Tag Archives: Apple

It’s Dunkin’. How You Like Us Now?

Change happens.  Brands must adapt.

Dunking a Toffee Coffee

As a company’s offerings evolve, a brand should keep up and not perpetuate a narrower or outdated image.

Thus:
Weight Watchers becomes WW (health)
Starbucks Coffee becomes Starbucks (more than coffee)
Apple Computer becomes Apple (obvious)
Kentucky Fried Chicken becomes KFC (downplay ‘fried’)
Boston Chicken becomes Boston Market (broader menu)
Jo-Ann Fabrics becomes Joann (whatever they are, not just fabrics, apparently)

In these cases, the ‘new’ names clarified the company’s position and formalized names already commonly used.

Quincy Dunkin' DonutsQuincy DD - external Quincy, MA Dunkin’ Donuts – 1950s

Dunkin’ Donuts started as a coffee and doughnut joint around 1950 in Massachusetts.  It was customary in those giddy post-war years to actually ‘sit on a stool’ at a ‘counter’, eat a doughnut served on a ‘plate’ and ‘dunk’ it in a heavy ‘ceramic mug’ of coffee from time to time.  Ah, those were innocent times with a cavalier attitude toward carbs.  You can’t really dunk while driving.  No one dunks.  It is a meaningless word.

From these humble beginnings it has now joined the name game and just announced a halving of its name to now just ‘Dunkin’’.

just call us dunkinThe reasons stated are to support their beverage-focused strategy, as well as to simplify the brand (they’ve already pared their menu 10%). Makes sense.

Dunkin’ hold-the-Donuts gets 60% of their sales from beverages, mostly coffee, but they want more.  Don’t worry, they will still sell their irresistible (or irresistable, depending on which website version you buy into) doughnuts.

Dunkin Irresistible.png

(In fact, Dunkin’ has been using largely the same menu for years, from time to time adding things like the healthier ‘DD Smart’ offerings, which will now likely have to be just ‘D-Smart’, which is a Turkish satellite TV company and no doubt trademarked.  These things do get complicated.  But we digress.)

The question is, is this a major step forward?  Is it worth the trouble and expense?  By itself, does Dunkin’ mean anything?  Is the value proposition really changed?

Considering that their locations, menu offerings, awesome circa-1973 logo font and color and pretty much everything else is staying the same*, it seems that this may be a very expensive PR play, nothing more.
*
apparently display fixtures will be undergoing a makeover.

Dunkin’ has long used ‘America Runs on Dunkin’’ as their tagline, and in their native New England, they apparently are fondly known as ‘Dunkin’’ or even ‘Dunkies’.

However, in the Midwest or Southeast I don’t recall ever referring to this chain as just ‘Dunkin’’ (or hearing anyone else do so).

It sounds a bit awkward and contrived, like when Radio Shack, in a last heaving gasp for survival, wanted to be known as ‘The Shack’. (it’s painfully true).

shack_promoSo, not sure that the name Dunkin’, by itself, is a game-changer.

Considering the vast franchisee-borne expense involved in re-outfitting 12,000+ international outlets, as well as rebranding pretty much every sign, coffee mug, drive-thru kiosk, menu, sign, placemat, napkin, rest room signs and heaven only knows how many other things, you have to wonder how the calculations worked on this at some point being profit-positive.  (and this follows the relatively recent ‘Coffee & More’ signage).Dunkin Coffee & More

And ultimately, profit is the point. 

It comes down to whether the absence of the word ‘Donuts’ will subconsciously, Jedi-style, draw new users in for non-doughnut beverage offerings as they drive past, or persuade current customers that it’s also ok to buy those other things on the menu.

Penetration vs buy rate, the primal existential growth question.

Dunkin traysIn the case of Weight Watchers, Boston Chicken and Jo-Ann Fabrics, a name change seems justified to align with a broader brand premise.  For Apple, Starbucks and KFC, arguably it formalizes what people already know, lets the CMO sleep at night knowing the brand is aligned, and is more of a check-the-box move.

Dunkin’ has tested this idea for more than a year so apparently the equation works.

I’m not so sure.

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Whither Apple? Can a brand be too strong?

Is there such a thing as too much brand strength?

