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Recommendation to Dunkin Donuts
To focus on its new target market of college students who crave caffeine but also want
convenience, low prices, quality, and taste, Dunkin’ Donuts will need a new marketing strategy..
Currently, Dunkin’ Donuts’ marketing focus is “America Runs on Dunkin’” which is nonspecific and is designed to appeal to everyone. For their new target market of college students,
ages of 18-23, they need to focus their marketing mix on this particular segment of the
population who do not always respond to the “everyone” strategy. Young adults do not
necessarily want to drink their parent’s coffee. The marketing mix consists of product, pricing,
promotion, and distribution (or place). Based on the results of our focus group, Dunkin’ Donuts
should focus on what they are excelling at which is price and improve on what the consumers
want which is convenience. Based on these two things, Dunkin should modify its marketing mix
for this new target market.
Currently, Dunkin’ Donuts products include baked goods (donuts), sandwiches, and
coffee drinks. For this target market we are primarily focusing on coffee drinks. Like Starbucks,
Dunkin’ Donuts offers a wide array of drinks like Coolattas which are sweetened frozen coffee
and fruit drinks, regular coffee, and specialty coffees in a variety of flavors.. From our focus
group it was clear that the actual product is not why students are choosing Starbucks over
Dunkin’ Donuts. When asked about Dunkin’s coffee quality, we got a nonchalant answer that
Dunkin’s coffee “tastes good.” “Would you improve anything about the quality of coffee?”
“No, I think it tastes good.” Based on this answer, we recommend that Dunkin’ Donuts remain
consistent with their product and not change it because students already believe it “tastes good”.
Dunkin’ Donuts prices its items fairly cheaply which really appeals to the average college
student. Students who need to stay up to study want something caffeinated that gets the job done
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cheaply... When students were asked, “What makes you want to go to Dunkin’?” they responded
with, “It’s substantially cheaper”. The pricing of Dunkin’ Donuts coffee is what allows it to
compete with Starbucks which tends to be more expensive therefore they should continue their
pricing strategy. Dunkin’ Donuts uses a Loss Leader pricing strategy where they continue to
have low prices which make them a competitive organization.
As for promotions, Dunkin’ Donuts does offer free ice coffees and has coupons like most
of its competitors. However, it is our suggestion that Dunkin’ consider doing late night study
deals for students. They already cater to students by accepting onecards and by being open at all
hours of the night, but doing discounted deals for students during exams would be a great
promotional idea for them. Students in our focus group stated that they like to drink coffee
during exams and that it is inconvenient when Starbucks isn’t open all night. “Depending on
exams, would you drink more or less coffee? Why? “Yes. When I have exams to study for, or
papers to write I usually drink more coffee to keep myself awake.” They also state that Starbucks
does not cater to that need. Dunkin’ Donuts should take this as an opportunity to expand their
market and accommodate college students who crave coffee in the late hours but need incentive
to make the trek to wherever the closest Dunkin’ Donuts is. One of Dunkin’s strengths is its
prices, but one of its weaknesses is it is an inconvenient distance so promoting late night deals
for students studying would give students more incentive.
Lastly, in the marketing mix is distribution strategies or place. One of Dunkin’ Donuts
primary weaknesses is its distance from campus. Although Dunkin’ cannot physically place a
store on campus like Starbucks it can create a space for students so that they are encouraged to
go there and have a place to study or sit like Starbucks. Dunkin’ could also consider a drive
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through which would make it even more convenient so students could drive there and quickly
grab their coffees.
Based on product positioning which refers to the way a product is perceived by a
consumer and can be represented by the number and types of characteristics that consumers
perceive (Babin & Harris, 2013), we have concluded that what is most important to this target
market is low pricing and convenience. Therefore, all strategies for the future should focus on
these two things. As a result of our focus group, we created a perceptual map which is a tool
used to graphically depict the positioning of competing products (Babin & Harris, 2013). (Figure
Y) depicts the chart used based on given attributes of importance and the ideal rating of those
attributes. Then based on the focus group, we created a ranking for Dunkin; Donuts and
Starbucks for the attributes. It is clear from (Figure Y) that pricing and convenience are among
the most important attributes. From this data, we created a perceptual map (Figure Z). This map
graphically depicts that the ideal is good (low) prices and high convenience. Starbucks ranks
badly when price is considered but it scores high in convenience. As for Dunkin’ Donuts, it
ranked well in pricing but not as well in convenience although not terribly. The other attributes
like quality and taste seemed to be less important to our focus group. They had similar feelings
for these brands based on those attributes. Based on this map, it is our recommendation that
Dunkin’ Donuts stress its prices when focusing on their new target market of college students
because the pricing strategy is what appeals to this target market. It is clear that in order to attract
more consumers in this market, they need to focus on emphasizing their cheap prices which
make it worth the small inconvenience of traveling to the nearest Dunkin Donuts.
Reference:
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Babin B. J. ,&Harris, E. J. (2013)CB5. Mason, OH: South-Western.
Figure Y
Attributes
Low Price
Convenience
Quality
Taste
Ideal
9
9
6
5
Dunkin Starbucks
8
4
4
8
4
5
4
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Figure Z
High
Convenience
Ideal
Starbuck
s
Bad Price
Good Price
Dunkin Donuts
Low
Convenience