Dynamic Marketing Communiqué

Just call us Dunkin’: How an iconic food chain’s huge branding decision became a marketing success [Monday Marketing Marvels]

May 4, 2020

Donuts.

A classic American snack.

A great partner to coffee.

A lot of flavors to choose from.

Donuts have gained popularity through the years and in different parts of the world. Now, so many people can enjoy this sweet treat!

One brand that has helped donuts become so popular is Dunkin’.

In 1948, the first branch located at Quincy, Massachusetts, USA was originally named Open Kettle. Two years later, it was renamed to Dunkin’ Donuts.

The restaurant served the classic combination of donuts and coffee. Over the years, they became increasingly popular and opened more locations!

They also popularized the term “donut”, becoming an acceptable way of spelling it other than the original “doughnut”.

From selling just their original set of donut flavors and standard coffee, they now have a huge variety of donut flavors inspired by global influences, different coffee-based drinks other than just the classic brewed, and savory selections like breakfast and sandwiches!

Today, Dunkin’ has over 12,000 locations around the globe.

Becoming an iconic brand is not only about offering quality products that people grow to love, but it is also a result of creating great marketing strategies.

Dunkin’ showed they had great marketing muscle. In fact, their marketing campaigns were the ones that made them so iconic and popular across the world!

They made their brand more relatable by creating different campaigns and menus that catered to the target market in each country.

USA – Launched “America runs on Dunkin” in 2006.

This campaign promoted their coffee products. It centered around the message that these are what “fuel” Americans that go to work or school every day.

The campaign was so successful, it ran for over a decade!

Philippines – “Pasalubong ng Bayan” (which translates to “the country’s take-home treat”)

This campaign marketed their donuts as the ideal pasalubong (souvenir or take-home treat). Take-home snacks are a very popular Filipino family tradition, and promoting them as the treat to get made them one of the most popular food chains in the country!

South Korea – Deliciously unique flavors!

Dunkin’ also made sure that they added items on the menu that are unique to each country. An example is the sweet potato and kimchi donuts in South Korea. YUM!

Technology, specifically online marketing, is also an important tool in their strategy.

Dunkin’ created their own on-the-go ordering app to offer their customers another convenient way to get their donut and coffee fix during a busy day!

Social media is another digital platform they use heavily. They collaborate with different influencers on Instagram, Facebook, and Twitter to promote their existing and new products. Seeing other people, especially “influential” ones, share their favorite food and drinks from Dunkin’ would make others want to go out and buy their own too.

Dunkin’ made sure that they had as many touchpoints as possible to attract more customers and retain brand loyalty. All their marketing efforts have surely helped their business grow!

THEIR BIGGEST MOVE YET

For a lot of established brands, what Dunkin’ Donuts did last 2018 was a very bold move.

They removed “Donuts” from their brand name, simply calling themselves, DUNKIN’.

When companies undergo a name change, it usually means they want to move past anything unpleasant attached to their old name. For some, it could be simply changing some part of their brand identity, while for others, something more drastic like a 180-degree rebrand.

For Dunkin’, however, changing their brand name was simply their way of showing the world that they are moving into the future—their biggest marketing move ever.

According to Dave Hoffman, CEO of Dunkin’ Brands and president of Dunkin’ U.S.:

“This isn’t a change for the sake of change. Our new branding is a clear signal that there is something new at Dunkin’. It says we are a dynamic, on-the-go brand yet still pays homage to our great heritage.”

Changing their brand name meant that they wanted to innovate and embrace fresh ideas while retaining what made them great in the first place.

While their iconic donuts are still an essential part of their menu, Dunkin’ has spent a lot of time and effort on improving their beverage menu.

They’ve even become one of the largest coffee chains in the world.

This bold move turned out to be a good thing for them. It confirmed what their loyal customers already knew about them–that they were more than just a donut store. They even generated USD 242 million in total net income worldwide in 2019, an increase from USD 230 million in 2018!

Dunkin’s Earning Power: Valens Research vs. As-reported numbers

Dunkin’ makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a phenomenal earning power generator.

So, how well has Dunkin’ been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results much higher than what traditional databases show.

The blue bars in the chart above represent Dunkin’s earning power (Uniform Return On Assets). These numbers have been positive, going over 40% seven times for the past 11 years.

The global ROA average is just 6%

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you won’t see the 43% adjusted ROA (return on assets, a measure of earning power) for 2019. You’d just see the company report less that, at 7% as-reported ROA.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Their returns have been well above the market.

The numbers show that they are doing well and making a profit.

From its humble beginnings, Dunkin’ has grown into a global name even more, serving customers donuts and coffee for over 70 years.

While the new name and plans for the future are another chapter for the brand, they continue to remember their roots and what made them the food icon that we know and love today.

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com