Dunkin' Donuts is analyzing its DDSMART healthy menu options and current marketing strategies. It aims to increase awareness of these options to attract new customers and increase market share. A survey found many customers are unaware of DDSMART items. Dunkin' Donuts will launch a campaign around New Year's including promotions through its app and partnerships with fitness events to promote DDSMART. It will also pilot digital menu boards and train employees to introduce "Smart Swaps" healthy options. Dunkin' Donuts will monitor results like sales and awareness to improve the strategy.

1. RUN SMARTER
GSM425 - Marketing Management
Rachel Bograd
Kelsey Gernert
Andrea Gordon
Nicole Mace
Lauren Mendes

2. Agenda
• Brand Position
• Industry Dynamics
• Industry Key Success Factors
• Company Analysis and Brand Position
• Competitive Analysis
• Key Issues
• Marketing Goals & Objectives
• Marketing Strategy & Execution
• Financial Projections
• Monitoring & Control

3. Brand Position
• Customer Value Proposition
• Brand Recognition: 7,500 + restaurants across 40 states
in the US & 3,000 + restaurants across 4 continents in 33
international countries
• 25.5% market share in the coffee and snacks shops
industry
• “America Runs on Dunkin’”

4. Industry
Coffee & Snack Shops, US
• $30.2 billion in revenue
• $1.8 billion in profit
• #1 Starbucks (37.7%)
• #2 Dunkin’ Brands (25.5%)
• 3.8% expected growth over
the next five years
Quick-Serve-Restaurants
• $225 billion in revenue
• Smaller portions at
affordable prices
• Most popular choice for
consumers age 26-30
• Industry is mature and
competition is high

5. External Factors and Trends
Political, Legal, Regulatory
• Increasing the minimum
wage level, wages account
for 26.1% of cost structure
• Social activism (workplace
conditions, health)
Economic
• Consumer spending is
increasing
• Supply chain:
Climate/weather
• Growing foreign demand for
coffee
Social Forces
• Healthier options
• Increased snacking between
meals
• Faster
Technology
• Mobile accessibility
• Franchise model
• Responsiveness

6. Key Industry Success Factors & Issues
Success Factors Key Issues for Dunkin’ Donuts
1. Meeting changing
consumer demand
2. Expanding brand image to
include healthier options
3. Do not alienate the current
customer base
Operational efficiency
• Franchise model
Same-store sales:
• Multi-product purchases
• Frequency of purchases
• Limited-Time-Offers (LTO)

7. SWOT Analysis
Strengths Weaknesses
• Dunkin’ Donuts has exhibited its ability to adapt its marketing
strategies in order to compete in the coffee and snack shops
industry.
• Consumer exhibit predictable purchasing behavior and brand
loyalty.
• Dunkin’ Donuts provides food and beverage products at low
costs; thus, the organization is able to compete on price in the
industry.
• Dunkin’ Donuts has implemented its own educational program to
guarantee uniformity among the products sold in the organization's
franchises
• Dunkin’ Donuts owns 25.5% of the market share in the coffee and
snack shops industry.
• Dunkin’ Donuts has exhibited a stall in its market share growth as
a result of high competition.
• Dunkin’ Donuts has a limited geographical presence compared to
organizations such as Starbucks and McDonalds.
• In recent years, there has been an increase in consumers’ desire
to have healthier options. Dunkin’ Donuts does not provide an
abundance of health conscious products.
• Dunkin’ Donuts has experienced some turbulence with its
franchisees due to brand non-compliance.
• Dunkin’ Donuts brand reputation is built on decades of selling
coffee and donuts, and the organization is well-known for its high
calorie food and beverage products.
Opportunities Threats
• Dunkin’ Donuts has the opportunity to further expand and
promote its business in the global market.
• Consumers’ increased desire for healthier food and beverage
products presents an opportunity for Dunkin’ Donuts to capitalize
on.
• Dunkin’ Donuts has the opportunity to expand its DD Smart menu
to include more health conscious products as well as market the
menu more effectively.
• In recent years, there has been an increase in competition in the
coffee and snack shops industry and the cost of switching is low.
• In recent years, the cost of coffee has been on the rise; thus, it is
difficult for Dunkin’ Donuts to keep the costs of its products down
and continue to compete on price.
• Dunkin’ Donuts might not be reacting fast enough to the rising
trend of health conscious consumers.
• Dunkin’ Donuts is threatened because the boundaries of the
market are changing to include non-coffee shop competitors

