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Ads Gone Bad: The Taco Bell Chihuahua

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This post is part of our Ads Gone Bad series. Share your thoughts and memories of this ad in the comments, and be sure to check out our other posts on marketing gone wrong.

Restaurant giant Yum Brands (NYSE: YUM) owns and operates several popular fast food chains like Pizza Hut, KFC, A&W, and of course Taco Bell. The Taco Bell chain features lower quality, packaged ingredients, frozen meats, and poultry, and all at low prices. Fair enough, it's a fast food joint and the food overall is okay-to-good -- depending on one's mood!

The Taco Bell dog featured in the advertising campaign that ended in 2000 was a Chihuahua, an almost rat-like creature. Cute? Yes. Annoying? Yes. I know because my family has a Chihuahua we call Gracie! The Hispanic community felt that the Chihuahua represented an ethnic stereotype. The dog was voiced-over with a Hispanic accent and the implication was very clear. Many Hispanics were especially annoyed because they do not consider Taco Bell's food authentic "home cooking."

Taco Bell's bad publicity was the Chihuahua's good fortune, however. After being canned by Taco Bell, it scored roles in Legally Blond 2, a Geico ad opposite the gekko, and a guest spot on Jay Leno's show. Jay offered the dog a choice of a Taco Bell Chalupa and some KFC chicken. It chose the chicken.

Taco Bell has emphatically stated that no disrespect is intended by the ads it ran from 1997 to 2000. Taco Bell was trying to establish the brand with a coy and funny theme. As I said, not many Hispanics have found it to be cute, funny, or anything else -- just annoying!

But while we're on the subject of Mexican restaurants, I would like to contrast Taco Bell with one of my favorite companies (and stocks) -- Chipotle Mexican Grill (NYSE: CMG). Offering a limited, but excellent menu, this restaurant features the freshest of ingredients and naturally raised beef and poultry. The customer spends about $8 per visit, almost $3 more than Taco Bell, and keeps coming back. I think it is a game changer for the fast-food industry. Check out my post, "The next McDonald's is Chipotle Mexican Grill," from June.

Plus, Chipotle advertises its products in a very simple, direct way. It advertises its food and doesn't require a four legged animal to keep customers attention!

Georges Yared is the editor of GameOnInvesting, a free service devoted to helping investors spot game-changing stocks before they breakout.

See other examples of Ads Gone Bad.

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Last updated: November 25, 2009: 05:11 AM

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