Dunkin’ Donuts Competitive Analysis

Dunkin’ Donuts
Target Market: the blue color middle class working American, both males and females, ranging in age from 18-45

Demographic Segmentation: Their salaries range
from $40,000 to $100,000 annually. They are
coffee enthusiasts, mainly people on the go,
and some families.

Psychographic Segmentation: a working professional, with a
family. They are generally in their thirties and
enjoy a good coffee drink and occasional
doughnut before work to get their day started.

Geographic Segmentation: urban areas with a mix of all different races as well as suburban areas with middle class families

Behavioral Segmentation: Customers that want an easy to understand menu and an easy to give order with stores that have a laid back feel without having to find a seat among the sea of laptop users who stay hours at a time like Starbucks

Product Positioning:

Starbucks (direct competitor)
Target Market: 9-5 white-collar workers between the ages of 25 and 44 Demographic Segmentation: well educated men and women either students or business ages 25-44 having a house hold income of over $90,000 living in either suburban or inurban areas.

Psychographic Segmentation: high middle class married, well educated men and women with children in the age of 40. Geographic Segmentation: Suburban areas Behavioral Segmentation: regular to heavy users that enjoy the European coffee house feel and don’t mind paying for quality of service.

Product Positioning: A premium coffee product, premium price, premium quality, and premium service that goes far beyond the coffee.

Starbucks holds themselves at a higher standard than Dunkin’ Donuts, starting with their target market. Starbucks’ ideal customer is the white educated female businesswoman in between the ages 25-45. While Dunkin Donuts’ ideal customer is the average Joe, a blue collar middle class working man between the ages of 18-45 who is always on the go. These specific target markets are reflectant all throughout both Starbucks and Dunkin’ Donuts market segmentations, starting with the demographic segmentations. Starbucks demographic segmentation aims at well-educated businessmen and women between the ages of 25-45. Due to their high education level Starbucks demographic segmentation have much better, white collar, jobs.

They are preferably married, with annual household incomes of $90,000 or higher. Starbucks is international with locations in 62 countries and because of this many different races fit this demographic segmentation, though because the majority of the locations are in the United States the race that most meets this demographic is predominantly white. On the other hand, Dunkin’ Donuts customers are working class Americans that are mostly single. They have a single or marital household income that ranges from $45,00-$100,000 in between the ages of 18-45. This wide range of household income is due to Dunkin’ Donuts’ demographic segmentation not being as well educated as compared to Starbucks’ demographic segmentation. Dunkin Donuts’ customers also vary far more widely in races than Starbucks, including: Asian, Black, Hispanic, and White, even though they are based in only 30 countries outside the U.S.

In choosing their Geographic segmentation Starbuck and Dunkin’ Donuts both have expanded outside of their United States homes bases. Starbucks has spread to 61 countries outside the U.S. in North America, South America, Africa, Europe, Asia, Transcontinental Europe and Asia, and Oceania. Dunkin’ Donuts has spread to 30 countries outside of the U.S. in North America, South America, Europe, Asia, Transcontinental Europe and Asia, and Oceania. Even though Starbucks and Dunkin’ Donuts are rapidly multiplying throughout the globe, the majority of their stores are inside the U.S. Starbucks has 13,279 coffee houses spread all throughout the U.S. Dunkin Donuts has 7,015 stores in 36 U.S. states. Seeing as how Dunkin Donuts originated in Quincy, Massachusetts the majority of Dunkin Donuts are in the New England area. Road Island is the state with the most Dunkin Donuts at 124 and counting. Dunkin Donuts is slowly spreading to more Southern states but is having a hard time succeeding in the Western states such as California who enjoy, and practice a more laid back lifestyle than the Eastern states who are always on the go with their cup of Joe.

The psychographic segmentation of a Starbucks patron is a upper middle to lower upper class, educated, achiever that you would usually find in the suburban areas that you would usually find a Starbucks in. Due to their educational and class level these patrons would have more leisure time for the daily stop at Starbucks between work and home. These patrons are ones that are able to spend $4 dollars on a coffee daily without hurting their pocket. They are ambitious people who like giving themselves the finer things and don’t mind spending extra for it. The Dunkin’ Donuts patron is a working class, striver in a urban and suburban, and city area that you would find a Dunkin’ Donuts in. These patrons are just looking for a good cup of coffee they can quickly grab on their way to work. They have an authoritarian personality and don’t want to splurge on a cup of a coffee when they need to save for other aspects of their life.

They see Starbucks as an over priced snotty coffee house and would usually never step foot in there or have the time to stay in one and use all of its resources or learn the coffee sizes. These psychographic segmentations tie into these customers Behavioral Segmentations. Both the Starbucks and Dunkin’ Donuts patron visits the stores or a regular, almost daily occasion. Though, Dunkin Donuts patrons see their store as an economical, convenient and speedy way to get their daily good cup of coffee without having to make it themselves. They know what they want and they know they’re going to get it because it has become part of their daily routine. These patrons like the taste of the coffee and the feel of Dunkin Donuts’ stores and proffered it best compared to Starbucks even though Starbucks added drive threw to their stores, it doesn’t offer Dunkin Donuts patrons what they’re looking for in a coffee house. Which is a place they go to before they start their busy days ahead of them.

