Current Strategy of Dunkin Donuts - Term Paper Example

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Dunkin Donuts Lecturer: Table of Contents Executive summary 4 PART Current Strategy) 5 1 Company Analysis 5 2 Mission & Goals 5 1.3 Core Competencies 6 1.4 Product Portfolio 6 1.5 Strengths & Weaknesses 6 1.6 Marketing External Environment (P.E.S.T.) 7 1.7 Marketing Internal Environment 7 Product-Brand Features 7 Direct and Indirect Competitors 8 Comparisons Between Product and Direct Competitors 8 Consumer Environment 8 Market Segmentation 8 1.8 Marketing Mix 9 Product 9 Price 9 Place (Marketing Channels) 10 Promotion (Integrated Communications) 10 1.9 Conclusion 10 PART 2 (Proposed New Strategy) 12 2.1 Growth Strategy 12 2.2 Value Proposition (Expected, Augmented & Ideal) 13 2.3 Segmentation Strategy 13 2.4 Marketing Mix 14 Product 14 Price 14 Place (Marketing Channels) 14 Promotion (Integrated Communications) 15 2.5 Conclusion 15 References 16 Executive Summary In part one, the researcher provided a brief analysis of the company followed by the company mission and objectives; the project introduced the product portfolio and the core competencies of the company were presented. The researcher also examined the internal and external environments by utilizing SWOT and PEST analysis to examine the factors that can favor or that cannot favor effective business performance. Marketing mix strategies such as product, place, price and promotion strategies were examined, and lastly, the conclusion that summarized this part was included. In part two, the research proposed varied growth strategies effective for enabling the company to achieve successful business performance. The researcher revealed that utilizing social media services and also creating value preposition, as well as, segmenting the market is vital. It was suggested that the company can employ the marketing mix such as the product strategy, price, place and the promotion strategy because these are imperative marketing strategies for achieving significant business growth. Lastly, the researcher provided a brief conclusion that summarized the proposed strategies vital for enabling the company to achieve successful business growth. Dunkin Donuts PART 1 (Current Strategy) 1.1 Company Analysis Dunkin’s Donuts is an international American corporation that was established by Rosenberg William and it is based in Massachusetts. The company declares itself as the largest global baked and coffee product chains serving more than 2.7 million clients daily in more than 8,800 stores within 31 countries (Dealbook, 2011). Most of the company stores are franchised and the Dunkin’s Donuts stores are owned by Dunkin Brands Inch. The Dunkin’s Donuts focuses on products but not the store environment; hence, the company designs their products in a manner that can attract many customers. The company strives hard in order to ensure that their customers are well satisfied and earns their loyalty. Their social responsibility towards their customers is reflected in the company mission. 1.2 Mission & Goals The mission of the company is to become the dormant global of high quality products by being a socially responsible company and keeping high-established image for their customers through offering them health product options (Dunkin' Donuts and Baskin-Robbins, 2007). The main goal of the company is to make the nutritional value of the menu choices in their stores better in order to achieve customer loyalty. Therefore, the main responsibility of the company revolves primarily around offering health products options for their customers. They offer low-calorie food options and healthier drinks to ensure that their clients view them as a caring company. Another goal is keeping on top of new nutrition developments and health related research to determine aspects that can impact the products of their company. The aim of the company is to be the quality leader in the market by offering a higher standard development of high dining experience with inventive product choices (Dunkin' Donuts and Baskin-Robbins, 2007). The last objective of the company is customer oriented because it mainly focuses on customer satisfaction. This is through offering them high quality products and services that meets their demanding needs. 1.3 Core Competencies The core competency of Dunkin’s Donuts is the capacity to produce high innovative brands that can enable them to achieve competitive advantage in the market. Their brand strength with more than 120 years of franchising experience has enabled the company to be the most recognized company in high provision of brand quality (Sanburn, 2013). The company is also commitment to corporate social responsibility in providing a brand that can satisfy their consumers both in the local and the international market. Another core competence is the exhibition of superior character such as being transparency, honest, humble to other customers, high integrity, respects, as well as, socially responsible for their services. 