Who is winning the coffee war Starbucks or Dunkin’ Donuts and why? Explain which growth strategies have been pursued by Starbucks and Dunkin’ Donuts in the past? Which strategies do you believe will be most successful for two firms in the future? Why? What new marketing concept will “you” implement towards market penetration if given the opportunity?

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
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Who is winning the coffee war Starbucks or Dunkin’ Donuts and why? Explain which growth strategies have been pursued by Starbucks and Dunkin’ Donuts in the past? Which strategies do you believe will be most successful for two firms in the future? Why? What new marketing concept will “you” implement towards market penetration if given the opportunity?
THE COFFEE WARS
In the coffee and breakfast market, Starbucks vigorously competes with the likes of Dunkin' A
Donuts and, more recently, McDonald's. Independent coffeehouses and smaller regional a
chains, seen by many as more hip and less commercial, also continually nip at Starbucks'
heels. However, the "coffee war" between Starbucks and Dunkin' Donuts is particularly
Tenso fierce in the areas in which they compete head to head, even though each chain has its geo-
graphic strongholds-Dunkin' in the East and Starbucks in the West.4 Part of the reason for
this infamous battle might be the dominance of these two brands: Together, Starbucks and
Dunkin' Donuts control well over half of the coffee market in the United States.65 Moreover,
Starbucks can claim some victories over Dunkin' Donuts, considering that its net revenues
and stock prices have risen continuously since 2009.66 By 2014, its global revenues had
reached a record-setting $16.4 billion, and in 2015, its stock surged by more than 50 percent
for the year.67
Starbucks' ubiquitous stores-from long-standing locations in U.S. cities and towns to
international expansion into a vast range of new nations-are easy to locate and visit. A re-
cent count showed that the chain maintains more than 22,000 stores, spanning 67 coun-
tries.68 By making sure its stores, with their familiar siren logo, are easy to find, Starbucks
Tango amplio
enorme
guarantees that most people can readily find a place to get their coffee fix. For the vast ma-
jority of buyers, an addictive Salted Caramel Mocha, or just a great cup of black coffee, is
convenient to find and very familiar.
There are plenty of jokes about how Starbucks manages to charge upwards of $5 for a
jce jolt of caffeine, but a quick glance at its marketing methods and strategies helps explain why
it can do so. The products it sells are appealing to customers and fulfill their needs: They
taste good, are available readily and conveniently, and offer the benefit of helping them
wake up to start th
100K
day (or stay awake for a long night of studying). Thus the exchange of
money for coffee-or tea or juice or yogurt or a nice pastry-is a good value for consumers,
despite the relatively high cost.
Starbucks also connects with fans through social marketing channels, including its pop-
ular My Starbucks Idea site. The site is an innovative approach to developing new products.
Customers share ideas about everything "Starbucks," from store designs to new drink reci-
pes. They can also join one of the many discussions in the customer forums. The site con-
nects customers to its Twitter and Facebook sites too, and it also links users to its mobile
Transcribed Image Text:THE COFFEE WARS In the coffee and breakfast market, Starbucks vigorously competes with the likes of Dunkin' A Donuts and, more recently, McDonald's. Independent coffeehouses and smaller regional a chains, seen by many as more hip and less commercial, also continually nip at Starbucks' heels. However, the "coffee war" between Starbucks and Dunkin' Donuts is particularly Tenso fierce in the areas in which they compete head to head, even though each chain has its geo- graphic strongholds-Dunkin' in the East and Starbucks in the West.4 Part of the reason for this infamous battle might be the dominance of these two brands: Together, Starbucks and Dunkin' Donuts control well over half of the coffee market in the United States.65 Moreover, Starbucks can claim some victories over Dunkin' Donuts, considering that its net revenues and stock prices have risen continuously since 2009.66 By 2014, its global revenues had reached a record-setting $16.4 billion, and in 2015, its stock surged by more than 50 percent for the year.67 Starbucks' ubiquitous stores-from long-standing locations in U.S. cities and towns to international expansion into a vast range of new nations-are easy to locate and visit. A re- cent count showed that the chain maintains more than 22,000 stores, spanning 67 coun- tries.68 By making sure its stores, with their familiar siren logo, are easy to find, Starbucks Tango amplio enorme guarantees that most people can readily find a place to get their coffee fix. For the vast ma- jority of buyers, an addictive Salted Caramel Mocha, or just a great cup of black coffee, is convenient to find and very familiar. There are plenty of jokes about how Starbucks manages to charge upwards of $5 for a jce jolt of caffeine, but a quick glance at its marketing methods and strategies helps explain why it can do so. The products it sells are appealing to customers and fulfill their needs: They taste good, are available readily and conveniently, and offer the benefit of helping them wake up to start th 100K day (or stay awake for a long night of studying). Thus the exchange of money for coffee-or tea or juice or yogurt or a nice pastry-is a good value for consumers, despite the relatively high cost. Starbucks also connects with fans through social marketing channels, including its pop- ular My Starbucks Idea site. The site is an innovative approach to developing new products. Customers share ideas about everything "Starbucks," from store designs to new drink reci- pes. They can also join one of the many discussions in the customer forums. The site con- nects customers to its Twitter and Facebook sites too, and it also links users to its mobile
vice began in Dallas, Texas; plans are in piae to expand it to other major U.S. cities.0
apps. New capabilities available through the apps allow consumers to order their preferred
beverage in advance and pay for their drinks or other products, then pop into the store to
