#109 Donut Burger
How do you like your donuts? Chocolate or pink frosting? Rainbow sprinkles? Old fashioned? Some coffee with that? If you’re Indian you’re more likely to show up at the local Dunkin Donuts to ask for a “Brute tough Guy Veggie Burger”. Competing with other US-chains including Taco Bell, McDonald’s, Pizza Hut, or Subway, the Massachussetts-based company Dunkin Donuts and its Indian master franchisee Jubilant Foodworks have had some tough lessons to learn in the Indian market. Adding some local flavors to their donut menu was not enough – they had to completely alter its menu and re-align its brand to fit the needs of the local consumers. The changes in the menu have gone so far that there are as many variations of burgers on the Dunkin menu as there are on McDonald’s. And yes, before you ask, they are all free of beef like many food items of US fast food chains in India. The differences between Indian consumers’ preferences and their US counterparts went beyond just menu items. While the typical Dunkin Donuts customer picks up a fast breakfast there on the way to the office, the concept of getting coffee with sugary sweets on the way from home was very foreign to Indians. The result was that Dunkin Donuts was perceived as a pastry shop (with a rather limited selection of pastries…). Today, after aligning the concept with Indian tastes, Dunkin Donuts is now “Dunkin Donuts and More”. The concept is catching on with Indian consumers, and it has big plans of growing from 35 outlets to about 100 within the next two years. Well done, Dunkin!
March 17, 2015 @ 2:39 pm
Dunkin Donuts showed a successful approach of a localization strategy for the global market in their second run. They clearly found out that there was no chance for their corporate model, which works fine in the US, being successful in India. Following a pro-active approach, which is more likely to success, they made themselves ready for India, seeing the high potential of the market.
The problems of the first run(s) root mainly in the cultural differences between those two countries. (societal). Analysing this via a Pest model there are no political, economic or technical market entry barriers which led to their initial problems. They found out that their standardized model of the US is not working in India, their solution was adaptation due to external drivers (cultural difference, consumer preferences) and create a localization strategy. India seems to be a tough market for the big players in (fast) food as Burger King and McDonalds, as a standardization strategy is seldom working in India due to their consumer preferences.
Lucky for them, DD did not try to change the breakfast habits of the Indians. With their willingness of adaptation, they learned from the local markets and increased their product portfolio. I assume that they found a way to keep economies of scale in production to reduce too much inefficiencies, as this “local” market is big in itself, and with their growing outlets the inefficiencies might be held at a very low level. Other markets of DD are still following the standardized – global marketing approach.
March 21, 2015 @ 1:20 pm
Dunkin Donuts first entry in the Indian market was doomed to fail simply because of cultural differences. The whole model Dunkin Donuts is built on in the U.S. – picking up the breakfast on the way to work – does not work in India. Indians do not start their day with sweets and prefer to eat breakfast at home with the family.
Interestingly, Dunkin Donuts’ Indian franchise owner Jubilant FoodWorks had experience in successfully bringing an established fast food concept to India with Domino’s Pizza in 1996, selling nowadays more pizzas outside the U.S. than in any other country[1]. But for Dominos, the cultural difference was not too big, at least pizza is an accepted meal in India. In addition to adapting to local tastes like all other international fast food chains do, they went further and did thorough research on how to create their menu.
The question is thus obvious, why did the first attempt of Dunkin Donuts / Jubilant FoodWorks fail with such obvious reasons? Why go the risk with the shortcoming localization and diversification strategy first? If we look at where Dunkin Donuts & More is now in India, it would have been probably more risk to implement this strategy in the first place. Also, if their initial strategy was to be accepted, they could have benefited from all their core competencies and strengthen their image as donut company. Donuts were also not new to India, Mad Over Donuts operated in India since 2008 [2]. Dunkin Donuts was fast in accepting that their initial strategy did not work out and Jubilant FoodWorks applied all its learnings from Dominos to make Dunkin Donuts & More that successful.
[1] http://www.fastcompany.com/3039746/how-dominos-won-india
[2] http://www.huffingtonpost.com/2014/11/05/india-doughnuts_n_6100482.html
March 24, 2015 @ 2:43 pm
Interesting and successful how “Dunkin Donuts & More“ approached the Indian market. If we have a closer look on it, it was how it should work. It is a repeated “deadly sin” in the area of business expansions if managers think they could copy and paste there success in one country to another country (or their home market to another market). Although there have been some examples in India that copy and paste is working (like for the Pizza giant Domino), on the international market there have been several examples that “STRG+C” is not working everywhere. Following that, I’m not really surprised that Dunkin Donuts have finally be successful, their magic formula is “localisation”. Dev Amritesh, COO, of Dunkin Donuts India mentioned, “The biggest learning point for him was…” the aspect of “…localisation” [1]. This starts by sourcing ingredients from India to give the donut menu an Indian touch and ends probably by not using beef at all in their products.
