Marketing Dunkin Donuts In India

For Global Marketing

Presented by Allen Fink Prachi Kuchroo

MARKETING DUNKIN DONUTS INDIA Table of Contents

Summary 3 Situation analysis.4 Pest and legal/ business analysis.6 Company analysis..11 Franchisee Local Company12 Customer analysis..13 Competitor Analysis..15 SWOT analysis..17 Market strategy.19 Financial26 Conclusion29 References30 Appendix..32

MARKETING DUNKIN DONUTS INDIA Summary As Dunkin Brands, Inc. we are introducing one of our successful brands, Dunkin Donuts in India. Dunkin Donuts has been successful internationally and the next step for continued growth is to target the Indian market. Our decision to expand to India is based on the many favorable factors in their political, economic, social, and business environment that will be

discussed throughout the paper. Dunkin Donuts restaurants are owned by franchisees all over the globe. In India there will be a master franchisee selected for the entire nation. The corporate head office will be in New Delhi. At the initial stage there will be one store launched in Delhi with plans to open in other cities in the coming months. Delhi is one of Indias fastest growing cities and also attracts many tourists. It is a perfect location to attract Indian consumers and many tourists who have enjoyed Dunkin Donuts in their home nation. In order to keep a reputable and consistent brand image, we will ensure that the Indian store operates under the standardized Dunkin Donuts values, culture, and policies. Since there are clear cultural differences in India compared to other countries there will be some changes done to match their specific requirements. We are confident that the opening of our Dunkin Donuts stores in Delhi will be profitable. Opening new stores will be less challenging since we will already have a corporate headquarters operating in the country. Situation analysis India has a very old coffee culture. Coffee was first brought to India in 1600 by a Muslim pilgrim Baba Budan, who smuggled seed out of Mecca. Coffee growing for export started after 1840 by the British. India is now the fifth largest producer of coffee in the world, after Brazil, Colombia, Mexico and Ethiopia (Coffee Review). Much of India's production is consumed at home. Coffee in India is consumed through three channels in the out-of-home category cafs, instant coffee mix or pre-mixed, and freshly brewed. In the out of home hot coffee consumption

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instant coffee vending machines dominate. Coffee consumption in India is low, just 90 grams per capita versus 1-2 kg per capita globally. The retail caf size is $185 million, and split between 1,500-odd cafs. Consumption, however, has been increasing exponentially (Tandon, 2011). The Coffee Boards figures show coffee consumption has almost doubled to 108,000 tons from 55,000 tons in 2000. India, where coffee consumption stands at 100 grams per person versus 4.5 kilograms in the U.S., provides enormous scope for growth. Increasing adoption of international tastes is leading local coffee consumption to rise 6%-7% annually, faster than the 3% growth in tea, a beverage traditionally preferred by Indians. A booming cafe market that is estimated to grow to $680 million in annual sales by March 2016 also holds out promise for the new entrants. Indias food services retail market generated about $8.2bn in the year ending in March 2011 and is forecast to grow more than 10 per cent annually over the next five years, according to Technopak, a retail market consultancy (Crabtree, Fontanella-Khan, & Jopson, 2012). India's coffee shops serve a range of coffees from mochas to lattes, iced coffees to espressos. But their appeal is greater than their beverages. According to personal interviews conducted it was learnt that many young students frequented coffee shops to hang out as they don't have many places to hang out, and these chains don't have any objections to customers spending hours and hours sitting there. In a country where there is a limited bar culture, it has provided an acceptable and safe outlet for people, particularly young Indians, to share a drink. The entrance of Starbucks, an American chain, into the Indian coffee market follows other international coffee brands such as Costa, Gloria Jeans, and Lavazza which has bought into Indian chain Barista. Like other Western brands, these tend to be seen as inspirational to many young Indians.

MARKETING DUNKIN DONUTS INDIA PEST analysis Political

Indias Constitution was adopted by a Constituent Assembly in 1949 and came into force on 26 January 1950. A state is conceived as a sovereign socialist democratic republic whose duty it is to secure justice, liberty, equality and fraternity for its citizens. The Constitution provides for a parliamentary system of government within a federal structure. Hindi is the official language under the Constitution, although it also provides for English as an associate language for many official purposes. The Head of State is the President, elected by an electoral college drawn from both Houses of the national Parliament and the legislatures of the states for a term of five years. S/he formally enjoys a range of executive powers, to be exercised on the advice of the Council of Ministers with the Prime Minister at its head, which is in turn responsible to Parliament. In practice, real power is exercised by the Prime Minister and the Council of Ministers. Social or cultural Culture is a combination of learned beliefs, values, and customs people in a group or society have in showing their behavior towards consumer products. It is often seen that the influence of culture is taken for granted as its natural and habitual. For example, in America as a breakfast drink coffee has competition from different juices, milk, teas (hot and iced), and caffeinated waters. Coffee marketers introduced gourmet and specialty coffees (e g, espresso, cappuccino, and cafe mocha) to their consumers. This worked well for the coffee sellers. India is a country of multi-cultures. At different times in history different rulers ruled over the country. At the same time there were different rulers in different parts of India. Invasion from outside Arab countries and then over 200 years long British rule in India also contributed to the culture.

