Dunkin Donuts: An International Brand for Average Joes
In the US Northeast, the Dunkin' Donuts brand has traditionally stood for hot coffee, fresh donuts, and shelter for off-duty policemen. Today, however, Dunkin Donuts is a global conglomerate that houses its own brand as well as quick service restaurant brands Baskin-Robbins and Togo's.
The Dunkin' Brands Inc. scope encompasses 30 countries and territories, with franchises spawning seemingly every second. This is serious business for a mom and pop chain founded by Massachusetts businessman William Rosenberg back in 1950. But from the very beginning, Rosenberg conceived of Dunkin' Donuts as a brand for the masses. As early as 1962, Dunkin’ Donuts crossed the border into Canada. It reached Japan by 1970. This makes sense, considering Rosenberg started the International Franchise Association.
“Our brand was built on franchising,” says Frances Allen, brand marketing officer for Dunkin’ Donuts.
The Carlyle Group, along with Bain Capital and Thomas H. Lee Partners, bought Dunkin' Brands from Pernod Ricard for $2.4 billion in 2006. They promptly launched “the most significant repositioning effort in the company’s history, focusing on the American values of hard work and fun,” supported by a humungous multi-million dollar ad campaign.
The current marketing campaign features omnipresent American food queen, Rachael Ray. Dunkin’ Donuts' latest tag line, “America Runs on Dunkin’s,” explores the concept of coffee as fuel, as opposed to the “Time to make the donuts!” ads of yesteryear, which featured its old brand icon, Fred the Baker.
“The ‘America Runs On Dunkins’ tag is all about heritage,” says Allen. "We are a part of people’s lives every day. We are their daily ritual. Our founder always said, 'If you serve good coffee and fresh product, people will come.' And our essence is as simple as that.”
“There’s a lot of emotional energy in the Dunkin’ Donuts brand,” says Bill Chidley, senior vice president of Design Forum, an agency that worked with Dunkin’ Donuts from the mid-90s through the early '00s. “Consumers retained a lot of folklore about going to Dunkin’ Donuts with their grandfather and having a treat. Part of their (rebranding) effort has been to make the product experience more of a ritual than a treat, focused on coffee instead of donuts.”
At first, Dunkin' Donuts and Starbucks, its chief competitor in caffeinated beverages, were like apples and oranges. If you wanted a fancy, schmancy US$ 5 soy flavor macchiato, Starbucks was your place. For a no-frills fast-food brand experience and a decent cup of joe for under US$ 2, you were a Dunkin Donuts devotee.
“Historically, the Dunkin’ Donuts menu was something like a train schedule in the Eastern bloc,” explains Chidley. “Visiting Dunkin’ Donuts was like going to a glorified vending machine: You went in, you got your coffee and donuts, and you left.”
“There is a wonderful piece of research about the two coffee tribes,” says Allen. “And the difference is so distinctive, so powerful. What makes our tribe, our tribe, is they are unpretentious, hardworking busy people, living busy lives. They don’t have an over-inflated sense of self and don’t need their coffee to have Italian names. They like their coffee called, 'small,' 'medium,' and 'large.'”
But now there’s some debate that Dunkin’ Donuts is out to sway the frugalistas among Starbucks’ market share, offering an array of espresso-based drinks, fancy frozen beverages, and to-go snacks—all with carefully cultivated names and price points that maintain its brand-of-the-working-man messaging.
Dunkin’ Donuts storefronts have even started to implement some Starbucks-ian offerings that go beyond the realm of baked goods, such as panini-esque sandwiches, Wi-Fi, and piped-in music. Allen says these newfangled changes are designed to take them from being more of a morning brand to an all-day brand.
“Starbucks has introduced the idea of their retail outlets being more of a social hang out: You come in, you have a cup of coffee, and you linger. It becomes more than just a transaction,” observes Chidley. “Dunkin’ Donuts seems to be doing that with their new menu items and by creating a warmer retail environment. But Dunkin’ Donuts has historically been a convenience brand. If someone who traditionally visits Dunkin’ Donuts for a quick cup of coffee gets behind someone who orders lots of their new fancy drinks, they run the risk of feeling betrayed by the brand.”
Aggressive expansion is the name of Dunkin' Donuts' game. Its goal is to open between 5,000 and 15,000 new stores by 2050. Many of these locations will also incorporate brand partners Baskin Robbins and Togo’s, an acquired brand that holds equity on the West Coast—a territory largely devoid of Dunkin’ Donuts locations.
It also started testing a marriage with Home Depot, by opening mini-stores in select test Home Depot locations that offer Dunkin’ Donuts' full menu options, seating, and Wi-Fi to capitalize on hungry Home Depot shoppers.
But are these co-branded locations beneficial to its brand equity? “There are many physical and emotional challenges in putting two brands together,” says Chidley. “Consumers don’t necessarily demand multi-brand concepts.”
Among other recent efforts to put the onus on coffee and off of donuts, Dunkin’ Donuts partnered with Proctor & Gamble to sell its coffee beans on supermarket shelves in the US. “Our partner, Proctor & Gamble, was surprised at how well the beans are doing, because they thought our brand had an East Coast focus,” says Allen.
“What Dunkin’ Donuts has going for them is a restaurant quality pedigree that establishes the brand in a retail environment,” says Chidley. “And Dunkin’ Donuts is one of those brands that tends to have equity outside its core market, due to product placement efforts and advertising.”
Dunkin’ Donuts executives have no concerns that messaging so focused on Americana can fly around the world. “There is very high awareness of the Dunkin' Donuts brand overseas. Not only because of the more than 1900 stores we have in 30 countries, but because so many people have had experiences with the brand in the US as students or while visiting,” says Tony Pavese, Vice President of International Branding at Dunkin’ Donuts. “The US advertising hits a chord with people all over. With busy lifestyles and people wanting a good value, our Asian customers can identify with the US advertising and 'America Runs On Dunkin.'"
There are current plans to expand Dunkin' Donuts in greater China, and also in Korea, Taiwan, Thailand, Indonesia, the Philippines, Malaysia, and New Zealand. While retaining its core visual branding elements, there are slight differences in the approach to retail branding overseas. For example, even with more obvious fast-food elements like self-serve cases, consumers tend to view Dunkin’ Donuts as more of a place to visit and linger than in the US. “Our Asian stores often have bigger dining areas because customers frequently visit the store with family and friends and enjoy their purchases in-store,” says Pavese. “In this sense it's very much a shared experience. Couches and big comfortable chairs are common.”
Many of these international consumers are charmed by Dunkin’ Donuts' slice—or circle—of Americana. “From what I’ve seen, the perception of the Dunkin’ Donuts brand abroad is still more about donuts,” says Chidley. “It’s considered a cultural novelty.”
Dunkin’ Donuts executives are fine with that, and have even found a way to adapt the donut to its environs. Take the Asia Mochi Ring. “It's a product similar to a donut but is made with a rice flour and has a chewier texture than donuts. Of course it's Mochi made in a special Dunkin' way.”