It looks like that everything is now in a good shape. However, what do we think, was the market entry well prepared, have it been unsystematic or systematic? Honestly, I think it was more unsystematic, as there have been no ideas about regional flavours at the beginning, just take what we have in the States and copy it to India. They had one advantage, that they have been very fast in adapting their products, as well as they had in my understanding selected the right market with India. Probably they have been not at the right level of cooperate readiness, but their motivation was clear I think, that the home market was saturated and new revenues have to be generated. India as such, has a great population and such kind of business could only be done successfully with a high number of customers, its quantity business – so a first failure is excused very fast.
Furthermore, I think that India is also a nation, which have a big gap between high-educated people and poor-educated people. This helps also selling products, which are just “sweet” but have no impact on the increase of the people health’s. An interesting statement was made in the Financial Teams, as cited here: “As a nation, Indians are famous for their love of sweets and the country is the world’s largest sugar consumer. However, these appetites have come at a price. India has one of the world’s highest rates of diabetes and increasing incidence of heart disease. However, Dunkin’ says it will offer Indian consumers an array of sweet and savoury options for all-day dining, not merely the calorie-filled donuts for which the chain is best known [2].”
A market entry in Europe, just with such kind of sweets might be more difficult as the European nations becoming more and more focusing their health’s etc. “
Finally I think, Dunkin Donuts did it right, they went very well from their unsystematic approach to enter India in the systematic approach where they ideally adapted the product – but let’s say it is from a certain perspective LEARNING BY DOING. .
[1] http://businesstoday.intoday.in/story/dunkin%C3%A2%E2%82%AC%E2%84%A2-donuts-india-has-lots-on-its-plate/1/202820.html
[2] http://www.ft.com/cms/s/0/f57b7fe4-4026-11e0-811f-00144feabdc0.html#axzz3VJBa765U
March 29, 2015 @ 7:28 pm
Dunkin Donuts is an excellent example of how a company succeeded to adapt its products to local markets conditions after having failed with its first strategy.
When Dunkin Donuts 2012 started offering American donuts and coffee in India from 7 am onwards to Indians it failed due to its inability to understand the Indian culture. Indian families prefer having breakfast together at home and are not used to pick up a fast breakfast on the way to the office. Moreover, Indians prefer fast food restaurants that offer full menus. [3]
Looking at other successful US fast food chains in India, such as Taco Bell, McDonald’s, Pizza Hut, or Subway India as a target market seemed to be promising for DD. However, DD’s product readiness in terms of alignment to cultural consumer preferences was not given.
Hence, DD changed its store timings and began later in the day instead of opening early in the morning. Moreover, DD entirely reworked its menu to suit the local culture and customized its food menu to offer burgers and cheese sandwiches that are popular among the Indian consumers [2]. According to analysts the swift shift to sandwiches was a smart move, as Indians saw DD as no more than a pastry shop when it arrived [4].
When to standardize and when to adapt is one of the most difficult questions in international market entry. The answer depends on various factors such as the industry a company operates in, the product itself, the foreign target market as well as the internationalization readiness of a company. [1] Adaptation usually helps companies to better address the local market environment, thus potentially gaining higher customer approval. The adaptation drivers in the DD case were cultural differences as well as consumer preferences that did not only affect DD’s products and services but also the brand Dunkin Donuts. DD made the drastic shift from a rather a.m. brand to a p.m. brand offering products that go against its identity. DD rebranded itself through an advertising campaign that informed consumers about the new products and even changed its brand name in India to Dunkin Donuts & More. [4]
Impressing how quickly DD learned from its failures, responded to cultural differences and adapted its products and brand to fit the needs of the local consumers.
[1] Apfelthaler, G. (1999). Internationale Markteintrittsstrategien. („International Market Entry Strategies“) Köln-München-Wien:Manz Verlag/Fortis.
[2] Chetty. P. (2015). Has Dunkin Donuts failed in India? Retrieved March 26, 2015 from progectguru.in: http://www.projectguru.in/publications/dunkin-donuts-failed-india/
[3] Rana, P. (2014). Dipping Into India, Dunkin’ Donuts Changes Menu. Retrieved March 26, 2015 from wsj.com: http://www.wsj.com/articles/dipping-into-india-dunkin-donuts-changes-menu-1417211158
[4] Vora, H. (2014). Globalization, Fast Food and the “Threat” to Local Culture. Retrieved March 26, 2015 from theglobalentreprenuer.com: http://www.theglobalentrepreneur.com/globalization-fast-food-threat-local-culture/
March 30, 2015 @ 2:29 pm
The final blog statement is to be agreed with. Dunkin’ Donuts, whose first entry into the Indian market in 2012 was not well received by Indian consumers [1], has demonstrated its capacity to learn from this initial experience and apply a localization strategy to its market entry in India [2]. Its global marketing approach did not prove fruitful for this specific market environment. Dunkin’ Donuts has successfully revised its concept by focusing on consumer preferences in India for fast food and, as of February 2015, has established 50 restaurants in India [1].
