Why Dunkin Donuts is Taking on Starbucks and Betting on Coffee?

Belonging to the competitive industry of Food and Beverage since the year 1948, Dunkin
or formerly known as Dunkin Donuts made a $100 million investment for the purpose of getting
a brand refresh. Originally, the company was known for their doughnuts but as the years go by,
their selection of doughnuts and other food items are not increasing. However, their beverage menu
is constantly updated with drinks that gives them a significant push to keep up with its greatest
competitors, the major companies of the industry, McDonalds and Starbucks. Part of the refresh
entailed the company to make big changes, such as taking out “Donuts” from the original brand
name, and changing up the aesthetics and ambiance of their stores locally and worldwide. With
this, it can be seen that Dunkin is adjusting itself to the latest trends of this generation. In relation
to trends, the company saw that 60% of their revenues come from coffee beverage sales. With this,
I personally believe that Dunkin made the right moves of being “trendy” and focusing its menu
expansion with what customers would gravitate to. These will help with competitive advantage,
strengthening customer loyalty and even attract new customers to come.

An external factor for Dunkin is their mammoth of an investment to update their brand and
marketing strategies. This amount helps the spotlight to shine on them for the objective of being
at par with the big companies in the industry, this is a way to achieve that. Additionally, to be able
to compete with Starbucks and McDonalds heightened their desire to update the marketing
strategies such as modernizing the look of their stores, bringing out an array of coffee beverages,
and partnering up with delivery services like GrabHub, which was mentioned in the video. On the
other hand, the internal factors that influenced Dunkin’s decisions involves a huge asset of the
company, customer service. With their expansion of coffee drinks and machines, the investment
is used to widen skill training and product knowledge of their employees to maintain the high
quality and service that their customers know and love. Dunkin saw the need to expand when their
sales were decreasing due to current trends and customers shifting to brands in search of something
new. With this, Dunkin focused on product and place, with coffee and store aesthetics, respectively.
By bringing out flavorful blends but at a fraction of a price compared to Starbucks, this aimed to
keep customers loyal to the brand and updating technologies and architecture of their branches
went well with the market trends.
 Provided information on the results of Dunkin’s $100 million investment, I believe that the
move of focusing on coffee drinks is sustainable in the long-run. Reason for this is it is the
company’s goal to modernize for the next generations, this is the long-term strategy that they took
the risk on for the journey to be a big name in the Food and Beverage Industry, hence the amount
of monetary investment put in. Moreover, their strategy reflects what they have observed in terms
of popularity in the market, Starbucks, leading for consecutive years for their main product, coffee.
If Dunkin sticks to affordable prices but constantly improving on the quality, roast, blends, and
types of coffee beverages, this will definitely carry this strategy on the long-run.

It is evident that Dunkin’s current marketing strategy revolves around the product that
brings them most sales, coffee. As part of the Generation Z, I can say that Dunkin put a lot of
thought into appealing to the next generation for partnered up with popular social media
influencers of Instagram and Tik Tok and similarly, utilized public relations packages or PR
packages to attract more customers through advising these influencers to post themselves unboxing
the package and tagging Dunkin, the same. Likewise, the trend and expansion of available delivery
service providers and mobile applications in America is incorporated to having Dunkin available
on GrabHub. I agree with this decision because this can bring in more customers since there is the
convenience and opportunity for people to grab themselves something to munch and sip. Which
brings me to emphasizing the original mission of the company which is being a one-stop place to
get a delicious quick fix of coffee and doughnuts. I believe that though these brand refreshers and
upgrades are great, they should not go too far off from their roots for they have gained customer
loyalty and satisfaction with doing that for over 70 years.