• Associated Press, Monday, February 6, 2006 11:46 AM

After years of relying on word-of-mouth buzz to generate sales, Krispy Kreme Doughnuts Inc., is now taking a more traditional marketing path. The company is using TV ads to support a Valentine's Day promotion for a new heart-shaped doughnut. The campaign carries the tag line "Share the Love" and is running in three states: North Carolina, Missouri, and Georgia. The move into advertising isn't surprising, said Steve Hockett, president of FranChoice Inc., a company that matches potential franchisees with companies. "I think that they're falling more into the mainstream of marketing their brand," Hockett said Wednesday. "It's the normal evolution of their business." The company also is running radio ads in four other markets and placing freestanding inserts in Sunday newspapers in 50 markets. "This is really consumer marketing to drive sales," said Mike Horn, a partner at Horn & Stronach, a marketing, advertising and public relations company. Increasing sales is particularly important to Krispy Kreme as it faces several financial problem in addition to decreased sales. The company has received a three-month extension for listing and trading on the New York Stock Exchange, and has not filed required quarterly financial results since November 2004. It is also being investigated by the Securities and Exchange Commission.

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