Dunkin Donuts belongs to the world’s leading coffee firms, which compete with Starbucks. The organization has undergone numerous stage to reinvent its segmentation, targeting and positioning in order to stay on the markets. In the 1990s, the company launched coffee sales in the sense of its segmentation, thus creating new consumers in its coffee segment. The company was able to increase its revenue through this segmentation. The services provided to consumers are another segmentation technique by Dunkin (Andaleeb 2016, p.200). While Starbucks segments itself to attract the wealthy and those from high social class Dunkin Donuts targets all kinds of customers despite their age, social or demographic differences. As such, the company is not looking to establish a Dunkin experience so as to create a niche for itself. Unlike Starbucks, whose customer composition is of the elite Dunkin has stayed true to the common citizen whose need is to enjoy a good cup of coffee at affordable prices.
Both Dunkin Donuts and Starbucks have targeted different kinds of customers through the products they offer. The targeting strategy for Starbucks involves three kinds of customers. Just like Dunkin Donuts, Starbucks targets the busy working class who needs a ready to drink coffee on their way to and from work. Starbucks has also targeted the customers who like to brew their coffee at home by stocking their coffee beans in the grocery market (Hassan and Craft 2012, p.350). As well, Starbucks has targeted random coffee drinkers by selling their coffee through vending machines, in hospital canteens and other social places such as theaters. Dunkin Donuts have a wider consumer target due to the variations on their menu. Their highly affordable coffee is targeted for the young generation including students and middle-income consumers. As well, they are the targets producers of baked products thus targeting people of all ages who enjoy baked foods. To expand its share in the market, Dunkin has also incorporated snacks that can be substituted as meals by the busy consumer who lacks time to cook or those who do not enjoy cooking (Allyson, Jones and Iverson, 2012, p. 215).
Dunkin Donuts is one of the beverage companies that has positioned itself as a product of choice both inside and outside the country. Although many companies use their prices to determine quality, Dunkin is one of the few companies that sell the best coffee and baked foods at affordable prices. As such, the company has positioned itself as the leading coffee seller within and outside the country. Dunkin relies on franchising to cater for a high number of customers thus reducing the common hustle experienced at other coffee stores. Unlike Dunkin, Donuts Starbucks has positioned itself to be the brand that offers a coffee experience to its customers (Hassan and Craft 2012, p.350). This has been achieved through the creation of the Starbucks experience. As such, Starbucks customers view Starbucks as a lifestyle rather than an affordable cup of coffee. Therefore, most of them are bound to drink their coffee at Starbucks to maintain their social cliques and improve on their social class.
Dunkin Donuts has managed to remain in the market despite the competition it gets from Starbucks and other coffee houses such as McDonald. The SWOT analysis proves that the company will continue to thrive despite this competition. To start on the strengths of Dunkin Donuts, the company has a strong brand image. The brand for this company is famous all over the world, and most people are conversant with some of their products if not all. As such, the company enjoys a large number of customers who comes with its popularity. Another strength is the field in which the company operates. The coffee and donuts niche is unique to Dunkin and competitors find it hard to venture into this niche. As such, Dunkin Donuts has an advantage over other coffee houses due to the variety of baked foods; it provides to its customers (Armstrong et al., 2012, p. 230).
Apart from that, the company is enjoying the franchising model thus creating a community within its customer target. Thus, the company has been able to retain loyal customers who would rather travel a longer distance just to have coffee at Dunkins than have it somewhere else. Dunkin is also smart in the way it approaches its marketing process. The company attracts all kinds of customers by making them believe that Dunkin Donuts is one big family where it does not matter which race, social class or age one belongs to. As such, the company has created a blue-collar mentality thus allowing the larger population from the middle class to feel at home every time they enjoy coffee at Dunkin (Hassan and Craft 2012, p.350).
In addition to this strengths, Dunkin Donuts has some weaknesses which if not carefully checked may result in major setbacks for the company. One of the weaknesses is the localized competition, which has taken advantage of Dunkins delayed expansion to other countries. One such competitor is the mad donut chain in India, which is doing well in the baked foods field (Armstrong et al., 2012, p. 230). Direct competition from Starbucks also acts as a weakness to Dunkin due to its popularity. Starbucks has managed to incorporate baked foods and snacks in their menu to meet the needs of customers who like take their coffee along with a snack. Also, Dunkin has a weakness in expanding to developing countries where it could attract meant customers from the privileged town dwellers. For instance, the company has a single store in Africa thus limiting its popularity in third world countries (Armstrong et al., 2014, p. 130).