8. Current Marketing Strategies

9. Current Performance and Assumptions
Q3'14 Performance:
•Operating income $92.4 million, 12% increase
•Net income $54.7 million, 36% increase
•2015 same-store sales growth, 2% - 4%
•Growth in emerging foreign markets, 20% - 25%
Assumptions:
•Store openings and closings
•Demand increases
•Does not vary based on seasonality, remains stable Q to Q
•Purchasing behavior changes regarding the types of goods
consumed quarter to quarter
•Income
•Franchise fees and royalty income
•Rental income - 24% of franchising fees and royalty income
annually
•Sales at company owned locations

10. Sales Forecast
Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
1.55%
1.60%
1.65%
1.70%
1.75%
1.80%
1.85%
1.90%
1.95%
2.00%
2.05%
%Increase
3 Year Quarterly Sales Forecast
Sales Growth Projection

11. Competition:
Product: Coffee & Snack Shops / Quick-Serve-Restaurants
Target Market: “Neighborhood,” “Family,” “Friends,” etc.
Pricing: Example: Coffee
• Dunkin’ Donuts: $1.49 - $2.19
• Starbucks Coffee: $1.75 - $2.35
• McDonald’s: $0.90 - $1.29
• Panera Bread: $1.79 - $2.19
Distribution
• Dunkin’ Donuts: 10,000+ stores, 36 states, 32 countries
• Starbucks Coffee: 20,000+ stores, 63 countries
• McDonald’s: 35,000+ stores, 100+ countries
• Panera Bread: 1,800+ stores, 45 states & Ontario, Canada

12. SURVEY RESULTS

13. Current Market Segment
• The majority of current customers fit the following criteria:
• Female (158/224 respondents)
• Between the ages of 23 and 27 (109/224 respondents)
• Have incomes above $41,000 (135/224 respondents)
• Live in Florida (24), Wisconsin (17), or Massachusetts (124)

14. Our survey also found the following to be
true of our current consumers:
• 73% visit Dunkin’ Donuts 0-2 times a week, and 18% visit
Dunkin’ Donuts 3-5 times per week,
• 7% purchase 6-8 times a week and 2% purchase 8 times
or more per week
• 47% go to Dunkin’ Donuts just to purchase a beverage
• 40% go to purchase both food and beverage
• 14% go for food items alone

15. Purchasing Behavior
• 60% purchased fast food 0-2 times a week
• 32% said 3-5 times a week
• 8% said more than 5 times a week.
0-2 Times / Week
3-5 Times / Week
5+ Times / Week

16. Of those interested in healthier product
offerings:
• 26% would be willing to pay $0.01-$2.00 for a healthier
food or beverage option at Dunkin’ Donuts
• 41% are willing to pay $2.00-$4.00 and only 1% is willing
to pay over $6.00 for a healthier food or beverage option
at Dunkin’ Donuts
• The healthy food items of greatest interest include:
Muffins (36%, and are already currently offered),
Yogurt/Parfait (36%), Fruit (32%), and Oatmeal (29%, also
already currently offered)

17. Target Market
• 32% of respondents look for healthy options when they
visit Dunkin’ Donuts or other fast food location
• 43% sometimes look for healthy options at Dunkin’
Donuts or other fast food locations
• 132/163 or 81% of respondents who reported that they
either always or at least sometimes search out healthy
food options at Dunkin’ Donuts or other fast food locations
are women
• Higher income
• Customers in their 20’s

