Starbucks and Dunkin Donuts are two of the largest coffee chain in the US. They are the fiercest rivals and thus it is interesting to study their marketing strategy. Both the companies have been undergoing coffee wars in terms of marketing strategy and pricing (Rowe). The coffee wars saw changing marketing strategy, products, and customer experience as the key changes adopted by the coffee houses to retaliate against each other. Thus, this paper is proposal to the research that will be conducted into the marketing strategy of the companies.
This paragraph provides a brief background about the companies. Starbucks is a $64.3 million company, which operates internationally and holds more than 140 stores in the US (MarketWatch). The company specializes in coffee and other beverages. Dunkin’ Donuts is a coffee chain, which operates in the US, is a joint venture between Procter & Gamble Co. and J.M. Smucker Co. (Neff). The company is famous for its products like Donuts, other food items, and coffee and other hot beverages. Thus, Starbucks specializes only in coffee while Dunkin’ specializes in coffee and baking.
The proposed study will be based on the marketing strategy employed by Starbucks and Dunkin’ in marketing their coffee. After a thorough review of the secondary sources, it can be deduced that the present marketing strategy employed by Starbucks is to promote its high-quality beans and new product offerings like instant coffee and offering a more-for-less strategy (Ordoñez). Further, they are offering $1.50 short at Starbuck outlets in the US in order to compete with Dunkin’ low prices for coffee. The company has employed innovative and cost-effective marketing strategy, and have provided high-quality product and customer experience.
Dunkin’ Donuts is a company, which has increased its coffee offerings largely in the last few years (Ordoñez). Dunkin’ has ventured into a more aggressive expansion plan by opening more retail outlets all over US (Paz-Frankel) and selling coffee through grocers all around the country (Jewell). Further Dunkin’ has also started to market their product to the health-conscious market, and has introduced ‘green’ and low-calorie products.
First of all, a comparison of the prices of Starbucks and Dunkin’ shows that the prices of Starbucks ‘ coffee are higher than that of Dunkin’. Starbucks coffee is available in three varieties i.e. All Starbucks® Coffees, Starbucks® Regular Coffees, Starbucks® Decaf Coffees, and Starbucks VIA. They are served in four sizes i.e. mid, medium, bold, and extra bold. Apart from this, they sell coffee beans from different countries and have recently launched filter and instant packs. The prices at Starbucks start at $11.95 for 1 lb of coffee while Dunkin’ starts at $7.99. The coffee at Dunkin’ store starts at $1.79 while that at Starbucks starts at $2.96. Therefore, prices at Starbucks are higher. The sources through which this information can be gathered are the company website, or the menu of the stores (Starbucks; Dunkin’ Donuts).
For understanding the demographics of the customers who visit these stores, it is best to observe the customers who drop in the Starbuck and Dunkin’ store for a day’s time and do a short questionnaire survey. This will provide the demographic, economic and social background of the customers.
The promotional aspect of the stores can be understood through a thorough review of the promotions in television, newspapers, and internet to understand the kind of promotional strategy employed by the companies. To gather information regarding distribution, the interview will be conducted with the store managers who will provide thorough information regarding the distribution strategy of the companies.
Reference
Dunkin’ Donuts. Dunkin’ Donuts. 2009. Web.
Jewell, Mark. “Grocers to sell Dunkin’ Donuts coffee.” 2007. USA Today. 2009. Web.
MarketWatch. Company spotlight: Starbucks. Company Report. New York: Datamonitor, 2009.
Neff, Jack. “Dunkin’ Donuts Coffee.” Advertising Age 79(43) 2008: S-12.
Ordoñez, Jennifer. “Starbucks Stirs Things Up.” 2008. Newsweek. Web.
Paz-Frankel, Einat. “Dunkin’ Donuts prepares major expansion with plans for 70 locations in Memphis area.” 2007. Memphis Business. 2009. Web.
Rowe, Megan. “Coffee Watch.” Resturant Hospitality News September 2009: 52.
Starbucks. 2009. Web.