The new strategy was based on a thorough analysis of the Indian culture and eating habits, e.g. Indians prefer to eat a healthy and complete breakfast with family members rather than get a quick coffee to go. While market analysis tools are manifold, PEST analysis [3] or PESTLE framework [4] seem the most reasonable for the Indian (fast food) market.
In addition, knowing that Indian consumers are highly price sensitive [5], Dunkin’ Donuts has adopted a strategy of penetration pricing. Such strategy usually allows a company to enhance sales, capture market share quickly as well as gain widespread market acceptance for its brand [6]. The price of Dunkin’ Donuts products was aimed to be 10 to 15 percent lower than those of competitors [7].
Another general benefit for Dunkin’ Donuts is that coffee has become an increasingly popular product in India in recent years [5]. This is, besides offering a range of meals suiting Indian tastes and preferences, the company is able to pursue a strategy of boosting its sales of coffee. However, competition is though in this sector (cf. Starbucks).
Overall, the case of Dunkin’ Donuts demonstrates how important it is to analyse and evaluate potential new markets. Companies have to develop critical thinking and consider each market separately, without relying on the market knowledge from other countries. Solutions and decisions which are appropriate for one market do not necessarily fit all other markets. [8]
References:
[1] JUBILANT FoodWorks Ltd. (2015). Dunkin’ Donuts – Jubilant FoodWorks Limited – JFL – Brand. Retrieved March 27, 2015, from http://www.jubilantfoodworks.com/brand/dunkin-donuts/.
[2] Rana, P. (2014, October 21). Diwali Doughnuts Anyone? Dunkin’ Donuts’ New India Menu. Retrieved March 27, 2015, from http://blogs.wsj.com/indiarealtime/2014/10/21/diwali-doughnuts-anyone-dunkin-donuts-new-india-menu/.
[3] Datt, S. (2014, October 28). Analysis of the snack food market in India. Retrieved March 27, 2015, from http://www.projectguru.in/publications/pest-analysis-snack-food-market-india/.
[4] Analyst. (2014, October 1). PESTLE Analysis of India in five Steps. Retrieved March 27, 2015, from http://pestleanalysis.com/pestle-analysis-india/.
[5] Chetty, P. (2015, February 10). Has Dunkin Donuts failed in India? Retrieved March 27, 2015, from http://www.projectguru.in/publications/dunkin-donuts-failed-india/
[6] Ferrell, O., & Hartline, M. (2014). Marketing strategy: Text and cases (6th ed.). Mason, OH: South-Western/Cengage Learning.
[7] FP Editors. (2012, May 9). 10 things about Dunkin’ Donuts launch in India – Firstpost. Retrieved March 27, 2015, from http://www.firstpost.com/business/10-things-about-dunkin-donuts-launch-in-india-304001.html.
[8] Bilgin, F., & Wührer, G. (2014). International Marketing Compact (1st ed.). Wien: Linde.
March 31, 2015 @ 11:18 pm
Definitely Dunkin’ Donuts crated a success story by adapting their strategy to the local market needs. The real success behind adapting to local habits and creating a successful business, I would however see in the fact, that a company does so, by not harming its normal, original business. Brand value can only be generated, if the brand has clear values, which they are capable of communicating. “The best strategy doesn’t automatically create a strong brand” (2). That’s exactly what happened here. However, they also had learned (from failure) and excepted (by innovating) that, cultural differences are not eliminated by just adding some local flavours, they had to change their original entry strategy (one fits all) completely (4). DD was even able to keep its developed brand. It seems though, that Travis Nigel (CEO) has learned the lesson. In a recent interview he gets quoted that the strategy for expanding internationally “is to re-brand the franchise in every new country”. Including the brand’s namesake menu completely (1). On their international expanding plans also Austria found its place. Currently, they opened up one shop in Vienna and 2 more are following in 2015, in total the plan would be to have 25 shops in Austria (which is quite something). Machl (CEO and single licensee of DD for Austria) has however also learned and taken into account, that Austria is a highly saturated market and proud of its “Kaffekultur” (coffe culture). For that reason, he doesn’t yet think of implementing DD drive in’s, and also adapted the flavours by localizing and working together with successful local manufactures to demonstrate their willingness and appreciation of local taste and culture (4), same affect it had on pricing. The donut is sold for 1,69 € and the coffee for 1,99. The main target group is defined as being very young and allows a dedicated communication strategy, that includes all the “globalness” necessary to make it hip, thus localize it, by showing willingness of thinking global, but acting local. Following a publication of the Boston Consulting Group (5), they seem to meet the expectations of the targeted “Millenials”, as brands, especially when global, need to demonstrate to clearly communicate their (global) values, thus secure, that the targeted ones, seem to have the feeling of “doing something good” (locally).
