Designing a Customer Driven Statergy

While growing up, this fast-food restaurant has held an integral place in my heart. Knowing how much I loved donuts, my grandparents have made it a tradition to bring a box every time they come to visit. Because they live so far away, the family only gets to see them once every other year. When they arrive, it is always exciting to see them carry on the custom and appear with the box of goodies. Ever since I was a little girl, I have loved the variety of donuts that Dunkin’ has to offer. From Boston Kreme to Strawberry Frosted, the variation of these tasty treats never seems to disappoint. Dunkin’ Donuts does not just hold significance fulfilling my cravings, but it holds great importance in the memories I have made with my grandparents. So, you may ask, “Why Dunkin’?” I choose this company because it is not just a restaurant. It is an opportunity: an opportunity to create memories, an opportunity to change lives, and an opportunity to help the company

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

A marketing strategy provides a big picture of what a firm can do in a specific market. When creating a marketing strategy, a firm must identify a target market and a related marketing mix. A target market is "a group of similar customers to whom a firm wishes to appeal," and a marketing mix is "the controllable variables the company puts together to satisfy this target group." (Perrault and McCarthy 36) Focusing on specific target customers can help a firm develop a marketing mix that satisfies those customers ' specific needs better than another firm, making a firm less likely to face direct competitors.

I have chosen Dunkin Donuts for my Ethnography of a Coffee House report. Opened in 1948 by William Rosenberg in Quincy, Massachusetts, Mr. Rosenberg named his restaurant “Open Kettle” which at that time served only donuts and coffee. Two years later in 1950, Mr. Rosenberg renamed his restaurant “Dunkin Donuts.” Mr. Rosenberg’s goal was “make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores,” a philosophy which still holds true today (News Dunkin Donuts).

In increasingly competitive markets, consumers have better choices over where they buy their products. For an organisation to meet its business objectives, it has to find out what consumers require and then identify the best way in which it can satisfy these needs and wants. Creating a competitive advantage can be difficult. A unique marketing strategy with clear objectives is vital to ensure effective promotional activity.

In order to market the product into the market successfully, marketers need to have some marketing strategy to enter the desired market and make profit. Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics (Schiffman et al., 2011). Understanding the market size and segmentation is valuable, but the keys to effective targeting is to know just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends ( Berry, 1999).

Starbucks positions itself as a place college students can hang out, study, write term papers and meet people. A Starbucks appeal to this consumer directly through introducing technology as soon as it comes available, focusing on social networking and actively cultivating a “cool” image. The young adult audience grows 4.6 percent each year (O’ Farrell).” However, the majority of the advertising is catered to Adults around the ages of 25 to 40. Adults seem to prefer a pick me up first thing in the morning on their way to work. Most Starbucks today have a drive thru to make it faster to grab and go.

- Marketing Segmentation: is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match

Customers are assets, and their values grow and decline. Segmenting customers based on their lifetime value is a powerful way to target them because marketing mix activities can then aim at enhancing customer value. (Ho, 2006)

Socio-Cultural- Due to the numerous cultures present in Dunkin' Donuts' target market, the company as a whole must be in continuous change in order to keep up with its consumers. Dunkin Donuts must keep in mind the age, income, occupation, and most importantly the lifestyles of their customers if they wish to succeed in such a competitive market. As an answer to this problem, the company has implemented several changes aimed at keeping and attracting a new customer base. Many restaurants are looking towards centralized kitchens to maximize space and reduce costs, consequently cutting product costs, thus saving the customer money. The

Starbucks provide a large in store seating with free wi fi and a take-out service which only a few retail shops offer. The main target customers for Starbucks are office workers, with enough income, whom are able to afford the high prices of their products (Gaudio, 2003). The company has worked hard to establish itself as the brand leader with its branding as the most frequently drank coffee and noticeable brand logo. Introduction of promotions like the Starbucks Card, allows a more convenient way for a person to
pay for
your
drinks
and
earn
rewards
for
your purchase (Starbucks Coffee Company, 2011).
Furthermore, in‐store
promotions
accompanied
by
new
products and
amenities like free internet use are all strategies that Starbucks use to maintain their position in the market (Vasudha, 2011).

The three most powerful marketing concepts are customer focus, marketing imagination, and market segmentation. Each of the three concepts when used alone establishes an intimate customer following (further described individually below); as they are aimed at satisfying a customer’s needs rather than persuading a customer that they need a certain product or service (“product”). When used in conjunction with one another, these concepts cultivate a relationship with customers that will lead to repeat business, word-of-mouth advertising, and brand loyalty; thus

The CEO (Chief Executive Officer), Howard Schultz pointed that the main reason from the decline of “Starbucks Experience” was that the number of Starbucks shops increased sharply from only 1,000 to 13,000 within ten years. Other people considered their brand has been commercialized, and the customers hadn’t had enough enthusiasms to appreciate every moment of their coffee any longer. He suggested that Starbucks should re-find its origin. Nevertheless, his advice apparently was opposite to the

14) Markets can be segmented into groups of nonusers, ex-users, potential users, first-time users, and regular users of a product. This method of segmentation is called ________.

According to Blythe (2010), segmentation, targeting and positioning are fundamental to the concept of meeting customer need. This essay will outline and analyse these fundamental tools of marketing in an academic setting, in addition to, assessing how an organisation of my choice applies them in a working environment. Included in this essay, will be an academic discussion of the advantages of market segmentation, targeting and positioning drawing upon views of various scholars. Furthermore, I will provide a profile of my chosen organisation as well as an assessment of their market segmentation, targeting and positioning strategies. The essay will finish with a summary of the main points and will draw conclusions based on the evidence which has been presented.