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Back to donuts



Burgers take a backseat as Dunkin tries to get back its mojo with donuts and coffee

Elon Musk, the maverick billionaire known for rockets and electric cars, also has another inconspicuous distinction: understanding brands. Sample this: “Brand is just a perception, and perception will match reality over time. Brand is simply a collective impression some have about a product.”

Back home, Jubilant FoodWorks – master franchisee for Dunkin in India – discovered its ‘Musk moment’ a few months back: Dunkin stands for donuts, not burgers.

“The DNA of Dunkin is donuts,” asserts Pratik Pota, CEO of Jubilant FoodWorks. Dunkin, he lets on, has to start by being what it stands for in the minds of customers.

The ‘perception’, it seems, has finally matched the ‘reality’ after four years of Dunkin rolling out burgers in India. Starting in July 2013, the American QSR started aggressively pushing the bun and taking on the biggies. Over the last two quarters, Dunkin has brought back the focus to donuts, expanding its range, including a low-priced offering at Rs 25, and rolling out new variants of coffee.

Tarun Bhasin, president and chief operating officer of Dunkin, explains the logic: Brand DNA must not be tampered. While conceding that burgers had caught the imagination of consumers, Bhasin reckons that it would have taken a lot of marketing effort for Dunkin to stand for burgers. “And should it even do so? It was a strategic question we had to answer,” he says. After lot of introspection and customer research, the company decided to play down burgers. The brand, he lets on, has to be anchored on something that it can credibly own. “For Dunkin, its donuts and coffee,” he avers.

Apart from opening smaller format stores and shutting down loss-making ones, Dunkin has been rationalising its food portfolio, introducing ‘simpler’ items such as toasties. The move allows it to serve food that doesn’t require a lot of assembly labour. “We are on track to cut losses by half this year and reaching breakeven by next year,” he says, adding the brand is being assisted by its global parent in the US in arriving at a profitable business model. The portfolio strategy includes value as well as signature donuts. Even in the case of burgers, Dunkin is shrinking its currently large range.

Consumer insights too have helped. Most customers, after buying donuts, would ask for a knife so they could cut it in two parts. Reason: the standard size was too big for one person. Consequently, Dunkin rolled out Rs 25 donuts. “Sales have jumped up. Coffee-donut combos drive experience,” he says.

Brands reckon marketing experts, must never tinker with the DNA of the product. After flirting with buns and aspiring to take on burger biggies, the brand has made a smart move. “It’s gharvapsi for Dunkin,” grins Ashita Aggarwal, head of marketing at SP Jain Institute of Management and Research. “Staying focused is the name of the game. It had to dunk burgers,” she says. Focus strategy, lets on Aggarwal, works because people know you for your core and remember you for the differentiated value you provide to them. While it’s always tough to build a category, one has to stay committed to a brand’s promise. “Dunkin can’t be a Haldiram that sells Indian, Chinese, American and Italian,” she adds.

The challenge, however, for the brand would be to resist the temptation of flirting with other food categories. “The temptation would be huge but the downside would also be equally damaging,” she adds.

Bhasin, for his part, asserts that brand won’t try to be promiscuous. “Donuts would stay as core DNA of Dunkin. Its donuts, coffee and simple food,” he says.

Looks like Bhasin has learnt the lesson: once dunked, always shy.

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