The Challenge of Dunkin’ Donuts
Saturday, April 8th, 2006This is a fascinating article about the challenges faced by Dunkin’ Donuts. The basic gist of it is that they are trying to become more upscale to increase profitability but have to walk the line to not alienate their core base of consumers.
Dunkin’ Donuts last year paid dozens of faithful customers in Phoenix, Chicago and Charlotte, N.C., $100 a week to buy coffee at Starbucks instead. At the same time, the no-frills coffee chain paid Starbucks customers to make the opposite switch.
When it later debriefed the two groups, Dunkin’ says it found them so polarized that company researchers dubbed them “tribes” — each of whom loathed the very things that made the other tribe loyal to their coffee shop. Dunkin’ fans viewed Starbucks as pretentious and trendy, while Starbucks loyalists saw Dunkin’ as austere and unoriginal.
“I don’t get it,” one Dunkin’ regular told researchers after visiting Starbucks. “If I want to sit on a couch, I stay at home.”
It’s a really interesting dilemma. People probably fall into one camp or another. Changing their stores is going to be challenging. I mean how do you take their “signature pink and orange scheme” and make it upscale?
