Read the story about Dunkin Donuts and identify at least three types of marketing research that Dunkin
Question:
Read the story about Dunkin Donuts and identify at least three types of marketing research that Dunkin uses. Are they doing quantitative or qualitative research?
Story:
In 1946, Bill Rosenberg launched Industrial Lunch Services, which distributed meals, snacks, and coffee to factory workers in the Boston area. From his daily sales totals, Rosenberg knew that his working-class customers loved his coffee and donuts. Rosenberg thought a sit-down restaurant with these two menu items could be a success, and a few years later, Dunkin' Donuts was born. At the time, Dunkin' was only charging 52 cents for one of its 5 types of donuts. While a 10-cent cup of Dunkin's coffee may seem like a bargain today, it was twice the price it went for. Still, customers found the high-quality coffee, which was always served quickly and hot, to be a good value.
By 2005, Dunkin' had grown to 6,000 franchised locations in the United States and abroad. Coffee represented almost two-thirds of its sales; The donuts and sandwiches were about 17 percent each. Dunkin's flavored coffees, lattes, Chais, iced coffees, and other beverages put it in direct competition with Starbucks. With 90 percent of its stores in the northeastern United States, it saw a huge opportunity for growth. Still, Dunkin' marketing executives wondered if they needed to change their marketing strategy to better adapt to evolving customer behavior, changing competition, and new target markets.
Dunkin's executives knew they had many options: for example, adding new sandwiches, offering catering and delivery services, and providing more comfortable seating. Copernicus Marketing did the research and designed Dunkin's "store of the future." The product design software evaluated more than two billion combinations with varying portion sizes, store exterior design, indoor music selection, and more. With data from a nationally representative sample of more than 1,000 customers and prospects, sales and costs were estimated for each combination and the most profitable options were identified. This research guided the construction of experimental prototype stores that emphasized Dunkin's quality coffee and speed of service at the counter and trolley display case. When the new stores exceeded their sales and profit goals, their managers knew they had direction for the future.
Dunkin' Donuts knew it needed to better understand loyal coffee drinkers and arch-rival Starbucks. So the company paid dozens of its most loyal customers to buy coffee at Starbucks, while at the same time paying a similar number of Starbucks-goers to come to Dunkin' Donuts. After briefing interviews, the two groups were found to be so different that Dunkin's researchers dubbed them "tribes."
What each tribe hated in its rival's shop was precisely what made it love its usual store. Starbucks' regulars, for example, didn't find Dunkin's outlets boring, plain, and original. They didn't like it when workers threw a standard amount of milk and sugar into their drinks — they didn't feel special at Dunkin' Donuts. While members of Dunkin's tribe wanted stores that looked newer, the Starbucks experience shut them down. All these laptop users found it difficult to find seats and wondered why cafes needed couches. They complained about Starbucks' higher prices and slower speed of service. They didn't like Starbucks' "long," "grande," and "venti" language; Please give us "small", "medium" and "big"! This exercise convinced Dunkin that there were customers who wanted an alternative to Starbucks and that he could fine-tune a marketing strategy to provide it.
A psychographic study gave us more insight into the attitudes, values, and interests of Dunkin' tribal members. They are busy, love routine, prefer unpretentious simplicity and consider themselves unpretentious, down-to-earth people. One-third of Americans fit this profile, but these people are more common in the Midwest and South than in the Northeast. So Dunkin' quickly targeted new stores in cities across Ohio, Tennessee and Florida. This research also guided the "America Runs on Dunkin'" advertising campaign, which featured office and construction workers who spent their days with the help of the chain.
Dunkin' Donuts' Head Chef Jeff Miller (see photo) and his team are making innovative additions to the menu. However, these foods get input from customers before they go to market. Dunkin's chefs have developed a new line of hearty snacks for customers looking for a bite to eat on the go. The focus groups liked the smoothies and hot waffles, but they couldn't satisfy their hunger with small stuffed pinwheels. When Dunkin' came back with bigger "bites" filled with pork and other ingredients, they liked it even more.
Dunkin' encourages customer feedback and listens closely to ideas to fine-tune its marketing strategy. A group of their best clients serve on the Dunkin' Advisory Panel, where they regularly complete online surveys and participate in online focus groups. The company also closely monitors its website and social media efforts by reading what Facebook fans and Twitter followers are typing and using analytics software to collect and analyze buzz across the Internet. Dunkin' knows why and how people come to its website.
The data even determines the exact location of each Dunkin' Donuts store; A software program analyzes data about demographics, competition, and traffic patterns at the neighborhood level. This program predicted that sales would increase by adding a drive-by lane in a store and moving the store just 100 yards from one end of the mall to the other. Following the move, sales increased by more than 50 percent.
Dunkin' Donuts wondered if the costs and discounts of a loyalty program could be offset by higher sales and profits. So they did an experiment. The purchases of a group of customers were tracked before and after they received a prototype Dunkin' Donuts loyalty card.
After receiving the card, customers visited Dunkin 30 percent more often and spent 40 percent more. The decision was made. Currently, more than 3 million customers have a DD Perks Rewards card. The new cards bring more data, which Dunkin uses to target sales promotions. Since 60 percent of sales come before 11 p.m., there are opportunities to boost sales later in the day. That's why DD Perks members who regularly visit Dunkin's in the morning are offered huge discounts to keep them coming back for an afternoon snack, which often becomes a new habit.
Dunkin' continues to grow—it has more than 36,11 stores in 000 countries. Dunkin' Donuts will continue to collect, analyze and act on data for marketing strategy planning, implementation and control to continue to grow.
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella