dunkin donuts -...

Dunkin Donuts

John Beebe-Center

Terrence Gagala

Meghan O’Brien

Drew Rosen

HOSP 3050 - Hospitality Strategic Marketing

Professor Howarth

2/17/2014

Beebe-Center, Gagala, O'Brien, Rosen 2

Contents Introduction .................................................................................................................................................. 3

Core Product ............................................................................................................................................. 3

Facilitating Product ................................................................................................................................... 4

Supporting Product ................................................................................................................................... 4

Augmented Products ................................................................................................................................ 5

Service Characteristics .................................................................................................................................. 5

Intangibility ............................................................................................................................................... 6

Inseparability............................................................................................................................................. 7

Variability .................................................................................................................................................. 8

Perishability ............................................................................................................................................... 9

Price .............................................................................................................................................................. 9

Distribution Channels .................................................................................................................................. 10

Promotion ................................................................................................................................................... 10

Conclusion ................................................................................................................................................... 11

Works Cited ................................................................................................................................................. 12

Work Breakdown Structure for Dunkin Donuts .......................................................................................... 13


Introduction

From the survey we conducted on the areas surrounding Providence, RI, we decided to

launch a new line of tea's. Using Providence as a test market, we want to explore the success we

can have by offering more tea options. Tea is one of the world's most popular beverages, and it

showed on our survey's; almost 50% of respondents stated that they drink tea. Our menu

currently only has three tea options; the basics of green, oolong and black teas. Our new line will

expand upon our existing flavors and ideally allow us to capture a currently growing market.

Teavana and Tealuxe are two chains that are two growing chains of "tea bars" that are

capitalizing on this market. Starbuck's also offers over 25 tea based options to cater to this

market. By adding tea to our product line we can better compete with these companies. Our new

product line will contain a raspberry herbal tea, a cranberry herbal tea and a peppermint herbal

tea.

Core Product The core product that people usually purchase at Dunkin Donuts is coffee. There are

many types of coffee but the two main coffees are hot and cold. They give you the options to

choose from once ordering your coffee. People usually order hot coffee when it’s cold outside

and ice coffee when it’s hot outside. Their slogan, “everyone runs on Dunkin” is true because

many people can’t get their day started without coffee.

This addition of these three herbal teas to your choice of beverages will not directly affect

coffee. We are not trying to replace our loyal customer's favorite brew; we are looking to expand

our menu to bring in a new base of customers. The addition of tea also offers a healthier, lower

caffeine option to attract the growing health and fitness markets back to our shops.


Facilitating Product Facilitating products is mostly about the employees who serve the coffee to the

customers. Furthermore, the employees who work the drive thru windows are a huge part

because most of the people who go to Dunkin Donuts go thru the drive thru window. Obviously

the workers at Dunkin Donuts will use their hospitality skills to make sure the customer gets

what he/she want. Usually if it’s cold outside, customers will need to use napkins to hold their

coffee or even if the coffee is hot or cold in general.

The addition of the new line of herbal teas will not change the set up of our facilities

much. We will possibly need more room for storage and more tea brewing stations set up at the

front counter. The drive thru, service counters and the service stations containing the paper goods

our customers rely on will remain the same. The biggest change will to be training the employees

on the new items and having them suggest them to the customers.

Supporting Product The main supporting products that Dunkin Donuts has to offer is the donuts, sandwiches,

and the merchandise that they offer. Most people like to get something to eat when they go to

Dunkin Donuts. Customers have different types of products to choose from. These different

types of products help the DD product differ from the types of products that Starbucks or other

coffee shops offer.

With these new teas added to our menu, we will be able to compete with Starbuck's on a

higher level. Starbucks already offers twenty-four different varieties of tea drinks to compare to

our simplistic menu. Dunkin Donuts only currently carries green, oolong and black teas. By

diversifying our menu, it is our hope to attract new customers and be better fit to compete with

Starbucks and other competitors. These tea's will act as a substitute good for coffee, leading to


broadening of our customer base. We will still continue serving the same complimentary goods

as before.

Augmented Products The augmented product of Dunkin Donuts is the interaction you receive as a customer

from the employee. As an employee you want be able to give the customer the visit of a life

time, meaning that nothing goes wrong. Customer interaction is huge because the employee

needs to greet and say goodbye to every customer.

Looking at the variety of locations online, the atmosphere really grabs the customer’s

attention. The customer has the opportunity to submit their feedback because Dunkin Donuts

likes to hear the complements/complaints that are made by the customers. Customers want to be

in and out of the door, so they employees of the store locations need to make sure that everything

is accessible to the customers. Customers expect the service and product to be good enough for

them to return in the future.

This expansion of our beverage line gives us multiple opportunities to please more

customers than before. By adding on this product, new customers will be entering and with a few

good visits make Dunkin Donuts tea a ritual of their own. Once again, training the employees on

this new product is essential for success in the future with building these relationships.

Service Characteristics

To promote our new tea lines we have to make sure our service characteristics are up to

date. The four service characteristics that really help promote are product are intangibility,

inseparability, variability, and perishability. Intangibility is the services that can’t be seen,


tasted, felt, heard, or smelled before purchase. Variability is the quality of services that depend

on who provides them and where, when, and how. Inseparability is services that can’t be

separated from their providers. Finally perishability is services that can’t be stored for latter

sale or use. All these service characteristics are key factors for our new tea products to be

successful.

Intangibility

According to our textbook intangibility are services that can’t be seen, taste, felt, heard or

smelled before the purchase. It’s pretty much marketing using tangible objects, that don’t so

you’re probably wondering how this affects the coffee we drink almost every day. Our new tea

product, will have to be advertised a different way because we want more customers to be able to

come in to Dunkin Donuts and purchase it. Marketing a product can be tough but if you advertise

it correctly, more people will purchase it.

Another way it’s intangible with its coffee is the quality of Dunkin’s service that provides

you. Before you even purchase it Dunkin experts on average test out the new tea product every

day to make sure it stays consistent. Also all Dunkin Donuts have customer surveys that lets the

employees know what they can improve on. It may not help much with the first immediate trip,

but it will help future trips before the first customer even walk in the door. This also have the

additional benefit of increasing management’s focus on the brand, which is set apart as a crucial

asset. It also ensures that, rather than being given the brand to use for free, management is now

responsible for ensuring a healthy return for its use. These intangible services help them compete

with places like Starbucks and McDonalds that are high competitors in the coffee industry.


Inseparability

What will make our products inseparable from the other places that serve herbal tea is

how our service is. Service is what keeps people coming back to the place. This means that we

need to make sure that all of our employees are up to date with the product and everything

about the new herbal tea product, to re-ensure the consumer to buy the product. It’s the

manager’s job to inform each employee every single fact about the tea, so employees can sell

the tea to the consumers. Consumers are more impressed and are more likely to buy a product

when an employee can list off each fact about the product. We should also offer nutrition facts

about the product because today every one cares about how healthy the product is they’re

about to consume.

Another way to keep the product inseparable is have each new employee that goes on

shift to try the product, to re ensure that the tea is to perfection for every customer. This is

what Dunkin does for their coffee every morning and it re ensures the customer that they’re

drinking the highest quality tea every day. Finally, it’s important to leave out certain items that

go in tea like honey/sugar for the customers to put in themselves. Even though Dunkin does put

everything in them to make life easier for the consumer, it’ll quicken up time for the employee

and also it allows the consumer to have the drink exactly how they like it. This will increase

business because it reduces time so employees can serve more quickly and the consumer can

have their drink exactly the way they want it.


Variability

To make our new herbal tea products successful really depends on the quality of service

that is provided by our employees serving the customers. To really promote it we need to place

signs promoting the new tea flavors all over the store to really catch the consumer’s eye. This

will actually let the consumer know and maybe they will even want to try out the new product.

Maybe also have an advertisement place in the facility with someone famous to really make the

consumer try the product. For example almost every Dunkin Donuts one of our representatives

went to have a cardboard cutout with Ron Gronkowski promoting a new steak and egg

sandwich. This really catches the consumer’s eye because in the eyes of consumer seeing a big

celebrity holding a product really makes people want to try the product. This could also lead to

maybe a celebrity going to different Dunkin Donuts in different areas offering a meet and greet,

and offering free samples to really bring in a lot of consumers to try the new products. This

could really expose our new herbal tea product.

It’s also important for our employees to have top notch service. We believe that Dunkin

should implement to their employees to say the following when introducing themselves to the

customer: “Hello my name is (insert name here) and welcome to Dunkin Donuts. Would you

like to try are new herbal tea today.” Many fast food places do this when they have any new

product because it informs the consumer that there is a new product and the likeliness of the

consumer buying it increases. It’s also necessary for the consumers to have a great background

knowledge on the product like different flavors because if the consumer asks questions about

the product they’ll expect the employee to respond with an answer rather quickly and will

again increase the chances of the consumer to buy it.


Another good idea for us is to monitor customer satisfaction by offering surveys of the

service and how they like the product. This will allow us to see how much they like the product

and give us an idea how we can improve the product/ if we should keep the product going.

Surveys are the most efficient way to see if the product will be successful in the long run. Also

it’s important that the quality of service is very high and the facility is clean and up to food

safety codes because these are important factors to have the consumer come back again and

buy our product.

Perishability Perishability is defined as services that can’t be stored for later sale or use. This is pretty

obvious when talking about the new tea product because you can’t really save tea for later; even

if it’s cold it loses its freshness. If they don’t constantly make fresh tea and keep up with peoples

order, there is a recipe for disaster. Each Dunkin employee needs to make sure that each cup is

made to the customer’s perfection or the customer won’t be happy. Usually if made wrong

Dunkin will replace the cup, but that’s a waste of tea which is trying to be avoided. Messing up a

cup of tea makes the customer angry and the process for them to receive the cup of coffee will be

longer. Dunkin employees have monitors and can write it down to ensure that they won’t forget

the customer’s order.

Price

Right now Dunkin Donuts only has 3 varieties of tea, regular black, decaf, and green. Hot

tea ranges from a size small to extra-large and costs from $1.49-$2.39. The new teas should be

offered with this same price range. A box of 20 count tea bags is $5.99 and when deciding to

offer the new flavors prepackaged, they should be this price as well. Dunkin Donuts should keep


all the pricing consistent so customers will want to buy the new teas and still have the same low

prices they have come to expect.

Distribution Channels

The Dunkin Donuts Brand uses the National DCP to deliver its products to the Dunkin

Donuts franchises and will continue to do so for their new line of teas. The National DCP is an

exclusive purchasing and distribution entity for over 7,000 Dunkin Donuts locations in the

United States. They will just add the new varieties of tea to their products. Dunkin Donuts will

utilize all their franchises as distribution for their main distribution channel for the new teas. This

will be the most effective way to introduce the new product to the market and to see how the

customers will react to it.

After selling it in the franchised locations for several months, Dunkin Donuts can gage

how well the tea has been perceived by customers. If the sales are good, the Dunkin Donuts can

start selling the packaged tea in food stores. This will help reach more customers and reach the

consumers that like to have hot tea at home. The new tea flavors should also be placed online as

well for people to order.

Promotion

Dunkin Donuts utilizes a large variety of promotional methods. To quickly get word out

about their new product, they should run multiple television, radio, and billboard advertisements.

By using multiple different promotional methods, Dunkin Donuts will be able to reach large

amounts of people and persuade those who would not normally go to Dunkin Donuts to come


and try the new product. Another great method would be to place coupons in popular magazines

and newspapers to entice people to try the product and hopefully create new customers. A simple

promotional method would be to place posters on the windows of Dunkin Donuts franchises

displaying the new tea varieties. People will see these posters as they walk or drive by and could

be tempted to walk in a try the new product.

Conclusion

Expanding our market to include more teas will allow us to start new relationships with

customers and strengthen existing ones. This diversification will protects our assets and allows

the company continuing growth and stability. This also speaks of our never ending desire to

please our customers, as they inspired this change.


Works Cited "Dunkin' Donuts National Franchisee-Owned Distribution & Purchasing Cooperative to Open

First Local Distribution Center West of the Mississippi." DunkinDonuts. Dunkin' Brands Media

Relations, 8 May 2012. Web. 13 Dec. 2013.

"Driving Tomorrow's Business." Driving Tomorrows Business. National DCP, n.d. Web. 16

Dec. 2013.

"About Us." DunkinDonuts.com. N.p., n.d. Web. 17 Dec. 2013.

<http://www.dunkindonuts.com/content/dunkindonuts/en.html>.

"Let's Hear It For Consistency." DunkinDonuts.com. N.p., n.d. Web. 17 Dec. 2013.

<http://www.dunkindonuts.com/content/dunkindonuts/en/coffee.html>.

DunkinDonuts.com. N.p., n.d. Web. 17 Dec. 2013.

Saif, Wagar. "Is Dunkin Donuts the Best Coffeehouse in Town?" Is Dunkin Donuts the Best

Coffeehouse in Town? The Motley Fool, 17 Dec. 2013. Web. 17 Dec. 2013.

Sellen, Tom. "Coffee Connoisseurs Sniff Out Cheaper, No-Frills Fix." The Wall Street Journal.

The Wall Street Journal, 16 Mar. 2009. Web. 16 Dec. 2013.

Smith, Stephen. "Ten Reasons Why Tea Is Better than Coffee." Tea. Teaviews.com, 24 Mar.

2013. Web. 15 Feb. 2014.

"Teas." Starbucks: Menu: Tea. Starbucks, n.d. Web. 15 Feb. 2014.


Work Breakdown Structure for Dunkin Donuts Prepared By: Terrence Gagala (Project Manager) Date: 2/13/14

A. Terrence Gagala

1. Project Manager

2. Team Member

3. Sections include:

- Title Page

-Introduction

-Product

-Conclusion

-Works Cited

-PowerPoint Slide Show

B. Drew Rosen

1. Team Member

-Sections include:

- Service Characteristics

-Intangibility

-Perishability

-Works Cited

C. Meghan O’Brien

1. Team Member

-Sections include:

- Promotion

-Price

-Distribution Channel

-Works Cited

D. John Beebe-Center

1. Team Member

-Sections include:

- Service Characteristics

-Variability

-Inseperatability

- Works Cited

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