Dunkin’ Donuts India: The blunder of Brand positioning
Introduction:
Dunkin donuts is a subsidiary of the Dunkin’ brands. They are in the food and beverage industry through quick service restaurants and have been selling donuts since 1950’s. They are one of the most well recognized brands in baked goods and caffeinated beverages in the world. And is said to be the largest coffee and baked goods chain in the world. Dunkin is now a conglomerate which houses its own brands and brands like Baskin Robbins and Togo’s. Dunkin launched its first location in India in 2012 in a joint venture with Jubilant Food works who had bought dominos to India. They launched as ‘Dunkin donuts and more’ with a menu going beyond their traditional donuts and coffee with customized Indian tastes and priced it targeting middle class population. They followed a fast paced extensive expansion strategy, however by 2018 they had closed almost half of their stores.
The major customer base for Dunkin donuts in western countries are the fast paced working class adults. Their product mix, high quality coffee and donuts are part of a quick breakfast culture in western countries. Their philosophy was: “to make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern and well merchandised stores”. Dunkin had priced its products affordable for the lower income and not exclusive for higher income. In America they positioned themselves as a regular 24/7 coffee shop at a lower price point than Starbucks. Their slogan “America runs on Dunkin’ focuses on how they fuel a younger generation of workforce. However, in India, they underplayed their coffee and diversified to new products like burgers and sandwiches after donuts saw stagnating sales.
Perception-The popular Dunkin donuts logo in pink and orange with a small cup of hot coffee couldn’t communicate that one of their main products which they have traditionally stood for was coffee. Since the word donut is associated with the brand, it is quite natural that people assume their primary products are donuts. This is what happened in India and Dunkin did wrong by underplaying it when it came to their best beverage. Also Donuts were not an ideal breakfast option for the Indian consumers. Indians have a culture where they sit down and have a hearty breakfast with the family before leaving for work. Also sweet foods generally do not qualify as breakfasts as the Indian taste is accustomed to more savory breakfasts. Hence the positioning that worked for Dunkin in America and western markets wouldn’t fit for the product in the Indian market.
What went wrong in positioning?
Dunkin donuts launched in India with a diversified menu, although the donuts were same, they ‘Indianised’ the flavors by introducing mango, litchi, grated coconut etc. Although their long term strategy was to promote a donut eating culture in India, they initially launched as donuts & more. It included spicy chicken sandwiches which was a drastic difference from their primary product and it was a risk they took only in the Indian market. The idea was to win over customers and eventually push the donuts more, which was initially a niche.
Both sandwiches and donuts were initially priced moderately in Rs 45 and Rs 85 respectively. What went wrong in positioning of Dunkin Donuts in India is that Dunkin took the strategy of introducing donuts, burgers and sandwich options, expanding its menu and offerings. They positioned it as a breakfast/lunch/dinner café. Their initial target being lunch and dinner due to the dearth of such cafes in India. They positioned it as a whole meal option whereas for Indians fast-food options like burgers and sandwiches are usually a mid-day snack.
As for the donut, they initially underplayed it, promoting the burger more. Later they tried associating it to Indian sweets and launched a version of assorted donuts for Diwali. Donuts are basically bread and glazing, which could never replace the relevance of traditional sweets in India, nor could they be as flamboyant as a whole cake. They come between a cupcake and a chocolate. They should have realized this and positioned it accordingly, without compromising the soul of the brand i.e Dunkin. The myth of tea being the popular preference of Indians have changed a lot and we have seen café coffee day and similar players bring coffee to the mainstream even before dunkin’ entered the market.
They could have positioned coffee and donut as an evening snack option for the hundreds of working youngsters in India who would grab a cup on their way back home or as a midnight indulgence for keeping awake and working for those taking night shifts. Rather than pushing a product that they are acclaimed for in the world and even evidently in their name, they promoted their sandwiches ignorantly. Brand positioning should mean adapting the external associations and body of the brand without disregarding its soul, especially for a brand like Dunkin which is well established globally. Since dunkin’ has always been about on the go coffee and donuts, upgrading online ordering technology and self-service kiosks and fresh donut vending machines in offices can help promote the product.
