Category: Dunkin Donuts

Research report

1.1 Research and develop a profile of a great innovator

A description of the innovation/innovator

The innovation that I have taken after enough of research is DUNKIN DONUTS. This was established in 1948 with the name as open kettle and by William Rosenberg in Quincy, Massachusetts. In early 1950 it was renamed as Dunkin donuts. From the time of establishment to till date the growth of this company is very high holding its franchises at nearly 12,000 locations in 36 countries.

The type of innovation

The type of innovations being followed in this company from the very long time is increasing the menu as well as fast customer service.

Adding various items to menu falls under product innovation whereas fast customer service falls under process innovation.

Example: in 1950 the company menu has started with coffee and donuts which has increased its number of items in menu in the following years. They have also introduced a new ice cream brand in 2017 by name Baskin-Robbins. This eventually caused 2.8% growth in overall sales.

How their innovation led to benefits of their organization

For every business the success rate is measured mainly in three ways such as

1. Expansion of the business
2. Profits
3. customer satisfaction. The Dunkin donuts company has achieved all these three.

Adding the number of items to menu has increased their profits and fast customer service also has increased the fame of the company.

1. Current locations
2. Former locations

• https://en.wikipedia.org/wiki/Dunkin%27_Donuts

Challenges and problems faced by the innovator

The three biggest challenges faced and facing by the Dunkin donuts company are

• Labor shortages
• Declining retail traffic
• Health concern

An explanation of how they developed the innovation with specific reference to idea generation and idea evaluation

When it comes to the idea of developing new donut the following idea generation steps are followed in the Dunkin donuts group

Brainstorming, customer feedback, customer expectations, researching in the market place are considered to develop an idea. Once the idea is been developed that is been implemented and the staff will develop a new donut.

As part of idea evaluation the new donut that is been developed in the kitchen is been tested by the customers by sending into different restaurants worldwide.

However, it takes 18 months for the team to develop and release a new donut into market.

1.2 Research and identify innovation sysytem features under the following headings ( dimensions of innovation)

A managed innovation process

In the process of innovating new donuts the Dunkin donuts company had stick to the basics but making them better.

Chris Dunkin donuts senior vice president of brand marketing, Global consumer insights and product innovation explains that their focus is on raising bar on both quality and variety of foods for which their innovation team constantly explore on innovating new items. They also concentrate on fast to market product innovation and increase use of digital technologies.

Strategic alignment

In 2018 Dunkin Donuts Company has announced that they are going to rebrand their company name as just Dunkin with a view to position their market as focusing on coffee, tea, quick service foods of course donuts. The decision was taken as 67% profits are from coffee sales.

Inconsideration to this whenever company wants to rebrand the company they must look for the following points.

• Brand reputation issues
• Business model alignment
• ·egarding brand relevancy

1. Industry foresight

This company has strategy for the growth in the forecast period.

• Streamlined menu
• Digital initiatives
• Product innovation and brand differentiation
• Strong relationship with franchisees

1. Customer insights

Dunkin donuts look in to customer insights by using marketing cloud they respond to the customer behavior throughout their loyalty journey. In addition to this the company is also sending e mails to power up their email marketing.

Core technologies and competencies

Core technology of 2018 – mobile drives-thru lane, 75 percent of all restaurants with drive-thru lane and NextGen restaurant design, OTG mobile ordering platform

Core competencies –

Dunkin donuts brand has core competencies between brand management, marketing strategy, distribution and product innovation, food preparation and customer service. These sort of different core competencies are allowing both to fetch success rate.

The core competency is coffee and backed goods, Reilly, M. (2011) and customer loyalty, fast customer service, updating of menu with new innovative items.

1. Organizational readiness
2. Disciplined implementation

Dunkin donuts has a very disciplinary implementation in serving customers without letting them to wait so to keep up their reputation for almost over 60 years as a quick service restaurant (QSR).

1.3 Research the ways that organizational nad team dynamics can affect workplace innovation sysytems. Explain

How different approaches to management and leadership can support or hinder innovation?

Approaches to management and leadership that support innovation

According to Jon Warner (2016) there are different ways of leadership that supports the innovation such as

1. Building a climate of trust
2. Talking about the importance of ideas, creativity and innovation
3. Strong vision
4. Setting up clear goals
5. Focusing on customer and employee needs
6. Encouraging different levels of communication such as cross and upward communication
7. Being optimistic
8. Encouraging quality over quantity
9. Providing quick and positive feedback
10. Should be a role model

Approaches to leadership and management that hinder innovation

According to Brendan Playford there are 9 challenges that hinder the innovation

1. Employees are not empowered to innovate
2. No motivation to employee for being innovative
3. No innovation strategy
4. Innovation is limited to only one functional group
5. Lack of collaboration
6. Lack of diversity
7. Experiencing the success
8. Lack of connections with consumers
9. Improper or wrong way of measuring innovation

Introduction:

• The two brands I have selected are Dunkin Donuts and Starbucks coffee. The reason I chose them because I love coffee and these two franchises sell the best coffee. These two brands while being comparative in their items have unfathomably various meanings related with them.

