Why Invest: Iconic Dunkin’ Donuts Brand Has Room for Expansion, Particularly in Western Markets, Says VP Grant Benson (Part 2)

This post is the second of two parts. To read Part 1, please click here.

With a main emphasis on baked goods and coffee, Dunkin’ Donuts is competing with operations such as Starbucks and Caribou Coffee, but McDonald’s is also seen as a major competitor, Benson said.

“We feel very comfortable with our product mix, our value composition, and we can compete on a very broad spectrum.”

For example, Dunkin’ Donuts is now the No. 2 breakfast sandwich purveyor behind McDonald’s, a fact that Benson calls a “best kept secret,” and it has expanded menu offerings with items such as wraps and iced and frozen coffee drinks to capture more business beyond breakfast.

National Advertising Campaign

One of the benefits for new franchisees is Dunkin’s national advertising campaign that reinforces brand awareness through a highly recognizable tagline: “America runs on Dunkin’.”

“We’ve got a national advertising program that is very significant. So, even in the most remote corners of the United States, a significant base level of advertising is going to go into every home,” Benson said.

Regionally, all franchisees contribute to an ad fund, which is driven by the company to determine the best way to spend the money. In new markets with few franchisees, the company provides incentives and matching dollars. But even with corporate and co-op dollars, franchisees must market on a local level, Benson said.

“The reality is, who they’ve really got to reach out to is who is within five or ten miles of that store and how to become the destination of choice for coffee and sandwiches in their trade area.”

New franchisees are encouraged to be very aggressive in getting the product “into the hands and the mouths of guests,” he said, by providing good value or even free samples.

“That type of aggressive approach in getting the product into the hands of guests pays big dividends downstream,” he said. “While the sign says donuts, and we love that, we are more than donuts.”