Bell’s breakfast menu, research shows that when

“considering” $1 breakfast options, 81 percent of Americans say that they should be given more

choices. Overall, Taco Bell’s consumer market values quick and convenience of food items at a

great value, however today’s consumer is not willing to sacrifice the quality of taste, even at a

bargain price.

Technological Changes. Technology can be a very transformative force for a company

for better or worse. If used correctly, it could leverage a company with a strategic advantage over

its competitors. Failure to adapt quickly could be fatal in most rapidly changing markets. Taco

Bell has made a number of changes in the realm of technology over the years. They have

developed an advanced system and “They work out of a high-tech room called the Fishbowl that’s

lined with wall-size mission control-ish screens providing real-time info about the always churning

online conversation about the company” (Ringen, 2016, p. 116).

As the consumer environment has evolved, Taco Bell did not become complacent by just

using traditional marketing such as television and newspapers. Its willingness to take chances in

conjunction with clever marketing allowed for Taco Bell to continue its growth well into the turn

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of the century. Over the years, Taco Bell has continued to progress technologically in ways to

reach more customers. With the millennial audience as their target, Morrison (2013) posits that

“Taco Bell experimented with social media in ways other companies in its category have not”

(para 7). With the growth technology in others sectors such as the smartphone market, a new

wave of innovations was ushered in. Taco Bell saw an opportunity to reach more of its customers

using a mobile app. “Heartland Payments System announced that its Heartland Omni-Channel

Commerce Engine (XCE) is powering Taco Bell’s mobile ordering and payment app, which has

seen 3 million downloads” by 2015 (PYMNTS, 2015, para 1). Customers today are able to see

menu’s and choose their orders through the Taco Bell mobile app. Taco Bell’s ability to stay

aware of the technology trends will keep its consumers engaged and gain new consumer’s

acceptance.

Consumer’s Tastes and Preferences. Understanding how to keep consumers engaged

and loyal to Taco Bell’s brand depends on the timeliness and quality of consumer information as it

relates to purchasing behavior. In analyzing consumer markets, Kotler and Keller (2016)

described various consumer characteristics and psychological processes that impact consumers’

purchasing behavior. Based on various consumer reviews for Taco Bell’s fast food products and

services, the common theme appears to be that consumers demand consistency in quality, service

and accommodations (Yelp, Taco Bell, 2017). And, as consumer’s discretionary income, lifestyle

and values for nutrition change, so does the type of food choices and purchasing behavior that

ultimately impact a fast food business, such as Taco Bell’s bottom line.

Social and Cultural Factors. Taco Bell, rather than trying to assimilate to Mexican

culture, has differentiated themselves by marketing as a restaurant that sold American food, going

as far as to add French fries to the menu. Taco Bell even modiﬁed the names of their items to

acknowledge their differences from real Mexican food (Yo Quiero Taco Bell 2017). In addition

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to recognizing the need to differentiate from the traditional expectations for Mexican fast food

restaurants, Taco Bell has acknowledged it must pay attention to consumers’ way of life changes.

Market Analysis

Analyzing Consumer Market

Cultural Factors. Culture is the determining factor of a person’s wants and desires

(Kotler & Keller, 2016). As a result, Taco Bell has picked up on that trend and was able to set up

shop all over the United States and beyond. According to Taco Bell’s website, they have

restaurants in Spain, Korea, Japan, United Kingdom, India and El Salvador just to name a few

(www.tacobell.com, 2017). Since 1960, the international presence Mexican cuisine has been

expanding all over the world (Pilcher, 2008). Prior to fast food restaurants like Taco Bell, if you

wanted a dozen tacos you had to wait a long time. Taco Bell was able to analyze the market and

succeeded in creating fast food tacos for the consumers (Pilcher, 2008). Tacos are easily

recognized and can be found anywhere (Herrera, 2010). Of course, this is based on the culture of

which the restaurant is located.

Social Factors. Like all major corporations, Taco Bell has a team of workers who focus

on reaching new segments of the market. This act involves having a working knowledge of each

segment that’s targeted. As some social trends (Social factors are family, friends, roles and status

and reference groups) change, so does the behavior of some consumers. Being aware of these

changes and the behavior of your targeted segment is a part of that working knowledge. Kotler

and Keller (2016) explain that “consumer behavior is the study of how individuals, groups, and

organizations select, buy, use, and dispose of goods services, ideas, or experiences to satisfy their

needs and wants” (p. 157). Taco Bell has seen the opportunity for growth in the millennial

generation market, the budget conscious crowd, and the healthy eater’s segments of society

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through this study. Taco Bell’s influence and attractiveness in these 3 areas can be seen directly in

the millennial segment of the market.

Personal Factors. In analyzing consumer markets, Kotler and Keller (2016) explain that

personal factors have a direct impact on consumer behavior (p. 161). Of the many factors that

influence consumer’s purchasing behavior, personal factors such as a change in disposable income,

lifestyle, values or a critical life event can have a direct and abrupt effect on consumers’

purchasing behavior and product consumption. Consumers can choose from a variety of select

favorites or customizable items for $1 in fulfilling Taco Bell’s mission to offer great tasting

Mexican fast food options at a bargain price without sacrificing quality.

Consumers’ personal lifestyle and values appear to have the most influence on Taco Bell’s

consumer markets as corporate’s mission is to provide “food that’s customizable and fits your

lifestyle, with a commitment to never compromise on flavor” (Taco Bell, Nutrition, 2017, p.1).

