The Story of Taco Bell's Value Meal

I am writing an article for client's employee newsletter. The company

is experimenting with changing their business model to try and reduce

the cost of their products in the belief that it will increase volume

and therefore increase profit.

The president of the company believes that Taco Bell's introduction of

the Value Meal is a good analogy. Taco Bell dropped the price on many

items believing that it increase volume and therefore increase profit.

I need to know about the Taco Bell Value Meal story. Any background on when and

why they started the Value Meal, and especially how it has worked out

for them. Has it, in fact, improved business? Are they sticking with

it, dumping it, expanding it?

I don't need a lot of information. My article will be only one page in

the magazine. But I need some facts about the Taco Bell experience with their



One thought on “The Story of Taco Bell's Value Meal

  1. Dear wordkraft-ga;

    Thank you for allowing me to answer your interesting question. Taco

    Bell?s value meal was not a one time event and has, in fact, been

    expanded several times since the concept began in 1988 and several

    more times since campaign?s launch in the early 1990?s. Taco Bell was

    one of the first fast food outlets to implement what it called ?smart

    research? surveys to determine what people wanted. Initially the value

    menu featured items priced at .49, .59 and .69 cents:

    NEW AMERICA FOUNDATION

    http://www.newamerica.net/index.cfm?pg=article&DocID=1084

    ?In 1988 Taco Bell launched the value initiative, lowering the price

    of new items and introduced Free Drink Refills. It also began the

    three-tier pricing strategy which remained the core of the value

    offering through 1994.?

    CATTLE NETWORK

    ?History of Taco Bell?

    http://www.cattlenetwork.com/Retail_Content.asp?contentid=22709

    By the late '80s, everybody from Burger King to Wendy's was following

    suit, and implement similar pricing techniques to appeal to their

    customers. It was about this time that Taco Bell really began to focus

    on its value meal as a successful ad campaign, perhaps viewing its

    competitions? enthusiasm to mimic the initiative as confirmation of

    its viability:

    ?In the early nineties, Taco Bell was famous for its ".59 .79 .99"

    pricing plan, in which nearly everything on the menu was either .59,

    .79 or .99 cents.

    Despite Taco Bell's relatively cheap per-item pricing, it never had a

    true value menu until the mid 2000's. The menu features several items

    generally priced below $1.49. The introduction of the value menu also

    brought new items to the restaurant's offerings, notably items made

    with potatoes and Taco Bell's third dessert, the Caramel Apple

    Empanada. (Cinnamon Crispas, triangular fried flour tortilla shells

    were offered until being replaced by Cinnamon Twists) The Cheesy Bean

    and Rice Burrito recently replaced the Bean Burrito Especial, which

    was removed because of its small profit margin. Also of note is that

    half of the menu is not truly new, as Beef Combo Burritos, Cheesy Bean

    and Rice Burritos, Double Decker Tacos, and both Spicy Chicken items

    had been on the regular menu before, as permanent or limited time only

    items.

    WIKIPEDIA

    http://en.wikipedia.org/wiki/Taco_Bell

    Clearly, the ?value meal? has not only been successful for Taco Bell

    but has largely become the franchise?s defining quality. Yum! Brands,

    Inc., the parent company of Taco Bell and other enterprises such as

    Pizza Hut and KFC, continues to place significant market value on it?s

    ?value meal? initiative and by all appearances isn?t likely to change

    that position any time soon. The campaign continues to be viable and

    it seems that they have an ?if it ain?t broke don?t fix it? mentality

    when it comes to sticking with what works.

    ?There is a marketing relationship to value. Taco Bell continues to

    sell a "value meal"; whereas Wendy goes towards big fries, drinks,

    salads. Each is approaching value from a different perspective.?

    PRODUCT DEVELOPMENT AND PROMOTION

    http://food.oregonstate.edu/prodev/pr_marketing.html

    I suggest you read the articles credited above in their entirety as

    there is obvious a great deal of pertinent information that I am

    unable to cover here in detail.

    I hope you find that my answer exceeds your expectations. If you have

    any questions about my research please post a clarification request

    prior to rating the answer. Otherwise I welcome your rating and your

    final comments and I look forward to working with you again in the

    near future. Thank you for bringing your question to us.

    Best regards;

    Tutuzdad-ga ? Google Answers Researcher

    INFORMATION SOURCES

    Defined above

    SEARCH STRATEGY

    SEARCH ENGINE USED:

    Google ://www.google.com

    SEARCH TERMS USED:

    Taco bell

    History

    Value meal

    Marketing

    Promotion

    Inception

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