(1) Dunkin’ Donuts Is Plotting A Huge Expansion http://www.businessinsider.com/dunkin-donuts-is-expanding-like-crazy-2014-12
(2) Die beste Strategie macht noch keine starke Marke https://www.risknet.de/themen/risknews/die-beste-strategie-macht-noch-keine-starke-marke/19c8a24462c6a1b62e69dd0430c132ba/
(3) Eine Frage der Zeit http://www.brandeins.de/wissen/mck-wissen/branding/eine-frage-der-zeit/
(4) Dunkn Donuts rollt nach Wien – Salzburg und Graz folgen http://wirtschaftsblatt.at/home/nachrichten/newsletter/4599387/Dunkin-Donuts-rollt-nach-Wien-Salzburg-Graz-folgen
(5) Millenials changing market forever https://www.bcgperspectives.com/content/articles/marketing_center_consumer_customer_insight_how_millennials_changing_marketing_forever/
November 25, 2015 @ 12:50 pm
Do be successful in other countries you have to have a high brand power or you have to adopt your products to the market needs.
In my opinion it’s hard to launch products abroad without adopting especially for the food industries, because food is linked to tradition, culutre, history and so on. In contrast to food market, technical products do not have to adopt as much as food.
It also have to be mentioned that technical products are fast-changing, nobody would use his 10 year old mobile phone as replacement when his phone is broken – he will buy a new one as soon as possible. In contrast to, however the food industry is changing, traditional menues and recipes will always exist.
According to the case of Dunkin’ Donuts, a local strategy was the right decision. India seems to be an high power distance evironment. DD expanded his menue, so Indians could choose between different products and variantions.
November 25, 2015 @ 5:25 pm
The strategy of Dunkin Donuts to standardize as much as possible and to adapt as much as necessary was a quite successful approach. Unfortunately, more often than not a simple transfer of the product and of the marketing strategy from the home market to a new market does not work that well. Especially if the culture of the domestic country and the country a company wants to enter differs a lot, there are quite a lot of aspects that have to be taken into consideration in order to be successful.
In this case, an enterprise from the United States wanted to enter the Indian market. The first thing to do when entering a new market is, of course, to make an extensive market research. It is obvious that this important step was a bit neglected by Dunkin Donuts in the first run. Doing a research on the “hard facts” such as market potential, market volume and competition is clearly not enough. In order to be successful, an intensive analysis of culture, values, preferences and the behaviour of consumers in the target market has to be conducted. As a result, Dunkin Donuts would have known from the beginning, that adding some local flavours to their donuts would not be enough.
As the culture of India is very different to the culture of the United States, Dunkin Donuts has finally completely changed its offer for the Indian market, as it now has almost as many burgers on the menu in India as big fast food chains like McDonald´s. One of the reasons for repositioning from the traditional pastry shop (as Dunkin Donut is seen in the US) to a kind of fast food restaurant (changing even the name in “Dunkin Donuts & More) were of course the different breakfast habits.
In the US, people tend to take a fast coffee and some kind of pastry on their way to work. In India, however, people prefer having breakfast at home, with the whole family eating together. This aspect can be referred to the dimension of Individualism of Hofstede. According to the study of Hofstede, Americans keep hold of individualistic values such as success or image and are rather selfish. The first rank on the Individualism-Index demonstrates this quite well. Indians, in contrast, are on the 21st rank, meaning they have a rather collectivistic attitude, which means they tend to pay attention to their family and prefer spending time with it. As it would not be possible for a company to change breakfast habits of a whole country, Dunkin Donuts had to learn from the local markets and adapt their strategy. “That´s when we decided the role of the brand needs to change” [1]
Regarding to Uncertainty Avoidance both countries are rather low ranked (India: 45, USA: 43). When considering this aspect, it was quite important that Dunkin Donut aligned their concept with Indian tastes and launched a lot of new products, as countries with rather low uncertainty avoidance like changes, innovation and they tend to essay new things. Because of that, Dunkin Donuts should probably think about some customer loyalty programmes, as customers switch easily to competing companies.
Also in Hofstede´s Dimension “Power Distance” there are huge differences between the two countries. While India is ranked rather high (10th rank), meaning Indian companies are more likely to have a strong hierarchy, with powerful chiefs whose decisions are not questioned, the United States are ranked on the 38th position. This aspect should definitely be considered when deciding on the organizational structure of the company. Thus it would probably be a guarantee for failure, if managers from the US try to transfer their management style and their leadership to India and the Indian workforce.
In summary, in order to be successful when entering a new market, a company has to find out about the cultural differences between the domestic country and the new country and then has to adopt the brand, the product and the whole marketing strategy according to the culture of the target market.
Also Dunkin Donuts had to learn this important lesson and now will benefit from these findings in their further market entries. [2]
[1] Wall Street Journal, Mr. Amritesh, Dunkin Donuts, 2014/11/28
http://www.wsj.com/articles/dipping-into-india-dunkin-donuts-changes-menu-1417211158
[2] Wall Street Journal, 2014/11/28
http://www.wsj.com/articles/dipping-into-india-dunkin-donuts-changes-menu-1417211158
March 26, 2016 @ 8:42 pm
Today, Dunkin Donuts can be considered as a success story of adjusting to local needs and preferences. However, things didn’t look so good at the beginning and Dunkin Donuts made some crucial mistakes which one would not expect from a company present is so many countries worldwide. Being already very successful in so many countries Dunkin Donuts were blinded by their achievements and believed that they had a concept that will work anywhere in the world. Unfortunately for them, Indian market was different and the concept needed to be changed quickly to survive in this unique cultural environment.