Lifestyles are shaped partly by whether consumers are money constrained or time constrained

(Kotler & Keller, 2016, p. 164). During a study regarding fast food chains such as Taco Bell

using social media, Kolodinsky and Reynolds (2009) noticed that contemporary marketing

strategies now employ lifestyle-based and product benefit approaches (p.2). In regards to lifestyle

changes, such as the need to choose healthier fast food option in a fast-paced society, Taco Bell

has embraced the need to hire their own nutritionist to cater refined products and services for the

more “healthy” conscious consumer while maintaining market competitiveness.

Psychological Factors. Kotler and Keller (2016) discuss the four key psychological

processes: motivation, perception, learning, and memory (p. 165). In regards to the motivation of

the consumer, Taco Bell attempts to motivate its customer base using innovative advertising, low

prices, and flavorful Mexican-style food choices. To further motivate the consumer to respond,

Taco Bell uses social media engines such as Twitter, Snapchat and Facebook to promote

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marketing campaigns with bright colors and focus on value, flavor, and fun to tap into the

consumer’s selective attention perceptual process, giving the consumer instant access to these

advertisements.

Learning theory describes the changes in actions due to internalized knowledge. This

theory shows marketers the usefulness of associating products with a compelling need. Taco Bell

continually stresses the excitement, uniqueness, and low cost of their offerings. This repetitive,

yet distinct message creates and maintains customer loyalty.

Similar to the loyalty from the learned experiences with Taco Bell, marketers understand the

value in using the memory component of the psychological process to create memorable and

persuasive advertising to help facilitate the development of memory. The marketers at Taco Bell

have created several extraordinary and remarkable advertising campaigns such as Fourth Meal and

the Taco Bell Chihuahua. These marketing concepts may be slightly silly, but memories and new

customers were generated. Success marketers understand very well that customer purchase

activities are based on four psychological processes and acknowledge the substantial power that

these processes have in regards to consumer behavior and the decision to purchase.

Consumer Behavior Factors. Taco Bell is a Mexican fast food chain which puts

emphasis on brand personality and aggressively targets young adults and teenagers in its

marketing plan. Personality can be a useful variable in analyzing consumer brand choices. Brands

also have personalities, and consumers are likely to choose brands whose personalities match their

own. We define brand personality as the specific mix of human traits that we can attribute to a

particular brand (Kotler & Keller, 2016.) Taco Bell hours of operations are indicative of the

brands personality with consumers. Taco was one of the first fast food chains to offer late night

service well before 24-hour drive-thru. Based on research, today’s consumers care less for

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design, and more for what a brand means to them personally. Taco Bell means to the consumer

quick, convenient, and reasonable Mexican food at any time of the day.

Analyzing Market Segments

Variables for Segmentation. Market segments consist of two broad groups based on the

needs and wants of customer (Kotler & Keller, 2016). Of these broad groups, one of the variables

used by Taco Bell is through demographics. This is when a company divides the market into

geographical units by nations, states, regions, counties, cities, or neighborhoods (Kotler & Keller,

2016). For example, Taco Bell was able to become popular in Los Angeles by tapping into

markets made available by the geography of segregation and ethnic communities (Pilcher, 2008).

Evaluation Methods for Attractiveness. Because Taco Bell was using social media to

strategize their sales around, they came up with an innovative way of measuring the attractiveness

of the target market using their smartphone app and social media together. Their social media

platforms had a significant following. Taco Bell decided to go all in on the smartphone app and

direct all their social media followers to download the app. Taco Bell used their social media

interactions to promote the things that drove culture: food, music, sports, fashion, and

technology (Jennings, 2015, para 6). Then Taco Bell blacked out all their social media p.s with a

sign that read “The New Way To Taco Bell Isn’t On Facebook, It’s #OnlyInTheApp.” Taco Bell

measured the effectiveness of their marketing campaign by the number of downloads of the

smartphone app in the app store from their followers (Gaule, 2014, para 2).

Analysis for Full or Specialized Markets. In a study evaluating how consumer values

contribute to consumer’s purchasing and consumption behavior, Ha and Jang (2012) noted that

even though there are no strict rules, for classifying restaurants into distinct categories, that they

are often classified into either fast food casual dining or fine dining. These main classifications

impact how marketing tailors and targets various market segments with potential to drive product

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sales and market sustainability. Specifically, as it pertains to market segments, each restaurant

segment has its own characteristics and attracts target customers by providing unique attributes

(Ha & Jang, 2012, p. 124). Research shows that successful marketing campaigns include

competitive positioning strategies, whereas firms segment consumers by various needs or

behaviors that help them target markets based on various consumer profiles (Gherghina, 2015).

Full market coverage. In describing this level for target marketing, Kotler and Keller

(2016) describe full market coverage when a firm attempts to serve all customer groups with all

the products they might need. Furthermore, in strategically aiming to achieve full market

coverage, Kotler and Keller (2016) explain that the firm ignores segment differences and goes

after the whole market with one offer. It designs a marketing program for a product with a

superior image that can be sold to the broadest number of buyers via mass distribution and mass

communications (p. 264). Taco Bell’s specialized products appear to be marketed with a full-

market strategy, including some specialized market segmentation approaches.

Single-segment concentration. In targeting markets, single segmentation involves a case

in which the firm markets to only one particular segment rather than the full market masses

(Kotler & Keller, 2016, p. 265). This particular strategy conflicts with Taco Bell’s mission to feed

the “masses.”

Multiple segment specialization. As in the case with Taco Bell, the multi-segment

strategy has the advantage of diversifying the firm’s risk because different groups of consumers

have different needs and wants (Kotler & Keller, 2016, p. 265). In a study covering the U.S.

overweight population, cluster analyses were used to identify different segments of US consumers

based on food choices, activity, food knowledge, overweight, and other environmental variables,

strategically identifying and targeted marketing distinguishable segments of the overweight

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population aimed at moving them toward more healthy weights (Kolodinsky, & Reynolds, 2009,

p3).

