Question

Case 2.2-Baskin-Robbins: Can It Bask in the Good 'Ole Days? QUESTIONS ARE AT THE BOTTOM

CASE: BASKIN-ROBBINS

Can it bask in the good ‘ole days?

It was early December 2003, and Baskin-Robbins Brand Officer Ken Kimmel had just returned from lunch. To his surprise, his walk from the parking lot to the Randolph, MA headquarters building had quickly turned into a sprint. Kimmel was trying to avoid the chilly effects of a Nor’easter that was whipping most of New England with arctic winds.

Like the nasty weather Kimmel just escaped, the frozen food retailing industry had become more hostile to Baskin-Robbins (www.baskinrobbins.com) in recent years. New entrants, such as Cold Stone Creamery’s founded in 1988, had popularized the in-store experience with customers watching their ice-cream creations being made before their eyes on cold stone slabs. For years, Baskin-Robbins had turned their back to Cold Stone Creamery’s gains, in a similar way the Baskin-Robbins counter staff turned their back on customers to make a banana split. Cold Stone Creamery’s sales were now almost 75% of Baskin-Robbins’ sales.

In response, the Baskin-Robbins executive group along with Kimmel had recently moved to redesign stores, but it was not easy convincing the thousands of franchisees who ran the Baskin-Robbins stores to change. A store redesign could run up to $50,000 and was funded mostly by the franchisees. One aspect of the redesign resulted in lowering the ice-cream cases to make it easier for children to look down into the ice-cream bins.

Another change being considered was changing the Baskin-Robbins logo to coincide with the redesign of store interiors. The logo appears on napkins, cone wrappers, spoons, cups, uniforms, and signs at each Baskin-Robbins store. The estimated cost for making such a change was $5 million for Baskin-Robbins headquarters. Individual franchisees would have to invest about $10,000 for the logo change to be made inside the stores.

Later that afternoon, Kimmel’s brand group was deep in discussion about whether to change the brand symbol of Baskin-Robbins at the same time stores would be redesigned,

“The context has changed since the mid 1980’s,” visiting retailing consultant Zack Wheatly said. “Customers are more demanding about the hospitality experience. They earn more money and they can buy comparable ice creams to Baskin-Robbins in grocery stores now.”

Kimmel sensed it was time to mention recent strategy decisions by the Baskin-Robbins executive group.

“While our competitors are pushing this mix-in experience- a higher-priced theater experience-Baskin-Robbins has decided to focus on delivering a great value for our consumers in an accessible kind of environment,” Kimmel responded. “The executive group has decided that we are going to focus on our new products as opposed to the theater of the business. As part of this new emphasis, we have recently begun highlighting innovations such as our own frozen coffee beverage-the Cappucino Blast-and a fruit-based beverage-Bold Breezes. Carrying frozen custard is also on the horizon.”

Marsha Davis, Kimmel’s research director took her turn in the conversation. “ Is, Baskin-Robbins such as established brand that the logo for Baskin-Robbins should not be overhauled?” Davis asked.

“I know what you are suggesting,” Wheatly replied. “Conventional wisdom in this industry would say that one shouldn’t tinker with an established brand.”

“We have discussed this among ourselves here at headquarters with the CEO and other senior executives, and we have also invested in hearing from consultants in retailing communications,” Kimmel said. “They think the decision to change the logo should be taken only after extensive deliberation and direct research with customers.”

“Right,” Wheatly said. “Analysis in the quick-service restaurant industry have reported in the trade journals that the new entrants have continued to grow faster than Baskin-Robbins-especially in the key metric of same-store sales compared the previous year. What did the qualitative research say about the proposed new logos?”

Davis paused, dug in her briefcase, and removed the glossy printed versions of the old logo and the leading candidate among proposed new logo. She put them both on the table facing the others.

“We talked with four focus groups in Chicago, LA, and New York and they agreed that the Baskin-Robbins brand represented irresistible treats, smiles, and fun,” Davis said. “They also liked this proposed logo that the senior executive group liked.”

“So where do we go from here?” Kimmel asked.