Product Attributes:

• Dunkin Donuts; Dunkin doughnuts offers entire beans and ground espresso roast. They likewise offer numerous kinds of flavors for example Columbian, hazelnut and French vanilla. The roasts are regular or dark. The majority of the beans are Arabica, which means they are picked generally from Ethiopia
• Starbucks; Starbucks has wide assortment of espressos. The espressos from numerous nations including Peru, Mexico, Guatemala, Nicaragua, Brazil, Ethiopia and Sumatra. The espresso roasts extend from blonde to medium to dark. They sell whole bean and ground. They additionally offer decaf alternatives.

Benefits Provided:

• Dunkin Donuts; Functional-Caffeinated

Psychological-Mental Saves Money

• Starbucks: Functional-Caffeinated

Psychological-Mental Confident and Stylish

Product Line:

• Dunkin Donuts: Food, Made-to-arrange drinks, bundled espresso, market things for example, K-cups
• Made-to-arrange drinks, bundled espresso, tea, syrups and sauces, Instant coffee and market things for example, K-cups

Packaging:

• Dunkin Donuts’ espresso arrives in a reasonable cup with ‘Dunkin Donuts’ written in straight intense, pink and orange hues in its focal point. Dunkin Donuts offers various kinds of espressos, of which have exceptional pressing hues.
• Starbucks espresso arrives in a white or clear cup, contingent upon the sort of beverage, with their green, white and black logo of a woman in the center. While Dunkin Donuts bundling highlights splendid and strong hues, Starbucks picks warm and consoling hues, for example, green and brown. There are additionally different hues for extraordinary espressos as occasion items.

Brand Image:

• Dunkin Donuts: It is less expensive than Starbucks, Work environment, snappy fix, Large sizes, Hearty, Creamy.
• Individuals see Dunkin Donuts as a simple, economical approach to get coffee when they are in a hurry, more often like work. Dunkin Donuts isn’t about extraordinary coffee nor is it about the experience of setting off to the store-it is basically about getting some coffee to endure the day.
• Starbucks: Expensive, has a decent status, smells better, bitter. The purpose of going to Starbucks is to go to Starbucks-to get the extravagant espresso and grab a chair to appreciate both your espresso and condition that you are in.
• Individuals go to Starbucks to study, do schoolwork and even have proficient gatherings. Starbucks is about the experience of the store.

Positioning Statement:

1. To individuals in a hurry, Dunkin Donuts is a fast stop that never disappoints.
2. To occupied business professionals, Starbucks is the area to allow you to unwind.

Introduction: The Coffee Industry Titans

Starbucks has become a market leader by understanding the core qualities of the coffee industry and the needs and wants of their customers. They have been able to deliver exceptional service to their customers and impeccable training to their employees for years. Acquiring a large percentage of the market, Starbucks is present in several different countries with thousands of stores throughout the world. In this report, I will give an overview of Starbucks Co. By going over its current mission statement, values, and performance, we will be able to better assess the internal and external environment of the company and the strength of its competitive forces.

Starbucks: A Global Coffee Experience

What was once “Cargo House”, is now the infamous premium coffee company, Starbucks Co. Starbucks now operates in 78 different markets and has more than 30,000 stores as of 2019. Starbucks first started its operations in 1971 with one small store in Seattle’s Pike Place Market. While Starbucks started off its operations by selling only coffee, they soon branched out into teas, smoothies, pastries, water, and sandwiches. Originally acknowledged for their fine whole bean coffees, Starbucks soon became more than just a simple grab-and-go coffee location. Starbucks is a place for friends, couples, and families to conversate, work, and enjoy their coffee. That is why Starbucks’ mission is to “inspire and nurture the human spirit-one person, one cup and one neighborhood at a time”. While Starbucks has a mission statement, they do not have a clear vision statement, but instead they have made it clear what their values are. They want to create a culture of “warmth and belonging”, where everyone is welcome and included. They want to make sure that they are doing the best that they can day in and day out. They want to, “be present, transparent, and respectful” in all that they do. It is important to note that not only is Starbucks’ mission to make their customers happy but to inspire its employees as well.

In 2014, Starbucks opened its first roastery reserve location in Seattle. Starbucks reserve is more about the experience that you are getting when entering the store and ordering the unique coffee of your taste. Starbucks’ reserve carries limited coffees and their goal is always make sure that they are creating an exclusive experience for each customer. After Seattle, Starbucks’ reserve locations expanded to New York City, Shanghai, Milano, and Tokyo and has a store opening soon in Chicago.

As aforementioned, although Starbucks does not have a clear vision statement, the values that they continue to reinforce, is at the forefront of their priorities. Not only is it important to Starbucks that their customers are always satisfied, but their employees as well. They strive to build a nurturing, friendly, and exemplary relationship between top management and employees, by providing proper training to all prospective employees. Since trends are so important in our society nowadays, Starbucks makes sure that they are always up to date with what their customers’ needs and desires are. For example, Starbucks brings back and introduces new beverages every season. As of May 2019, they have brought back their S’mores Frappuccino, as well as introducing a new refresher drink for the warmer days, dragon fruit and mango tea. The introduction of new beverages every few months demonstrates that Starbucks takes into consideration the new trends of the season as well as the demand. In summation, Starbucks makes it their goal to always remain transparent, have the best quality, dignity, and respect for their customers and employees.

According to Starbucks’ latest annual report, as of September 30th, 2018, Starbucks Co.’s total net revenues increased $2.3 billion, or 10.4%, from fiscal 2017. Regarding the United States, it was calculated that total net revenue for fiscal 2018 increased by $1.1 billion, in comparison to fiscal 2017. When understanding where this increase in net revenue came from, it is important to note that 383 new stores were opened, contributing to $909 million, as well as 313 new licensed stores generating $197 million in net revenue. On a broader scale, we can see that China and Asia Pacific generated a total net revenue for fiscal 2018 of $4.4 billion, in comparison to a $3.2 billion total in fiscal 2017. From this total, $0.9 billion was due to the impact of ownership change in East China and $0.3 billion due to 443 company-operated stores opening. Starbucks’ 2018 annual revenue was $24.72 billion higher than 2013 annual revenue ($14.87 billion). There has also been a drastic change in the stock price over the past 5 years. In 2014, Starbucks was selling shares at $34.57, and as of May 3rd, 2019, its shares have increased to a selling point of $78.04. Starbucks is striving and performing exceptionally well in the Asian regions. However, Starbucks is not doing as well in balancing out its profit and liabilities ratio. Starbucks is distributing a large amount of money to its shareholders as opposed to investing more into the market. Additionally, Starbucks should reconsider its overall profitability and borrow less money as it would be more beneficial in the future.

Expected Rate of Return on Market Portfolio

1. https://www.stock-analysis-on.net/NASDAQ/Company/Starbucks-Corp/DCF/Present-Value-of-FCFF
2. The weighted-Average effective interest rate on Debt
3. https://www.stock-analysis-on.net/NASDAQ/Company/Starbucks-Corp/DCF/Present-Value-of-FCFF
4. Long-term Debt(10k-filing date: 2019-11-15)

As of November 8, 2019, there were 1,181.0 million shares of the registrant’s common stock outstanding and stock price was $83.02 during that time.

1. Equity=No. shares of common stock outstanding * Current share price=$1,181,000,000*$83.02=$98,046,620,000.00
2. Long-term debt=$12,033,000
3. Rate of return on Long-term Treasury Composite=2.15%, Expected rate of return on market portfolio=11.49%, Systematic risk(B) of Starbucks Corp’s. common stock=0.52, then we can use the CAPM formula to calculate required rate of return on Equity=2.15%+0.52(11.49%-2.15%) =7.00%.
4. Weighted-Average effective interest rate on debt=3.33%. 5)Estimated(average) effective income tax rate=(19.5%+19%+33.2%+32.9%+29.3%+34.6%)/6=$28.08% 6)(After tax)Required rate of return on Debt=3.33%*(1-28.08%)=2.39%.

Value Weight Required rate of return

1. Equity (fair value) 9,8046,620 0.89 7.00%
2. Long-term debt (fair value) 12,033,000 0.11 2.39%

WACC=0.89*7%+0.11*2.39%=6.5%

FCFF Growth Rate Forecast

Year Value g(t)

• 1 g1 18.44%
• 2 g2 14.64%
• 3 g3 10.84%
• 4 g4 7.04%
• 5 g5 3.24%

Starbucks Corp., current enterprise value Calculation

• Current share price $ 83.02
• No. Shares of common stock outstanding 1,181,000,000.00

US $ in thousands

• Common equity (market value) 98,046,620.00
• Add: Noncontrolling interests (Per book) 1,200.00
• Total Equity 98,047,820.00
• Add: Long-term debt 11,167,000.00
• Total equity and debt 109,214,820.00
• Less: Cash and cash equivalents (2,686,600.00)
• Less: Short-term investments (70,500.00)
• Market Price $ 106,457,720.00

Intrinsic Valuation Calculation of the Company

US $ in thousands

Year Value FCFF Calculation Present value at 6.5%

• 0 FCFF0 3,481,498.00
• 1 FCFF1 4,123,415.00 3,481,498*(1+18.44%) 3,871,743.00
• 2 FCFF2 4,726,971.00 4,123,415*(1+14.64%) 4,167,559.00
• 3 FCFF3 5,239,213.00 4,726,971*(1+10.84%) 4,337,249.00
• 4 FCFF4 5,607,839.00 5,239,213*(1+7.04%) 4,359,064.00
• 5 FCFF5 5,789,264.00 5,607,839*(1+3.24%) 4,225,426.00

5 Terminal Value 183,047,662.00 5,789,264*(1+3.24%)/ (6.5%-3.24%) 133,601,501.00

• Intrinsic Value of Starbucks Corp.’s capital 154,562,542.00
• Less: Long-term debt (12,033,000.00)
• Intrinsic Value of Starbucks Corp.’s common stock(per share) 142,529,542.00

It is no doubt that Starbucks has competitors that are always trying to one-up them in the coffee industry. With customers’ opinions constantly changing, companies must make sure that they are aware of current trends to satisfy demand. It is evident that all companies in the industry strive for success, growth, good word-of-mouth, and finally, profit. Starbucks’ two largest known competitors are Dunkin Donuts and McDonald’s Cafe. Dunkin Donuts has a market share of 16.09%, McDonald’s Cafe has 11.94% of the shares, and Starbucks remains the leading brand with 21.83%. While McDonald’s Cafe is a rising force in the industry, Dunkin Donuts poses more of a threat to Starbucks because it is currently using very similar strategies and marketing techniques as Starbucks.

Dunkin’ Donuts: The Affordable Alternative

Dunkin Donuts first opened its doors in 1950 and after just five years, was already franchising throughout the United States. In 2004, Dunkin Donuts became one of Starbucks’ biggest competitors. While Starbucks was offering premium quality coffee drinks at a high price point, Dunkin Donuts was offering almost the same quality coffee, but at a much lower price, causing a potential threat. The low price point attracted many Starbucks customers that were looking for a more affordable option. To attract new customers, Starbucks relied heavily on word-of-mouth from their present loyal customers. On the other hand, Dunkin Donuts used the more “classic” form of advertisements, such as TV commercials and fliers. This may be an advantage to Dunkin Donuts as they are targeting many different people through several platforms, while Starbucks is promoting more exclusively, only through word-of-mouth. As the second biggest competitor, McDonald’s Cafe has also marked its presence in the premium coffee market. Competitors pose a concern for the future of Starbucks because as they are offering similar quality products at lower prices. Because of this, Starbucks is at risk of losing loyal customers to Dunkin Donuts and McDonald’s Cafe. External elements contribute to their low switching costs, which also causes strong competition. With Starbucks’ high-quality Arabica and Robusta coffee beans grown worldwide, it creates a low switching cost between other suppliers trying to follow in their footsteps. A low switching cost also causes a low bargaining power because of its enormous size and services.

McDonald’s Cafe: The Fast-Food Coffee Contender

When we think of quick fast food, McDonald’s is the first company that comes to mind, but no one stops to think about their performance in the coffee industry. They opened doors in 1955, and their first McCafé location opened in 1993 in Australia. Once it was known that customers had high demands for customizing their coffee, McDonald’s took the opportunity to introduce several different coffees for customers to choose from. They sold cappuccinos, smoothies, hot chocolate, lattes, and other breakfast items. McDonald’s goal was to create an at home, cozy, comfortable, warm atmosphere for customers. Because obesity is such a hot topic in the United States, McCafé introduced many healthy options, appealing to those looking for a healthier alternative. Studies have also shown two important facts, customers have a personal connection with a company that speaks to you face to face, and they also prefer separate sections within one store. By combining their new ideas in 2017, McDonald Cafe’s sales increased by 6.6%. Both Dunkin Donuts and McDonald’s Cafe are big players with similar structures and many diversified store locations. It is important to note that Starbucks’ has had a lot of imitation from smaller chains that are trying to achieve a similar marketing strategy. While Starbucks has many loyal customers that order the same drink every day, McDonald’s Cafe and Dunkin Donuts have customers that vary a little in their purchasing habits. Starbucks remains the leader of the industry and is continuously growing their market share. With more than 200 items on their menu, they have many options for their loyal and new customers to choose from, while Dunkin Donuts only provides 32 items and McDonald’s Cafe 145 items.

Comparative Financial Analysis

Starbucks main industry which it competes in, is coffee beverages. Offering different varieties of coffee, customers can request their drinks anyway they like. One may ask, just how attractive is the coffee industry? The coffee industry is a constantly growing with millions of customers viewing coffee as a stable purchase. Coffee is one of the most commonly consumed beverages in United States, even more so than tap water. According to the study that National Coffee Association conducted in collaboration with Specialty Coffee Association of America, the total economic impact of the coffee industry in the United States in 2015 was $225.2 billion. In addition, it was also established that the coffee industry is responsible for 1,694,710 jobs in the United States economy. It generates nearly $28 billion in taxes and it is estimated that over the next five years, industry revenue is forecasted to grow at an annualized rate of 2.1% to $50.6 billion due to strong consumer demand for gourmet coffee in numerous blends, flavors and varieties. With the demand for coffee increasing, Starbucks is surely able to grow alongside it, supplying the coffee to fulfill consumers demands.

The popularity that has developed with Starbucks’ brand is unmistakable. Since its first store opening in 1971, there is an estimated 28,218 other locations around the world. Originated in the United States, popularity began here and spread throughout other countries. By targeting its main consumers, 20-40-year old, the U.S. market is the most profitable market. Over 70% of Americans spend money on coffee daily, with an average of $16.00 spent per week. Starbucks’ highest source of revenue is in the U.S., with $16.73 billion accounted for in 2018 compared to its second main market, China, with only $4.47 billion. Moreover, the main source of revenue is beverages, with 73% of the market. The remaining 27% is divided by 23% going to food sales and the last 3% in single packaged served coffees. Although the U.S. accounts for the highest quantity of stores, the American customer satisfaction index score was 78%, compared to previous years in which the satisfaction score reached 80%. However, visits to the stores is significantly high within the country where approximately 40 million customers visited Starbucks in only 30 days ranging from 18 to 39 years.

Conclusion: The Future of Coffee Retail

At the end, I would suggest that Starbucks partner with Netflix. The reason why we believe that this partnership would be beneficial is because we are providing an incentive for those who have the mobile app and use it to purchase our products. The way that this partnership would work is that for those customers who purchase through the mobile app, can be eligible for free Netflix membership. However, customers would not be eligible for free Netflix with just one purchase through the mobile app, they would have to purchase a minimum of $10 per month through app. For our loyal customers, this would be beneficial because they are most likely already spending more than $10 per month, so receiving free Netflix membership would be another incentive to continue purchasing from us. For new customers, this partnership would be beneficial because through our mobile app, every purchase you receive points and after a certain amount of points are accumulated, you are eligible for a free drink. Not only will this be an incentive to purchase from Starbucks, but it will also be a great opportunity for them to explore our menu and find which drinks they like the best, while having a free Netflix membership.

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The Future of Coffee Production Within the Grind Café

Executive summary

After the recent opening of six stores for the newest coffee establishment, known as the Grind Café, it has come to the attention of each of the franchise owners that the expected sales outcome has not been meant based on the preference of customers going to Starbucks and Dunkin Donuts. In an effort to find a solution before the problem becomes too serious, each of the six franchises have been asked to establish possible new marketing techniques to lure customers away from the bigger name brand companies.

Findings and conclusions.

Research revealed the following:

• Two areas must be addressed when considering customer satisfaction and familiarity with the company.
• Customer retention, in relation to the service in store and the subsequent treatment following the purchase of a product.
• Product wait times, the efficiency of production of said products will determine whether the customer returns.
• • Customer retention rates can vary based on many factors and it is important for the people analyzing said performance to take the time to understand that as well as how that relates to norms of the coffee industry and the standards put in place by that.
• • There are various techniques already in place to measure if customers will become regular visitors to the Grind Café and this up and coming company also has the technology to perform such a ask in-store with things like paper surveys available or web-based ones.

After research (from surveys), the conclusion is:

• Creating a “1, 2, 3’s” system for the Grind Café will allow for customer retention to be a number one priority within the company and have each of the business decisions be oriented to the retention and have strategic planning to achieve these goals.
• There are countless resources that were implemented in the original business plan of the Grind Café to give the customers a voice in order for the wants and needs of the customers be effectively communicated early and often. The gaps from the original survey show executives that the customer retention problem and be an inexpensive fix by partnering with other companies and focusing on advertisements.