They feel that Starbucks is too confusing and takes too much time out of their busy schedule for a regular cup of coffee On the other hand, Starbucks patrons see the quality in their coffee and the service that Starbucks offers and are willing to spend more for it. Starbucks patrons are everyday if not multiple times a day customers that have absolute loyalty to the store because, they enjoy all the benefits that come with the coffee, such as the European coffee house environment, free Wi-Fi, and most importantly variation of macchiato, cappuccinos, and Frappuccino’s in which Starbucks offers that they can’t find anywhere else. This has Starbucks patrons looking forward to their daily visits to its stores for their specialty coffees. As well as for their leisure time being spent there, instead of home. The coffee industry has taken off in the past couple of decades. Within that industry Starbucks positions themselves, and their products, as high quality products with great detail to attention that goes far beyond the coffee by creating a high standard.

“Starbucks tried to position themselves as a premium product in the coffee industry by creating a high standard, introducing innovative products and providing excellent service” (Gangadharan). Starbucks takes great pride in their products starting from their distributors. Starbucks wants to keep the quality of their products high, therefore they want to keep their distributors happy and healthy so they pay market value for all their coffee and offer healthcare to their coffee farmers. This has caused them to have long standing relationships with their coffee farmers who in return provide Starbucks with the best coffee they possibly can. Price also plays a part in of product positioning because price has a direct correlation with quality to the consumer. This correlation between price and quality creates value is what Starbucks has used to position their product in the market with their expensive coffee prices. Though the prices didn’t just express quality to the consumer, it gave it with the quality of their coffee and the extensive training of their employees.

All of this positioned Starbucks as a high end, high priced coffee shop amongst all the rest. Dunkin Donuts positions themselves almost the complete opposite compared to Starbucks. They know that the Starbucks crowd looks down on them and they play right into that. They keep everything all American and brand themselves within that theme. They don’t try to appeal to Starbucks’ customers in any way. Instead, they fuel the fan base they already have by keeping their prices low and their coffee good for the average American. This is reflected all the way up to Dunkin Donuts’ slogan “America runs on Dunkin”. Positioning themselves with the average American Dunkin’ Donuts makes themselves more relatable to the average American than Starbucks. This helps Dunkin’ take hold of a market of people who don’t want to learn new sizing words and would rather enjoy coffee with a donut than espresso with a aspiring poet in the corner.

STARBUCKS

Geographic
World region or country: International, in 62 countries, with the majority of there stores in U.S. North America, South America Western Europe, Middle East, Pacific Rim, China, India, Canada, Mexico, 
Country Region: Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New England
 Density: suburban, exurban

Climate: North and south
Demographic
Age
 25-45
Gender: male and female
Family size: 3-4
Family life cycle: married, no children; young, married with children; older, married with children; older, married, no children;
Income: over $95,000
Occupation: Professional and technical; managers, officials, and proprietors Education: well educated, college graduate or advanced degree Race: Caucasian (in U.S)
Generation: Generation X
Nationality: North American, South American, Middle Eastern, Asian, European, African Psychographic
Social class: middle class, upper middles, lower uppers, upper uppers Lifestyle: achievers and strivers
Personality: ambitious
Behavioral
Occasions: Regular occasion, the place between work and home 
Benefits
: Quality, coffee & service
User status
: regular user
User rates
: medium to heavy user
Loyalty status: absolute
Readiness stage: intending to buy
Attitude toward product: positive, enthusiastic

DUNKIN’ DONUTS
Geographic
World region or country: 30 countries, including the U.S.
North America, South America, Western Europe, Middle East, Pacific Rim, China, India, Country region: West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New England Density: Urban, suburban

Climate: Northern and Southern
Demographic
Age
: 18-45
Gender
: male and female
Family size: 1-5, or more
Family life cycle: Young, single; young, married, no children; young, married with children; older, married with children; older, married, no children; under 18; older, single; other Income: $40,000-$100,000

Occupation: Professional and technical; managers, officials, and proprietors; clerical; sales; craftspeople; supervisors; operatives; retired 
; students; homemakers; Education: some high school; high school graduate; some college; college graduate 
 Race: Asian, Hispanic, Black, White
,

Generation: Baby boomer, Generation X
Nationality: North American, South American, Middle Eastern, Asian, European, African Psychographic
Social class: lower lowers, upper lowers, middle class
Lifestyle: survivors and strivers
Personality: authoritarian, ambitious

Behavioral
Occasions: every day use
Benefits
: good, cheap, convenient, quick, cup of coffee User status: regular user
User rates
: medium to heavy user
Loyalty status: strong to absolute
Readiness stage: desirous, intending to buy
Attitude toward product: Enthusiastic and positive

Global Starbucks Map

U.S. Starbucks map

Global Dunkin Map

U.S. Dunkin Map

References

Gangadharan, Sreerag. “Starbucks – Targetting, Positioning and Marketing Mix.” Scribd. Scribd Inc., 2009. Web. 8 Sep. 2014.

Starbucks Global Map

Clarke, Keir. “The World-Wide Starbucks Map.” Weblog post. Blogspot.com.
GOOGLE MAPS MANIA, 14 Jan. 2012. Web. 8 Sep. 2014. .

U.S. Starbucks Map

Davis, Kathleen. “Is Your Coffee Habit Keeping You Up at Night?” Woman’s Day. Hearst Communications, Inc, Sept. 09. Web. 8 Sep. 2014. .

Global Dunkin Map

“Global Presence.” DunkinDonuts.com. Http://www.dunkindonuts.com/content/dunkindonuts/en/company/global.html, 2011. Web. 8 Sep. 2014. .

U.S.Dunkin Map

Sullivan, Danny. “Red States / Blue States: The In-N-Out Burger, Dunkin’ Donuts Divide.” Daggle Red States Blue States The InNOut Burger Dunkin Donuts Divide Comments. Daggle, Inc., 25 Feb. 2010. Web. 8 Sep. 2014. .