They failed in assessing their product readiness to enter Indian market. Dunkin Donuts entered India with the aim of offering breakfast, consisting of high priced donuts and coffee, to local people. They failed to understand the Indian culture and the concept of healthy and complete breakfast in India with family members. The fact is that Indians do not like donuts, some never heard of them and they are unlikely to buy them in bulk. Also, since Indians have different concept of breakfast than the one offered by the Dunkin Donuts they only went there for a desert. Those are some of the cultural aspects concerning product that needed to be analysed before entering the market. Dunkin Donuts also neglected the fact that Indian customers are highly price sensitive and prefer products that are of good quality and offered at attractive prices. Their donuts and coffee were priced too high for a price sensitive market.
Despite all the flaws in the market entry steps Dunkin Donuts quickly recognized the problems and acted on them. They adjusted their American food menu to Indian taste and expanded with India centric menu items such as vegetarian burgers, spicy sandwiches and lychee coolattas. Concerning their pricing strategy Dunkin Donuts adopted a penetration pricing strategy to boost sales, quickly gain a larger market share and gain a market acceptance for the brand by setting a price lower than those of the competitors. They priced their products nearly 10-15 % lower than those of the competitors in the Indian fast food industry.
To sum up, Indian market entry was rather unsystematic and mistakes were but Dunkin Donuts quickly realized what the problems were and managed to turn their failure into success. This is a good lesson not only for Dunkin Donuts but for all companies considering foreign market entry strategies.
Resources:
1. Garber, M. (2014, October 22). In India, Dunkin’s Donuts Include Chickpea, Saffron, and Chili. Retrieved March 26, 2016 from http://www.theatlantic.com/international/archive/2014/10/dunkin-donuts-would-like-to-sell-you-some-desi-donuts/381779/
2. Chetty, P. (2015, February 10). Has Dunkin Donuts failed in India? Retrieved March 26, 2016 from http://www.projectguru.in/publications/dunkin-donuts-failed-india/
3. Rana, P. (2014, November 28). Dipping Into India, Dunkin’ Donuts Changes Menu. Retrieved March 26, 2016 from http://www.wsj.com/articles/dipping-into-india-dunkin-donuts-changes-menu-1417211158
March 27, 2016 @ 7:53 pm
Several failures can occur, when a company wants to enter a new market. Especially in foreign markets, where the cultural behavior differs severely from the home-market, a perfect customized dynamic and agile strategy is necessary. Why dynamic and agile, because the market expectations were not as expected or the market can change quickly.
Jubilant FoodWorks Limited has launched the first Donkin Donut store in India in 2012. At this time, Jubilant FoodWorks Limited (JFL) has established already a successful food service network with 439 Domino’s Pizza stores with exclusive rights in India, Sri Lanka, Nepal and Bangladesh. JFL knew how they had to adapt to the US brand to Indian’s cultural behavior and it took them a year to establish the right systematic strategy for the market entry, where they create the right Donkin Donut portfolio with a local R&D team and marketing strategy to target the local needs. The JFL CEO Mr. Ajay Kaul had the strategy to open 10 stores in the first year and over the next five years further 80-100 stores. (Jubilant FoodWorks, 2012) This target was very ambiguous and to meet it, JFL where agile and dynamic enough that after one year, they already modified the market entry process to a continuous improving market penetration process where they elaborated their product portfolio with the Dunkin Burgers and Ice teas. (Jubilant FoodWorks, 2013) This kind of forward and polycentric approach was the right choice for DD India. If they have been ethnocentric companies, they would have focused on their branded products and cooperate standards. Brand recognition should be on top of a list when it comes to new market entries for companies. It is something so substantial that it should have a high priority. Even though it is important, one should not rule out the importance of a systematic market entry process and everything that comes with it.
Resources:
Jubilant FoodWorks. (2012). Jubilat FoodWorks Ltd. Offically Launches Dunkin’Donuts in Dehli. Press release. Retrieved March 27, 2016 from http://www.jubilantfoodworks.com/wp-content/themes/river-of-silver/pdf/A%20_DD_%20CP_%20Store_%20launch_Press_%20release%20_final_8_%20May.pdf
Jubilant FoodWorks. (2013). Dunkin’ Donuts launches heavenly range of Burgers!. Press release. Retrieved March 27, 2016 from http://www.jubilantfoodworks.com/wp-content/uploads/2013/07/Dunkin-Donuts-launches-Dunkin-Burgers_Press-release.pdf
Apfelthaler. G,. (2016). International Business – Systematic Market Entry Process. Course Material BUS592. School of Management, California Lutheran University.