Recommendations.

We recommend the following:

• Enhance our current QC efforts by adding a customer feedback loop to identify strengths and weaknesses in our coffee shop performance. The benefits are increased credibility of our quality story by providing objective measurement and a unique selling point to help retain and attract clients.
• In order to further control the quality and retention of customers, it is important to implement this into everyday practices within the Grind Café. Simple benefits of this system will be to establish a sort of direct accountability and measurement of the goals of the coffee shop and show how easy it is to build a credible business. Attached is a simple picture of a system used in a coffee shop similar to the Grind Cafe:

Figure 1 Source

• Estimated Cost to THE GRIND CAFE: $1,000 pilot program $5,000 – $7,000 annually
• Included in the cost along with the technology and screens, is a staged system, similar to the “1, 2, 3’s” stated previously, that will allow for a simple understanding of customer needs and wants. The program will have the basic one through 5-star rating as well as more analytical system that will be used according to sales for each month.

Estimated Cost to THE GRIND CAFE: Varies based on sales of the 6 locations.

Introduction & methodology

Introduction & rationale.

Customers of The Grind Café visit our locations instead of Starbucks and Dunkin Donuts because we provide the “homey” feel of how coffee should be. We use more simplistic flavors that provide a better connection with the customer with less confusion. The use of technology and expertly trained staff allows for the Café to implement better customer satisfaction and an employee-customer relationship. A problem that has been faced in recent months is that sales have reached a plateau without any growth in the near future predicted. The current customers are very satisfied and do not understand why customers still prefer the overpriced competitors. A path towards increased sales will first start with understanding the source of the current customer satisfaction and retention. Trying to answer these questions will increase the satisfaction of future customers and create more competition with the bigger competitors.

Methodology and objectives.

The customer retention inquiry was undertaken by an internal investigation in order to fully understand the situation. The marketing team at headquarters was commissioned by Spencer McCloskey, the Franchise director, to understand if this was a marketing issue or something a long those lines. In addition to looking into the lack of growth in sales, spencer and the team will continue to analyze precedents of already well-established competitors of Starbucks and Dunkin Donuts. In previous months the department that has been commissioned for this situation has provided vital information on services within the competitive coffee market that have allowed the Grind Café to stay able to compete. This shows the capabilities of this team as well as the past success showing that this problem has a great possibility of being solved.

The detailed intentions in said investigation are to deliver:

• Simple factors that eventually lead to retention of customers.
• Understanding what tools are at hand to measure said retention.
• Implement a plan and have this reflect the goals of the company

In order to lay a groundwork for the goals, the marketing team has concluded that these are the key factors:

• the influences that determine customer retention.
• the practices used by leaders in the customer retention field
• the availability of quarterly sales information

Background

Importance of consumer retention.

What is the retention of customers? Do customers continue to use the same establishments for the quality of product or is it more based on how the customer is treated and how they feel after they visit the restaurant? There is no book of answers for these tough questions that all restaurants and other establishment owners want and need to know. All we can do is have educated guesses based on life and business experiences. According to NG data, customer retention is a goal for many owners. “The goal of customer retention programs is to help companies retain as many customers as possible, often through customer loyalty and brand loyalty initiatives” (Galetto, p. 1). The problem that many companies face though, is that they are too focused on retaining their customers that they do not focus enough on bringing in new ones. Companies that tend to find the balance of customer retention and bringing in new ones are the ones that are able to be successful and are able to outperform their competitors.

Customer retention versus sacrifcing profit.

According to Forbes, companies tend to sacrifice long term good business practices in order to make fast cash. These companies are not worried about securing healthy business practices to have a solid future with the company. “You need long-term, favorable relationships with your customers in order to build a successful business. Securing future sales is as important as current sales” (Weinberger P. 3) This is why most times customer retention takes a hit and leads to stagnant sales without any growth. Companies must understand that marketing is vital for an important and successful tenure as a company trying to make a profit.

Analysis of customer retention

Overall objectives of retention measurement.

The use of these techniques to measure the retention of the customers who choose the Grind Cafés coffee is meant to provide the feedback from the eyes of the customers in order to ensure that these customers are receiving the service that is expected and wanted in order for them to return in the future. The type of research that this is referring to is used to identify what the weak points are whether it be the product itself, the service, or the ambiance of the café. Evaluations when compared against the big names reveal gaps in those companies and where the Grind Café can improve in those specific gaps in order to be better than the competition. The measurement of customer retention is what the main focus should be for the current state of the business so sales will increase and the process will continue to improve.

