ADVERTISING CAMPAIGN EVENT DECA Chapter: Bedford High School 3/10/2016

Dunkin’ Donuts : Energizing the

Youth CGD Company: Chrissy Howard­Smith, Grace Irvin Dillard &

Dejae’Naye Wilkins Bedford High School 481 Northfield Rd Bedford, OH

44146

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I. EXECUTIVE SUMMARY Headquartered in Canton, Massachusetts, Dunkin Donuts is the world’s leading baked

goods and coffee chain. Dunkin Donuts serves over 3 million customers per day as they satisfy the desires of donut, coffee and baked goods connoisseurs worldwide. Despite tremendous previous growth and worldwide “America Runs on Dunkin” notoriety, Dunkin Donuts has closed over 100 stores nationwide, and experienced a decline in sales along with a decline in overall traffic. Reported decline is mostly due to increased competition, increases in pricing (due to an increase in egg prices), and an economic downturn. The proposed advertising campaign addresses Dunkin Donuts’ current reality and strives to help propel Dunkin Donuts into the next generation by focusing on the next generation ­­ the millennial and teen buyer market.

With the new campaign, Energizing the Youth , CGD Company has decided to target a younger buying demographic: young adults between the ages of 16 and 24. The campaign will be composed of a 7 pronged approach: traditional channels, digital channels, loyalty programs and social responsibility, population appeal, retail customization, product line extensions, and product placement. The multifaceted seven pronged approach includes a new and improved loyalty card to increase customer loyalty, Hulu advertisements (online television streaming) , television advertisements, radio advertisements, a sponsorship with Kim Kardashian, remodeling stores to have a more casual sitting area, and expanding our product line by adding Cuban coffee beans to provide a substitution for Monster energy drinks. CGD Company also aims to develop the business’s presence on social media to reach the target market and promote new deals. It is expected that the total budget needed for this campaign is $3,616,721. Implemented activities will result in a ROI of 10% over a period of 12­14 months.

II. DESCRIPTION

Dunkin’ Donuts was opened by Bill Rosenberg in Quincy, Massachusetts in 1950.

Dunkin’ Donuts is the largest baked goods and coffee chain worldwide, serving over 3 million

customers daily. The Company sells 52 different donut varieties, other baked goods, and over a

dozen different beverages like tea and coffee. This differentiates Dunkin’ Donuts from other

coffee places because it has significant bakery options. Also, Dunkin’ Donuts has more brand

recognition than other similar places. Dunkin’ Donuts has over 11,300 restaurants in 36 different

countries.

Competitive Matrix:

Qualities Starbucks Panera Bread Dunkin Donuts How We Do It

Availability of food Low High Medium By utilizing local

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products (breads, sandwiches, etc.)

food markets.

Cost effectiveness Low Medium High By sticking to an efficient budget to sell to the consumers.

Appealing social environment

High High Low By improving the restaurants furniture and make it a more social room

Brand perception High Medium Medium By centering the campaign on energizing the youth.

III. OBJECTIVE(S) OF THE CAMPAIGN The objective of Energizing the Youth is to

increase Dunkin’ Donuts sales by 10% by the end of the advertising campaign by targeting a

younger demographic: teenagers and college students. The coffeehouse industry is valued at

$28.84 billion and Dunkin’ Donuts owns a share of 16.1% of the market. This is less than half of

the market share that Starbucks has; with a of 32.8% share. The goal of this campaign is to

change the younger audiences’ views of Dunkin’ Donuts and reposition the company in the

younger audiences’ mind to directly compete with Starbucks and gain market share. CGD

Company wants to reposition and compete with Starbucks by creating a similar instore

atmosphere while capitalizing on Dunkin' Donuts strong differentiation position.

IV. TARGET MARKETS

In this promotional strategy, Dunkin’ Donuts will target teenagers and college students

between the ages 16­24 who are often overwhelmed and in extreme need of coffee. Currently,

Dunkin’ Donuts has failed to provide a relevant positional campaign to target this demographic

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leaving them to go to the more trendier coffee shop, Starbucks. Therefore, the goal of this

advertisement campaign is to change the positioning of Dunkin’ Donuts in the younger

audiences’ mind to directly compete with Starbucks and gain market share.

The Current State:

Currently, Dunkin’ Donuts target market is middle­aged consumers

between the ages of 25­45 (largest consumers of coffee) with a

disposable income; earning $35,000 minimally a year. Dunkin

Donuts’ current buyer persona is Stressed Steve who is a professional

businessmen with a family at home who makes an ideal customer

since he is typically busy and on the run, looking for fast service to provide him with a

caffeinated beverage.