Selective specialization. This target marketing strategy consists of campaigns targeting

certain groups, a sub-segment within the larger group or “super-segment”. In this case, a firm

selects a subset of all the possible segments, each objectively attractive with the potential to be

uniquely profitable (Kotler & Keller, 2016, p. 265). In selectively targeting a specific group,

gender is often used as a segmentation variable in the fast food industry (Yelkur & Chakrabarty,

2006). Successful marketers understand the importance of tailoring campaigns to a specific

market niche or a consumer group based on the product and corporate’s capacity to meet the

consumer’s needs or demands.

Market specialization. Once the marketing team has an understanding of the market or

sub-market their campaign will be geared toward, they can further define how to customize their

marketing strategies toward a specific potential consumer group. In this case, the firm

concentrates on serving many needs of a particular customer group, and generally within a certain

industry (Kotler & Keller, 2016, p. 265). Taco Bell’s current initiatives toward using 100% cage-

free egg ingredients helps strategically capture the consumers who feel strongly about this issue.

Product specialization. Unlike selling products to a specific targeted market or industry

sector, in product specialization, the firm sells a certain product to several different market

segments or consumer groups (Kotler & Keller, 2016, p. 265). Taco Bell’s mission and strategic

objectives are to offer Mexican fast food, specializing in food products that are not only

affordable and easily accessible but also meets the needs of “all” potential consumers (Taco Bell,

Food, 2017). More specifically to the notion of “potential” consumers, Taco Bell is specialized

because they do not offer everything to everyone. Taco Bell strategically customizes marketing

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campaigns to meet certain target consumers that value its specialized products in competing for

consumer’s choice in the Mexican fast food industry.

Target Markets Identified. Taco Bell is undertaking a targeted market strategy called

multiple segment specialization. One facet of multiple segment specialization is called selective

specialization. (Kotler and Keller (2016) discuss, “With selective specialization, a firm selects a

subset of all the possible segments, each objectively attractive and appropriate” (p. 265). The

subsets Taco Bell has chosen in the U. S. are: Millennials, budget-conscious buyers, and the

healthy eating faction.

The Millennials are a focused group due to both the large population of this demographic

and the amount of disposable income they possess. This target group typically does not want to

eat a full meal, so they snack several times a day. Krol (2014) describes this habit as, “Some of

this demand is due to low cost choices, and some is caused by cravings” (para. 6). Taco Bell has

had a high level of success in these markets. The corporate-level recognizes that a large part of its

customer base is the late-night crowd, which is typically Millennials.

Taco Bell has also targeted the “budget-conscious consumers, one of its core groups.

Taco Bell revamped its value menu to include $1 items after prices for some offerings climbed

well past a buck” (Morrison, 2013, p. 15). Three basic forms of value pricing policies are

typically used, as discussed by Hayes and Huffman (1995) as everyday value pricing, bundling,

and special value pricing. Taco Bell has applied all three of these strategies with the realization of

reaching their target.

Target Market Needs. Taco Bell answers the target market need for Mexican food on

the run. In a society that has become microwaved and on the move; quick on the run foods have

become the staple diet of most Americans. Drive-thru has become the norm for most families, and

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fast food is a way of life. In a one block radius, there can be several fast food options within steps

one another.

In meeting the consumer’s desires and needs, Taco Bell has combined its consumers

favorite snack food with traditional taco. The well-known Doritos-flavored tacos introduced last

year have become a staple of the Taco Bell menu. With all of the craveable choice items, as

American’s eat more fast food they have also become unhealthier, and the alarming cry for

healthier fast food has become the call of the consumer. Taco Bell’s executives have recognized

the change in consumer’s preferences by adopting healthier, lighter versions of its menu to answer

the call for healthier options.

Positioning, Competition & Branding

Positioning in the Market

Positioning Statement. According to Kotler & Keller (2016), a good brand positioning

helps a company with its marketing strategy to clarify the brand’s essence, consumer

achievements, and by showing its uniqueness. An appropriate positioning statement for Taco Bell

would be: Taco Bell provides fast Mexican style food at better prices than any other Mexican

restaurant. They provide this with good customer service and satisfying $1 menu items that range

from breakfast to dinner varieties.

Product Positioning. Kotler and Kotler (2016) describe product positioning as “the act

of designing a company’s offering and image to occupy a distinctive place in the minds of the

target market” (p. 275). Since February 2012, the 6,000-unit Mexican quick-service chain has

actively courted a coveted group of consumers, the Millennials, with its "Live Mas" campaign. It

also looked to move the brand away from its image as merely a late-night refueling station

(Brandau, 2013, para 2).

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With the rise of competitors such as Del Taco, Taco Bueno in the Midwest, Taco Cabana

on the West Coast, Chipotle, and Qdoba, Taco Bell has to work harder to differentiate itself from

the pack. To do that, Taco Bell did three things to better position their brand outside the

competition. First, management focused on basing their brand innovations around creating food

experiences and not just innovation for the sake of innovating. They took a major step in this area

with the release of the Doritos Loco Tacos. These tacos combine two known brands to create

wildly popular menu items. It became hard to mention Taco Bell without at least alluding to the

wildly popular Nacho Cheese and Cool Ranch Doritos Loco Tacos (Avant, 2013, p. 1). Even

though the Doritos Loco Tacos lead the turnaround for Taco Bell after 2012, Taco Bell continues

to create experiences by offering other special products like the Volcano Taco and the Cheesy

Gordita Crunch. Taco Bell constantly does limited-time-only products and this keeps them with

product news (Del, 2008, para 1).