Preparation for retention inquiry.

ny program focused on retention of customers at a specific place must first have a concrete plan. There are steps that go along with said plan and they are as follows.

Step 1. Understand and communicate how the research will be used. THE GRIND CAFE has two possible sets of outcomes:

1. 1. Use the research to build upon to develop and determine how efficient the customer services provided:

• a. How are customers feeling the company is handling feedback?
• b. How do the Grind Cafes resources compare to that of other coffee competitors?
• c. What are certain areas that we can improve on? And what are areas that we are proficient in?

1. 2. Create a plan for each of the 6 cafes that specifies what is going to be and when to better understand the customers and their needs to have them return in the future.

• a. What is the general consensus for retention of customers?
• b. How does these techniques compare to competitors of Starbucks or Dunkin Donuts?
• c. Where do customers most generally want to see improvements?

Step 2. Understand resources needed to complete the goals. Examining the retention research can be simplified into analyzing business and economic trends that can bring said problems to the surface the actual causes for lack of retention of customers and preferences of bigger companies over the up and coming grind café. Another thing to make this process as simple as possible is to look at the business processes of Starbucks and Dunkin Donuts to look at how they run their business that seems to attract customers. Understanding these standards will allow the Grind Café to choose whether or not to spend more money on other resources or utilize the resources already within the company.

Step 3. Choose the correct tool to obtain opinions of customers. There are a variety of different ways to pinpoint what customers are feeling and how often. This feedback can be used by a simple press of button instore, a face-to-face feedback, or web-based survey.

Resources at hand (in-house Grind Café). Because of the foundations that the Grind Café has set, the company has resources at its disposal in order to look at the satisfaction of the customers and act accordingly if such a thing is an issue. So far, the Grind Café, has an online feedback as well as Telephone messaging system. However, the technology is not necessarily there and must be developed in order for the sales to continue to increase.

With the missing pieces that are with the resources of the Grind Café, there are other places that have the resources that can be implemented within these companies.

Conclusion & recommendations

It is advised that the marketing and research department of the Grind Café develop a new way 2-sided effort in order to avoid further plateaus of sales in the future.

1. 1. Add an in-house customer feedback option like the one shown previously in the report. Use the marketing teams tiered approach to providing customer retention numbers to improve.

• a. Tier 1 Use a survey that has a positive and negative option that discusses quality of product and quality of overall experience so it can specifically apply to the company.
• b. Tier 2 Have each of the collected surveys be categorized into a report that each employee can use in order to improve the company piece by piece.
• c. Tier 3 This would allow for tier 2 to be expanded on with the more analytical side. This will be more specific and sophisticated reports more for managers and executives for the more business-oriented decisions.

Sources consulted

1. “10 Factors That Affect Your Restaurant Profit.” Restaurant Engine, 8 June 2017, restaurantengine.com/10-factors-that-affect-your-restaurant-profit/.
2. “6 Best Customer Feedback Software for 2018.” Fit Small Business, 25 Jan. 2019, fitsmallbusiness.com/best-customer-feedback-software/.
3. Bhasin, Hitesh. “Marketing Strategy of Dunkin Donuts – Dunkin Donuts Marketing Strategy.” Marketing91, 3 Mar. 2018, www.marketing91.com/marketing-strategy-of-dunkin-donuts/.
4. Bloem, Craig. “84 Percent of People Trust Online Reviews As Much As Friends. Here’s How to Manage What They See.” Inc.com, Inc., 31 July 2017, www.inc.com/craig-bloem/84-percent-of-people-trust-online-reviews-as-much-.html.
5. “Sales Lessons from Starbucks.” Sales Force Training, 18 Feb. 2011, www.salesforcetraining.com/sales-lessons-from-starbucks/.
6. Weinberger, Dr. Richard. “Business Owners: Don’t Sacrifice Long-Term Success By Making Short-Sighted Decisions.” Forbes, Forbes Magazine, 9 Nov. 2017, www.forbes.com/sites/allbusiness/2017/11/09/business-owners-dont-sacrifice-long-term-success-by-making-short-sighted-decisions/#73e624fd1c4d.
7. “What Is Customer Retention? Definition and Metrics.” NGDATA, 3 July 2018, www.ngdata.com/what-is-customer-retention/.
8. Wholley, Meredith. “17 Mind-Blowing Statistics on Performance Reviews and Employee Engagement.” Talent Management Blog by ClearCompany, 25 Mar. 2019, blog.clearcompany.com/mind-blowing-statistics-performance-reviews-employee-engagement.

