Introduction
Fast-food restaurants have seen a rise in popularity since the beginning of the century. With numerous competitors in the food and beverage industry, each company faces various obstacles in attracting and retaining customers while continually improving the brand in response to market trends and tendencies. Dunkin’ Donuts is one of the oldest and most well-known companies that adapts to changes in the business. The franchise remains successful in overcoming challenges such as cultural adaptation, the rise of prioritizing healthy food, and the tendency to shop online, which reflects the changing nature of society.
Company Background
The Dunkin’ Brands Group was founded in 1950 when William Rosenberg opened a restaurant named Open Kettle in Massachusetts to serve coffee and doughnuts. Later, the same restaurant was converted into a Dunkin’ Donuts, and by 1965, the first hundred shops had been opened. Since then, the restaurant has gained worldwide fame, boasting an international franchise and ranking as the second-largest coffee shop on the market, after Starbucks.
However, the brand suffered a decrease in annual revenue in 2020, to $1.25 billion, compared to pre-pandemic COVID-19 statistics of $ 1.31 billion (Sandria et al., 2022). Additionally, over 800 shops were closed after the pandemic, and 200 restaurants closed in India. Therefore, many obstacles are created by the current economic and social situations.
Navigating Changing Tastes and Global Markets
Cultural Menu Adaptation
One of the company’s challenges is adapting its menu and policies to different cultures and nations. The Dunkin’ Donuts franchise opened its first international shop in 1970 in Japan; since then, the brand has expanded to 45 countries worldwide. However, facing new cultures created the need to alter the original menu.
Dunkin’ Donuts used a successful marketing strategy to connect with target customers through their native culture. For instance, donuts such as Kai Young, featuring Thai chili paste, and Fruity Paradise, with the addition of pineapple, kiwi, and cherries, can only be found in restaurants in Thailand (Sandria et al., 2022). For Japan, market marketing specialists created Mochi Ring donuts made with glutinous rice in several flavors.
Nevertheless, not all cultures easily accept new franchises. For instance, more than 200 restaurants in India were closed due to failed market research. The target customers included individuals who did not prefer donuts or sweets for breakfast, which was one of the critical aspects the corporation overlooked.
Indians chose to drink tea, known as chai, the beverage with various spices, rather than coffee, even though coffee, iced tea, and espresso are Dunkin’ Donuts’ top-selling products in the United States. Additionally, people preferred local family-owned businesses over big companies due to their well-known reputation. Hence, orientation to the international market may broaden the marketing horizons and create further challenges.
Health Menu Adaptation
In addition to multicultural development, there is a growing need to adapt the menus in local US restaurants to reflect changing societal trends. Health awareness has become crucial to society, creating a need for unique menu options that allow people to follow a diet or track their intake of calories, sugar, gluten, and salt. To attract customers according to different market requirements, Dunkin’ Donuts offers specific menu items, such as oatmeal, egg white flatbread, and coffee with skim milk, which provide more protein than the original food (Drayer, 2016). There are also menus for vegetarians, vegans, carb-cautious, gluten-sensitive, and many others. Hence, Dunkin’ Donuts quickly adapts its food options to meet customers’ requirements, overcoming the challenges of changing social trends and health needs.
Online Operations and Delivery
The customer’s opinion is not the brand’s only priority. Since the pandemic, the core of the income decrease has been the shift from offline to online shopping and the rapid delivery of food. The problem of adapting restaurants to the new reality of social distancing and lockdowns compelled the company to reassess its marketing and management strategies. While Dunkin’ Donuts’ popularity peaked around fast food in malls, it created a challenge for relocating most restaurants due to the COVID-19 lockdowns and the reluctance of people to eat inside with others. Dunkin’ aims to create a new image as an “on-the-go brand.”
Efficiency at the drive-through has been given top priority for the last year. Early results from the company’s testing of mobile order pickup locations are promising, with 70% of new customers re-downloading the app. Even better, in the third quarter, mobile orders accounted for 3% of all transactions, and several of Dunkin’s urban restaurants were processing up to 20% of transactions via mobile ordering (Nastasoiu & Vandenbosch, 2019). The strategy is closely tied to the brand’s online presence. Dunkin’ engages users through social media platforms like Instagram and Twitter, building a loyal customer base. Promoting appealing graphics and videos alongside menu advertisements in the context of modern popular culture awakens customers’ interest in the company.
Conclusion
To conclude, Dunkin’ Donuts faces numerous challenges in maintaining its reputation as one of the industry’s top food and beverage establishments. The core of the problem lies in social markers of international relevance, combined with shifting views on fast food and coffee shops during the pandemic. Dunkin’ determines working marketing strategies to overcome challenges and build a strong franchise with loyal customers.
References
Drayer, L. (2016). Dunkin’ Donuts’ menu, as curated by a nutritionist. CNN Health. Web.
Nastasoiu, A., & Vandenbosch, M. (2019). Competing with loyalty: How to design successful customer loyalty reward programs, Business Horizons, 62 (2), 207-214. Web.
Sandria, W., Kusumawati, T. D., Reza, V., & Purwati, A. A. (2022). An analysis of the impact of promotion strategies on buying decision and buying amount on Dunkin’ Donuts Jambi. International Journal of Economics Development Research, 3(2), 84–101. Web.