Failure Case Study: Dunkin Donuts & More - Misaligned positioning kept the brand from forging a deeper connection with consumers
Summary
Dunkin Donuts, a leading American quick-service restaurant (QSR) brand with worldwide presence, forayed into the Indian market in 2012 in collaboration with Jubilant FoodWorks Limited. Dunkin Donuts customized its menu to suit the taste buds of young Indian consumers, and the pockets of middle-class households. It also revamped its stores, menu, and positioning to boost sales. However, in spite of store facelifts and a menu revamp, Dunkin Donuts continued to struggle in the Indian market. Consequently, Dunkin Donuts refocused its core offering and Jubilant began optimizing store counts and costs.
Dunkin Donuts opened its first branch in India in 2012 under the name Dunkin Donuts & More, with a more localized and broader menu than its US stores. Despite customizing the menu and revamping its store ambience, the company failed to make any meaningful gains, leading to the closure of about 50% of its stores by 2018.
Scope
- Dunkin Donuts core offering of doughnuts and coffee was not in sync with the Indian concept of breakfast as Indians are not familiar with the idea of having doughnuts for breakfast. Moreover, out-of-home breakfast occasions are few and far between in India.
- Dunkin Donuts sidelined its beverages menu to focus only on food items and neglected its lucrative beverages line, which cost the company potential growth.
- While its localized menu drove sales, Dunkin Donuts risked its brand identity as by expanding its menu, thereby losing its core differentiation from other QSRs.
- Multinational QSR brands need to think global and act local in their product positioning strategies, keeping their core brand identity intact while adapting product offerings for local tastes.
- Continual investment into market research and customer education is the key to understanding the needs of target consumers in new markets.
Reasons to buy
- Reduce the risk of failure by learning from brands/products that have under-performed: failed innovation can severely impact profit and reputation.
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1. Introduction
2. What?
3. Why?
4. Take-Outs
5. Appendix
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