1.4 Product Portfolio Dunkin’s Donuts stores are placed at convenient locations and the company has many shares and this has enabled the company to perform well in the global competitive market. The New York Times reports that in 2000, the company had a market value of $ 570 million; however, Dunkin’ Brands earned $26.9 million last year on revenue of $577.1 million, nearly all from franchising (Dealbook, 2011). 1.5 Strengths & Weaknesses One of the strengths of the company is that all the company branches receive more than 2.7 million customers daily. The company is also socially responsible for their services they offer to their customers; thus making it to achieve high reputation for better services and high quality services. Lastly, the company offer affordable prices for the products and it employ social media services to communicate effectively with their customers; thus enabling them to achieve better business performances. However, the weakness is that the company spends much on media advertisement and the media tactics they employ may enable them to undergo high costs. Competition also from other companies producing similar products also creates a limited share market for the company products. 1.6 Marketing External Environment (P.E.S.T.) One of the aspects that the company can take into consideration is the external analysis because this can enable the company to analyze external factors that may impact the effective organisation. First, analyzing the political factors especially the governmental issues such as price control policy is crucial. The company faces varied economic problems; thus analyzing economic factors such as economic recession and other economic issues that can impact the business is vital. Lastly, taking into considerations social and technological factors of the external environment is also imperative. Social factors may include cultural aspects or traditional beliefs of people, the consumption patterns or behaviors and analyzing them is vital. Technology can impact the business severely because technology keeps changing; thus analyzing technological factors can enable the company to implement effective strategies vital for achieving successful business performance. 1.7 Marketing Internal Environment Product-Brand Features The Dunkin’s Donut franchise rests in the brand name of doughnuts but it has achieved greatly better achievements with its increased sales for coffee (Sanburn, 2013. The company offers a variety of brands with different features including different sizes, colors and many others. Direct and Indirect Competitors Dunkin’s Donuts face much competition both locally and internationally; hence, their competitors include Caribou Coffee restaurant, Starbucks Company and other local coffee shops (Jewell, 2007). The company aims to expand their brand nationally and grow internationally in order to be the quick quality leader in the market. Therefore, they compete indirectly with their competitors by employing unique product strategies for their brands. Comparisons Between Product and Direct Competitors There is high relationship between the product and direct competitors because the company provides high quality products, which can enable them to outcompete with their direct competitors. Dunkin’s Donut is afforded by different customers because the products are cheap; thus an effective way of competing directly with competitors. Consumer Environment The company attracts many customers across the globe because of the key features of its offering to the customers. One of them is high quality products which are highly nutritious; thus the company has many consumers from different parts of the globe. The company also offers varieties and affordable products to their customers and these are the main purpose that has enabled the company to receive more than 2.7 million customers globally. Many of the company consumers include school children, working class people and many others. Market Segmentation The company segments their markets according to the size of the markets and they segment their targeted customers depending on their class, gender, age and many others. The aim of marketing segmentation is to enable the company to distribute their products effectively to the targeted market; thereby, increasing product sales (Kotler and Keller, 2009). The target market includes both local, international coffee customers and donut retailers; thus the company segments them in different categories in order to achieve their stated objectives effectively. 1.8 Marketing Mix Product The company differentiates their products from that of their competitors through producing varieties of product with differentiated brand features. The company offers a variety of fresh doughnuts and affordable coffee services, as well as, other snacks and drinks. The company employs technology in product development process and this has enabled them to offer innovative products of high quality to their customers in the market. Price The company provides affordable prices for their products and this has enabled them to increase their customers; thus increasing sales. It employs cost based pricing strategy by determining the production costs in order to enable them arrive at the selling price. They also employ competitor pricing strategy and this is whereby the company reduces the cost of the products in relation to