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Dunkin Donuts: Principles of Marketing

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Introduction:

The purpose of our report is to explore new product opportunities for Dunkin Donuts. It will provide a specific description of the suggested new product which is Arabic coffee. Also, it will discuss what are the product’s levels, who is the segment, and the marketing mix strategy.

Brief background information about the brand:

Dunkin Donuts’ story began in 1948 when William Rosenberg opened his first donuts and coffee shop in Quincy in the United States, called ‘Open Kettle.’ After two years, Rosenberg renamed his shop ‘Dunkin Donuts.’ Besides that, his objective was to ‘make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores.’ In 1955, the first Dunkin Donuts opened, and in 10 years the number of shops increased by over 100 shops. Since then, Dunkin has more than 12500 outlets in 46 countries, which proved the success of his repositioning strategy.

In 1997, Dunkin Donuts opened its first outlet in the UAE since then, they have over 60 outlets across the UAE. Also, on 1St April 2018 Dunkin opened the first Café in the area at Al Majaz Waterfront in Sharjah. Moreover, Dunkin Donuts sells: Hot & Iced drinks included: Dunkin original, Espresso, Cappuccino, Teas, Iced Mocha, Iced Tea, and other drinks. Also, they sell donuts and munchkins.

Consumer product:

Core Product:

The power and energy through the day. The caffeine wakes you up and sugar gives you the energy that you need to function.

Actual Product:

Features: Dunkin freshly roasted Arabica coffee guarantees original and strong taste. Also, they provide different types of coffee to satisfy their customer. Moreover, the daily fresh-made donuts with different types or flavors make a good combination.

Quality: It’s 100% Arabica coffee beans and specialized coffee. In addition, they carefully picked the ingredients including dairy products, flour, sugar, chocolate, and other to ensure the customer are satisfied with the taste of the donuts.

Packaging and labeling: The boxes have white in color, and rectangle shapes with different sizes. Moreover, Dunkin Donuts use clear plastic cups for a cold drink and opaque paper cups for hot drinks also they provide different sizes.

Brand name: Dunkin Donuts is all about “getting you the morning and keeping you running all day or which “Dunkin run to you”. Dunkin has a strong player in the coffee market globally.

Augmented product:

Additional service: Online website to get more information about the brand and its product. Social Media platform to communicate with customers.

Delivery: In some regions, Dunkin deliver through the app which called “DD On-the-Go Ordering, which enables the customer to order by using their phone and it’s opened 24 hours.

SWOT Analysis of Dunkin Donuts

Strength:

  1. Strong brand name.
  2. Brand loyalty between customers.
  3. Dunkin Donuts offer over 1000 type of doughnuts.

Weakness:

  1. Poor media advertising than their competitor.
  2. Poor franchise relationship.

Opportunities:

  1. Offer low-calorie snacks.
  2. Increase the number of Dunkin Donuts Cafés around the world.

Threats:

  1. Increase the cost of raw materials.
  2. People move to healthier food.
  3. Strong competition (Ex. Krispy Kreme – Starbucks).

Marketing Opportunities:

Growth strategies are a plan for future survival, and business success enables the company to know the level at which they are, to be able to develop products and market.

Market penetration:

  • Promotion for Employees or students around 5% discount on coffee.
  • People can order online.
  • Free delivery for more than AED 100.

Product development:

  • Make new flavors available for donuts.

Market development:

  • Extend dunking donuts shops in different countries.

Diversification:

  • New hotel.
  • New Furniture shop.

Segmentation and targeting:

Segmentation is an act of dividing the market into segments several by population and Geographic, psychological factors, the targeted group of people share common characteristics between them. Dunkin Donuts has branches in most countries of the world, which means that it has high popularity and therefore we will focus on the customers of Abu Dhabi city with a population of 2.908 million.

Demographics: One of the most important things is knowing the average age of the segment that will create them a product to match their age, as we see through the survey that the most 68% of the age of 20-30 and therefore we will focus on the age of 20 and above.

Geographic: Dividing the market into different geographical units, understanding the geographic area of client groups enables you to determine how to expand your business, In the survey, the largest category of 92% is from the United Arab Emirates, that is, it holds nationality. This category is a great influence on us, and their satisfaction will affect our work and social communication as well.

Psychographic: Depends on the person himself, such as lifestyle or personality, and what he prefers and how our product will benefit their interest, since our product is Arabic coffee we have a large proportion prefer the coffee of the United Arab Emirates, which is 65% will have a variety of flavors will satisfy most like the flavor of saffron, cloves, and cardamon.

Actual product:

Features: Our genuine freshly roasted coffee guarantees original taste with every sip. Based on 65% of the responses, we provided one blend which is Emirati coffee, which has its unique flavor and wild aroma. What makes Emirati coffee special is the addition of different spices such as: cardamom, cloves, and saffron, that what’s our participants preferred it, and it serves with munchkins and dates.