Repositioning:
Brand position is defined as” the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market” by Kotler. Therefore brand positioning affects the brand equity and overall performance of the brand. The following are the key aspects of brand repositioning that Dunkin Donuts needs to undertake in the Indian market.
Target audience:
The target audience for Dunkin donuts in India should be of the age demography of 15–25 years old and 25–35 years old. 8–15 year old kids can be easily wooed over by their natural sweet tooth and strong appetite for fast food. Teenagers, especially after the age of 15 are senior school students and college going kid who usually spend a lot of time with friends at cafes and fast food joints. People over the age of 25 are usually working adults who have gotten into the coffee- office culture. Targeting office going people working in MNC’s who work in different shifts can be beneficial. These target groups are those who prefer to have a coffee other than from home which would be a differentiating factor.
Needs and wants:
Understanding the needs and wants of the customer is a significant part of deciding the brand positioning and creating a customer based value proposition. Customers need a good cup of coffee/tea and some snack to go with it at an affordable price in the evening. The want for something tasty, customizable, indulging and exquisite can be met by exceeding normal expectations. The needs will be met by the standard products offered by Dunkin, the wants can also be offered at a competitive price point to delight the customer. The want for a change in choice or multiple options can be satisfied by offering a range of hot/cold beverages like the ‘Coolattas’ they are already selling, Also a variety of baked goods like croissants, donut holes etc.
Competitive frame of reference:
A significant aspect of positioning is creating a competitive frame of reference. It includes identify competitors which would be local cafes and more organized competition would be café coffee day, Indian coffee house, costa coffee, barista etc.
Analyzing competitors: Analyze the competitors to identify their customer value points and the product quality, availability, technical assistance, customer awareness and employees. Identifying and analyzing the competitors can help in creating a competitive frame of reference which could be leveraged by Dunkin’ from the fact of being the world largest chain of coffee and baked goods.
Points of difference and points of parity:
Points of parity for Dunkin would be convenience, quality, variety, community. Correlational points of parity arising due to the brands strong association with coffee and donuts would dilute the brand equity by promoting sales of other products like burgers and sandwiches. The main points of difference for Dunkin in India would be taste, authenticity, price, value for money and diversity.
Competitive points of parity- Dunkin donuts might have an issue when it comes to competitive points of parity. As Donuts are sugary and high in calorie, they have a disadvantage as compared to healthier grab and go food options like subway etc. They can reduce this conflict by creating competitive points of parity and launching decaf, dairy-free, eggless, healthier versions of donuts with lower calories. Also in order to compete with the likes of Starbucks and café coffee day, Dunkin needs to focus on the in store experience of customers. This would lead to creating Multiple frames of reference; by focusing on kiosks, store counters and drive thru for the grab n go customer and also creating a ambience to attract customers who would like to spend some time catching up on conversations and relaxing inside a café. Thus there are multiple frames of references to the cafes and to fast food joints and drive thru’s.
Straddle positioning: With different frames of references for both these services mentioned above, Dunkin can create a straddle positioning by focusing on the POP with premium cafes like Starbucks and CCD, also by focusing on its POD of grab n go of donuts and coffee.
Means of differentiation and competitive advantage:
Dunkin donuts was planning on renaming the brand as Dunkin. This was because the chain sole more coffee than donuts. But although this is true, their brand differentiation was based on offering both of these products. Rejecting that differentiation would have affected the brand. Selling the combination of good quality donuts, baked goods and coffee at affordable prices have been a differentiating factor for Dunkin donuts, this is their lead attribute. Forgetting this and focusing on a diversified menu would be a bad decision. Hence while re-positioning they need to focus on this differentiating factor and highlight their offerings and pricings. While communicating this, leveraging the international presence and heritage, authenticity of the brand and products will make a huge difference.
Creating a Brand narrative:
Narrative branding is based on deep metaphors that relate to people’s memories, stories and associations. For Dunkin, creating a brand narrative that would resonate with the Indian customers can help break the ice. In the brand story, we can highlight that the humble origins of Dunkin donuts and its vision and passion to give the best quality and service were the reason why they were taken into the hearts of millions of people around the world. The consumer journey would be the various touchpoints of its frontline employees in the store and the customer and also the technology interfaces that are now coming up like the self-service counters and kiosks, vending machines. The iconic pink and orange logo and what it stands for is the visual language or expression of the brand. Ultimately the role of the brand in the customer’s life is also a critical part of the narrative. The ‘America runs on Dunkin’ was successful enough in catching a lot of these aspects.