Staying cool for the summer, especially if you’re in the middle of a heat wave in Europe for instance, could keep you dehydrated and just stuck in a puddle of sweat. Chilling indoors or outdoors could be a drag with climate change continuously screwing up your summer plans with an intense heat wave, but thankfully, thirsty guys and gals have a variety of smoothies and cold shakes to choose from to keep cool. Say, Dunkin Donuts iced coffee, or maybe even their new limited edition summer beverage, the Kit Kat Coolatta.

Dunkin Donuts may be a maven in the donut industry but it’s not entirely foreign to the hype of cold smoothies and frappes. The 69-year-old Massachusetts-born business has never been a lagger in the donut scene, with quite the successful portfolio of over three decades of experience in retail, Dunkin Donuts is nowhere near done running America on donuts. In fact, according to a report by Dunkin Brands, 2018’s revenue boasts a 3.6% increase at $1.32 million in contrast to 2017’s revenue estimate at $1.28 million.

Store sales of the Dunkin Donuts brand experienced a 0.6% constant rate by December of 2017 and December of 2018. In 2018, Dunkin Donuts added 392 new stores and restaurants worldwide. About 278 were estimated to be in the US. Fourth quarter sales were also positive with a revenue of $319.6 with 1.5% from 2017 which was at $314.9 during the year’s Q4 sales. Overall, Dunkin Donuts is here to stay and is an established part of the American dessert trend that continues to challenge the likes of Krispy Kreme and Gonuts Donuts, day in and day out. With its new installment of a limited edition summer drink, the KitKat Coolatta is about to get Dunkin Donuts the millennial seal of approval.

Coolatta OverDrive

Dunkin’s summer coolatta was first made available last June 26th to the public in all Dunkin Donuts locations until August 20th, making it the summer must-try for everyone scorching from the summer heat. According to product review site Best Products, the collaborative effort of Dunkin and Hersey’s-inspired products are set to up the brand’s summer game. The best seller and fiercely promoted summer drink is called “Vanilla Bean

Coolatta is a frozen beverage mixed with pieces of KitKat, while the “KitKat” Coolatta is a mixture of tasty flavors of crispy chocolate-coated wafers. Aside from these signature coolattas, there’s also the HEATH swirl latte, and the Hersey’s Cookies ‘N’ Creme Donut.

If everyone is skeptical with the level of sweetness these drinks have from just the name themselves, below are the nutritional facts to fully disclose the sweet tooth’s must-try drink, according to food website Fast Food Post. Either way, it’s summer, it’s hot, and giving into your little sweet cravings is not a sin in the spirit of the season.

My favourite Drinks

Hershey’s Cookies ‘N’ Creme Donut Nutrition Facts

• 450 calories
• 210 calories from fat
• 24 grams of fat
• 11 grams of saturated fat
• 380 milligrams of sodium
• 56 grams of carbs
• 33 grams of sugar
• 5 grams of protein

Kit Kat Coolatta (Small) Nutrition Facts

• 570 calories
• 110 calories from fat
• 12 grams of fat
• 8 grams of saturated fat
• 180 milligrams of sodium
• 108 grams of carbs
• 101 grams of sugar
• 7 grams of protein

Hershey’s Cookies ‘N’ Creme Iced Coffee (Small) Nutrition Facts

• 110 calories
• 45 milligrams of sodium
• 25 grams of carbs
• 24 grams of sugar
• 2 grams of protein

Heath Iced Coffee (Small) Nutrition Facts

• 110 calories
• 35 milligrams of sodium
• 26 grams of carbs
• 24 grams of sugar
• 2 grams of protein

The summer coolattas may be uber sweet but they are definitely not something to pass on after years in the business. The new summer menu sells the Kit Kat Coolatta at $3.09 while the prices of the other three may vary, but Hershey’s Cookies and ‘N’ Creme Donut sells at $1.09. According to Bustle, Dunkin’ Donuts’ restaurant at 210 West 38th Street in Manhattan, New York City turned its branch into a “sweet escape” where customers and guests are immersed in a theme of island oasis with sights, sounds, and scents.

The Dunkin’ Donuts branch welcomed customers with a chance to win a surprise of a trip for two to the Bahamas. It’s not just in the West of 38th street where this surprise counter is at. Come first week of July, another Dunkin’ shop in New York is set to surprise another customer who purchases a Coolatta from 7:00 am to 6:00 pm with a beach trip to the Bahamas as well. Rest assured, the hype is not simmering down, with Dunkin’ Donuts continuously finding new ways to innovate products and staying afloat in a competitive industry. With its impressive $1.32 billion revenue, and EBITDA at $452.9 million from 2018, the 3.8% growth this year has led to an impressive $1.37 billion, according to Forbes.