Coffee Shop Analysis:
Marketing 452: Principles of Retailing
Tuesday, April 28th, 2009
Table of Contents
In the coffee industry, the three retailers, Dunkin’ Donuts, Intelligentsia, and Starbucks, all have their own unique style to attract consumers. To better understand and observe the elements of coffee retailers, we selected two locations from each retailer to perform our research. First, we collected menus to determine the products, depth of assortment, and product preparation. Secondly, we conducted customer interviews to determine the customer base, frequency of visits, average spending habits, customer insight and preferences. Additionally, we gathered promotional pamphlets, photographs, store layouts, placement, product displays, and store information. Topics discussed include the analysis of each chain’s history and official goal, marketing mix, consumers, human resources, financials, and recommendations for each retailer. Each coffee retailer focuses on a different aspect of the business to satisfy the consumer’s needs. First, Dunkin’ Donuts is known as the world’s largest coffee and baked goods chain with the on-the-go coffee stop that provides customers with a wide variety of beverages at the most competitive price. Dunkin’ Donuts lacks where their competitors capitalize. Some examples include, Dunkin’ Donuts needs to create a “coffee shop” feel or a more personal setting to attract a more relaxed atmosphere and a diverse audience. Dunkin’ Donuts also should consider expanding into the natural or organic market and becoming a part of the “Go Green” movement. Dunkin’ Donuts could increase their customers with just a few changes to their strategy. Second, Intelligentsia is reminiscent of small town, low-key European café with its smaller menus in place of the overwhelming menu hanging behind the counter. Intelligentsia provides customers with fair trade and organic coffee to customers that want more of the “local” coffee shop feel instead of corporate giants such as Dunkin’ Donuts and Starbucks. For Intelligentsia, gaining and maintaining a loyal customer base requires consistency. The stores should uphold consistent hours for all locations. Intelligentsia should increase their advertising, especially for their gift cards. To avoid costs and subtly promote the company, Intelligentsia could utilize word of mouth advertising. Lastly, Starbucks provides customers with top-of-the-line specialty beverages and encourages customers to relax and enjoy their beverage within their coffee shop. Starbucks is known as the coffee giant, but only offers one brewed selection, the Pike’s Place blend. Starbucks needs to increase the variety of coffees they brew everyday to please a wider coffee drinker base. The best way to alternate the coffee selection would be to propose a “coffee of the week” rotation. Next, as part of the “Go Green” movement, Starbucks should start a marketing campaign targeting the environmental benefit of using its travel tumblers as well as using ceramic mugs while drinking their beverage inside the store. Lastly, another way to attract new customers could also be to have special promotional events. They could sale apparel and accessories. This could serve as a form of free advertising for the company as well. By observing all three retailers and their practices, each retailer can draw in on one another to draw in new consumers and increase profitability for their company using the same techniques their rivals have been capitalizing on. We have established and collected primary and secondary data, translated our observations into conclusions, and presented an analysis and recommendations on how competing coffee retailers can improve...