Proposed Target Audience: As previously stated, CGD Company believes that if Dunkin’

Donuts creates appealing advertisements for a younger audience, they would gain more sales and

generate a bigger profit. Therefore, this advertisement campaign will target 16­24 year olds.

V. PRIMARY BUYER’S PERSONA­ Meet Stereotypical Sally. She is

currently in college majoring in Psychology and loves to be spiritually

sound. Stereotypical Sally often tends to follow the next best thing that

captures her attention and the attention of her peers around her. She

enjoys watching reality shows such as Keeping Up with the Kardashians. Although there is a

hindrance to her budget, she loves to eat at places like Chipotle and usually picks up Starbucks

before she eats there. However, her school schedule has been so hectic to the point where she

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cannot afford to wait at both of the never­ending lines. So before she has to head to her next class

for finals, she goes to Dunkin’ Donuts to buy coffee that will help her find the motivation and

energy that will get her through her finals. She is greeted by a gracious staff and is given her

coffee almost immediately upon her transaction as well as a breakfast sandwich she ordered. She

realizes that she has extra time on her hand since she did not go to Starbucks and Chipotle so she

finds a nice, calm seat to study in for the twenty minutes before her final. She realizes that since

the reconstruction of Dunkin’ Donuts (as a result of this campaign) she finally has the perfect

place to both study and hang out with her friends, so her and her friends become regular

customers.

VI. TARGETED MEDIA

In order to successfully implement this advertisement

campaign and reach the younger target market, CGD

Company must use selective media outlets that the buyer

persona will consume using the 7 Multifaceted Approach.

The media that this advertisement campaign will target is:

1. Traditional Channels 1. Radio­ on the way to school, the selected target market tends to listen to the FM station

(Z107.9 and 97.1) and to prepare them for the day ahead. The radio advertisements will be released approximately at 7am to convince the target that they need a cup of coffee before school to get them through the day. CGD Company will also release an advertisement during the average lunch break, 12pm, in order to persuade them that Dunkin’ Donuts is the best option. These radio advertisements will also run at 8pm while Stereotypically Sally is on her way to hang out with her friends so that they will be persuaded to stop at Dunkin’ Donuts before getting their night started.

2. Television­ the selected target market tends to watch reality shows since they are full of drama. Therefore, CGD Company will promote the advertisements on E! where Keeping up with the Kardashians is aired. CGD will also promote advertisements on other television stations which airs reality shows such as VH1 and Bravo. Since teenagers and

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college students are big on binge watching series on Hulu, CGD will also promote advertisements on there since Netflix only promotes their own advertisements.

2. Digital Channels Social Media­ Since Millennials are Digital natives, it is imperative that the company uses social media to reach them since they are always online. As “66% of 18­24 year­olds are more loyal to companies they follow through social media accounts” (Loyalty Statistics: The Ultimate Collection), CGD Company aims to use social media to build relationships with the selected target market. Social media will be used as a gateway to connect and update them about new deals and incentives that Dunkin’ Donuts are offering. CGD Company will target the selected audience through Instagram and Twitter which are mainly populated by teenagers and college students. VII. PROMOTIONAL ACTIVITIES

To successfully appeal to the selected target audience, CGD Company will target promotional activities directly at them. As an added advantage, CGD Company are experts at the selected target markets’ likes and dislikes, what they watch, what they listen to, and which social media sites they can be found on. To makes sure the company gets in contact with as many of potential consumers in the selected target market as possible, CGD Company will push advertisements on to each of these media outlets. CGD Company’s planned promotional activities complete the rest of the 7 Multifaceted approach that include: 3. Loyalty Program and Social Responsibility­ Dunkin’ Donuts improved loyalty card —loyalty cards will now be offered to customers after 10 purchases. CGD Company wants the customers to need to have a loyalty card, therefore, the company will create a new and improved card that represents the theme “Energizing the Youth” while offering loyalty deals. The loyalty card will provide loyal customers with 3% off of each purchase with a free donut and coffee on birthdays. The card will also give them a choice to donate 5 cents with each purchase to a partnered cause of their choice: local homeless shelter, local food banks, Action Against Hunger, and more since a study stated that “63% of millennials said it’s important that their loyalty program participation supports lifestyle preferences such as wellness programs, sustainability efforts or a charity, versus 53% of Gen X’ers (35­50) and 46% of baby boomers (51 and over)” (Loyalty Statistics: The Ultimate Collection) . The loyalty program will also allow loyal customers to be the first to drink/eat the new extensions in the product line for free the first time. 4. Population Appeal­ Spokesperson to appeal to the selected target market —Kim Kardashian has been a role model to the Stereotypical Sallies in the world lately as she turned a negative into a positive light. That's the type of person that CGD Company aims to endorse at the new and improved Dunkin’ Donuts establishment. Kim Kardashian will also allow the company to reach her target audience (whose demographics that the company is trying to target) and persuade them that Dunkin’ Donuts is the key to a better life. CGD Company will incorporate Dunkin’ Donuts into Kim Kardashian’s popular game which will provide her with an energy boost and add to the theme of the advertising campaign “Dunkin’ Donuts: Energizing the Youth ”. This form of product placement will be used to target the 16­24 year olds who are obsessed with her game. In due time, it will entice Kim Kardashian’s fans to want to buy Dunkin’ Donuts as well.