Secondly, in positioning their brand, Taco Bell released the Cantina Bell Menu. Taco Bell

sought to move away from the perception of being “typical fast food” and “cheap and filling” to

their targeted segments. “Crafted in conjunction with celebrity chef Lorena Garcia of “Top Chef

Masters” fame, the menu features bowls, burritos, and quesadillas made with whole black beans,

cilantro rice, citrus-and-herb marinated chicken, steak, and other high-quality ingredients” (Avant,

2013, p. 1). In fiscal 2012, when the “Live Mas” campaign debuted and was used to support such

new products as Doritos Locos Tacos and the Cantina Bell platform, Taco Bell's U.S. same-store

sales increased 8 percent (Brandau, 2013, para 2).

In regards to choice, the third thing Taco Bell did to position its brand was to create a

breakfast menu. With the breakfast wars being anchored by other companies such McDonald’s

and Dunkin Donuts, Taco Bell entry into this market offered yet another choice for Millennials

and parents. Even though there are points of parity between Taco Bell and its competitors Del

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Taco and Chipotle, the US-Mex fast food breakfast offering by Taco Bell is an optimal point of

difference. “Taco Bell's positioning as the segment's largest Mexican brand, and its market

leadership in value pricing, has poised it to capitalize on the morning meal” (Taco Bell, 2010, para

1). All of these efforts have positioned Taco Bell to get their target audience to “think outside the

bun” in more ways than one.

Understanding the Competition

Broadly defined, Kotler and Keller (2016) describe competition as including all the

“actual” and “potential” rival offerings and substitutes a buyer might consider (p. 11). As there

are many fast food options available today, it is important for executives of Taco Bell to stay in

touch with the fast food industry substitutes available to ensure that the products offered are

attractive and strong enough to maintain brand loyalty as lifestyle changes occur. In researching

market competitors of Taco Bell owned by Yum Brands, Inc., Chipotle Mexican Grill was among

the list of strong fast food chains in competition of McDonald’s (Downie, 2015). As a major

competitor to Taco Bell which is owned by Yum! Brands, Inc., Chipotle Mexican Grill, Inc.

appears to be holding its own with a market cap of 13.9 billion as compared to Yum! Brands, Inc.

with a combined market cap over 24 billion as of June 2016 (Investopedia, “CMG Stock

Overview,” 2017). To maintain marketability and its competitive edge in the fast food service

industry, it is important for Taco Bell’s executives constantly review the strengths and weaknesses

of its primary competition.

Kotler and Keller (2016) define a SWOT analysis as an overall evaluation of a company’s

strengths, weaknesses, opportunities and threats within the market (p. 49). Specifically, within the

Mexican fast food sector, Value Line’s SWOT analysis of Chipotle Mexican Grill, Inc. revealed

some of its strengths consisting of rapid growth and strong financial health (Dalavagas, 2016).

Chipotle is known to support family farms and local growers who behave responsibly towards

MMGP GROUP 3 – TACO BELL 21

animals and the environment (Kotler & Keller, 2016, p. 10). However, these strengths have been

countered with Chipotle restaurants being heavily based in the U.S., a weakness that is impacted

by and sensitive to U.S. consumer discretionary spending fluctuations (Dalavagas, 2016). And,

unlike Taco Bell, Chipotle’s competitive strategy does not include emphasis on “lower-cost” value

meals like it’s market competitors which makes it difficult to compete with primary competitors

such as McDonald’s and Taco Bell (Dalavagas, 2016).

Product Branding

A critical characteristic of marketing a company is the ability to differentiate it from the

competition. The creation and development of a brand is fundamental to a successful marketing

strategy. The brand is the key component, the link that ties a customer to the company.

Brand Elements. Ataman, Mela, and Van Heerde (2008) describe the brand elements as

items that distinguish, separate, and characterize a brand. These devices may include: images,

mottos, packaging designs, mascots, brand names, and distinctive sounds. Brand elements have

an important function for the marketer. Natural competition will compel consumers to evaluate

comparable companies to each other. Therefore, it is critical that the competing companies

develop strategies to differentiate themselves from each other.

Knowing the importance of brand elements, it should be evident that the choice of

elements is critical. Kotler and Keller (2016) state “There are six criteria for choosing brand

elements. The first three—memorable, meaningful, and likable—are ‘brand building.’ The latter

three, transferable, adaptable, and protectable, are ‘defensive’ and help leverage and preserve

brand equity against challenges” (p. 309). The Taco Bell marketing team has done a great job

with selecting brand elements. The newly updated logo consists of block letters and the bell logo

in black and white. The “TACO BELL” logo contains the flagship bell, and is meaningful and

memorable; the bell represents the founder of Taco Bell, Glen Bell and the word taco. Current

MMGP GROUP 3 – TACO BELL 22

brand elements include notions of being simple, likable, and unforgettable. This simple and

modern update caters to the young, trendy crowd, with the white background that can be easily

changed to any color or pattern.

The Brand Promise. With the use of social-media, customers, many in high school and

college, proudly post photos of their Taco Bell meals to Twitter and Instagram (Lutz, 2014.) Taco

Bell’s CEO Brian Niccol understands and appreciates this segment of the consumer, and has

devised some key components to better cater’ to the Millennials. Because this target group is a

key variable in computing the cost of the product, Taco Bell promises to keep prices low without

compromising quality. Taco Bell executives understand that the majority of its consumers have

limited cash resources so it must create prices strategically maintaining market share. Taco Bell

has creatively and successfully capitalized on this price limitation.

Although several fast food companies have adopted the “Dollar menu,” Taco Bell is well

known for adopting this marketing strategy. There are a total of 11 items on the Dollar Cravings

menu. The dollar menu concept sees quick revenue with less stress on the consumer’s pockets. It

allows the consumer to enjoy their favorite brand while focusing still on cost efficiency. Taco Bell

has effectively fulfilled its brand promise by offering menu options that better accommodate the

need for fast food for the consumer with limited expendable resources.

