First, let me say that I have never worked for / with Krispy Creme. 
My observations are those of one on the outside, but I think they are
fascinating.  I don’t know if you have Krispy Creme donuts where you
live, but  in the Western states, they have a cult following.  My wife
can’t go to Utah (the closest store to us) without buying a box of
donuts.  You get to the store before 8:00 a.m. and you’ll see a line of
cars clear across the parking lot and out into the street as locals
stock up for the day.  These are the best donuts you can buy.  It’s not
just an opinion, it’s a fact.  And people will do whatever it takes to
get a box of them.

In stark contrast, drive by Dunkin’ Donuts or Daylight Donuts and
you’ll see nothing of the sort.  Of course they have customers, but
people are just buying donuts.  You don’t see the absolute, complete,
customer devotion that Krispy Creme has.

Why?  What does Krispy Creme have that others don’t?

It’s the recipe.  Their stores are no better.  Their prices are way
higher.  There are no special perks of any kind.  The customer service
is roughly the same.  The only real difference is the recipe.  They’re
not just frying up some bread dough and coating it with a sugary goo. 
They’re creating a true, gourmet product — and people are willing to
pay whatever it costs and stand in line for however long it takes to
get it.

This is a fabulous way to do business on several levels.  First,
you’re not competing with anyone.  Nobody does what you do, so there’s
no way to say what the product is “worth.”  You charge what the market
will bear, and let everyone else wrestle around in the mud of price
competition.  Second, you don’t have to try and be different from (or
the same as) everyone else, to show you’re part of that market.  You
create your own market.  Third, when you regularly deliver a
high-quality, truly unique product, your customers become dedicated —
almost beyond reason.  As long as you don’t ruin that cult following
through bad service or poor-quality product, the product will flourish
as long as you’re on top (which could conceivably be a long time —
maybe forever.)

All that because you have the right product.  I’d say that makes a
pretty good case for not being just another “me-too,” product.  Life is
so much easier when you have the right product — one that people want,
will pay for and will support almost religiously.  Had Krispy Creme
opened “just another” donut shop with “just another” donut, it’s
unlikely anyone would have ever heard of them (maybe they wouldn’t have
survived the difficult startup period.)  But as it is, they are the
clear leader in product quality and customer satisfaction / dedication.

Tomorrow we’ll look at the expansion plan of Krispy Creme and how that’s contributed to their success.