Last month, the Wall Street Journal published a lengthly article on Dunkin’ Donuts’ corporate strategy–on page A1 no less! The pressure that Starbucks has exerted on Dunkin’ Donuts recently led the coffee-and-donuts chain’s executives to study ways to counter the Seattle-based coffee giant. Their findings were both predictable–at least to this observer–and disturbing to some of the Dunkin’ Donuts faithful.

The key finding in Dunkin’ Donuts study of coffee drinkers was that consumers were “so polarized that company researchers dubbed them “tribes” — each of whom loathed the very things that made the other tribe loyal to their coffee shop. Dunkin’ fans viewed Starbucks as pretentious and trendy, while Starbucks loyalists saw Dunkin’ as austere and unoriginal.

“I don’t get it,” one Dunkin’ regular told researchers after visiting Starbucks. “If I want to sit on a couch, I stay at home.”

All of us here at Dunkin Donuts Talk are aware of the differences between the two “tribes”, but I was very surprised by the loyalty of their customer base. Many of them who participated in the study fiercely resisted the concept of a more upscale Dunkin’ Donuts, a la Starbucks.

Early research showed consumers wanted nicer stores, but revealed a potential problem: the loyal Dunkin’ tribe was bewildered and turned off by the atmosphere at Starbucks. They groused that crowds of laptop users made it difficult to find a seat, Dunkin’ says. They didn’t like Starbucks’ “tall,” “grande” and “venti” lingo for small, medium and large coffees. And, Dunkin’ says, they couldn’t understand why anyone would pay as much as $4 for a cup of coffee.

“It was almost as though they were a group of Martians talking about a group of Earthlings,” says Justin Holloway, an executive vice president at Hill, Holliday, Connors, Cosmopulos Inc., the advertising agency that helped Dunkin’ with its research. One customer told researchers that lingering in a Starbucks felt like “celebrating Christmas with people you don’t know.”
Dunkin’ researchers concluded that it wasn’t income that set the two tribes apart, as much as an ideal: Dunkin’ tribe members wanted to be part of a crowd, while members of the Starbucks tribe had a desire to stand out as individuals. “The Starbucks tribe, they seek out things to make them feel more important,” Ms. Lewis says. Members of the Dunkin’ Donuts tribe “don’t need to be any more important than they are.”

The study’s findings made it clear to Dunkin’ Donuts executives that they needed to think over their proposed makeover of their beloved brand, lest they make a mistake of New Coke-proportions. They decided to focus on changes to the menu, with more snack items and smoothie-based drinks, along with piped-in music and a self-service new coffee bar with stainless steel pitchers of cream and skim milk — a first for Dunkin’ Donuts. The net result will be a “fresher” look for Dunkin’ Donuts, but without the couches, wireless internet or stacks of CDs getting in the way of the customers.

Dunkin’ executives made dozens of decisions, big and small, ranging from where to put the espresso machines to how much of its signature pink and orange color scheme to retain to where to display its fresh-baked goods. They decided early on that Dunkin’ would keep its goal of moving customers through its cash register line in two minutes; Starbucks, by comparison, has a goal of three minutes. Dunkin’ customers said they didn’t want any changes in store design to result in longer waiting times. Out went the square laminate tables, to be replaced by round imitation-granite tabletops and sleek chairs. Dunkin’ covered store walls in espresso brown and dialed down the pink and orange tones.

To what tribe do you belong (see poll on left)?

Source: The Wall Street Journal