July 6, 2016 @ 7:38 am
Dunkin Donut has done a very impressive job in India market. Dunkin Donut has adopted and exploited localized strategy for oversee operation. It shows that approaches that were successful US market could not be applied international market. Dunkin does many pro-active approaches in order to increase numbers of customers[1].
First, culture difference is significant factor in the India market (societal). Dunkin Donut has prepared about culture difference. Dunkin knows that competition in Fast Food Chain Company is tough (Economic). The localization is key for new strategy and it learns customers’ preference from local market. Dunkin adds new favor in menu, which attract local people. Moreover, it changes menu in order to fit with customers’ need [3]. For example, there is variety of beef in menu items and it offer burgers to customers. This strategic plan Dunkin knows that local people in India has different eating behavior. In us market, most people usually go to Dunkin Donut to take fast breakfast such as coffee or donut before work. However, most Indian customers prefer basked products such as milk, sugar, and eggs. Then, Dunkin has changes products by increase more sugar into donuts [2].
In my perspective, Dunkin has changed plan when it does business internationally. It turns to be positive results. Finally, Dunkin expected to increase outlets from 35 to 100.
Reference:
[1] http://www.reuters.com/article/us-consumer-retail-jubilant-idUSBRE98A0HW20130911
[2] https://next.ft.com/content/723833a2-d506-3249-9ff0-dfae327cb623
[3] http://www.wsj.com/articles/dipping-into-india-dunkin-donuts-changes-menu-1417211158
November 7, 2016 @ 9:23 am
This blog statement is a very good example of how important and hard it is for such a big company to address every single country’s needs. As the western countries are more individualistic, the eastern countries are more collectivistic. Therefore, it is from high priority to know the differences in each culture.
When Dunkin Donuts (DD) started to offer the American donuts and coffee, they were far away from success. DD thought they could adapt their strategy which they have in an individualistic country, to a collectivistic country. As the Individualism (one of the four dimensions of Hofstede) in India scores 48, the US come up to 91. DD didn’t think about the differences. India as a collectivistic culture, focus on in-group benefits, harmony and family. For that reason, the initial strategy failed as Indians have breakfast at home with their families rather than picking up something sweet on their way to work. In addition to that many Indians just do not like doughnuts.
However, the company redesigned the strategy which was based on a analysis of the Indian culture and eating habits. Therefore, the best idea was to rework its menu as well as pushing its opening hours to later in the day. DD rebrand itself through an advertising campaign to let consumers know it offers more than doughnuts and coffee. The new menu is adjusted to the Indian style and contains many beef-free burgers, wraps and sandwiches.
All in all DD definitely did a great success story by adapting their strategy to the local market needs. A company has to consider the whole marketing strategy according to the culture when going into a foreign country. DD apparently had to learn this, but will benefit from these findings in the future.
November 15, 2016 @ 4:18 pm
This perfectly shows cultural differences. The concept of Dunkin Donuts might perfectly works for the US-American market, however the Indian market was not asking for a pastry- or coffee shop. In fact, Indian people do not even drink as much coffee as “western” cultures do, they prefer tea instead. Thus, the concept of picking up coffee to go and having a donut with it did not work out for Dunkin Donuts. Hence, DD had to come up with a different idea, and they thankfully did.
I’m of the opinion that if a company wants to expand its stores to countries with different cultures, that’s exactly the way they have to behave. Being flexible and listening to the foreign cultures needs and wants is crucial if a company wants to succeed in the new, foreign market.
A good example therefor is Mc Donalds, only with their willingness to addapt its products to different cultures led them to their worldwide success. Mc Donalds nowadays only works out in countries like France due to the fact that french Mc Donalds food tastes less american. From the choice of burgers to the choice of sauces – Mc Donalds adapted all their products to their different markets. Also, the marketing was changed and adapted.
Summing up, it can be said that internationalization does have some benefits concerning costs and spendings, however to fully react on customers needs, build customer loyalty and compete with local competitiors, acting the way Dunkin Donuts or Mc Donalds did for sure is the smarter and more successfull one.
March 13, 2017 @ 3:46 pm
This is an outstanding example for localization of a global brand. Above all for big, successfull and world-wide known brands it is hard to accept that some markets work different and will not act according to their strategy, if they are not able to adapt their products and services to its needs.
Referring to Austria, Dunkin Donuts is also a role model for taking up regional habits and behavioural patterns. By establishing cooperations with original companies like Nutella etc. they were able to enter the market fast and without stumbling blocks. They already got the right understanding of market orientation, which is not about imposing the target group on their product as the company wants to see it, but it is about putting the customer in focus, trying to understand his needs and wants.
From my point of view, a potential customer will never adapt a product if he feels forced to. Therefore Dunkin Donuts does a good job which is not common in that business.