Packaging and Labeling. Good packaging is important because it has to catch the

attention of the potential buyer. It serves as a “five-second commercial for the product (Kotler &

Keller, 2016). Taco Bell spends up to $250 million a year for its packaging strategy

(plasticsnews.com). The majority of Taco Bell’s packaging has the colors blue, white, black and

yellow on it.

A survey conducted on 100 U. S. fast food restaurants assessed that the six most used

colors for logos are white, red, and yellow, black, green and blue (Dupont, 2014). The colors of

MMGP GROUP 3 – TACO BELL 23

the Taco Bell logo are blue, pink and yellow to appeal to young customers (tacobell.com, 2017).

According to Kotler & Keller (2016), in reference to the Color Wheel of Branding and Packaging,

color is an important part of packaging and has different meanings according to culture (Kotler &

Keller, 2016). On the Color Wheel of Branding and Packaging, the color blue stands for the color

of the sea and is associated with dependability, trust, competence and integrity. The color white

stands for purity, innocence and cleanliness. The color black is seen as classic, strong and

balanced and yellow is the color of the sun which equals warmth, joy and happiness. These colors

combined on Taco Bell’s wrappers means that a consumer should depend on food that is prepared

in a clean restaurant with strong classic tastes that you will be happy to eat.

Similar to packaging, product labeling is another important aspect of product presentation.

Product labeling performs three functions. It identifies the product, grades the product, as well as

describes and promotes the product (Kotler & Keller, 2016). Product labeling must be consumer

friendly and not a false representation of the product. In 2011, Taco Bell was sued for misleading

consumers about what is in the beef for the tacos. It was reported that most of it was beef and

the rest was from a secret recipe (Pilcher, 2012). Subsequently, Taco Bell labeling now includes

nutritional information for their menu items that can also be found on Taco Bell’s website as well

as in the restaurants.

Services/Pricing

Consumer Support Services

Taco Bell’s quick service combined with great marketing and high-quality ingredients has

helped it to differentiate itself from other fast food service restaurants in an overcrowded market.

Taco Bell excels in drive-thru speed and accuracy. The drive-through is a huge source of revenue

for them (Kotler & Keller, 2016, p. 406). To keep up with consumer demand, Taco Bell goes to

great length to quality control its support services. Speaker technology advancements have been

MMGP GROUP 3 – TACO BELL 24

helpful in increasing accuracy and the time it takes to fulfill customer orders. Wireless headsets,

digital noise cancellation headsets, and the increased market penetration of order confirmation

boards all aided in the improving Taco Bells drive-thru locations (Improved, 2005, para 1). Menu

boards with liquid crystal display screens and other high-resolution screens visible even in bright

sunlight give customers an opportunity to confirm their order and the price before driving to the

pick-up window as well (Accuracy, 2003, para 4). With these improvements, customers can

depend on Taco Bell to get them their order quickly and accurately so they can get back to their

busy day.

Main Competitor’s Support Services

In the fast food service industry, Chipotle is regarded as a leader because its mission

objective includes food served fast that is more than the "fast-food" experience. To maintain

competitiveness, Chipotle has recognized the need to incorporate a “hybrid offering” of services

which consists of equal parts goods and services (Kotler & Keller, 2016, p.400). Chipotle

investor relations describe the dining experience to include “high-quality raw ingredients, classic

cooking methods and a distinctive interior design, and friendly people to take care of each

customer” which shows that Chipotle’s marketing strategy includes proving service quality

through what consumers can see in action (Chipotle Investor Relations, “Corporate Profile”,

2017, p. 1). Executives have acknowledged that their loyal consumers desire “food quality that's

more in line with full-service restaurants, coupled with the speed and convenience of fast food”

(Chipotle Investor Relations, “Corporate Profile”, 2017, p. 1). For the 2017 outlook, Chipotle

stated in their recent annual report that they intend to attract more customers with a variety of

marketing activities and improvements to their digital ordering platforms, and by improving the

quality of the “customer experience” provided in their restaurants (Chipotle Investor Relations,

“Annual Report,” 2016, p. 28).

MMGP GROUP 3 – TACO BELL 25

Unfortunately, in regards to the service initiative of maintaining trust and integrity with

consumers, Chipotle’s sales and profitability was adversely impacted throughout 2016 as a result

of a number of foodborne illness incidents associated with restaurants in as many as 15 states,

which were widely reported during the fourth quarter of 2015 and the first quarter of 2016

(Chipotle Investor Relations, “Annual Report,” 2016, p. 27). To promptly respond reinforcing

Chipotle’s reputation and willingness to accept responsibility and promote it is a fast food

company that values integrity, Chipotle has implemented enhanced food safety procedures in their

supply chain and restaurants that have increased food costs, impacting revenue, but slowly

recapturing the trust of loyal consumers.

Post-sale Service Arrangements

A post-sale service strategy is important to both discrete items and services. Discrete

items such as automobiles, appliances, electronics, and consumables typically include some type of

warranty associated with the item. Repair services include post-sale provisions regarding parts

and labor. Conversely, fast food restaurants do not utilize similar post-sales strategies. This

industry does not supply their customer with labor, warranty issues, or replacement parts. The

goals are to quickly serve the proper order at the quality expected by the customer at the correct

price. Restaurant success is contingent on proper execution and the consumers’ opinion regarding

the overall experience, which leads to customer loyalty. Namin (2017) confirms, “More loyal

customers who choose to make the purchase and decide on repeating their purchase in the future

make the business more successful, which would then help the business survive in a competitive

market” (p. 70).

