Dr. Bari Courts
30 September 2011
Cold Stone Creamery operates approximately fourteen hundred stores worldwide. Their premium ice cream products have kept them at the apex of the ice cream industry. An audit of Cold Stone’s marketing approach revealed flaws in areas that are critical to organizations in today’s marketplace. A first person interview revealed Cold Stone’s lack of innovative technology and a failure to incorporate the recommendations of franchise owners. Although Cold Stone has been successful utilizing low-tech marketing, today’s technology has the potential to solidify their market advantage. Cold Stone’s centralized control of marketing decisions has also created negative effects on local owners. The economic situation and the desire for customers to live a healthier lifestyle may have continued affects on the company. This student provided technology, market research, and branding recommendations that could improve the company’s market growth. Executive Summary
Cold Stone Creamery was founded in 1988 in Tempe Arizona and is owned and operated by Kahala L.L.C. (Cold Stone, 2012). Since inception, their philosophy has been to provide superior ice cream to consumers. They went as far as trade marking their products as Creations™ in order to brand a product that is limited only by the consumer’s imagination. Mr. Toby Douglas, Cold Stone Creamery franchisee, agreed to be interviewed to discuss Cold Stone’s marketing strategies. Cold Stone franchisees operate over 1400 high-end ice cream stores worldwide (Cold Stone, 2012). Their superior ice cream is made daily in each individual store and only uses fresh quality ingredients. Cold Stone consistently ranks high in customer satisfaction, company reputation, and product quality (T. Douglas, personal communications, September 25, 2012). Conversely, their pricing is ranked low when compared to their competitors. Their marketing plan is not very robust considering today’s technology venues. The plan consists of electronic and hard copy coupons, free in store samples, television advertising, partnerships with other business owners, and birthday clubs. The impending health care reform coupled with more health conscious consumers has the potential to threaten Cold Stone’s future profits. Within the mandate, is a requirement for calorie count to be displayed on the menu by the end of 2013 (T. Douglas, personal communications, September 25, 2012). Mr. Douglas was the first Cold Stone franchisee to introduce yogurt in his product line. His store is located in a middle class suburb; therefore, he should be in a position to continue to thrive under the new mandates. By continuing to collaborate with the franchisor on decision-making, collecting, and analyzing consumer habits, Mr. Douglas should achieve continued growth in his customer base.
Marketing has been defined as fulfilling the needs and wants of a prospect while remaining profitable throughout the process (Kotler & Keller, 2012). The role of marketing cannot be over stated. Cold Stone has done an exemplary job increasing demand for a product that some would argue sales itself. Successful marketing compliments other business operations such as administration, accounting, and finance (Kotler & Keller, 2012). Cold Stone’s marketing research determined the target consumer to be women aged 25-50 (T. Douglas, personal communication, September 25, 2012). The background of their research is proprietary; therefore, this student has no data to support or refute the findings. Given their success, one can conclude that Cold Stone’s comprehension of Kotler and Keller’s (2012) demand states concept is mature. Marketers must consider eight possible demand states: 1. Negative demand – customers do not desire a product. 2. Nonexistent demand – product is unknown to the consumer. 3....