Despite these weaknesses, Dunkin has various opportunities, which it could explore to minimize threats. Since it is a renowned company, Dunkin should not delay its expansion to highly populated areas. Thus, the company would be able to attract a new set of customers by expanding to new areas. Another opportunity for Dunkin is to consider targeting the customer with health issues. As such, they could introduce healthy snacks with low calorie to ensure they cater for individuals who are health conscious. With the increasing health watchful population, the company would be able to create a new segment for its sales (Armstrong et al., 2012, p. 230). As well, Dunkin can also review its menu to increase children snacks to ensure they have snacks for all ages thus encouraging families to enjoy coffee at Dunkin.
The major threat for Dunkin Donuts is the shelf life of the baked products. Dunkin Donuts does not produce their bakery goods on order basis unlike the competitors such as KFC and McDonalds (Brizek, 2014, p. 1). As such, there is a high probability of expiry of this product thus contributing to losses for the company. As such, the is also not in a position to stock their products in grocery stores and vending machines hence unable to beat their competitors (Contois, 2013, p. 420). The company is also facing a threat from the increasing health conscious population. Dunkin Donuts main products are coffee and baked snacks. Since people are currently watching their daily calorie intake, the company is bound to lose a part of its customers it does not switch to healthier snacks and drinks. Apart from that, the increased cost of low materials will force the company to increase the price of their products, which will affect their customer relations. Consequently, the company will lose some of the customers to competitors. Another threat is the inability to change snacking styles in different countries especially Asia making difficult for the company to thrive in such places without altering its menu (Darian et al., 2015, p.320).
You kin do it campaign is designed to bring about the spirit for fun to Dunkin Donuts customers. Dunkin aimed the company to create a sense of togetherness between the company and American people who keep America running. By participating in this campaign, the participants felt encouraged since they know there is somebody cheering them on acknowledging that they can do it. Dunkin coffee and donuts act as reminders to the consumers to know they can do anything. As such, by creating a sense of encouragement Dunkin has ignited the liking for its products by the consumers (Kotler et al., 2014, p.1).
To capture the attention of its consumers the campaign is operating on the premise that hard working people require motivation and appreciation. As such, Dunkin is the sole motivator reminding people there is nothing they cannot do thus elevating their mood. Apart from motivation Dunkin is, reminding people that, the existence of the company is to fuel and replenish their energy with coffee and donuts even through the most challenging times (Pergelova, and Angulo-Ruiz, 2013, p.203). Thus, the consumers are happy to know even after their busy lives they can go to Dunkin for coffee or donut without having to blow their budget. In the eyes of Dunkins customers, the company is a partner rather than a coffee and donut vendor. What I would have differently about this campaign is to split the $ 100 million into different packages to ensure there is not only one winner. As such, most of the participants would win a small percentage of the money. This way, many people would feel like part of the campaign thus be able to believe in the policies of the company (Hoffmann, 2014, p. 1).
List of References
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Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia pp. 210-212.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2012. Marketing: an introduction. Pearson Prentice-Hall, London pp. 127-130.
Brizek, M.G., 2014. Coffee wars: The Big Three: Starbucks, McDonald’s and Dunkin’Donuts. Journal of Case Research in Business and Economics, 5, p.1.
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Darian, J.C., Tucci, L., Newman, C.M. and Naylor, L., 2015. An analysis of consumer motivations for purchasing fair trade coffee. Journal of International Consumer Marketing, 27(4), pp.318-327.
DUNKIN’ DONUTS’ NEW ADVERTISING OFFERS RALLYING CRY FOR 2009: “YOU KIN’ DO IT!” | Dunkin’ Donuts https://news.Dunkindonuts.com/news/Dunkin-donuts-new-advertising-offers-rallying-cry-for-2009:-you-kin-do-it
Hassan, S.S. and Craft, S., 2012. Examining world market segmentation and brand positioning strategies. Journal of Consumer marketing, 29(5), pp.344-356.
Hoffmann, A., 2014. DunkinDonuts: Global Expansion Through Franchising p.1.
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Pergelova, A. and Angulo-Ruiz, L.F., 2013. Marketing and Corporate Social Performance: Steering the wheel towards marketing’s impact on society. Social Business, 3(3), pp.201-224.
SWOT analysis of Dunkin Donuts – Dunkin Donuts SWOT http://www.marketing91.com/swot-analysis-of-Dunkin-donuts/