Question

From Dunkin Donuts to Just Dunkin! The famous American Donut’s brand is rebranding and closing stores across the world including Oman as its outlets have shut down for good. The demand for donuts in America is decreasing as customers preferring more healthy food with less sugar and fat.

The company’s brand CEO Mr. David Hoffmann said, “the rebranding comes as an effort to reshape the company’s strategic goals and focusing on drinks more than donuts.” While analyzing the company’s different products, the managers noticed that 60% of its revenue is coming from drinks like coffee while demand for donuts is declining.

The company redesigned its brand, and its stores making them look simpler. The company is also introducing new coffee experiences like nitro, cold brew, black...etc. The company will also introduce digital menu and drive through to fit the customers on the go lifestyle. The company will also reduce its employees as the new digital menus will eliminate the need of human employees, reducing the company’s costs.

Questions:

1. On the product life cycle, where the donuts fall? What are the best strategies the company can use in this case? (250 words)

2. Explain, how the demographic environment is affecting the company? (250 words)

Answer 1

On the product life cycle, where the donuts fall? What are the best strategies the company can use in this case?

Donust falls on the Decline stage of product life cycle because Donuts demand and sale is low and generating profit from donuts has been challenging for the company.Product life cycle is a framework which help us to know the stages of life a product goes throug. Every product has its own life cycle some can last long while some can be dead within months. Every product goes through four stages of Product life cycle.

Introduction stage at which product is newly launched in the market.Growth stage which is the second stage of PLC. at this stage, product picks up the growth in demand. In this stage, demand is higher and company makes profit from the sale of new product.Maturity stage at which product's demand is at peak. after this demand start to decline.This is because product has a lot of competitors and product is not new anymore.Decline stage at which product's demand is very low and generate very less profit to company. The Donuts are at this stage because Donuts has become common food can be made at home.Also customer's preferences are changing.

The best strategies that company can use is to re position the product to the market or leave the product and focus on profitable one. for example- Dunkin either can make healthy version of donuts like protien packed donuts with less sugar and fat or leave the donut and focus on its drink market which is generating more demand in the market.

Explain, how the demographic environment is affecting the company?

Demographic environment consists of factors like age, income,family size,education etc. This environment is definitely affecting the company because now Demographic of US population is changing. People are more educated and concern about thier health and thier families. They are cutting foods that are unhealthy like fried, fatty, filled with sugar and moving towards healthy options that are low in calories and high in protien.

This change or trend in prefences of people for healthy food cause decline in sale of its long famous food that is donut now these days. Now company is suffering from poor sales and profit because customers are not buying those donuts from themselves.Even they want to then they prefer it to make at home because now people can access to tutorials to make donuts in more healthy way at home for their family.

Also, Coffee is daily part of US people. They consume on average 3 cups of coffee every day as per satistics. This has increased the demand for Dunkin's coffee. In this case, we can see how the managers noticed that 60% of its revenue is coming from drinks like coffee. The Families are dual income family which are busy so they have to hurry to office and have less time to make coffee so they prefer to take coffee from stores like dunkin on the way. So, we can see how demographic shift has affected the company's sale for coffee as well as donuts.