grab their purchases without ever having to wait in line.
When it comes to Starbucks' competition with Dunkin' Donuts, history shows that the
two early morning giants actually had coexisted nicely for many years: Dunkin’ Donuts
made the donuts, and
Convivido
lavoro
on the upscale coffee market with the Dunkaccino. It also
joined the "espresso revolution" in 2003, before formally declaring in 2006 its explicit intent
to enter a head-to-head competition with Starbucks.69
Along with expanding its menu to feature specialty espresso drinks, Dunkin' Donuts
launched a smartphone app that competes directly with Starbucks' widely popular version. In
particular, the new Dùnkin' Donuts app aims to extend the battle to the mobile field. It offers
not just mobile ordering but also mobile delivery services, called DoorDash. The delivery ser-
mp!come
70
are
in
Although Dunkin' Donuts still trails Starbucks as a global company-with only 3,100
stores in 30 countries"-it uses this relatively small size and regional feel strategically, lever-
aging these attributes to adjust flexibly and integrate itself with local communities. Accord-
ingly, it has ranked tops in the market for customer loyalty since 2007.
loyalty also resonates with the company's chosen sponsorship efforts. It lends its support to
professional sports teams with strong local and national followings, including all the major
league Boston-area teams (Red Sox, Patriots, Celtics, and Bruins), the Dallas Cowboys,
York's Yankees and Mets, and the Tampa Bay Rays. Expanding on the strategy, both
abroad and to less famous leagues, Dunkin' Donuts partners with the Liverpool Football
Club and the National Women's Hockey League.
Through these partnerships with sports teams, Dunkin' Donuts encourages consumers
to interact more closely with it. For example, New England customers receive inducements
to become DD Perks members and use its mobile app. With its "Pats Win, You Win" pro-
motion, DD Perks members who pay through the app receive a free cup of coffee each time
the New England Patriots win a game. The popular, vastly successful promotion has contin-
ued for several seasons, during which the Patriots continue winning lots of games, thus
bringing lots of excited fans into Dunkin' Donuts stores.73
72 This focus on
Transcribed Image Text:vice began in Dallas, Texas; plans are in piae to expand it to other major U.S. cities.0 apps. New capabilities available through the apps allow consumers to order their preferred beverage in advance and pay for their drinks or other products, then pop into the store to grab their purchases without ever having to wait in line. When it comes to Starbucks' competition with Dunkin' Donuts, history shows that the two early morning giants actually had coexisted nicely for many years: Dunkin’ Donuts made the donuts, and Convivido lavoro on the upscale coffee market with the Dunkaccino. It also joined the "espresso revolution" in 2003, before formally declaring in 2006 its explicit intent to enter a head-to-head competition with Starbucks.69 Along with expanding its menu to feature specialty espresso drinks, Dunkin' Donuts launched a smartphone app that competes directly with Starbucks' widely popular version. In particular, the new Dùnkin' Donuts app aims to extend the battle to the mobile field. It offers not just mobile ordering but also mobile delivery services, called DoorDash. The delivery ser- mp!come 70 are in Although Dunkin' Donuts still trails Starbucks as a global company-with only 3,100 stores in 30 countries"-it uses this relatively small size and regional feel strategically, lever- aging these attributes to adjust flexibly and integrate itself with local communities. Accord- ingly, it has ranked tops in the market for customer loyalty since 2007. loyalty also resonates with the company's chosen sponsorship efforts. It lends its support to professional sports teams with strong local and national followings, including all the major league Boston-area teams (Red Sox, Patriots, Celtics, and Bruins), the Dallas Cowboys, York's Yankees and Mets, and the Tampa Bay Rays. Expanding on the strategy, both abroad and to less famous leagues, Dunkin' Donuts partners with the Liverpool Football Club and the National Women's Hockey League. Through these partnerships with sports teams, Dunkin' Donuts encourages consumers to interact more closely with it. For example, New England customers receive inducements to become DD Perks members and use its mobile app. With its "Pats Win, You Win" pro- motion, DD Perks members who pay through the app receive a free cup of coffee each time the New England Patriots win a game. The popular, vastly successful promotion has contin- ued for several seasons, during which the Patriots continue winning lots of games, thus bringing lots of excited fans into Dunkin' Donuts stores.73 72 This focus on
Expert Solution
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1.) It can clearly be comprehended that Starbucks is winning the coffee war as its net revenue and stock prices are continuously rising over the years. Its global revenue reached 16.4 billion in 2014 and stock surged more than 50 percent in 2015. They have an effective and efficient operation, for an instance, they are operating in 67 countries with 20000 outlets. Being the first mover in the market it created a loyal customer base in comparison to competitors like Dunkin donot. Another reason can the creative and innovative implementation of marketing strategies as a whole.

2.) Starbucks marketing strategies:

  • Easily recognizable, readable, easy to pronounce brand with an attractive logo to increase the brand recall.
  • Convenient and easy to grab coffee due to its availability of stores all around the cities.
  • It creates value for the product in the mind of customers through marketing its product as being a refreshing agent before going to work even being relatively costly.
  • Connecting to customers through social media and taking suggestions, ideas, products, and feedback from the customers. Basically, they are indulging customers in the decision making of the company management indirectly.
  • Application for pre-ordering the product or drinks so that customers can pop in the store and grab it when it on the way, without standing in the queue.
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