Week 8 - America runs on Dunkin

One of my favorite companies is Dunkin Donuts.  Growing up and working in Connecticut it’s hard to avoid them.  Dunkin Donuts is one of the most successful companies in America, and I believe they do a great job of managing their marketing mix.

Dunkin’s target audience is anyone “on the go”.  This definition targets a lot of people who occasionally or always find themselves in a situation where Dunkin Donuts can add value to their situation.  On the go could mean the typical person going to work every day, it could be the person bringing breakfast to Church, or the shopper on the go who needs an afternoon pick me up.  All of these people have a need for coffee or a quick breakfast.  Either way, Dunkin Donuts will get them what they need and fast!

Dunkin Donuts satisfies their on the go customers with many different products.  Dunkin Donut’s primary product offering is coffee and donuts, which create a caffeinated and sugary cocktail that could jumpstart anyone’s morning.  But over the years Dunkin has broadened their menu with espresso drinks and breakfast sandwiches to meet the more diverse tastes of their customer base.  Dunkin also offers products to customers in the afternoon.  In addition to coffee all day, they have ice teas and lunch sandwiches.  Dunkin also has product packaging that caters to large groups making it easy for someone to stop in and buy breakfast for the office.

Dunkin Donuts utilizes price and place to enhance the value of their offering.  Customers, who are on the go, are already stressed or have some type of burden.  So Dunkin creates an easy, low cost experience for these busy individuals.  Dunkin does this by having many locations spread out across high traffic areas.  Particularly in the North East, you can’t turn around without walking into a Dunkin Donuts.  Dunkin is always “on the way” to where you’re going, and you typically do not have to hunt for a Dunkin Donuts.  The second thing they offer is a low cost experience.  Dunkin offers low cost coffees and low cost combo meals if you choose to add some type of food to your beverage.  Compared to Starbucks, you can’t get a coffee and food for the same cost of an espresso drink.  Dunkin Donuts are easy to find and do not put a big dent in your wallet, so you never think twice about stopping in one.

Dunkin’s latest communication strategy has relied on the “America runs on Dunkin” theme.  This theme ties in the other elements of their product mix perfectly.  America RUNS on Dunkin is perfectly targeted at individuals on the go.  Dunkin identifies itself as the fuel that America runs on.  An essential ingredient to any trip!  To communicate this message Dunkin uses TV ads (showing people on the go), radio ads (in the cars of people on the go), billboards (targeting on the go commuters) and web / email advertising that people on the go can use to get coupons and new product information.

Week 7 - Cleopatra Case

This is Cleopatra from HBO’s Rome. This Cleopatra was also lazy and rested on her laurels.

 

The Cleopatra soap case underlines the importance of market research and proper planning.  The team at Colgate was blinded by the surprise success of Cleopatra soap in France and assumed it would also be a runaway success wherever people spoke French.  Here are my thoughts.

First, Colgate wanted to sell the product in Quebec.  The team was already convinced the product would do great in Quebec, because you know they speak French, but wanted the “proper” market research to confirm their beliefs.  So, naturally they went to Toronto to conduct their market research.  Geography lesson, Toronto is not in Quebec! It’s in Ontario!  And English is the dominant language in Toronto, so they shouldn’t even like Cleopatra soap, right?  But none the less, Torontonians did like the soap and validated Colgate’s belief to push ahead in Quebec.

This led Colgate to use the same advertisement they used in France.  The advertisement in France is very Egyptian and provocative.  The ad tested very well with the Toronto group (50% reacted positively), so the team assumed it was well suited for the Quebec market.  However, it was later discovered that only 37% of people in Quebec reacted favorably to the ad.  For a soap being pushed as premium niche soap, this was not a good start.

The failure of the ad to create positive customer awareness complicated the pull strategy Colgate was relying on.  The case said that Colgate was trying to “generate enthusiasm” and needed the “best ever media and consumer promotion schedule”, but it appears that the Cleopatra French ad proved to be a stumbling block out of the gate.  Because people did not react favorably to the advertisement sales suffered and consumer demand did not persuade retailers to free up shelf space through the pull strategy in an already saturated soap market.  Finally, because the product was not being properly pulled to retailers’ shelves, consumers who did want the product could not find it!  The number one response to “why haven’t you tried Cleopatra?” was “it’s not available where I shop”.  30% of people who wanted the product could not physically buy it.

The sad part of this was Colgate had a winner on its hands and it just botched the implementation.  Cleopatra was really well liked by those who bought it!  About 30% of customers who tried Cleopatra soap used it all or most of the time.  This was the highest conversion rate for any of the competing soaps.  The closest competitor was Dove at 21%.  I would recommend that Colgate retool their marketing approach for Cleopatra and adjust the advertising, or bite the bullet and invest in a push strategy.

Week 6 - Product Obsolescence

Product life cycles can vary depending on the product.  Some products have a very long product life cycle.  The wheel is a pretty good example, even most things that fly need wheels.  But other products can have very short life cycles.  I like to think of championship t-shirts for professional sports teams.  Once a team wins a championship their fans buy memorabilia, most often t-shirts, to celebrate the moment.  It’s an emotional purchase.  The life cycle for these items can be a matter of weeks.  But nothing hastens the life cycle of a product like obsolescence.  When a product becomes obsolete it’s because the customer need it was serving is now being served more efficiently by another product or service.  More efficiently can be quicker, cheaper, simpler, you name it.

A great example of this is the typewriter.  If I were getting my MBA 30 years ago I might be writing this paper/blog post on a typewriter.  Originally, the typewriter was a vastly more efficient form of word processing than writing something by hand.  With a typewriter users could write something quickly and without have to worry about the legibility of hand writing.  In the 1990’s the typewriter became obsolete with the mass appeal of personal computers.  Personal computers gave users the same keyboard functionality as a typewriter, but now they could edit their document on a computer screen and print when ready.  Not to mention their document became a digital document that could be transferred via email.  The personal computer became an easier and more efficient tool for word processing and effectively ended the product life cycle of the typewriter.

 

Various forms of Media like music and movies are another good example of product obsolescence.  When I first became interested in music I was listening to it on cassettes.  I have no fond memories of using cassettes and CD’s quickly made cassettes obsolete.   CD’s gave consumers a better listening experience with improved sound quality and ease of changing songs.  No more did you have to fast forward or rewind to get to the song you wanted!  The same transition happened as movies transitioned between VHS to DVD to Blu-ray.  But now the tangible product of a CD or DVD is being replaced by digital distribution.  Consumers are starting to prefer to own their media in the digital space via ITunes, Netflix, or Amazon.