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5. Retail Customization­ Improving some Dunkin’ Donuts restaurants ­ CGD Company will improve two Dunkin’ Donuts restaurants in each state to see if the modifications improve the amount of youth that come in and sit inside of the restaurant. These changes will be in Dunkin’ Donuts locations which can be accessed by high school and college students with a large population of Millennials; for example, Columbus and Cleveland. The designs chosen by CGD Company will give the restaurant a more youthful vibe so that the selected target market can come in, hang out, and study inside while buying more products. In the restaurants, CGD Company will add couches, a fireplace, and circular tables with outlets near them so the target market can plug up their phones and laptops. 6. Product Line Extensions­ to compete directly with Starbucks, Dunkin’ Donuts will unleash their version of Cuban Coffee to add a stronger coffee selection to its mix. CGD will also provide seasonal coffee flavors such as “pumpkin spice” which appears strongly to the selected target audience. These additions to the product line will provide bold flavors to target the new bold audience. CGD Company aims to ease them of their fatigue and “energize the youth” so that they can continue working hard by creating strong flavors which will still be healthier than Monster drinks. 7. Product Placement­ along with placing Dunkin’ Donuts inside of Kim Kardashian’s game CGD will place it inside of her reality show which, in turn, will convince her audience (16­34 year olds) to buy Dunkin’ Donuts as well since a local coffee shop, International Bakery Cuban Dulceria, that the Kardashians mentioned in their reality show increased their profits by 85%. VIII. Primary Data

CGD Company has taken the liberty in conducting a two week survey that illustrates the

thoughts of the Stereotypical Sallys in high school and colleges in the Northeast Ohio region.

The survey was based on their thoughts of Dunkin’ Donuts and Kim Kardashian to further prove

how the implemented strategies will increase sales. When asked how much money have they

spent on energy in the Kim Kardashian game 83.3% of respondents stated that they have not

spent anything on energy but clothes instead. This statistic proves that Kim Kardashian would

not be losing much money by incorporating Dunkin’ Donuts as an energy boost in her game.

When asked how irritable they got when they run out of energy while playing the game on a

scale of 1­5, one being not at all and five being extremely irritable, 44.4% of them stated that

they were extremely irritable. Thus proving that the incorporation of Dunkin’ Donuts in the

game would be a win/win situation for both sides. It would cause the players of her game to

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become less irritated and less likely to quit while giving Dunkin’ Donuts more brand recognition

as they target the millennials. As seen in Figure 1, 45% of respondents stated that they do not

feel that Dunkin’ Donuts appeals to the youth. When asked about the reason behind their answer,

63% of the respondents stated that Dunkin’ Donuts targeted older people more. As seen in Figure

2, 70% of respondents believed that Kim Kardashian appealed to the youth which proves how

much her endorsements can help with Dunkin’ Donuts new campaign, Energizing the Youth. In

another question which asked would Kim Kardashian's endorsement make more millennials

liable to buy Dunkin’ Donuts, 67% of respondents stated that it would since the youth is

infatuated with Kim Kardashian. Which proves why her endorsement is worth it as she will bring

in more of the selected target market. Lastly, when asked would they study at Dunkin’ Donuts

55% of respondents said that they would not and 61.1% of them has stated that it is because

Dunkin’ Donuts does not have a comfortable environment. Which proves that remodeling some

restaurants will prove effective for Dunkin’ Donuts.

Figure 1

Figure 2

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XI. BUDGET

To successfully fulfill this advertisement campaign, it is projected that CGD Company will need $3,616,721 to be able to successfully advertise in our selected medias. Although public relations and most of the social media promotions will be free, it will cost a negotiable $1,000,000 for Kim Kardashian to endorse Dunkin’ Donuts plus her negotiable demands such as plane tickets, a hotel, security, stylists, and a rental car. The plane tickets alone will be about $17,781 for first class tickets for her and 4 other friends and a coach ticket for her assistant ($3,500 per ticket x 5 +281 for a coach ticket=$17,781) to get to the set. As seen in an article, the added cost of the rest of her demands will come roughly to $51,260.