that of their competitors. Handlechner (2008) argues that employing effective marketing price strategy is vital because it will enable the company to achieve successful business performance in the competitive market. Place (Marketing Channels) Dunkin’s Donut has integrated its Internet operations across the marketing channels in order enable them increased their sales. The distribution channels for the company products include packaged coffee Donuts, online sales producers, and retailer consumers among others. Promotion (Integrated Communications) The company began a new promotion in the beginning of 2011 known as the Chance for Stardom. This was the biggest contest that was carried out through using post photographs that were distributed by using social networking sites such as Facebook, Twitter and many others. It also employs blogs for advertising or promoting their products and this has enabled them to increase their sales. The company has its owns social media services such as blogs, corporate websites, regional Facebook and Twitter accounts, as well as, featured You Tube videos. 1.9 Conclusion In conclusion, Product marketing strategy has become one of the significant approaches employed in the competitive business market in order to improve organizational performance level. With the rapid technological advancement, the product life cycle is getting shorter everyday; thus companies are constantly advancing their products in order to remain the top players in the market. Many companies employ product marketing strategy in order to improve products and this is essential because it will enable them to continue satisfying their customers. This strategy is based on SWOT analysis; hence, a company must either create distinctive brand or position their products in a way that can enable them to gain a competitive advantage. Dunkin’s Donuts employs unique marketing mix strategies and their product is simple not over the top or fancy. The company employ different brand tool for sending their message to the consumers. Building a brand image is vital because it adds value to products beyond functional and physical features. PART 2 (Proposed New Strategy) 2.1 Growth Strategy Employing growth strategy is effective because it can enable the company to determine in case it is achieving useful business performance and it is one way of enabling the company to improve their business performance. Therefore, opening franchisee developed stores is crucial and this has been already proved by their niche in franchising business activities in the company. The franchising developed stores will have more weight age over the company owned stores and this is vital because franchising business activities will enable the company to increase their business performance level. There is high possibility that upgrading developed stores by franchisee owners would create success; this is crucial because it will enable the company to attract more customers in their regions without incurring financial costs of advertising. Employing social media strategy is also an effective aspect that can enable the company to increase their growth. Use of social media strategy has become one of the significant aspects that cannot only increase organizational growth but also enable the company to sustain their business in the competitive global market. This is because social media plays significant roles of maintaining a highly engaged global community and offering meaningful information about the product offered in the market (Harris and Rae, 2010. This strategy can also enable the company to communicate about their brand and services they offer in a global context within the shortest time possible. Through the company websites, blogs, Facebook and Twitter accounts, the company can be able to communicate with their clients; thus enabling them to understand the demanding needs of their clients effectively. Therefore, incorporating media sources in the contemporary business world is one of the effective ways of increasing business growth in the competitive business world. 2.2 Value Proposition (Expected, Augmented & Ideal) Creating value proposition is among the significant ways of improving business growth in the competitive business market. The value preposition has become the broadly approach for increasing customer values in the global market (Doole and Lowe, 2012). Value preposition can enable the company to meet the demanding needs for customers effectively by using their scarce resources. The creation of vale proposition does not only rely on the perception of meeting the needs of customers but also on the purpose of delivering products to customers effectively in exchange of income (Mitchell, Wooliscroft and Higham, 2010). Therefore, the company is customer oriented because their aim is to satisfy customers. This is through offering them high quality products and services at affordable process; thus attracting many consumers from all levels. 