Title Page Number
2. Company Overview4
3. Attractiveness Assessment
1. Market Size5
3. Consumer expenditure6
4. Coffee consumption7
5. Rate of growth7
5. Marketing Mix9
6. Marketing Segmentation11
7. Target Market12
8. Product Positioning12
9. Entry Modes13
• The product chosen is the coffee range of Dunkin Donuts. • The country chosen is the United Kingdom.
• Target customers are in the age range of 18-45.
• Major competitors are Costa Coffee, Starbucks and Café Nero. • Penetration pricing has been recommended.
• The intended entry mode is business format franchising.
In our endeavor to find a suitable brand which would suit the criteria set, the group decided from the outset that it had to be a brand associated with the food and beverage industry. We then next searched for a brand in a growing market and a country which had a growing demand for the said product. This narrowed our choice down to the coffee range of Dunkin Donuts and the United Kingdom. In the report, we have tried to evaluate and analyze the various factors which we think would aptly explain and support the reasons for our decision and help to give a brief overview of the market attractiveness and the entry modes for the same.
2. Company Overview
The brand Dunkin’ Donuts is a coffee and doughnut franchise under the ownership and control by parent company Dunkin’ Brands. Dunkin’ Donuts was founded in Quincy, Massachusetts by Bill Rosenberg in 1950 and ever since it has been a staple of the snack food and beverage sector in the geographic region. Today, Dunkin’ Donuts dominates the snack food sector and is making its mark on the coffee house sector not only in the U.S., but across 30 countries world over (www.dunkindonuts.com). Dunkin' Donuts is the world's biggest coffee and baked goods chain, with more than 3 million customers daily. At the end of 2007, there were 7,988 Dunkin' Donuts stores worldwide, including 5,769 franchised restaurants in the U.S. and 2,219 internationally. Dunkin Donuts generated annual sales of $ 5.3 billion in 2007. In the span of the last decade, Dunkin’ Donuts has produced a quality line of coffee blends and espresso drinks that have led to it achieving the number one spot in the US in coffee-by-the-cup sales (Bright Agency. 2006).
3. Attractiveness Assessment
3.1 Market Size
The UK market 3 major brands with a strong level of competition amongst them. There is a growing demand for this market and also non-existent switching costs. This makes it easier for a new entrant to capture customers of competitors. Research has shown the U.K coffee market will nearly double in size in the next 10 years. Branded coffee outlets number more than 3000 with annual sales of £1.3 billion. According to Allegra Strategies Consultancy, the market has seen an annual increase of 15 % in the last decade and will further grow to 6000 outlets with a turnover of £2.5 billion pounds in the next decade. This shows that the market is still in the growth phase of the life cycle.
The same survey also claimed that about 11 million people go to a coffee shop once a week and according to figures from Euro Monitor surveys, the average UK citizen consumes up to 2.2 kg of coffee an year which translates to about 300 cups per year. Taken as a nation wide average, this figure is quite a large one. Hence there is a demand that can be effectively served by Dunkin Donuts.
According to (Euromonitor, 2008), in the coffee market of UK, the sales of coffee has gradually increased from 48, 475 tones in 2002 to 52, 983.4 tones in...