Taco Bell (Taco Bell, “Taco Bell Refund,” 2017) has established a simple, yet

comprehensive satisfaction guarantee, if a customer is not satisfied with the item they have

ordered; they will receive a replacement item. Taco Bell also uses customer empowerment to

MMGP GROUP 3 – TACO BELL 26

receive feedback after the sale. Taco Bell prints an invitation to participate in an online survey on

each sales receipt. The survey asks a variety of questions regarding the customers’ visit relating

to service, quality of food, and the overall experience (Taco Bell Survey, 2017). This method

allows the consumer to offer timely feedback regarding their last visit.

Service Efforts Impact on Customer Satisfaction

Consumer loyalty can represent the deciding moment for an organization. General customer

satisfaction will be founded on how the organization settled the issues where customer service

initiatives breakdown. At times this may mean, price dropping or finding a better alternative to

producing the product to meet consumer expectations. Given strong consumer resistance,

marketers go to great lengths to find alternate approaches that avoid increasing prices when they

otherwise would have done so (Kotler and Keller, 2016, p. 447). To ensure the highest level of

customer satisfaction, Taco Bell’s system gives customers the ability to customize every order

with a nearly incalculable number of variations.

Price Adaptation Strategies

With the influx of newcomers to the fast food market, comparative pricing has become an

issue for most restaurants. In analyzing potential new marketing strategies, once a pricing

objective is selected, the company has to determine the demand, estimate costs, analyze the

competitors’ costs, prices and offers, as well as select a pricing method and the final price (Kotler

& Keller, 2016). Fortunately, Taco Bell has been able to corner the market in the Mexican food

sector because of the lack of competition of fast food restaurants that offer Mexican style foods.

With that being said, Taco Bell can still run a risk of losing customers if their pricing is not

adaptable to the consumer needs. Some of Taco Bell’s adaptation in their marketing plan consists

of the economical $1 menu and the higher priced Cantina Bell menu.

MMGP GROUP 3 – TACO BELL 27

On the other hand, at times when pricing is too low for products, it can fall in the low-

quality trap (Kotler & Keller, 2016). This is when a consumer thinks the quality of the product is

low. To combat this, Taco Bell is using a pricing adaptation strategy that also introduces higher

price menu items. In offering the competitive $1 menu, Taco Bell offers items that cost around $5

in the “Fresh Mex” category to avoid the perception of low value.

Possible Strategic Pricing Changes

An innovative approach Taco Bell could make to broaden its appeal to more customers in

its target segment is by changing its price structure from a single transaction based format to a

subscription format. With today’s busier-than-ever lifestyle, on-the-go meal options have become

more prevalent (Hennessy, 2016, para 10). Taco Bell should utilize its DoorDash delivery service

along with its mobile app to offer different subscription packages for customers. Weekly

packages could range from breakfast, lunch, dinner, and two snacks for one ($45), two ($80),

three ($120), or four ($155). Taco Bell could also expand their premium options and create a

Cantina level subscription option, and bring in a licensed nutritionist to put together different meal

types for different customer needs. This approach could even further differentiate Taco Bell from

the pack and change the positioning of the brand. “As consumers raise their expectations

regarding “convenience” food (as evidenced by meal kits like Blue Apron, which sold well over 1

million meals each month last year), mainstream brands have an opportunity to tap into that

market” (Hennessy, 2016, para 18). Having a hybrid business model and pricing structure could

give more choice to target market segment and meet the wants and needs of a busy society.

Promotions and Socially Responsible Marketing

Integrated Marketing Communication Mix

Kotler and Keller (2016) describe the integrated marketing mix to include some variation

of advertising, sales promotion, events and experiences, public relations and publicity, direct

MMGP GROUP 3 – TACO BELL 28

marketing, and personal selling (p. 560). They further explain that to effectively reach and

influence target markets, holistic marketers are creatively employing multiple forms of

communications such as these (Kotler & Keller, 2016, p.556). Taco Bell’s integrated marketing

communications consist of all of these, effectively targeting consumers today with sales

promotional ads that appear through conventional and innovative channels such as recently

developed mobile applications. To capitalize and extend the value from recent events, Taco Bell

has been known to use mobile campaigns to promote its much-hyped Quesalupa that debuted

during the 2016 Super Bowl (Johnson, 2016). Today, Taco Bell uses “keyword-based” mobile

ads to reach targeted consumers based on their preferences to visit restaurants “frequently” versus

the “occasional” dining experience. To measure the success of the promotional ads pushed to

consumers mobile devices, Taco Bell’s marketing executives use statistical data obtained from

various store locations as a result of the mobile ads (Johnson, 2016).

Use of the Internet

Interactive marketing usually consists of all marketing activities accomplished by means of

the internet. Taco Bell incorporates interactive marketing by utilizing the various alternatives of

search ads; by using search engine optimization, company websites, and social media. Taco Bell’s

primary and microsites meet the criteria of an effective website, (Kotler & Keller, 2016). Taco

Bell’s principal interactive marketing instrument is Taco Bell.com which contains several product-

centric microsites. All the microsites appear to be effective when evaluated with the seven key

design elements of an effective website. Kotler and Keller (2016) define these elements as:

“community, customization, context, content, connection, communication, and commerce” (p.

618). Taco Bell marketing appears to embrace the potential rewards that are accessible by

interactive marketing. Taco Bell fully implements various marketing opportunities effectively,

MMGP GROUP 3 – TACO BELL 29

while cultivating additional valuable techniques. These techniques tailor specific user experiences

and advance different approaches for customers to gather product and merchandise information.