BREAKDOWN

Cost for Kim Kardashian to

Endorse

Cost for 5 First Class Tickets Plus 1 Coach

Cost for the Rest of Her Demands

Expected Costs Summary

$1,000,000 $17,781 $51,260 $1,069,041

The budget also includes the $35 per Hulu advertisement which CGD Company will run for 12 months ($1,680), $850,000 to add to the product line and for hiring researcher, $1,026,000 to advertise five commercials on television (How Much Does Television Advertising Really Cost?), $550,000 to create and print loyalty cards, and $120,000 to cover 12 months of radio advertisements.

BREAKDOWN

Total price for Kim

Kardashian

12 Months of Hulu Ads

Cost to Create and Print Loyalty Cards

Cost for 5 TV Ads

Cost to Test and Add to Product Line

12 Months of Radio Ads

Expected Costs

Summary

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$1,069,041 $1,680 $550,000 $1,026,000 $850,000 $120,000 $3,616,721

X. ROI

With the anticipated outcome from the advertising campaign, CGD Company expects to return the money used in the budget plus $1,000,000 within the next 12­14 months. This is an expected ROI since CGD will be increasing brand awareness through the new promotions, appealing to/gaining a new target market by targeting teenagers and college students, while maintaining the regular customers that Dunkin’ Donuts is known for: the middle aged business man. With this advertisement campaign directly targeting teenagers and college students, CGD Company expects at least 750,000 new customers nationwide, 1,200,000 worldwide which is about .0125% of the 80 million Millennials in the world (The Millennial Generation Research Review). This increase will drive at least a 10% increase in sales within the 12­14 month time frame that CGD Company will be working on this campaign as well as drive long term customer loyalty to the brand. XI. SCHEDULE OF ADVERTISING PLANNED

The goal for this advertising program is to capture the youth’s attention by centering advertisements around the theme “Dunkin Donuts: Energizing the Youth.” The advertisements will focus on promoting new products to Dunkin’ Donuts’ product line such as the loyalty card, coffee made with cuban beans, and giving back to the communities across America to create social responsibility within the brand. CGD Company will be using three media outlets to inform the primary target market to ensure the appropriate reach of the consumers from the appropriate channels. The three media outlets will be radio, social media, and television (to promote the new loyalty card, cuban coffee, and our way to give back). The goal is to release the media outlets by August 1 of 2016 due to the target audience starting school around the fall and the heavy workload will result in the need to consume coffee. Outlets such as social media and television will begin in the beginning of the fall (Early August) to announce our new campaign.

Radio Television Kim K’s Endorseme

nt

Social Media

Addition to Product Line

Improve Locations

Date August 2016

August 2016

new season premiere­ fall

August 2016

August 2016

August 2016

Time 7am and 12pm

8pm 8pm 6pm­7pm 5am 7am

XII. SCHEDULE OF ALL SALES PROMOTION ACTIVITIES PLANNED:

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Dunkin Donuts will launch their improved loyalty card to persuade the target market in August due to majority of students resume back to school and college. The appearance of Dunkin Donuts in the Kim Kardashian game will begin in September because it is not of top priority to push sales and entice our primary target market.

Improved Loyalty Card with Added Benefits

Kim Kardashian Game

Date August 2016 September 2016

Time 12pm 12am

XIII. STATEMENT OF BENEFITS TO THE CLIENT/ADVERTISER The goal is for both the client and advertiser is to feel as though they are both benefiting

through the product. The main goal for the advertiser is to gain ROI and the main goal for the

consumer is to feel as though they are getting the best deal possible to satisfy their wants and

needs. Other benefits of Energizing the Youth include:

Advertiser’s Benefits:

gaining a relationship with the consumer increasing sales have a popular outlet (Kim Kardashian Game) appealing to the primary target market and gaining a larger profit supporting a cause to gain a positive perspective in the consumers’ minds generating a new loyal lifelong customer

Customer Benefits: Feel closer to spokesperson “Kim Kardashian” have a product and a place which satisfies their wants and needs Retail location meeting physical and social needs Gain benefit from loyalty program Feel as though they are helping humanity Can create a conversation spark on social media

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2014. Web. 14 Jan. 2016. "Kim Kardashian Charges Nearly $1M per Product Endorsement: Report." NY Daily News.

N.p., n.d. Web. 27 Jan. 2016. "Loyalty Statistics: The Ultimate Collection." Loyalty Statistics: The Ultimate Collection. N.p.,

n.d. Web. 27 Jan. 2016. "Thanks to Khloe Kardashian, International Bakery Cuban Dulceria Is Selling More Cortaditos

Than Ever | SideDish." SideDish. N.p., 20 Mar. 2013. Web. 27 Jan. 2016. "What It Costs: Ad Prices From TV's Biggest Buys to the Smallest Screens." Advertising Age

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