Feature: Insight To Go – Research at Dunkin' Brands

Surprise - researchers at the drinks 'n' donuts giant are not obsessed with coffee wars and dietary health. They set their own agenda, and it's creative to say the least. Paying loyal customers not to use your stores? Regina Lewis, Ph.D, VP of the Consumer and Brand Insights Group, talks in the latest MRWho.

Meanwhle, a report out today from Mintel shows the extent of the boom for premium coffee - see below for details.


Dunkin' Brands Interview

For the marketers of a company whose name is synonymous with donuts, one might expect the health / obesity topic to be top-of-mind. Well no - it's a very important issue, but it's not one of the perceived key business challenges right now at Dunkin', for two reasons. Firstly, 'we haven't seen any drop in our donut sales as a result of the low carb frenzy that has occurred', says Lewis, who oversees all branding, advertising and new product concept testing research for the group. Secondly, 'in many of our markets, donuts account for less than ten percent of our revenue. At this point, we're much more a coffee and beverage company.'

Instead, Lewis sees key business challenges associated with taking Dunkin' Donuts national - the goal is to double the business by 2010 and at present the 4,600 DD stores are concentrated in New England, with Mid-Atlantic, South, Cleveland, Chicago and other US locations on the rise.

For a company targeting US expansion with an offering based on coffee and beverages, there's some obvious, stiff competition - but again, Lewis says the first assumption may be a misconception. 'People often think of Dunkin' Donuts versus Starbucks. Certainly they are our competition, but as far as Dunkin' Donuts is concerned, if you look at the wallet share out there, and you look at coffee sales, the convenience stores are where the opportunity lies for us.'

'When I do qualitative work with our consumers, the typical Dunkin' Donuts customer says things like, 'Give me a break. If I want to sit on a couch I'll do it at home.' So through our drive-through service and a lot of our standards, we're for them. We really are much more the 'every person' definition.

'In my view, there will always be fantastic opportunity for Starbucks and what they offer. They're a brilliant business. What we offer is a very different fit within people's days. So there's a lot of coffee consumed and a lot of room for everybody.'

Lewis' team has an intimate involvement with the company's strategy. 'Our philosophy here, and certainly our CEO and leadership council philosophy, is that it is only through insights that we can formulate smart strategy that addresses the business issues. She dislikes the historical notion of market researchers as order takers, and stresses the scope for her team to be proactive, formulating key questions and suggesting them to the marketing group rather than being told what needs finding out. At present a good 60 percent of projects were initiated by Lewis and her immediate colleagues.

The team tries out new approaches on a regular basis - 'whatever we feel is required'. Recently, this includes diary study work to get inside the mindsets of certain groups of consumers. Participants attended training sessions and were given hand-held recorders with laminated questions taped on them. 'So when 18-24 year-olds think about coffee, they flip on the recorder and say, 'It's 9:30 on Thursday, and I'm headed out with my friend and I'm thinking about coffee and here's why and here's where I'm thinking of going.' Then of course you get to the decisions they actually made, price points they made and gratifications. That sort of qualitative method is different from focus groups or what's typical.'

Another recent study addressed the Starbucks - Dunkin' Donuts branding question. 'We took loyal Dunkin' consumers and only allowed them to go to Starbucks for two weeks. And loyal Starbucks customers could only go to Dunkin' Donuts for a couple of weeks. I think that the only way that you truly understand a brand as a researcher is to put it in opposition to something that's very different from that brand.' Yet another took people from Dunkin's VIP panels (those going to Dunkin' Donuts at least six to eight times a week) and for a couple of weeks deprived them of the Dunkin' Donuts experience. 'So basically, we paid them not to go. We had them keep diaries and talked to them... These are examples of the work we've done that has yielded really, really valuable knowledge from the vantage point of a cultural anthropologist.'

Regina Lewis talked to MrWeb's US Director Michael Kenyon at the International Research Institute's Market Research Event held in November. The full article is here: www.mrweb.com/drno/frm-dunkin.htm . To subscribe to MRWho...


Mintel Chronicles the Boom in Premium Coffee

A report out today from Mintel shows that premium coffee is driving success for national coffeehouses, donut shops and quick-service restaurants, with a corresponding downturn in coffee sales through food, drug, and mass-merchandise (FDM) outlets. Coffeehouses have more than doubled their US sales in the last five years to an estimated $8.3 billion and are expected to more than double again in the next five years, to $18.8bn. There is now one coffeehouse for every c.14,000 Americans.

Mintel notes that McDonald's recently threw its hat into the premium coffee ring, last week rolling out premium roast coffee in restaurants across the US. Mintel is online at www.mintel.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.