18. Consumer Awareness
• Only 106 out of 216 respondents were aware of these
healthier food options
• 51% were unaware of any of the healthier food options
available at Dunkin’ Donuts.
• According to our survey 59/160 (or 37%) people who
currently shop at Dunkin’ Donuts are unaware of their
healthy menu options.
• Among those who do not shop at Dunkin’ Donuts currently
56/63 or 89% were unaware of Dunkin’ Donuts’ healthier
product offerings

19. DDSMART®: RUN SMARTER CAMPAIGN

20. Overview Marketing Mix
Dunkin’ Donuts Offering Better Choices to Keep You
Running
• Goal:
• To attract new customers who are interested in healthy options and
who see DDSMART® as a credible healthy option.
• Increase awareness of DDSMART® line among current and non-
current customers, increase revenue
• 2% increase in market share annually over 5 years
• Methods:
• Market-penetration using social media and mobile marketing
• Cross-penetration through sponsorship of fitness events

22. Tactic 1: DDSMART® Value to Customers
Objective: Raise awareness and promote DDSMART®
options to current Dunkin' Donuts customers
Goal: Increase Sales and Awareness
Budget: Replacement of current New Years promotions
Promotion Plan: Limited time offer (LTO) via DD Perks® App;
DDSMART® options worth 2x points
Media: DD Perks® App
Schedule: LTO rolled out prior to and after New Years 2016
Measure of Success: Exceed annual growth projections

23. Tactic 2: DDSMART® Partnerships
Objective: Raise awareness and promote DDSMART® options
to current Dunkin' Donuts customers
Goal: Increase awareness of DDSMART® by 25% in the next
year.
Budget: Secondary Marketing through Spartan Race®
(Posters, Media, Billboards), Budgetary Dollars Needed for
Complimentary Food and Beverages at Event – Allot for
Discount from Coupons
Promotion Plan: Sponsor for Spartan Race®
• “Spartans run on DDSMART®”
 DDSMART® complimentary food and beverages at finish line.
 DDSMART® coupons with identifiable UPC labels for
Spartans
Media: Posters, Media, Billboards
Schedule: Races throughout the year
Measure of Success: Tracking Usage of Coupons

25. Tactic 3: Smart Swaps
Objective: Introduce Healthy Options
Goal: Increase Sales
Promotion Plan
• DD Perks® App
• Social Media
• Digital Menu Board Pilot
• Employee Training
Budget: Use Existing Platforms
Media: DD Perks® App / Social Media
Schedule: Prior to New Years 2016
Measure of Success: increase in DDSMART®
sales at pilot locations.

27. Project Timeline
Project start date May 1: Internal launch by the
Executive team, CMO
Planning stage 3 months: Marketing, IT, and Budgeting
Testing stage 2 months: Marketing, IT, Executive
team
Campaign begins 3 month pre- and post- New Year’s
Day : Marketing, IT, Executive team
Ongoing monitoring and improvement activities will
continue throughout the year: Marketing, IT, Budgeting,
Executive team

28. Monitoring and Control
Daily and quarterly reporting
Sales revenue for DDMART®
items vs traditional items
Franchisee profitability analysis
• Expense-to-Sales Analysis
Same-store sales analysis
• Multi-product purchases
• Frequency of purchases
Market penetration
• ‘Likes” and App usage rates
• Limited-Time-Offers (LTO)
Monthly and quarterly
Market Share Analysis
Cross-Penetration marketing:
Spartan Race®
• 20,000 people per event x 12
events per year = 240,000
potential direct contacts UPC
• Indirect touchpoints: NBC
coverage, Reebok
What percentage of current
customers are purchasing
DDSMART® item?

29. Questions?

30. References
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Dunkin’ Brands Investor Presentation (2014). Dunkin Brands Inc.
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www.fastfoodmenuprices.com/dunkin-donuts-prices/
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