Use of Social Media

This modern society has become enthralled with social media with internet sites such as

Facebook, Twitter, and Instagram becoming the norm of communication. Companies have started

to recognize the impact social media has on sales, and have begun to utilize this enterprise to

better business revenue. Taco Bell acknowledged the need to maximize the potential of social

media with sites like Facebook and Twitter. Taco Bell has garnered nearly 10.4 million Facebook

fans and 1.7 million Twitter followers, not to mention their many other supporters on other social

channels, such as Snapchat and Vine. By using social media, Taco Bell understands how to stay in

touch with its primary customer base, the millennials. The use of social media is the key to

understanding the demands of their consumers, while having easy access to their opinions on what

changes should be made. Unlike other fast food companies, Taco Bell has embraced the use of

social media as a vital resource to strengthen consumer relations and always be at the pulse of

change.

Promotional Efforts Delivering Value

Taco Bell delivers value to its customers by staying ahead of the trend with a variety of

promotions (Pilcher, 2012). Promotions are used by restaurants through wide ranges of short-

term incentives to get customers to try a product with the hope of purchasing (Kotler & Keller,

2016). Taco Bell promotional efforts are offered online, for walk-in customers and through

charity. Online marketing allows businesses to get a more detailed measure on what customers

are interested in on your site as well as how many visitors come to the p. (Funk, 2011).

MMGP GROUP 3 – TACO BELL 30

To better monitor and enhance the consumer experience, Taco Bell has its own online

website that allows the consumer to sign up for a Taco Bell account, accessing promotional offers

instantly. Members receive special offers via email. Online orders can be customized without the

pressures of standing in line. This also allows a higher percentage of accuracy with your order.

Taking a trip to the restaurant is still another way Taco Bell provides value of their

products. Promotions are posted all over the restaurant inside and out. One advantage a

consumer has for taking a trip to the restaurant versus on-line is to be able to enjoy Taco Bell’s

freeze drinks. During Taco Bell’s Happier Hour that is available between the hours of 2pm to 5pm

or anytime of the day, customers can enjoy various freeze flavors as Airheads Blue Raspberry,

Starburst Strawberry, or Mountain Dew Baja Blast (www.tacobell.com, 2017). Online orders do

not include the freeze drinks for risk of it being liquidized by time it reaches your destination.

Socially Responsible Marketing (SRM)

Examples of Successful SRM. In researching examples of peers that have been

successful in SRM, Starbucks has been positively regarded by consumers as a sustainable

approach to meeting expectations. Kleinrichert (2008) posits that “An inter-organizational ally-

building process by executive and management leaders has a distinct reciprocity related to

corporate community involvement, yet is also similar to various concepts of corporate social

responsibility” (p. 475). Keller and Kotler (2016) believe that “taking a more active, strategic role

in corporate social responsibility is thought to benefit not just customers, employees, community,

and the environment but also shareholders” (p. 663). “Since Starbucks Coffee started in 1971,

the company has focused on acting responsibly and ethically” (Liodice, 2010, para 7). “In the

midst of debates over global warming and the environmental effects of fuel‐hungry emerging

economies, some companies are regarding sustainability as an opportunity to create a competitive

MMGP GROUP 3 – TACO BELL 31

advantage” (Rigby, 2008, para 4). “Sustainability—the ability to meet humanity’s needs without

harming future generations—now tops many corporate agendas” (p. 667).

In addition to its socially responsible marketing strategies, having a socially responsible

supply chain of coffee farmers helps bolsters Starbucks’ sustainable resume and can be marketed

to give a competitive advantage. Clarice Turner, senior vice president of Starbucks Coffee Co.

says “"It's not only the right thing to do, but we know we will have greater loyalty from our

customers and the people who work at our restaurants because we are tackling something

relevant and important to them" (Starbucks’, 2013, para 3). Starbucks is considered by most

experts to be one of the most socially responsible companies in the world

Recommended Best Practices for SRM. The developing issue of obesity in America

represents a danger to Taco Bell and other fast-food chains. These patterns put weight on Taco

Bell and other fast-food chains to make their items healthier and increase the use of natural

ingredients in its processes. Taco Bell has made progress in addressing the consumers demands

for healthier choices by creating a "Fresco" menu which lists food choices that under nine grams

of fat. Likewise, their site plainly distributes a calorie menu their things.

Corporate social responsibility can affect the way customers perceive a company and can

influence product differentiation (Morgan, Dominick, Widmar, Yeager, Croney, 2016, p.1).

Beyond the primary mix of communication methods, Kotler and Keller (2016) state that the

product’s styling and price, the shape and color of the package, the salesperson’s manner and

dress, the store décor, and the company’s stationery all communicate something to buyers (p.

560). Furthermore, because effective marketing strategies are designed to connect with the

consumer’s sense of ethics, cultural and social values, the most successful companies in the world

MMGP GROUP 3 – TACO BELL 32

abide by high standards of business and marketing conduct that dictate serving people’s interests,

not only their own in marketing responsibly (Kotler & Keller, 2016, p.664).

To holistically measure socially responsible marketing, the study focused on the

consumer’s perception of how well the company incorporated food quality initiatives, healthy

eating product choices, animal welfare initiatives and involvement in community activities

(Morgan, et. al., 2016, p. 20). As noted in Morgan, et. al. (2016), it is important for marketing

executives of Taco Bell to research and obtain a continuous understanding of how these

perceptions and the relationship to the consumer’s demographic have the potential to improve

decision-making and targeted marketing strategies by fast food restaurants (p. 20).

Strategic Recommendations

In evaluating and selecting markets to introduce, sustain sales or expand market presence,

it is important for marketing executives and management of companies like Taco Bell to

understand that some attractive segments may not align with the company’s long-term strategic

objectives (Kotler & Keller, 2016, p. 265). Additionally, it is important for Taco Bell to

continuously review products and services offered to consumers by acknowledging that

consumers are segmented based on geographic location, demographic characteristics, and product

use (Kolodinsky, & Reynolds, 2009, p2).