2.3 Segmentation Strategy It is recommendable for the company to employ segmentation strategy because segmentation strategy is an effective approach that can enable the company to increase their product sales. Marketing segmentation involves dividing the targeted market into smaller groups with distinct needs, characteristics or behaviors (Ferrell and Hartline, 2011). Consumers differ in wants, locations, consumption attitude and many other aspects; thus segmentation will enable the company to meet the demanding needs of different customers effectively. The company can segment their customer in terms of geographical areas or demographic aspects. Demographic segmentation of consumers including age, gender, family size, occupation, religion, culture and income levels will enable the company to assess the size of their targeted market; thus reaching them effectively. This is vital because it can enable the company to satisfy the demanding needs of customer well; thereby, enabling them to increase their business growth. 2.4 Marketing Mix Product The company can employ product marketing strategy; thus it can employ effective technology for developing innovative products of high competitive in the market. The company can differentiate their products by manufacturing products that have unique and right features, which are different from those of their competitors. They can also be tasty and unique in a manner that can be difficult for their competitors to duplicate. Price The company can employ pricing strategy because this is an effective approach that can enable the company to improve their sales revenues. The price for products is an effective way of increasing sales value; thus a company can employ an effective pricing strategy that can enable them to increase growth. The company should carry out marketing research about pricing as this will enable them to determine the value for their business. The use of competitive pricing strategy can enable the company to achieve a competitive market; thus sustaining their business in the global competitive business environment. Place (Marketing Channels) The company can carry out marketing research in order to determine the effective place for distributing their products. The place is concerned with various marketing channels for distributing products; thus finding the right place at the right time requires effective distribution channels. However, the choice of the marketing channels will depend on diverse circumstances; thus it is recommendable for the company to sell to wholesalers who will also sell to retailers or the company can sell the products directly to retailers or customers. Promotion (Integrated Communications) The company can employ varied social media services for communicating about their product that they offer in the market. Doole and Lowe (2012) argue that the use of social media services in product promotion is vital because this will enable the company to promote its brand; thus achieving high organizational sales. Employing significant social media especially the use of company websites, social networking sites such as Twitter, Facebook, blogs and many other is vital. This is vital because social media tools can enable the company to achieve many customers and retain the old customers; thus increasing organisation sales. 2.5 Conclusion In conclusion, employing growth strategy is effective because it can enable the company to determine in case it is achieving successful business performance. The company can utilize social media services and also create value preposition, as well as, segment their market. This is because these are among the significant ways of improving business growth in the competitive global business market. Lastly, the company can employ the marketing mix such as the product strategy, price, place and the promotion strategy because these are imperative marketing strategies for achieving significant business growth. References Doole, I., & Lowe, R. (2012). International marketing strategy: Analysis, development and implementation. Andover: Cengage Learning. Dunkin' Donuts and Baskin-Robbins. (2007). Corporate History. Retrieved on June 12, 2013 from http://www.dunkinbrands.com/aboutus/history.html Dealbook. (July 27, 2011). Sweet Debut for Dunkin’ Brands. Dealbook New York Times. Retrieved on June 12, 2013 from http://dealbook.nytimes.com/2011/07/27/dunkin-brands-sweet-debut/ Ferrell, O. C., & Hartline, M. D. (2011). Marketing management strategies. Mason, Ohio?: South-Western Cengage Learning. Handlechner, M. (2008). Marketing Strategy. Munchen: GRIN Verlag GmbH. Harris, L., & Rae, A. (January 01, 2010). The online connection: transforming marketing strategy for small businesses. Journal of Business Strategy, 31, 2, 4-12. Jewell, M. (August 13, 2007). P&G, Dunkin' Donuts pour out coffee strategy, Seattletimes. Retrieved on June 12, 2013 from http://seattletimes.com/html/businesstechnology/2003833687_dunkin13.html Kotler, P., & Keller, K. L. (2009). Marketing management. Upper Saddle River, N.J: Pearson Prentice Hall. Mitchell, R., Wooliscroft, B., & Higham, J. (January 01, 2010). Sustainable Market Orientation: A New Approach to Managing Marketing Strategy. Journal of Macro-marketing, 30, 2, 160-170. Sanburn, J. (June 26, 2013). Don’t Call Dunkin’ Donuts a Donut Company. Business Time. Retrieved on June 12, 2013 from http://business.time.com/2013/06/26/dont-call-dunkin-donuts-a-donut-company/ Read More