Starbucks and Dunkin\' Donuts

¶ … Dunkin' Donuts and Starbucks Marketing

Comparative Analysis of Dunkin' Donuts and Starbucks Marketing Strategies

Dunkin' Donuts began as a blue-collar coffee and donut shop, and after choosing to expand using a franchise model, soon became a dominant chain across the eastern United States. Starbucks had equally humble beginnings in the downtown area of Seattle, Washington, yet the difference was the customers they were attracting. Coffee enthusiasts, students and intellectuals across the Seattle area adopted Starbucks as their brand. From those initial stores and strategies, each company has chosen widely divergent marketing strategies. The case analysis illustrates how powerful marketing strategies' impacts are over years of consistent execution and development, with Starbucks firmly entrenched as a premier brand attracting upscale customers who want to be treated as special, while Dunkin' Donuts is winning over the blue-collar, working class customers with a non-nonsense approach to marketing and service delivery (Kotler, Armstrong, 2013). Both of these companies are attracting drastically different customer bases as the case also discusses (Kotler, Armstrong, 2013) with Starbucks excelling on the customer experience dimension (Verhoef, Lemon, Parasuraman, et.al., 2009) and Dunkin' Donuts celebrating the working class roots it is predicated on and the strong respect for the work ethic of its customers (Cebrzynski, 2006). This paper analyzes the marketing mix of each of these companies.

Comparing Dunkin' Donuts and Starbucks Marketing Strategies

Comparing the value propositions of each of these two businesses further amplifies just how significant the differences are in the marketing, selling and service strategies. The unique value proposition of Starbucks is centered on creating a "third place" where customers can meet friends, away from work and their homes (Kotler, Armstrong, 2013). This core aspect of their value proposition is further strengthened by their selection of decor including overstuffed couches, chairs, free Wi-Fi and an overall ambiance of a high-end cafe (Kotler, Armstrong, 2013). What is also unique about the Starbucks approach to melding the foundational elements of the marketing mix is their orientation towards using social networks to further propagate their brand and use these channels to rapidly launch new products (Fitzgerald, 2013). Starbucks is a heavy user of social media to also show its humanitarian side, a critical part of their overall branding and marketing strategy (Berglind, Nakata, 2005). All of these elements are meant to create a unified brand that is continually strengthened and communicated using the four elements of the marketing mix. Contrasting this strategy of an all-enveloping experience and focus on how customers feel when they are in their stores, Dunkin' Donuts has gone after a much more stripped down, get-down-to-business marketing strategy that respects the nature of blue collar and white collar work (Kotler, Armstrong, 2013. The stores are much more oriented towards efficiency and quickness of response, concentrating on getting customers in and out with their coffee and pastries. The stores are nostalgic in that they are still brightly decorated and lack the indirect lighting and high-end nature of Starbucks -- which is another reason their customers love them so much according to the case (Kotler, Armstrong, 2013). Dunkin' Donuts has gone to great pains and side-stepped the temptation to go after a higher-end customer by keeping who they are real, not fabricated, and their loyal customers love them for it (Cebrzynski, 2006).

Each of these companies has as a result chosen entirely different areas of emphasis in their marketing mix. For Dunkin' Donuts the product and pricing are deliberately kept affordable and simple, with new flavors of coffee only reluctantly added over the 55 years the company has been in business (Gupta, 2012). Dunkin' differentiates on the pastries and donuts they offer, and is very good at seasonal selling, which can be seen from their website today, which gives a full splash screen to pumpkin flavored donuts. Starbucks differentiates on the customer experience and uses their website to show seasonal products and draw customers into stores, further accentuating one of their strongest competitive differentiators, which is the in-store customer experience (Gupta, 2012). The product and pricing strategies also differ markedly in terms of their aspirational value. At Starbucks the product naming is upscale and Italian, while at Dunkin' Donuts, drink sizes are very clear and unmistakable (small, medium, large) (Kotler, Armstrong, 2013).