Dunkin Donuts vs Starbucks, Essay Example

The U.S. coffee industry earned revenues in excess of $7 billion in 2010 (IBISWorld), thus, it is no surprise that Starbucks and Dunkin’ Donuts are in fierce competition with each other. Making things worse is the fact that even fast food chains such as McDonald’s and Wendy’s have also entered the specialty retail coffee market. Starbucks and Dunkin’ Donuts have responded by marketing themselves as premium lifestyle coffee brands and the ads demonstrate this. Starbucks and Dunkin’ Donuts indicate that these two specialty coffee retailers compete on the basis of brand perception rather than price.

Dunkin’ Donuts have a long running promotional tagline America Runs on Dunkin’and the company emphasizes the fact in the ad(Duarte Imaging) that workers across the country start their working day with Dunkin’ Donut’s coffee no matter whichever industry they work in. The company emphasizes the fact that Dunkin’ Donut’s coffee energizes workers and gives them a pleasant start to their work. The ‘incomplete building’ represents the America economy in the ad and as such, Dunkin’ Donuts represents itself as a company that makes great contributions towards the American economy. The ad also implies that Dunkin’ Donuts coffee is a daily ritual of American workers and a commodity product for them rather than an indulgent.

Whereas Dunkin’ Donuts represent its coffee as a commodity or ‘need’, Starbucks’ ad(Fotolog) represents its coffee as a ‘want’ of American consumers. The ad emphasizes the fact that Starbucks’ retail stores can be found anywhere, thus, consumers do not have to worry. The ad also implies that consumers love Starbucks’ coffee so much that they often crave for multiple visits in a single day. But they do not have to worry because their favorite cup of coffee will never be too far from where a consumer may find himself. The ad also portrays Starbucks as a comfortable place to relax with stores having exteriors more similar to homes than a retail store.

Both Starbucks and Dunkin’ Donuts ads are similar in the sense that they portray coffee as an essential component of Americans’ everyday lives. They both emphasize that coffee helps Americans go through their day. But where the ads differ is on the primary message and what they imply about consumers. Dunkin’ Donuts ad implies that its coffee increases workers’ productivity and the ad seem more targeted at workers than casual consumers of coffee. In contrast, Starbucks’ ad implies that coffee makes consumers happy and is more targeted at casual drinkers.

The Dunkin’ Donuts ad takes advantage of the general perception that coffee helps workers keep awake and focused. The cup in the ad represents U.S. economy which is growing as work is being done on it. Starbucks’ emphasizes the atmosphere of its stores in the ad which look like homes from the outside and not traditional retail outlets. Thus, instead of benefits, Starbucks emphasizes the utility its products provide to the consumers.

The ads may be an important clue to both companies’ marketing strategy and their preferred customer segments. By looking at Dunkin’ Donuts’ message, one is tempted to investigate the possibility that Dunkin’ Donuts stores generate greatest portion of their sales in the early hours of the day. A similar thesis about Starbucks could be that morning hours are elss important to Starbucks and the company’s branded stores are busier at other times of the day as compared to morning hours.

Both companies are facing severe competition from McDonald’s whose coffee venture is turning out to be a success and whose primary marketing message to consumers is low priced coffee. Yet Starbucks nor Dunkin’ Donuts have touched the subject or price or value in their ads. It is a wise strategy on the part of both companies because they realize that they can never match McDonald’s in terms of resources and a price war would be more damaging to them than to McDonald’s. This is because McDonald’s has more diversified revenue base and the company is much larger in size. Thus, Starbucks and Dunkin’ Donuts have attempted to differentiate themselves on the basis of non-price factors in their marketing messages.

Starbucks and Dunkin’ Donuts must be focused on gaining new customers as is every for-profit business but the ads do not show any such attempt. These ads are more an attempt to communicate with current consumers and remind them that they make wise choices every day. Thus, current consumers will feel assured that their chosen brands have not forgotten them and this may further increase consumer loyalty for the brands depicted in the ads.

Of these two ads, I found Dunkin’ Donuts ad to be more effective and convincing and the message was easy to understand. Starbucks ad was more visually appealing though different viewers may get different messages though they would be looking at the same ad. Dunkin’ Donuts ad is also clearer about the customer segment being targeted while Starbucks ad is going for the overall market instead of focusing on particular market segments. The ads also confirm that Americans have become used to a cup of Joe on a daily basis and it is not a luxury indulgence anymore.

Reference

Duarte Imaging. Illustration. 1 November 2011 <http://www.laduarte.com/illustration.html>.

Fotolog. 1 November 2011 <http://www.fotolog.com/starbucks/64217369>.

IBISWorld. Coffee Production in the US. 31 October 2011 <http://www.ibisworld.com/industry/default.aspx?indid=272>.