Dunkin’ Donuts dropped Donuts from their name and logo because their customers are primarily buying coffee and other beverages. (see earlier blog post
) But drop back to the question of what the Dunkin’ customer is buying. OK – a cup of coffee.
But they can make it at home or go to Starbucks.
The recent dialogue my friend Larry Gulko, well-known Brand Strategist and CBS Boston media personality, had with former Dunkin’ Brands CEO Nigel Travis as part of an Entrepreneurship conference at Babson College described the strategic shift Dunkin’ has made to better align with what their customers are buying.
Harley Davidson is selling freedom
. The Dunkin' customer is buying convenience
. The customer who wants a place to hang out and read the NY Times will go to Starbucks. A more direct competitor to Dunkin' is the convenience store that is losing revenues from declining cigarette and gasoline sales and needs to raise beverage revenues.
Travis described how Dunkin’ introduced the drive thru, modified the store layout, and simplified its menu to make the customer stop faster and simpler. Dunkin’ is competing against Starbucks, the convenience store, the gas station, McDonalds, and your kitchen by being the choice you will make when convenience is the primary product you are buying.
Following the same strategic concept, Dunkin’ kitchens in large buildings are coming so deliveries can be made directly to customers. They will not have to leave their apartment or office.
In the past, all Dunkin’ customers went into the store, bought a coffee, and left. Nigel Travis learned the value of knowing your customer from running Papa John’s Pizza before going to Dunkin’ Donuts. Pizza delivery allowed the company to know its customers and sell to them directly. Customers can go to the Dunkin’ website today and place an order – no waiting in line – or post their birthday and get “a free beverage.” Dunkin’ now knows who their customers are and can sell directly to them. Knowing, engaging, and embracing the Dunkin’ customer is the company’s path to success.