🍟 10/10/2022 – Dunkin’, Starbucks, And The Power of Branding
Dunkin’ vs Starbucks
Dunkin’ and Starbucks are the two biggest coffee providers on the planet.
They’ve chosen different paths to expand, as Dunkin’ is franchised, while the vast majority of Starbucks stores are corporate owned (stores in non-traditional locations like airports are some of the few Starbucks’ that are franchised).
Regardless of their business model, they’re both known for their coffee. But even though they sell the same product, each company speaks to a very different consumer.
1 word: brand.
In the words of Kat Cole, the former President of Focus Brands (the owners of Auntie Anne’s, Cinnabon, Jamba Juice, and more), brand is “the promise that consumers believe an entity has made to them”.
Ultimately, the combination of what a brand says, and what a brand does, leads to a set of beliefs about what that brand is, and therefore what they have “permission” to do in the market.
Through comparing Dunkin’ and Starbucks, we’ll see how the nuances in their branding has led to a difference in consumer expectations, and in their market positioning.
Ultimately, we’ll see that brand dictates so much of what a business can do, from menu prices, to the in-store experience, and more.
Dunkin’ vs Starbucks Logo Comparison
Logos are what you instantly think of when you hear the name of a brand.
This may or may not come as a surprise, but the biggest companies in the world are incredibly thoughtful about their logo.
It’s not as simple as “Does it look cool? Okay let’s run with it”.
Dunkin’s signature orange and pink colors are playful and light.
While for the last 15+ years they’ve transitioned heavily to a coffee/beverage company, they still know how to work in their colorful logo with images of beautiful frosted and sprinkled donuts.
The outcome is that their logo is approachable for many people, making Dunkin’ a place that’s accessible to the masses.
Starbucks on the other hand is known for their green and white emblem with a twin-tailed lady known as “the siren”.
The name Starbucks and the siren logo was inspired by a character in Moby Dick, but for our purposes, the important thing to focus on is the colors.
Green and white, especially compared to Dunkin’s bright orange and pink, come off as more composed, chic, and ultimately, more expensive. That’s not a mistake either, Starbucks wants their logo to signify wealth and money.
They wanted to be the premium player in the market, and they’re not the first company to use green and white to do so.
Heineken and Whole Foods are two other brands that come to mind that have positioned themselves as premium options in their respective markets.
With Dunkin’ building a brand around accessibility, and Starbucks building an aspirational brand with a premium identity, we’ll see how that impacts their store layouts and pricing.
Dunkin’ vs Starbucks Store Comparison
It’s no secret that the environment in Starbucks is vastly different from Dunkin’.
Starbucks is typically playing calm music, has spacious seating, and offers a lengthy menu of complicated drinks. Starbucks also has wifi at every location, which has made it a remote office location for many white-collar workers across the country.
Compare that to Dunkin, which has bright lighting, less square footage, and no public wifi. Additionally, for lack of a better explanation, the decor and furnishings resemble more of a fast-food restaurant than a coffee shop.
Thinking back to their logo comparison, this all makes sense. Dunkin’ wants to appeal to the masses, while Starbucks is aiming to feel more sophisticated and exclusive.
Dunkin’ vs Starbucks Pricing
We all know where I’m heading with this one – Dunkin’ pricing is far cheaper than Starbucks.
But let’s revisit Kat Cole’s definition of brand: the promise that consumers believe an entity has made to them.
If Dunkin’ were to have high menu prices, it’d be a complete narrative violation of their accessible branding. The same goes for if Starbucks priced themselves as a discount option.
People typically assign higher value and quality to higher prices. It’s a phenomenon known as “irrational value assessment”, hence why Starbucks has to have higher prices relative to competitors.
They’ve designed every aspect of their brand and experience around luxury – it’s the promise they’ve made to consumers – and thus is why Starbucks has permission to have the highest prices.
It all comes back to the branding.
Brand matters, full-stop.
I made the above meme months ago to get a few laughs, but society’s view of each company’s typical customer is evidence of the impact of their brand.
- Dunkin’: a blue-collar, rugged New Englander’s go-to coffee joint. Accessible.
- Starbucks: a materialistic, “bojuee” girl who who takes Instagram’s in fancy Autumn attire with a pumpkin spiced latte. Premium, exclusive.
- Bonus – Tim Horton’s: the world’s 3rd largest coffee brand – they’re largely associated with Canada, hence why I chose Wayne Gretzky to represent them 😂
Note: the above depiction is of course not representative of every single person that goes to a Dunkin’, Starbucks, etc. but it’s hard to argue with the customer personas that each brand is associated with. It’s just a meme at the end of the day!
While brand is less important for franchises operating in home-services or in a B2B capacity, it’s of the utmost importance for brick & mortar franchises providing retail products and services.
Brand will dictate what pricing strategy you will employ, and what the in-store experience will be like.
As a franchisee, you want to understand the brand you’re buying into.
Do you align with it? Does it excite you?
Does the franchisor think critically about branding, or is it an oversight?
If a brick & mortar franchise isn’t thinking intentionally about what they want their brand to stand for, keep looking.
If you’re still not sold on the importance and power of branding, check out Liquid Death. They’re a water startup that was recently valued at $700M.
I’ll say that again – Liquid Death is a water startup. They sell water in a can that looks like a tallboy of beer.
Can you name a more commoditized product than water?! I’ll wait!
But that’s the reason Liquid Death has thrived. Given how commoditized water is, brand is the only way to differentiate yourself in that arena, and Liquid Death has done an amazing job of it (hence their recent $700M valuation).
Brand determines numerous possibilities for your company, and the type of customer it’ll attract.
As a business owner, you must think intentionally about what you want your brand to stand for from day 1!
McDonald’s Is Selling Adult Happy Meals
McDonald’s is looking to serve up nostalgia for their older customer base by doing retro happy meals. I’m not gonna lie, I don’t know what any of these creatures are, which must mean I’m not that old yet!
Burger King Investing $400M Into Revamp
The King has fallen behind in recent years, as they’re no longer the #2 burger restaurant in the world. Between Wendy’s, and chicken-focused brands like Chick-Fil-A and Popeye’s eating into the fast-food marketshare, Burger King badly needs to rethink advertising and their store models.
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