Taco Bell should use micro-target marketing. Similar to how companies called advertising

networks, track Internet user’s activity across the Web, Taco Bell could use the transaction

registers to track spending trends, combinations of orders, peak times, off peak times, and high

demand items at particular stores in a particular area. This information should be compiled in a

monthly report by location managers and forwarded to district managers. The district managers

should be able to create a behavioral map for division marketing personnel using this data. Taco

MMGP GROUP 3 – TACO BELL 33

Bell could use these behavioral maps to do consumer behavioral targeting. The results of that

data could yield Taco Bell having different combo offerings at certain stores in certain areas as

oppose to a "one hat fits all" approach. Combo offerings may change during peak times versus

off peak times. Low demand items could become discounted items at peak times as well to drive

more traffic to those items. This data tracking could be effective in premiering region-specific

items such as shrimp or lobster tacos near coastal areas where seafood is more a part of the local

culture.

Additionally, although the majority of Taco Bell’s marketing efforts have been toward the

millennials, budget buyers, and the health conscious, the next target should be the over 50

consumer audience. This market represents “Sixty-two percent of all fast-food and drive-in

restaurant visits over the next 10 years will come from people 50 or older” (Davis, 2017, para. 4).

This micro-targeted marketing could be a part of an overall strategy of Taco Bell's new "Fluid

Menu" system.

On a global level, consumers’ tastes and preferences are one of the driving forces for

competitiveness in the market place. The success of fast food chains expanding globally depends

on how well the business adjusts to the taste and culture of the nation in which they are found.

Taco Bell is globally known as a brand leader with consumer loyalty in the Mexican fast food

industry. By 2020, Spain will be home to more than 70 Taco Bell restaurants and will be the

largest market in Europe (Schroeder, 2016). Yum! Brands, Inc. reports that domestic to the U.S.,

Taco Bell and its franchisees operate more than 7,000 restaurants, generating more than $9 billion

in sales. By 2022, the brand plans to become a $15 billion company in global system sales with

9,000 restaurants globally (Yum, 2017).

Taco Bell’s first restaurant in China is part of the brand’s global growth strategy of

reaching 1,000 restaurants internationally by 2022. Yum China highlighted the fact that over 30

MMGP GROUP 3 – TACO BELL 34

years’ experience in paying attention to consumer preferences helped to “fine-tune” and develop

the China location’s Taco Bell menu (Schouten, 2017). As it pertains to consumer tastes and

preferences globally, Yum China expressed the value in maintaining the brand loyalty that features

the classic Taco Bell offerings, but also the need to adapt to local consumer market’s tastes and

preferences (Schouten, 2017).

Operational

Taco Bell is the leader in the Mexican-style fast food industry and dominates this sector by

providing variety and introducing new items. Typically, Taco Bell introduces a new product every

five weeks (Ringen, 2016). One can anticipate operational issues at both the customer and

employee level if legacy items are retained along with an influx of new items. The menu at Taco

Bell keeps growing along with the wait for customers to receive their order (Jargon, 2014). Taco

Bell should verify that customer wait times are not increasing due to the addition of new items.

Further analysis would be required to determine either the deletion of less popular items, or the

need to reengineer the product assembly process.

Conclusion

Young consumers and university students have the persistent reputation of being avid

consumers of fast food. Taco Bell has successfully penetrated the Millennial demographic, and

has a symbolic representation as a teenager and young adult franchise. The marketing executives

understand that its product mix is consumed by people in a beginning of their life cycle, and are

more likely to be young adults looking for a quick meal.

As cited in Morgan, Dominick, Widmar, Yeager, and Croney (2016), consumption of food

away from home is largest, in terms of share of expenditures, for the segment of the population

which is eighteen–twenty-five years of age (p. 19). Although research concludes that the

Millennials are the main consumer base for Taco Bell, management understands that it must move

MMGP GROUP 3 – TACO BELL 35

beyond just millennials. By continuously paying attention to the target market audiences’

purchasing behavior and preferences will keep Taco Bell at the forefront in competing with some

of the best in the industry. Taco Bell’s flexibility has paid many dividends over the years and will

continue to aid them in achieving a steady growth in market penetration.

MMGP GROUP 3 – TACO BELL 36

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https%3a%2f%2fwww.researchgate.net%2fpublication

%2f282615509_Yo_quiero_Taco_Bell_How_Hispanic_Culture_Affects_American_Taste_

Buds&p=DevEx,5033.1

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MMGP GROUP 3 – TACO BELL 52

MARKET MANAGEMENT GROUP PROJECT (MMGP) - FINAL SUBMISSION

GRADING RUBRIC

Criteria Points Possible

Points

Earned

Organization 0 to 15 points

All required project components are addressed in their proper

order, each with a separate heading.

Support 0 to 15 points

Balanced presentation of relevant and legitimate information

that clearly supports the group’s findings and shows a

thoughtful, insightful, and in-depth analysis of the topic is

included.

Content 0 to 20 points

Topics are covered in sufficient detail with no duplication

among sections. Length of topic coverage is even and

appropriate.

Scholarly Sources 0 to 15 points

At least 25 scholarly sources are cited and properly listed in

references.

Focus 0 to 15 points

Focus is clear and coherent, with obvious understanding of

subject and orderly development. Document is written in one

voice and in third person.

Sentence Structure 0 to 10 points

Sentence fluency is coherent, unified, and varied, and sentence

structure is complete; correct spelling, punctuation,

capitalization, varied diction, and word choices are used.

Format 0 to 10 points

Conforms to current APA format. 9

Total 99

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