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Jake Soderberg - Dunkin Donuts Paper - Buyer Behavior - University of St. Thomas
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Jake Soderberg - Dunkin Donuts Paper - Buyer Behavior - University of St. Thomas

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Jake Soderberg - Dunkin Donuts Paper - Buyer Behavior - University of St. Thomas

Jake Soderberg - Dunkin Donuts Paper - Buyer Behavior - University of St. Thomas
http://www.linkedin.com/in/jakesoderberg

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Jake Soderberg - Dunkin Donuts Paper - Buyer Behavior - University of St. Thomas Jake Soderberg - Dunkin Donuts Paper - Buyer Behavior - University of St. Thomas Document Transcript

  • Jake Soderberg LinkedIn Profile: http://www.linkedin.com/in/jakesoderberg Twitter Profile: http://twitter.com/jakesoderberg (@jakesoderberg) Dunkin Donuts Market Conditions in MN By Jake Soderberg
  • Jake Soderberg University of St. Thomas Buying Behavior MKTG 370 Dunkin Donuts Market Conditions Fall 2008 There is not a large market for donuts in Minnesota compared to the Northeast United States specifically Massachusetts. There are several reasons why donuts sell well in the Northeast US. Donut brands have an established foothold in Massachusetts. Donut brands rely on a strong brand image (Dunkin Donuts and Krispy Kremes) and loyal customers. Donut brands hold top of the mind awareness for many consumers in the “morning on the go breakfast” product category. Donut brands in the Northeast US developed a loyal consumer base before there was an importance placed on health conscious diets and lifestyles. Donut brands rely on an emotional connection with consumers because the consumers grew up eating donuts and donuts symbolize simple things like happiness, comfort, and youth The conditions that make donuts popular in the Northeast US are not evident in MN. Donuts in MN compete against bagels, muffins, and possible breakfast sandwiches in the “morning on the go breakfast” product category. Many consumers in MN place an importance on healthy food choices limiting donut purchase. There are a lot of competitors in “morning on the go breakfast” category such as bagels and for the “sweet treat” category there are mini donuts which are surprisingly popular in MN. The Krispy Kreme brand failed in MN because the brand grew too quickly and the donuts became a product commodity when they became available in too many venues. There did not seem to be any significant differences in demographics among MN and MA (also included in the comparison New York and Illinois) so that was ruled out as a reason why donuts do not sell well in Minnesota. The recommendations to establish market conditions similar to the Northeast US where donuts are a viable business are as follows. Follow the marketing strategy of MN mini donuts Page 2 of 5
  • Jake Soderberg University of St. Thomas Buying Behavior MKTG 370 Dunkin Donuts Market Conditions Fall 2008 and copy some of strategies and positioning for what Burger King did promoting their sandwich the “steakhouse”, using the slogan “what did you do to earn that?”, or the new “mushroom and swiss” burger, using the slogan “what burger can bring you bliss?”. Burger King is a model of how to promote an unhealthy food item and move it from unhealthy associations into the consumer decision set (donuts are associated with “unhealthy” in MN). The new positioning strategy for Dunkin Donuts should be something similar to, “Dunkin Donuts are to families and working adults who need comfort this product is the sweet treat that is convenient.” Mini donuts are popular because they compete in the “sweet treat” category, rather then the “morning on the go breakfast” product category. Mini donuts have limited availability so consumers can rationalize purchasing them because even though they are unhealthy and somewhat expensive, it while be a while before repurchase. Mini donuts distribution to locations where there is a constant stream of consumers but consumers irregularly revisit is critical because of the extended period between repurchase (therefore keeping mini donuts scarce and keeping the product from becoming a commodity). It would be important for Dunkin Donuts to position their products (donuts) as “sweet treats” rather then “morning on the go breakfast” product category. This category move would reduce the market competition faced by Dunkin Donuts. Burger King sandwiches are widely recognized as unhealthy, so to sidestep that negative association, BK has marketed their steakhouse burger with personal success or accomplishment. Burger King consumers can rationalize eating a full days serving of fat, sodium and calories in one burger because it is thought the purchase is infrequent and they have earned it (through Page 3 of 5
  • Jake Soderberg University of St. Thomas Buying Behavior MKTG 370 Dunkin Donuts Market Conditions Fall 2008 personal success and accomplishment). Dunkin Donuts should follow that lead and promote to their consumers that they have earned and deserve their “sweet treat” product category donuts. Burger King has marketed the new mushroom and swiss burger by associating the burger with feelings of comfort. Consumers will feel they have earned the new burger because they had are having a difficult day and the burger will supposedly solve their problems bringing them the desired feelings of comfort during the difficult time. The marketing of the new burger with feelings of comfort also sidesteps the association of the burger with unhealthiness. Dunkin Donuts would be wise to build that associate among comfort and their donut products. Perhaps create a slogan something similar to “had a hard day? A Dunkin Donuts is only around the corner.” In summary Dunkin Donuts has to overcome the “morning on the go breakfast” product category problem and the negative health association with the donuts. Dunkin Donuts can do this taking the following specific steps. Distribution scarcity (limited locations only available at Dunkin Donut restaurants). Build association of donuts with feelings of comfort (rather then breakfast). Build association of donuts with feelings of achievement and success. Increase the restaurant product offerings to include coffee (get consumers in the door). Move donuts to the “sweet treat” product category rather then the “breakfast” category. Dunkin Donuts should target families to start to build loyal customers starting from the kids. Then in the long run build loyal consumer base from children and build those positive brand associations with donuts and comfort, fun and youth (similar to conditions in MA). LinkedIn and Twitter Page 4 of 5
  • Jake Soderberg University of St. Thomas Buying Behavior MKTG 370 Dunkin Donuts Market Conditions Fall 2008 LinkedIn Profile: http://www.linkedin.com/in/jakesoderberg Twitter Profile: http://twitter.com/jakesoderberg (@jakesoderberg) Page 5 of 5