Marketing Planning and Customer Loyalty: Dunkin' Donuts Case Study

This case study examines Dunkin' Donuts' strategic marketing decisions, particularly its shift in focus from donuts to coffee, and the associated risks and marketing strategies to mitigate them. The analysis compares Dunkin' Donuts' marketing approach with that of its primary competitor, Starbucks, highlighting key differences in branding, target audience, and overall customer experience. The study further explores Dunkin' Donuts' customer loyalty program, DD Perks, and suggests additional factors beyond rewards programs that drive brand loyalty, such as franchise-specific items, social media marketing, and expansion into premium locations. The student argues that the company needs to modernize its image and marketing strategies to appeal to a broader, particularly younger, demographic, focusing on customer needs and preferences to compete effectively in the coffee market. The study also emphasizes the importance of providing a trendy dining experience and expanding into high-traffic areas for increased accessibility.

Running head: Management Decision Case 1
Case Study
Marketing Planning Helps Dunkin’ Donuts Score Big in Coffee Customer Loyalty
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Management Decision Case 2
Question 1
Dunkin’ Donuts made a strategic decision to make its business about the coffee, not
just the donuts. What are the risks when a company that is so closely identified with one
product (it’s in their name!) decides to change its focus to a different product? What
marketing strategies can help reduce the risks and increase the probability of success?
If we were to be talking about a company like Starbucks, then it would be okay to change
focus from one item to another because the name is not specific for marketing purposes.
However for companies like Dunkin’ Donuts, it is much more difficult to divert focus towards
other items because of branding issues as their primary focus has always been on donuts and they
need to ensure their quality and taste doesn’t fall while increasing focus on other items because
the risk factor is very high, as the new focus may alienate existing consumers while not being
able to draw in additional clientele. I understand why they want to increase their focus on coffee;
because the consumers are interested in coffee more than donuts due to health awareness these
days. There are certain risks a company can face when changing its; The new product may or
may not be what the consumer desires and this can cause a loss in projected revenue and even
lead to a loss in existing revenue streams and customer growth which in this case are donuts if
the new focus diverts attention from quality control of existing high revenue products. Basically
what we need to do in order to reduce these risks and increase our probability of success is by
simply getting to know our customers, trying keeping our business updated for any social needs
and preferences for our customers, understanding our customers reactions on products; especially
on taste and quality measures while providing a decent variety of products to ensure all customer
categories are catered to. Companies should also try establishing reasonable development

Management Decision Case 3
business plans by employing personnel that have experience in product development and
marketing of the new product which in this case would be coffee. At the same time efforts needs
to be made to gather information by conducting market research and focus on customer
demands. For instance, Starbucks has perfected themselves in coffee since day one and added
other breakfast items to complement their coffee but didn’t lose focus on their main product.
Another example is of Krispy Kreme doughnuts who never compromised on their core product,
the donuts, whose taste and quality remains exceptional with the addition of good quality coffee
to complement their donuts. I am sharing this from personal experiences that I have obtained by
visiting these franchises and trying out all the stated items. I believe that the purpose of
marketing is all about planning and executing the concept of the business, pricing of the
products, and being creative when distributing ideas, goods and services so we can satisfy
customers and simultaneously increase profits for business.
Question 2
What are the key differences between the marketing strategy of Dunkin’ Donuts and its
chief competitor, Starbucks? What else could the company do from a marketing manager’s
standpoint to successfully compete with and clearly differentiate Dunkin’ from Starbucks?
Starbucks marketing strategies is all about creating a contemporary coffee culture where any
individual can come to please their taste buds because they offer the highest quality of coffee,
premium teas, fine pastries, and savory items for all ages. This works perfectly in conjunction
with the premium ambience generated through playing trendy music, high-class interior décor,
appealing art works and a casual relaxing atmosphere. This is combined with having specialty
coffee for each month. Furthermore the company maintains its modern image by engaging with
customers and making them feel connected by always trending on social media, focusing on

Management Decision Case 4
providing organic products, and making their customers feel healthy and not guilty. This is
complemented by the addition of high-tech experiences such as including apple pay and rewards
points which add on to the already polished customer experience. Most importantly Starbucks
tends to focus on less sugary times projecting a healthy outlook which tends to sit well with
millennials who are choosing to be more health conscious than their parents. On the other hand,
Dunkin’ Donuts focuses on more sugary items trying satisfying customers from the baby boomer
generation and law enforcement officers which is no longer considered part of todays ‘cool
factor’ Adding further to its woes the color scheme and decor is very orange/purple giving it a
fast food style outlook which is not very appealing or interesting for today’s youth. The franchise
has stuck to the same old coffee flavors and not invested in marketing new products or outlooks.
There has been no focus on youngster vibes at the coffee place, no trending social media
marketing on Instagram which is now essential to keep up with the times. Social appealing image
along with products having a good taste is essential for any business to thrive and while Dunkin
donuts may have made an effort on the taste aspect by trying new avenues they have not
strategized well in its marketing. If we are going to copy another coffee company like Starbucks
and expand our menu options to match them then we need to see what else do they implement
differently? What makes Starbucks more desirable? For instance, start socializing more on social
media, sharpen your marketing skills, keep up with the trends, and know your customer’s needs
and update your style and tastes, accordingly, provide an upscale and trendy dining experience
that makes small business talk or study sessions more relaxing to take place at. Trying to appeal
more to the younger generation and concentrate opening franchises in high consumer traffic
areas therefore providing more accessibility for customers.

Management Decision Case 5
Question 3
Loyalty programs like DD Perks can get customers engaged with the brand and
incentivize them to stay loyal. But loyalty programs alone are relatively easy for
competitors to match and top, and thus they often aren’t sufficient to retain customers and
thwart switching. In addition to reward programs, what other factors drive loyalty to a
brand, and which of these do you presently see in play at Dunkin’ Donuts? Is there more
that Dunkin’ could do to increase customer loyalty?
Currently, Dunkin’ Donuts only have DD Perks that offers every $1 customer spends, they
receive 5points and after reaching 200 points, a free medium beverage or every $40 spend, $2
back is giving and that’s possible for every 10 to 20 visit per customers and that’s not very
effective or calling your customers back marketing strategy. Aside from just having DD Perks
Programs, we need to include more features to drive more customers such as including more
franchise specific items for marketing such as including brand named coffee holders, flasks and
adding a degree of modernism to its accessory products. Social media marketing strategies and
adding a variety of special occasion products like specialty coffee can drive up sales also.
Including the addition of dunkin donut kiosks in premium locations like 5 star hotel lobbies,
airport lounges and high street locations can also boost consumer traffic and sales. Addition of
sugar free donuts and drinks can also cater to the health conscious consumer and allow the brand
to keep up with the trends.

Management Decision Case 6
References
Marshall, Greg W., and Mark W. Johnston. Marketing Management. 3rd ed., McGraw-Hill
Education, 2019.