June 26, 2017 @ 2:32 pm
It is really interesting to see, how Dunkin’ Donuts (& more) changed their strategy after they have failed with their first one. They found out, that it is not possible to use the same corporate business model in India like they use in the US. The first run of the company failed because of the cultural defences. Indian people are not interested in to pick up coffee and some sweet breakfast. Dunkin’ Donuts saw their struggles early enough and entered afterwards the Indian market in a fast way. If they go on so far they will be really successful in the future.
July 3, 2017 @ 9:02 am
Dunkin Donuts and more is a good example of the importance of local responsiveness. DD failed when they entered the Indian market because they did not enough market research and did not consider the cultural differences. One big difference to the US market is the consumption of coffee. In US coffee is the biggest revenue earner of DD whereas in India food products are much more important. Therefore, it was crucial that DD focused on the adaption of the menu. Now they offer regional products which cater to the local tastes and this strategy is very successful – they already have more than 50 stores in India.
When we have a look at the cultural dimensions of Hofstede the biggest difference is the individualism level. US is a very individualistic country whereas India is more collectivistic. This major distinction reflects on the breakfast behaviour. In the US, most of the customers pick up sweets at DD before they go to work. In India, on the contrary, a breakfast together with the family or friends is vital. As a result, DD had to change their business model in India and postponed the opening hours.
To summarise, DD learned from the failure and adapted as much as necessary to the local requirements. To keep an eye on the costs but also on the quality 90 per cent of the ingredients are being sourced locally. DD implemented the strategy “Think globally – act locally” very well.
July 3, 2017 @ 1:21 pm
Dunkin Donuts successfully implemented an individual marketing strategy for India. Following the cultural differences in taste and buying habits concerning food, they adapted and expanded their product portfolio to satisfy the need of their customers in India.
The strategy of offering fast food additional to their sweet donuts is very successful in India, but in my opinion, it probably would not have worked in other countries, like the US for example, due to the different consumer preferences.
Offering donuts for breakfast or as sweet snacks toghether with savory fast food within one store is a very unusual combination and might be refused by the customers.
July 5, 2017 @ 1:14 pm
Best practice example of how a companie´s strategy should be adapted to foreign cultures. When there is no demand for a specific strategy in a domestic country it is necessary to adapt the strategy to the local needs. Dunkin Donuts recognized that they will not have success with the same strategy worldwide so they took the plunge and developed a completly new strategy for India. And how we can see – it was very successfull.
It is always difficult to launch food products abroad because food is part of the culture and so it is individual from culture to culture. In my opinion therefore it is always necessary to develop a new strategy for each country where you want to launch your food products.
July 15, 2018 @ 2:34 pm
I am wondering in the first place – haven‘t they made any market research? It seems like, it took them a second run for a success with Dunkin donuts in India, which means, they haven’t done any or not enough research in advance.
It might have been necessary to talk with inhabitants or event work together with an inhabitant to understand the cultural differences. They obviously did not really have potential within the Indian market with their rooted menu but therefore they build potential by adding Indian flavors and taste to it, which worked out very well. Very often you have to adapt your marketing strategy for different markets, like Dunkin donuts did here. We can not assume that very country has the same traditions, tastes or rituals like getting coffee and pastry for breakfast on the way. Indians won‘t understand these ritual and also won’t learn or do it, just because Dunkin Donuts is mainly intended for this morning ritual. Therefore, market research is a decisive method to do before starting your business in other countries.
March 27, 2020 @ 4:54 pm
Before entering a new market, it is crucial to select the right market first, meaning to familiarize yourself with the market, analyze the competition, pick the right local partner, analyze the legal and political framework, select a strategy, etc. As there are several things to consider, the most important I think is to find out if there is a need or demand for the product or service a company is offering and what the profile of a potential consumer looks like to be able to respond accordingly. Dunkin Donuts successfully operates in several countries over the world, nonetheless, it had to adjust its business model to the market demands of India. It clearly shows the company was being aware and listened to the requests and preferences of its customers which led them to adjust their business model to stay competitive. If they would have stuck to the same business model in the US, they might have failed. We have seen such a case in Germany when Walmart tried to enter the market but ended up unsuccessful. Every market has its unique demands and companies need to assess whether to stick to standardization or move to adaptation when going global.
March 30, 2020 @ 4:13 pm
Before entering a new market, it is crucial to select the right market first, meaning to familiarize yourself with the market, analyze the competition, pick the right local partner, analyze the legal and political framework, select a strategy, etc. As there are several things to consider, the most important I think is to find out if there is a need or demand for the product or service a company is offering and what the profile of a potential consumer looks like to be able to respond accordingly. Dunkin Donuts successfully operates in several countries over the world, nonetheless, it had to adjust its business model to the market demands of India. It clearly shows the company was being aware and listened to the requests and preferences of its customers which led them to adjust their business model to stay competitive. If they would have stuck to the same business model in the US, they might have failed. We have seen such a case in Germany when Walmart tried to enter the market but ended up unsuccessful. Every market has its unique demands and companies need to assess whether to stick to standardization or move to adaptation when going global.