A fun yet energetic tagline like –‘donut’ stop, Keep up your hustle’ would suit the new generation of working Indians, who are in a constant hustle to achieve success .It also takes into account the current tagline of ‘Get your mojo back’ doesn’t show the narrative of the brand. The narrative can be expressed in several ways it can be through direct customer engagement or through marketing campaigns and media advertisements, through social media.
Brand mantra:
According to Kotler, brand mantra is a ‘3 to 5 word articulation of the heart and soul of the brand’. It ensures employees and marketing partners understand the brand. For Dunkin donuts after repositioning, the Brand mantra could be: Quality, convenience, community and care. Quality of the products are quite high for Indian donut standards, ensuring to keep up the quality and taste is quintessential. Convenience of having a coffee/ beverage with a donut on the way back from work or college or getting one on the go is communicated. Community and care for the customers and the partners and employees is also what the brand does and should stand for.
Communicating the repositioning:
Successfully communicating a brand repositioning to the customers involves creating new links in the minds and memory and also removing the links in memory associated with the earlier positioning. In a paper titled “Establishing Effective Repositioning Communications in a Competitive Marketplace” by Robert D. Jewell, he suggests that repositioning should focus on both removing the earlier links and subsequently promoting the new repositioning and link. He suggests that in order to remove the earlier association and link, it is advised to play the repositioning advertisement close to a competitor ad who follows their advertisement based on a similar positioning that our brand followed earlier. This would mean strengthening the association of the attribute/ link for the competitor and reducing it for our brand. For Dunkin it would mean playing the repositioned ads close to the breakfast ads of competitors to remove that association and create links in consumers mind to the new association of coffee and donut as a snack. Also to stop associations with traditional sweets, run the new repositioned ad close to competitor’s sweet ads to disassociate that link.
Customer involvement:
It is necessary to increase customer involvement in the repositioning and communicate the repositioning clearly to the customers. This will also help create strong associations and memory links in the minds of the consumers. To enhance memory on new positioning as mentioned in the previous point, airing the new ad campaign at the right time and with repetition can help create strong new association in consumer’s memory. Also using affective advertisement with either celebrity or distinctive appeal with good music and encoding can help cement strong new associations and subsequently help change consumers perception about the brand. For a product like coffee, donuts, focusing more on the hedonic aspects of the brand and the differentiating factor will be beneficial. Increasing customer involvement and following the central route (ELM) can promote the repositioning. ELM can be used thus to change consumer mind set about Dunkin. Increasing observability and trialability for donuts, by offering size/portion variations like mini donuts or donut holes can help promote the donut culture. Sticking to their core products can help forge prototypicality for the product which helps create strong memory and top of mind awareness for the product since these are typically low involvement products. Perception, motivation, learning and attitude are the buying influences for customers and repositioning should be so that it reflects in all these aspects.
Room for improvement: It is necessary to have room for improvement for the brand, diversifying the menu can happen without diluting the image and soul of the brand. Dunkin can move to healthier varieties of donuts to keep with changing consumer mind-sets and also expand the menu options going ahead in its life cycle. The brand positioning must not be restrictive to these changes and hence must highlight the brand innovativeness and the ‘best quality food which the customer wants’ attitude of the brand. It gives room for innovation and growth.
Thus Dunkin repositioning can help strengthen the brand in the minds of Indian consumers.
References:
1) https://blogs.wsj.com/indiarealtime/2012/05/08/dunkin-donuts-indian-menu/
2) https://study.com/academy/lesson/brand-repositioning-definition-strategies-examples.html
3) https://www.restaurantbusinessonline.com/operations/dunkin-donuts-air-details-its-repositioning-plan
4) https://blogs.wsj.com/indiarealtime/2012/05/08/dunkin-donuts-indian-menu/
6) http://www.ivycohen.com/MarketingCoach/BrandTransformationDunkinDonuts.html
7) Establishing Effective Repositioning Communications in a Competitive Marketplace Robert D. Jewell, Journal of Marketing Communications