This past week, Apple celebrated its 30th year in business and announced 1Q revenue and earnings above analysts’ estimates.  The reward?  Apple’s stock went down -8% in a single day.   The story was that iPhone unit sales were below expectations.
I suspect there’s more to it than that.

mac30

What’s going on?  Apparently Apple has so completely trained us to expect huge news, that merely growing a huge profitable business is seen as a negative, the ‘Microsofting’ of Apple, if you will.

Apple, of course, has brought this upon itself, introducing us to the Mac, iPod, iTunes, iPhone, iPad, and changing an entire industry.  As Apple’s legend continued to grow, this sort of pattern became expected, much like a sub-30 point game for Michael Jordan was greeted with a shrug.  The next cool thing?  It’ll come from Cupertino, of course.

More recently, Apple’s track record has been less spectacular (perhaps not coincidentally following the passing of Steve Jobs).  Solid growth, but innovation more of the incremental sort, compounded by previously unimaginable screwups in product (Apple Maps) and marketing (being ‘out-cooled’ by Samsung!).  Competitors have started to catch up – Apple actually is following by increasing iPhone screen size.  In a recent Forrester Research study, Apple dropped from second to fourth in a consumer electronics brand customer satisfaction survey, behind Samsung, Microsoft and Sony.  What the what?!?!

Apple Comp

Finally, as one measure of expected future profitability, Apple’s P/E stands at around 12.7, down from 22 or so a few years ago.

What should we make of this?  Has Apple set the bar for itself too high and is now entering a death spiral (#Sony)?

1) To be sure, Apple’s experience demonstrates that ‘what have you done for me lately’ is alive and well for investors.

2) However, to paraphrase Mark Twain, the rumors of Apple’s demise are greatly exaggerated.
– What is less visible is that Apple has built an enormously deep reservoir of confidence and mystique over the years.  Apple still commands our attention, and has retained its exceptional image as an innovator and cultural driver, the result of its exceptional record of success, and absolutely consistent, disciplined branding work over the years.

Ever notice how sportscasters lead with how Tiger Woods is doing, even when he misses the cut (as happened this last weekend)?  We are all still looking to Apple for the next surprise.  This is what branding can do.  And you don’t need a high-profile marital flame-out for it to work, either.

I would venture that Apple is still the one technology company that all others measure themselves against.

Apple absolutely needs to continue to drive category innovation.   But when this happens (and it will happen), its deep-seated brand equity will help to re-energize its consumer base, driving greater sales and loyalty than might be possible with the same product from a different company.   Personally, I’m waiting for the Apple TV…

Microsoft: Time to Surface?

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Mac Classic

First of all, I must note that I am a long-time Apple user – – starting in the 1980s with the Mac Classic, in the 1990s with a Quadra,  and continuing with roughly a $3000 purchase every 3 years when something died.  I figure that our family has bought close to 20 Apple products over the years, not including iPods – – but importantly, including a one-year old iPad. The appeal of Apple was no secret:  intuitive, sleek, inter-device compatibility, and increasingly, no worries about viruses, hackers, blue screen of death, etc.  The limitations of Apple were less compatibility with MS Windows software, which made it less popular with the typical office IT folks.

Mac Quadra

Now it seems Microsoft is (again) going all Apple on us, by announcing the introduction of their SURFACE product, sort of a combination of a pad and a notebook.  Following its history of not being a leader in the hardware arena, and specifically being an unsuccessful follower of Apple (Zune, anyone?) I must admit that the Surface has the possibility to break through.

New Microsoft SURFACE

Why?  Like Apple has done many times before, Microsoft has taken an existing innovation (there were lots of MP3 players before the iPod) and made it more usable.  The Surface tablet addresses probably the key downside of the iPad by simply adding a keyboard (on the reverse side of the now-ubiquitous cover panel).  In addition, the Surface products (there are 2 versions) will operate more like notebooks, with relatively full-function Windows desktops available.  Lack of a keyboard on my iPad, and inability to manipulate files have driven me to my (Apple) laptop more than I would like; these could be improvements that sort out the optimal capabilities array for this type of product and finally help Microsoft get its footing in the hardware arena.

Unless (until?), of course, Apple responds.  Will be interesting to see if Apple announces something before fall, when the Surface is scheduled to debut.  That could send MS back under water…