The Answer lies in Nashville Tennessee

We have finally come to the conclusion that we think In-N-Out is very over-hyped. Through what seems like sub-par patties for meat, and tons of toppings that just make the burger look thicker we came to a conclusion. The price for the burger and the cult following down it California are what drive its popularity.

Being down in California where there is tons of celebrity activity and practically free endorsement of the brand through social media by well known faces is part of what creates the following, as we stated in our earlier posts.

All though we think its over hyped, we think we found what In-N-Out Burger should do next to boost their companies prowess.

Revisiting this picture of their distribution radius shows that Nashville Tennessee happens to be on exactly 665 miles from the Dallas distribution center. It is well known that Nashville is one of the most influential cities for country music and celebrities to this day. Establishing a successful In-N-out chain here can lead to the same benefits that the hundreds of stores in California give. It also cuts it quite close to the edge of the distribution availability but if they expand into Nashville, the potential exchanges could lead to the expansion of another distribution center and even more places to establish their business.

Promotional Strategy

        In N Out burger does not spend millions of dollars on promotional strategies unlike other fast food chains such as Burger King and McDonalds, in which they though tons of money into ad campaigns, but In N Out burger relies on locations of their stores that can be convenient to costumers, they also give away hats, t-shirts, bumper stickers, and by doing so they let their customers broadcast their message through whatever platforms customers which to do.

          

                                           In N Out Burger's bumper stickers.

"One of In-N-Out's most successful marketing strategies came in the form of bumper stickers. In Southern California, starting in the early 1980s, placing an In-N-Out sticker on the back of one's car signified membership in a peculiar sort of club; all along the freeways, horns were honked, thumbs were raised, and heads were tipped in recognition."

This makes us wonder why such a strategy is so successful? and why it cannot be the same to other fast food chains?

http://www.businessweek.com/smallbiz/content/apr2009/sb20090424_877655.htm

In-N-Out Burger is one of the few companies that do not need to have in your face, and elaborate promotions like many of its competitors. They have such a dedicated customer base that anything they do usually get spread word of mouth. They do not offer coupons because they try to offer a good value everyday, which is one of the key things their company is based on. If they offer good value everyday then what is the need for a coupon? And if they have a loyal customer base that raves about them, hen they don't need to do anything as a company to try and attract new customers. 

With that being said from time to time In-N-Out burger will have popup shops. Previously they have had them in the Philippines, Hon Kong, and Taranto to name a few. They announce the location of the shops on social media with little warning and manage to sell out of burgers fewer than 3 hours and sometime faster. Another promotion they did was back in the mid 1980's. This had to do with bumper stickers. Since In-N-Out had already had a devoted following and people already had the stickers, Rick Snyder the CEO decided to do a several month long period contest which would consist of giving away bumper stickers. People were then instructed to write down the license plate number of the car housing the sticker and then that person would be put into a drawing. The prizes included microwave ovens, which I kind of ironic for a company who doesn't have microwaves, video cameras and even trips to Hawaii. This turned out to be one of their most successful marketing strategies. 

In-N-Out's Unique Distribution

Something that was discussed in one of our earlier blogs is that In-N-Out only has stores 500 miles away from their two distribution centers, the farthest being 685 in Centerville Utah. This fact is actually very important to In-N-Out's future. 

In-N-Out prides itself on having never frozen patties and that is part of the reason the distribution centers cannot be very far away from the restaurants. According to D Magazine in Dallas the process from the meat being on the cow to being served is about 5 days. The McDonalds website openly states that their patties are flash frozen 2 to 3 weeks before being served. But what is unique about In-N-Out patties is that they are not actually made at the distribution centers or the restaurants. Business Insider points out there are separate patty making facilities that then send the patties to the individual stores every day. Some customers are not happy with this fact but if they are never frozen then what is the harm?

The two distribution centers in Dallas, TX and Baldwin Park, CA support 304 In-N-Outs. The distribution center in California supports 251 stores while the other center supports 53. This seems like a lot of restaurants for one center to support but it is still less than McDonalds whose facilities provide to 250 to 700 stores according to University of San Francisco. Because the distribution center closest to Texas can support so many more store in the 500-mile radius, it leaves room for In-N-Out to expand. Should they? This is the question our group has been struggling with from day one. If they were to expand could their never frozen beef situation still work out? Would they lose that mystique? But if they don’t, they would utilize the power of the distribution centers?

The article Attack of the Double Double by Nancy Luna in D Magazine is actually very interesting and gives good insight into In-N-Outs distribution strategy.

http://www.dmagazine.com/publications/d-magazine/2011/march/how-in-n-out-burger-will-change-dallas-fast-food