Dunkin' Donuts searches for new tribe members

Thursday, May 03, 2007

Dunkin' Donuts searches for new tribe members

Back in our single days, my friend Tom & I would go to Tia's on the waterfront in Boston for happy hour. One time, we began chatting with a certain girl there. We asked her what she did. She said, "I work for Dunkin' Donuts. I'm the product manager for donuts." We said, "Oh boy, that seems like the best job ever." And she said, "No it's not. The best job is to be the product manager for coffee. Do you know what the margin on a cup of coffee is?"

I recalled this story when I read today's Wall Street Journal article on Dunkin' Donuts and its expansion strategy. In new markets, Dunkin' has an easy time selling its baked products, but not as easy a time inserting itself into people's coffee habits. And, as the product manager we met told us, coffee is where the profits are.

To improve their chances, Dunkin' has profiled their typical customer--part of the Dunkin' "tribe." They are more down-to-earth (read: less pretentious) than Starbucks customers. (The company calculates that one-third of the country fits the profile.)

So you probably won't be able to get your double-caf no-whip caramel macchiato at Dunkin' Donuts. But you will be able to get a large coffee approximately the size of a Slurpee. Sometimes, that's all you need.