Recommendation to Dunkin Donuts

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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:

4 Babin B. J. ,&Harris, E. J. (2013)CB5. Mason, OH: South-Western.

Figure Y Attributes Low Price Convenience Quality Taste

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Dunkin Starbucks

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Figure Z

High Convenience

Starbuck s

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Good Price Dunkin Donuts

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