December 17, 2021 @ 6:04 am
The American Coffee chain Dunkin Doughnuts perceived to think their moto of America Runs on Dunkin would would world wide. Dunkin, looking to expand to different markets and gain market share in a growing country seemed the right and logical next step for the coffee company. As Dunkin expanded to India, Dunkin did not adjust to the local customs and their preferences when choosing which item to consume for breakfast. Dunkin had to readjust their menu and remove meat items that they offered to attract customers. As the article stated, Dunkin has as many burger options as Mcdonalds is not good for business, let alone a coffee business. Dunkin should review sales and eliminate all but 6 top selling burgers. By limiting the number of burgers to clients, clients will be able to make up their mind a lot faster. Prior to expanding to India, Dunk should have allocated R&D funds into their new market to see how locals traditionally eat breakfast. If grabbing a coffee and doughnut is not part of their customs or traditions, then Dunkin should have advertised their expansion into India as a family pastry shop where one can gather to enjoy a cup of coffee with the family and slowly marketed the concert of grabbing a cup of coffee and sugary doughnut on your way to work.
January 27, 2022 @ 2:37 am
Prior to reading this blog post, I had no idea that Dunkin Donuts had an Indian master franchisee known as Jubilant Foodworks nor that it had added different variations of burgers to its menu in order to fit the needs and wants of the local consumers. White Dunkin Donuts may have initially experienced some failure in India, I believe Dunkin Donuts learned from its previous mistakes after it initially failed in Russia as Dunkin Donuts immediately responded to consumers’ criticisms and took the steps to incorporate their needs and wants after better understanding the market. For example, in addition to blindly implementing its US-based model into the Russian market without taking into consideration potential cultural differences, Dunkin Donuts also did not conduct the necessary consumer research to better understand Russia’s market and its consumers as Russian consumers did not have the same familiarity with donuts nor offer their preferences for traditional pastries in comparison to the U.S. consumers. Similarly to its lack in consumer and market research in Russia, Dunkin Donuts initially failed to take into account how Indians did not understand the more westernized concept of buying and associating coffee with sweets. As such, in order to sway Indians’ initial consumer perception where they viewed Dunkin Donuts as a pastry shop, Dunkin Donuts better aligned itself with their preferences by adding more menu items and eliminating beef from their products, similarly to how other US-based restaurant chains have done thus far also. Over time, Dunkin Donuts underwent tremendous growth and consumer acceptance amongst the Indian market as it has now been rebranded as “Dunkin Donuts and More”. Ultimately, while Dunkin Donuts underwent initial consumer issues when it came to brand perception and product adoption, I believe this case not only showcases Dunkin Donuts’ successful localization strategy where it learned from the local consumers how its brand and menu items have been perceived as well as what it can do to better meet its consumers’ preferences in order to stay competitive with more local competition, but also signals to other companies the importance of conducting extensive market research, determining any cultural differences, and evaluating foreign markets through analyses like the PESTEL framework before entering them.
February 19, 2022 @ 6:30 am
While I do believe it is nice to try different foods, pastries, or drinks, when you are used to a specific routine it may be hard to try something new. At least for myself, when I travel I expect to try different foods based on culture or tradition, but I most likely wouldn’t try much in my home town/ area. Dunkin Donuts was smart to try and alter their menu to be more traditional and Indian based. Changing to “Dunkin Donuts and More” and offering a veggie style burger or sandwich meant that it wasn’t seen as just a quick breakfast spot but can be eaten at any time. Understanding that in India they prefer a savory to sweet taste was crucial for Dunkin Donuts success. While they did change up the menu and try new things, it unfortunately did not last. According to an article written by CNBC they were not as successful as they hoped. Another factor that hurt Dunkin Donuts was the expansion that was too fast and too big. The article mentioned, “Despite efforts to cater the menu to Indian tastebuds, the franchisee has now closed more than half of Dunkin’ stores in less than two years.”
April 23, 2022 @ 6:31 pm
As we have learned in our class, before entering a foreign market, it is important to do extensive research before selecting the right market and learn to adapt to the different cultural preferences when entering as every country has unique demands. Even though Dunkin Donuts successfully operates in the US by just selling its pastries and coffee, it had to adapt its business strategy to meet the needs of the Indian market. The US has different local preferences, meaning what may work in India, may not work in the US. Although DD had a tough time, in the beginning, trying to adapt to the Indian market, they did a great job in following the local preferences in food and purchasing patterns to match the culture of the Indian market. The article has stated that the changes in the menu have gone so far that there are as many variations of burgers on the Dunkin menu as there are on McDonald’s. I think this may be a problem because they are ultimately altering the brand and what it is known for, pastries and coffee as a quick breakfast. Overall, I think this is a great lesson for all companies considering entering a foreign market to dig deeper into market research. Especially in the food industry, it is hard to launch a product without adopting the different traditions and cultures of the local country.