“Because your management wants to make a change to the logo only if it is necessary, you should study your customers’ attitude toward the new logo, so that you can explain whether a logo change is warranted,” Wheatly said.

Everyone stopped talking to reflect on what was just said. After about 10 seconds, Kimmel raised an open hand to the group.

“Wait. This is beginning to remind me of the New Coke introduction,” Kimmel said after some reflection. “Customers’ subjective attachment to the old Coke was ignored, then. We need to ask about the old logo, too. Also, I know the senior executives want a clear margin of preference for the new logo. If the new logo is not preferred 2:1 in a head-to-head competition with the old one, we need to drop it.”

Wheatly picked up the line of thought.

“OK, and now that you mention it, we also need to present the drawings of the new redesigned stores and have the customers respond to the old and new logos after understanding what our new stores will be like,” Wheatly said.

“So restating our problem, I guess it sounds this way,” Davis said. “Because management wants to make a change to the logo only if it is absolutely necessary, we should study our customer’s attitudes toward the old logo and toward the new logo after showing them the drawings of the redesigned stores. Only then can we explain whether customers prefer the new logo 2:1 over the old logo.”

The words seem to hang in the air in the conference room at Baskin-Robbins headquarters. The statement of the marketing research problem was sounding much improved to Kimmel. But he also had the following thoughts: (1) Given that Baskin-Robbins had moved to redesign store interiors, should the brand logo be changed to signal something new is happening at Baskin-Robbins? (2) If the logo is changed, would there be synergy between the logo change and the redesigned interiors? Synergistic results could be dramatic. A new look, a new menu, and a new strategy focused on delivering “irresistible treats, smiles, and fun” in an accessible way and at a reasonable price could check the momentum rival brands have developed by focusing on a high-end, in store experience. Considering these elements, the strategic importance of the Baskin-Robbins’ research project became more clear in Kimmel’s mind.

QUESTIONS:

1. State in your own words the management decision facing Baskin-Robins?

2. State in your own words the marketing research problem suggested by the management decision problem, and show how the two are related

3. Identify and state one research question and one hypothesis suggested by the case information and your answers to the above questions

4. Identify two sources of secondary data that might be useful to Baskin-Robbins in its attempt to address the management decision problem stated above. Explain why you chose the sources you did.

5. Suggest one type of qualitative research that you world recommend to Baskin-Robins and give your reasons for recommending.

Answer 1

In this case study, BR brand officer identifies that food retailing industry has become competitive and new entrants like CS making good sales over BR sales in less time. In order to compete with the current trend, BR executive team was focused to redesign the stores, high priced theater experience, make new product and also bring change in the logo. After the discussion of these changes, problem statement for market research is stated that customer attitude towards the new logo over old logo is studied after showing the pictures of redesigned stores to the customers. If new logo preference is high, then board would consider for logo change.

1.

BR brand officer and executive team would like to conduct the research study on logo preference as BR is moved to redesign their stores. As competitive positioning of BR was weakening from its rivals such as CS, the sales of BR is getting impacted. Moreover, the frozen food retailing industry has become aggressive over the recent years. As customers earnings and affordability has increased, the demand for better hospitality experience is also increased.

2

The market research problem is to study the customer preference towards the new logo over the old logo for the redesigned stores. The implication of this study would help the management team to decide whether customer prefer to change the logo along with the change in the store design. This made brand officer to address the question i.e. whether change of the logo and store redesign is signal to something new to happen at BR.

3

The one research question for the brand team is whether BR identified the right research problem i.e. conducting the study to identify the customer preference for change in brand logo. The hypothesis suggested for the research problem statement is - First, whether BR customers have a preference for the new logo over the old logo. Second, whether BR customer preference for new logo is twice the preference for old logo. These key questions regard preference for the new logo after understanding how the new store interiors will look like.

5

There are many methods of data collection in qualitative research such as focus groups, interviews, observations etc. In this case study, qualitative research had been done by four focus groups in Chicago, Los Angeles and New York. In that study, focus group participants agreed that the brand BR represented irresistible treats, smiles, and fun. Also, these focus group participants liked the new proposed logo.