Here’s How Dunkin’ Donuts Could Benefit From Its Chief Marketing Officer

by Trefis Team
Dunkin' Brands
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Recently, Dunkin’ Brands (NASDAQ:DNKN) announced that it is appointing marketing veteran Tony Weisman as the U.S. Chief Marketing Officer (CMO) for its Dunkin’ Donuts brand. Tony comes from the global marketing agency Digitas where he was leading the Dunkin’ account for the past six years. Tony’s role at Dunkin’ would be to focus on the strategies that build Dunkin’ Donuts position as a leading coffee and beverage brand, working on product innovation, consumer insights, and branding.  According to our estimates, Dunkin’ Donuts is the most valuable segment for Dunkin’ Brands accounting for nearly 90% of its valuation and an increased focus on this segment will be a key value driver for the company

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New Branding, More Focus On Coffee

Last month Dunkin’ Donuts started testing new signage in a few locations where it dropped the word “Donuts” and branded itself as just “Dunkin’.” While rebranding is a tricky exercise, this test signifies that the company wants to position itself more as a coffee and beverage brand rather than being known as a place which serves donuts. Dunkin’ Brands competes directly with Starbucks in the beverages segment, however it has not been able to match Starbucks’ growth rate. A strategic rebranding which focuses on beverages and coffee can help Dunkin’ attract customers and gain market share from Starbucks. A new marketing officer can help the company create this new identity which allows it to focus on beverages to drive growth. The coffee served by Dunkin’ Donuts is popular, the company sells more coffee than donuts, margins on coffee are higher than donuts and coffee is a faster growing segment compared to donuts. All these factors favor the company’s move to brand itself as a coffee house and create an identity away from donuts.

We believe with a new leader heading its marketing division, Dunkin’ Brands is serious about  competing effectively with Starbucks in the beverage segment and increase the focus on coffee. This could mark the beginning of a transition for Dunkin’ Brands, leading to a higher revenue growth in the future.

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