Industry Research

DONUTS R' US: What Dunkin' Brands Can Teach Limo Operators

LCT Staff
Posted on October 14, 2009

MOHEGAN SUN RESORT & CASINO, CT — Flash Back: A slumped baker with a drooping demeanor walks to the door putting on his coat. “Gotta make the donuts,” he recites. Variations of these commercials endeared us to Fred, the baker and embedded the Dunkin’ Donuts name into to our minds forever.

Jon Luther, Executive Chairman of the Board for Dunkin Brands, controls an empire that includes two powerhouse brands — Dunkin Donuts and Baskin-Robbins. Managing a brand that is as recognizable as the likes of Coca-Cola and McDonalds, Luther shared the secrets of Dunkin’ Brands success with sales increasing 66% since 2003.

Brand transformation

Sitting in the audience waiting to hear Jon Luther speak, I admit that I was skeptical. How can I take away information that I can share with the limousine and tour industry that can be applied to our businesses immediately? We all know that Dunkin’ Donuts are franchises, while most of our industry consists of mom-and-pop operators who own their business. I became even more skeptical when Luther relayed a story about a Japanese consultant who visited Nordstrom’s and took the information back to his client in Japan, only to have used what he learned lead his client to near ruin. The moral was that what works for Nordstrom’s, may not necessarily work for another company. Despite my reticence, I walked away with great insights from Luthern and Dunkin’ Brands, both for chauffeured transportation operators and everyday life.

Dunkin Brands has $7 billion in sales with 15,000 stores. They sell one billion cups of coffee per year. Luther pointed out that more than half of Dunkin’ Donuts revenue comes from sales of coffee. Additionally, it trails only McDonald’s in the breakfast market, which is an incredible feat as its market penetration does not encompass the entire country.

When you manage a multi-billion dollar company, research is critical. Research told them that the Dunkin’ Donuts customers were not driven by status. They were people who loved routine and who had a “I am who I am attitude.”

Key Take Away: Understand who your clients are and what their values are.

Dunkin’ Donuts stores are almost all located on the East Coast of the U.S. The stores all have a more contemporary look and the logo is now “DD” in the company colors. Although Dunkin’ Donut stores are not in the West, coffee is sold in supermarket chains and the company is marketing through unconventional means working with Jet Blue and Hess Oil to market and distribute. Luther stressed consistency of the brand throughout the transformation: the look of the retail stores, packaging of the product, and the service delivered.

Key Take Away: Build awareness in your brand first before you jump in completely. Maintain consistency in your brand.

Luther emphasized how Dunkin Brands got to where it is today. Dunkin’ Brands has a strategic heartbeat: “Eat, Drink, Think.” The think potion relates to the companies values, principles, and strategies. He explained that it is an “At Your Service” attitude. Dunkin’ has values-based leadership. It looks at things such as honesty, integrity, responsibility, humility, fairness, respectfulness, and transparency. It embedded these principles into its culture.

Key Take Away: Define your corporate culture. Know who you want to be.

Luther stressed the importance of building relationships and relayed stories of relationships he had throughout his career. His point was that you never know where a relationship may lead down the road. He felt that building relationships builds business.

He finished his talk with a number of insights which are all key takeaways:

• Set incredible targets: Think big. Aim high. See big ideas through.

• The status quo is the first sign of obsolescence.

• Aim high and take risks.

• You can’t keep doing things the same way — the world is changing rapidly.

• Headwinds only slow you down but don’t stop you from getting there.

• Preserving cash is important, but you can’t save your way to success.

• Dance with who you came with.

Dunkin Donuts delivers consistent, high quality products that America can relate to. It doesn’t try to be something it isn’t. It makes coffee, doughnuts, and sandwiches. That’s it. It delivers the product the same way every time regardless of where you are or which store you visit. Stores are located where the customers are. Customers know exactly what to expect when they visit their stores. The familiarity leads to loyalty. They know who they are and they deliver what the customer wants — every time. Operators in our industry can look at this brand when we develop our own brands and use this model. Brand success is obtained by a clear understanding of who you are and want to be with a complete comprehension of who your clients are and what their values are.

Source: Linda Jagiela, LCT Magazine

LCT Staff LCT Staff
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