Quality: It’s 100% Arabic coffee providing coffee beans from Yemen and Ethiopia. Moreover, we carefully select our spices, we the get saffron from Spain, cardamom from India, and cloves from Indonesia to make a strong and unique taste.

Packaging: The Arabic coffee will be served in Dallah which is a steel pot and it is a vacuum flask to save the temperature of the coffee, and the Finjan which is a small cup for serving Arabic coffee it will be glass. Moreover, the Dallah and two Finjan are served in a tray with three pieces of dates and four of munchkins.

Brand name: The serving set will be designed in a way to combines the Dunkin Donuts logo and colors and the traditional Arabic style. Dunkin daunts is an international strong player in the coffee market.

Augment product:

After-sale service: Discount coupon for the next purchase.

Product specification: This product considering a product development and its unique product, because it’s 100% Arabic coffee with genuine freshly roasted coffee which has a strong flavor and wild aroma, and the spices that we carefully picked it. That what makes us different. Also the price of our product is affordable compared to competitor price.

Service provided: 

  • Online application (to order before you came to be your order ready)
  • Accepts online payment (Apple pay and Samsung Pay)

Proposed Price:

In our product, the cost of the product will include a low percentage divided into workers’ expenses (salary) and materials. So, our profit will base on the following:

  1. We choose to put 18 dirhams per cup, based on the respondents 38% are willing to pay from 16 – 20 dirhams per cup of coffee.
  2. We decide to follow the rapid skimming strategy, for high price and high promotion and to have a significant repetition between the customers about (quality of coffee beans, service, and respect, etc…), to increase and get a profit, operating and investing in the business.
  3. According to our competitors in the market, we will focus on who will follow our strategy on how they set their price so that will be helpful on any advantage in the market.

Proposed Place:

First of all, there are many ways for companies to sell their products to the customer. Dunkin Donuts uses one channel to sell their products, and it is the producer-to-consumer channel so that they can meet and talk with their customers immediately. In our product, we will use the same channel that Dunkin Donuts uses (producer > consumer), and we will also use another channel (producer > retailer > consumer) because we found that 38% of the respondents buy their Arabic coffee from a specialized Arabic coffee shop like Arabic coffee roastery. So, we can sell the Arabic coffee beans of Dunkin Donuts in many roasteries in the UAE.

Proposed Promotion:

Promotion is one of the most critical factors in increasing brand awareness and increasing customer traffic. It makes the company more in contact with customers. Dunkin Donuts markets its products through social media they have an Instagram and a Facebook account. Also, the company uses TV ads. In order to, improve the promotion, we will do a discount coupon for the customer if they purchase Arabic coffee, they will get a 10% discount on their next order. We will put our promotion picture on social media such as Instagram and Twitter because it found in our survey that the percentage of people who buy products, they see in social media is 86%, which deserves attention to get more customers.

Conclusion:

In summary, it was interesting to know the background of Dunkin Donuts and how they improved after the repositioning strategy. Also, we recognized that Dunkin Donuts competes with their competitors by keeping their prices affordable and keeping the quality of their products high to satisfy customers. This report has a lot of information about the Dunkin Donuts markets opportunity, and the services that they provide.

References

  1. Dunkin Donuts. (n.d.). Dunkin Menu. Retrieved April 24, 2019, from Dunkin Donuts: https://dunkindonutsuae.com/menu/
  2. Dunkin Dounts. (n.d.). Dunkin History. Retrieved April 24, 2019, from news dunkin donut: https://news.dunkindonuts.com/internal_redirect/cms.ipressroom.com.s3.amazonaws.com/285/files/20189/Dunkin%20Donuts%20History.pdf
  3. GoDubai Editorial Team. (2018, April 1). Dunkin’ Donuts inaugurates its first café in the region at Al Majaz Waterfront in Sharjah. Retrieved April 24, 2019, from Go Dubai: http://www.godubai.com/citylife/press_release_page.asp?PR=129219&Sname=Food%20Industry
  4. Zigu. (n.d.). Dunkin Donuts SWOT Analysis | Competitors & USP | BrandGuide. Retrieved from https://www.mbaskool.com/brandguide/food-and-beverages/2803-dunkin-donuts.html
  5. Katzaman, J., & Katzaman, J. (2018, September 11). Growth strategies build competitive advantage. Retrieved from https://medium.com/datadriveninvestor/growth-strategies-build-competitive-advantage-d1b796f1fd43
  6. Abu Dhabi Population 2019. (n.d.). Retrieved from http://worldpopulationreview.com/world-cities/abu-dhabi-population/
  7. Pemberton, M. (2017, June 01). Top 5 benefits of promotional marketing. Retrieved from https://www.after.marketing/insights/2017/6/1/top-5-benefits-of-promotional-marketin
  8. Social. (n.d.). Retrieved from https://dunkindonutsuae.com/social/

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