William Rosenberg opened the first Dunkin Donuts in Quincy, Massachusetts, in 1950. Residents flocked to his store each morning for the coffee and fresh doughnuts. Rosenberg started franchising the Dunkin' Donuts name and the chain grew rapidly throughout the Midwest and Southeast. By the early 1990s, however, Dunkin' was losing breakfast sales to morning sandwiches at McDonald's and Burger King. Starbucks and other high-end cafes began sprouting up, bringing more competition. Sales slid as the company clung to its strategy of selling sugary doughnuts by the dozen.
In the mid-90s, however, Dunkin shifted its focus from doughnuts to coffee in the hope that promoting a more frequently consumed item would drive store traffic. The coffee push worked- doughnuts make up a mere 17 % of sales. Dunkin' sells 2.7 million cups of coffee a day, nearly one billion cups a year. And, Dunkin' sales have surged 40 % during the past four years. Based on this recent success, Dunkin' now has ambitious plans to expand into a national coffee powerhouse, on a par with Starbucks, the nation's largest coffee chain. Over the next few years, Dunkin' plans to remake its more than 5,400 US shops in 34 states and grow to double that
number by 2020.
But Dunkin' is not Starbucks. In fact, it does not want to be. To succeed, Dunkin must have its own clear vision of just which customers it wants to serve (target segment) and how (value proposition). Dunkin' gut feeling is that Dunkin' and Starbucks target very different customers, who want very different things from their favorite coffee shops. Starbucks is strongly positioned as a sort of highbrow third place - outside of home and office - featuring couches, eclectic music, wireless internet access, and art splashed walls. Dunkin' has decidedly lowbrow, everyman kind of positioning.
With its makeover, Dunkin plans to move upscale - a bit but not too far - to reposition itself as a quick but appealing alternative to specialty coffee shops and fast-food chains. Yes, Dunkin' built itself on serving simple fare to working class customers. Inching upscale without alienating that base will prove tricky.
This is why they decided to conduct a marketing research study. This is why they approached you to provide them with insightful details on how to re-position themselves.
Question 1: What makes Dunkin' to conduct a marketing research study? What is the main motivation?
Question 2: They seem to choose conducting a marketing research project.
(a) Please discuss why it is important to start the research process with the right question.
(b) What is the research question in this case? What does Dunkin' want to know? Please elaborate.
Question 3: CMO of Dunkin', Paul Reynish, asked your thoughts about whether it is necessary to conduct secondary research first. He seems to want to skip that step, and start gathering primary data to save some time and money.
(a) What is primary data and secondary data research? What are the main differences between these two types of research?
(b) What do you suggest Mr. Reynish to do? Should he move on with or without conducting secondary data research? Why?
Question 4: After you answered Q.3, Mr. Reynish asked you what you think of qualitative research and its importance before conducting any quantitative research? How would you respond to Mr. Reynish? How do those two research types related? Why (please elaborate)?
Question 5: It is time to conduct the qualitative research. You told him that best approach is conducting focus groups and observations to get the preliminary insights
(a) Mr. Reynish asked you: Why do we need to conduct focus groups and observations? Why is it important?
(b) After your explanation on focus groups and observations, how would you conduct the focus groups: - What are the steps in a focus group?
- Provide 5 focus group questions that you would ask in the Dunkin study
- What would the sample frame look like?
- How would you analyze the qualitative data?
Question 6: Mr. Reynish also asked how big data would play a role in this research. Thus,
(1) What is big data?
(2) What is the difference between big data and traditional marketing research study?
(3) How would you utilize big data in the Dunkin' study? What role would it play?