Sunday, June 25, 2006
Dunkin Donuts vs. Starbucks
Having grown up on the east coast, I love my Dunkin Donuts regala coffee in the AM - so it's with great interest that I've been following the new DD ad campaign: "America runs on Dunkin" - designed with a national takeover in mind. Apparently, Dunkin's is poised to take on the big boys - expanding across the country and tripling its size in the next few years. And this new campaign's tagline reflects a brand positioning that is almost diametrically opposed to their biggest competitor: Starbucks. While Dunkin's campaign is focused on helping Americans to get things done, Starbucks steadfastly holds onto their position of 'the third place' - the place where you take a break from your home and work lives and enjoy time to yourself - in their tv spots.
So Dunkin's campaign is about motivating people to do more, and Starbuck's urges people to take a moment out and relax. One could argue that Starbucks seems to espouse both messages, as giving you permission to take time out to enjoy Starbucks intimates that you've done something to deserve it.
Both campaigns have appeal among their target audiences, which are in fact, very different. As stated by Baba Shetty of Hill Holliday, the agency that created the campaign, Dunkin's target is "the everyday folks who get things done. They're unpretentious, comfortable just being themselves, and like to order their coffee in small, medium or large, thank you very much. They're busy people who use Dunkin's to get fueled up for work or play. They don't have time to linger, because they've got things to do. But they do like to have fun. This is their brand."
Starbucks targets, according to an early (1992) research study, are "more sophisticated consumers that are health conscious, like to travel and identify with gourmets."
So there are psychographic and probably demographic differences among the two groups when you look at them in this way.
But unlike the old days of brand consumerism where you had "your" coffee shop, or your brand of X, many people today identify as consumers of both brands and the choice depends on the experience one is looking for vs. a distinct target group one identifies with. I.e..: on my way between the gym and grocery store, I drive through Dunkin's to grab a medium regala to take with me on the road. I usually keep a few dollar bills in the car for tolls, so I can almost guarantee I'll have cash readily available to speed through Dunkins ($1.63 here in the northeast). On the other hand, when I have writing to do, when I'm meeting someone, when I've had a crap day and think I deserve a special something - it's Starbucks for me without question...and the $3+ for my grande double-pump soy white mocha seems a pittance to pay for my momentary happiness.
This idea manifests itself in other categories as well: it's common knowledge that Target, Macy's, and Barney's peacefully co-exist in some consumer's brand portfolios. So it shouldn't surprise that the same holds true in a truly experiential category like coffee shops. And it seems the market can support an array of coffee shop brands. But I wonder, when Dunkin Donuts goes national and is literally located on the same block as Starbucks, will a consumer like me be confronted with the choices of loyalty and betrayal? Will this more obvious competitive environment force the consumer, once again, to brand loyalty?
As always, love to hear your thoughts and predictions on the coffee wars and brand loyalty in general.
And kudos to our friends at Hill Holliday! The new campaign is getting lots of press and positive reviews. And they've supported the launch with a blog where you can read more about the concept and leave your feedback. You can read the blog here.
Having grown up on the east coast, I love my Dunkin Donuts regala coffee in the AM - so it's with great interest that I've been following the new DD ad campaign: "America runs on Dunkin" - designed with a national takeover in mind. Apparently, Dunkin's is poised to take on the big boys - expanding across the country and tripling its size in the next few years. And this new campaign's tagline reflects a brand positioning that is almost diametrically opposed to their biggest competitor: Starbucks. While Dunkin's campaign is focused on helping Americans to get things done, Starbucks steadfastly holds onto their position of 'the third place' - the place where you take a break from your home and work lives and enjoy time to yourself - in their tv spots.
So Dunkin's campaign is about motivating people to do more, and Starbuck's urges people to take a moment out and relax. One could argue that Starbucks seems to espouse both messages, as giving you permission to take time out to enjoy Starbucks intimates that you've done something to deserve it.
Both campaigns have appeal among their target audiences, which are in fact, very different. As stated by Baba Shetty of Hill Holliday, the agency that created the campaign, Dunkin's target is "the everyday folks who get things done. They're unpretentious, comfortable just being themselves, and like to order their coffee in small, medium or large, thank you very much. They're busy people who use Dunkin's to get fueled up for work or play. They don't have time to linger, because they've got things to do. But they do like to have fun. This is their brand."
Starbucks targets, according to an early (1992) research study, are "more sophisticated consumers that are health conscious, like to travel and identify with gourmets."
So there are psychographic and probably demographic differences among the two groups when you look at them in this way.
But unlike the old days of brand consumerism where you had "your" coffee shop, or your brand of X, many people today identify as consumers of both brands and the choice depends on the experience one is looking for vs. a distinct target group one identifies with. I.e..: on my way between the gym and grocery store, I drive through Dunkin's to grab a medium regala to take with me on the road. I usually keep a few dollar bills in the car for tolls, so I can almost guarantee I'll have cash readily available to speed through Dunkins ($1.63 here in the northeast). On the other hand, when I have writing to do, when I'm meeting someone, when I've had a crap day and think I deserve a special something - it's Starbucks for me without question...and the $3+ for my grande double-pump soy white mocha seems a pittance to pay for my momentary happiness.
This idea manifests itself in other categories as well: it's common knowledge that Target, Macy's, and Barney's peacefully co-exist in some consumer's brand portfolios. So it shouldn't surprise that the same holds true in a truly experiential category like coffee shops. And it seems the market can support an array of coffee shop brands. But I wonder, when Dunkin Donuts goes national and is literally located on the same block as Starbucks, will a consumer like me be confronted with the choices of loyalty and betrayal? Will this more obvious competitive environment force the consumer, once again, to brand loyalty?
As always, love to hear your thoughts and predictions on the coffee wars and brand loyalty in general.
And kudos to our friends at Hill Holliday! The new campaign is getting lots of press and positive reviews. And they've supported the launch with a blog where you can read more about the concept and leave your feedback. You can read the blog here.
Comments:
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I'm a little late on the draw to comment, since I only just discovered your website. Although my comment isn't so much brand related I just want to mention how much I love Dunkin's new campaign.
I think advertising has gotten lazy when the day of the jingles has been replaced with just taking a pre-existing song and dubbing it over your spot. Or slightly changing the words so that the popular song now related to your product. Cringeworthy example: EMF's "Unbelievable" transformed to "Crumbelievable" for the purpose of Kraft's new cheese crumbles product.
The Dunkin TV spots are fun, fresh and creative. Not only have they come up with original music paired with amusing imagery, but they went with a quirky, reputable band to perform it. Of course, I may be biased in this case since the band in question is one of Litelysalted's faves for the better part of 15 years.
As far as coffee wars go, I don't see a clear winner or loser. Although I wouldn't mind seeing a chunk of Starbucks business taken away I think both brands will continue to thrive even with the competition heating up.
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I think advertising has gotten lazy when the day of the jingles has been replaced with just taking a pre-existing song and dubbing it over your spot. Or slightly changing the words so that the popular song now related to your product. Cringeworthy example: EMF's "Unbelievable" transformed to "Crumbelievable" for the purpose of Kraft's new cheese crumbles product.
The Dunkin TV spots are fun, fresh and creative. Not only have they come up with original music paired with amusing imagery, but they went with a quirky, reputable band to perform it. Of course, I may be biased in this case since the band in question is one of Litelysalted's faves for the better part of 15 years.
As far as coffee wars go, I don't see a clear winner or loser. Although I wouldn't mind seeing a chunk of Starbucks business taken away I think both brands will continue to thrive even with the competition heating up.
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