Bloomberg has a story about Dunkin' Donuts, and floats the suggestion that by "pushing into tonier offerings, such as espresso, cold brew coffee and Rainforest Alliance-certified coffee beans," it is flirting with a loss of its lowbrow appeal as it tries to go head-to-head with Starbucks.
"Imitation is the sincerest form of flattery," Bloomberg writes, "and also one of the easiest ways to lose your identity."
The story notes that "Dunkin’ is having its identity crisis at a time where it is pushing to open more than 400 new U.S. locations this year.
"As it operates very few of its own stores, its growth relies heavily on whether current or potential franchisees feel jazzed enough to open additional locations. To keep in franchisees’ good graces, Dunkin’ not only has to make the case that opening a location is a good investment — which means keeping both profit and sales growing — but that it has a long-term vision."
Defining itself as "a cheap alternative to Starbucks doesn’t exactly cut it, in an industry faced with fickle consumers and restaurant players that regularly jiggle prices to attract customers ... As retailers such as Macy’s and the Gap have discovered, the murky middle is never a good place to be when consumers are increasingly choosing either the cheapest option or the one with the highest quality. Unfortunately for Dunkin’, it can claim to be neither."
"Imitation is the sincerest form of flattery," Bloomberg writes, "and also one of the easiest ways to lose your identity."
The story notes that "Dunkin’ is having its identity crisis at a time where it is pushing to open more than 400 new U.S. locations this year.
"As it operates very few of its own stores, its growth relies heavily on whether current or potential franchisees feel jazzed enough to open additional locations. To keep in franchisees’ good graces, Dunkin’ not only has to make the case that opening a location is a good investment — which means keeping both profit and sales growing — but that it has a long-term vision."
Defining itself as "a cheap alternative to Starbucks doesn’t exactly cut it, in an industry faced with fickle consumers and restaurant players that regularly jiggle prices to attract customers ... As retailers such as Macy’s and the Gap have discovered, the murky middle is never a good place to be when consumers are increasingly choosing either the cheapest option or the one with the highest quality. Unfortunately for Dunkin’, it can claim to be neither."
- KC's View:
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Absolutely true. The so-called mushy middle is a lousy place to be. While there is nothing wrong with trying to stretch one's appeal a little bit and bring in new customers, you have to be very careful not to alienate the old ones.
Remember ... the middle of the road is where you find roadkill.