MARKETING DUNKIN DONUTS INDIA In part of the country for sometime there had been French and Portuguese rule. The different rulers had different systems of governance and social practices. All these factors left a deep imprint on culture. As in olden days means of transport and communication were very poor; large number of languages, systems, habits, values developed which continue even today. At present there are 29 states and six union territories, each having its own culture and in some states there is more than one subculture. Indian Culture varies as we move from one region to another. Therefore, consumer preferences also differ and same policy cannot succeed everywhere. Hindi is the national language and English is the official language in most private offices and for interstate correspondence, teaching of technical courses. Besides official languages there are many other local languages have great influence on consumers especially in rural areas, a point for marketer to note. There is more than one religion practiced and every religion has its own values, faith, beliefs and greatly affects consumer behavior. For instance Hindus by and large are vegetarians and those who are non-vegetarians generally do not take meat on certain days of the week and on holy days and days of fast. Cow in considered holy by Hindus and so they do not take cow meat. Muslims do not take pig meat. Sikhs do not consume tobacco in any form. Staunch Jains do not take even many vegetables and believe in non

violence and they do not take food at night. The faith in vegetarianism is so strong in Hindus that many restaurants and eating-places are for vegetarian food. McDonalds has to advertise that in India their French fries are cooked in vegetable oil. When they used lard for flavor, as in USA, vegetarians sued McDonalds for huge damage. Now it has been made compulsory to mention contents on food items so that one may know what it contains (The Influence of Culture on Consumer Behavior). Technological Environment

MARKETING DUNKIN DONUTS INDIA Dunkin Donuts took advantage of advancing technology in the form of computer-aided product design to sort through more than two billion different configurations of product, service and price and calculate the impact of each individual item on visits and spending. The chain considered different options for every element, from store type to portion size to music to exterior experience and more. All the possible restaurant and menu combinations were reassembled to forecast visits, spending and ultimately sales. In India many chains use technology to check and keep account of what is needed in each branch. As such trends are common with McDonalds, Dominos and other brands, Dunkin Donuts will be able to use this system in India. Company analysis Dunkin Donuts is a doughnut franchise owned by parent company Dunkin Brands. Dunkin Donuts was founded in Quincy, Massachusetts by Bill Rosenberg in 1950. Until very recently, Dunkin Donuts was owned by Allied Domecq, a Britain-based company, the worlds second-largest spirits and wines group and global food service business. Allied Domecq had acquired Dunkin Donuts in 1989 from William Rosenberg, who founded the company in 1950. Dunkin Donuts boasts quality doughnuts and pastries, as well as a delicious line of coffee and espresso blends. In 1950, Bill Rosenberg opened the first Dunkin' Donuts shop in Quincy, Massachusetts. Dunkin' Donuts licensed the first of many franchises in 1955. Dunkin' Donuts is the world's leading baked goods and coffee chain, serving more than 3 million customers per

day. Dunkin' Donuts sells 52 varieties of donuts and more than a dozen coffee beverages as well as an array of bagels, breakfast sandwiches and other baked goods With over 2,600 stores in 30 countries outside of the U.S., Dunkin' Donuts has been serving loyal customers around the globe for over 27 years. In the US, Dunkin Donuts has a beverage-to-food mix of 70:30; when it steps

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outside, it is typically 60:40. Other co-branded chains are Baskin Robbins, the worlds largest ice cream franchise, and Togos, a sandwich brand popular in California (Rangaswamy, 2007). Franchisee Local Company Analysis Dunkin Donuts will need to have an Indian company as master franchisee for the local market. The Indian firm needs to have experience in fast food business and preferably have some knowledge on how to handle international brands. The working climate in the company should compliment Dunkin Donuts working style. Franchising allows companies to expand quickly with fairly lower capital investment. The combination of the knowledge of franchiser and local entrepreneur helps generate more employment opportunities in the local market (Nahra, 2010). After checking a few companies, we found that Jubilant Food Works looks perfect for the role. Company was set up in 1995. It had its first Store in January 1996. The company has exclusive Master franchise rights of Dominos Pizza International Inc for India, Bangladesh, Sri Lanka and Nepal. In 2011 there was a 56% year-on-year jump in net profit at Rs.29.5 crore (USD 5670000) for the October-December period against Rs 19 crore (USD 365446) a year ago (HT Correspondent, 2012).

Customer analysis According to Euro monitor Internationals report released in December 2010 on consumer lifestyle in India, urban Indians may hop into a coffee shop once a week to once a day, but consumers still consider a visit to a caf or a bar a special outing; they want to consume more than a drink. Coffee is not considered on-the-go; one has to sit down and savor it. For a typical Indian customer, a beverage is usually something which is accompanied with food and spending alone on a beverage is a new concept, although that trend is slowly changing. Many of these customers prefer to spend money on value and food is something they perceive to have greater

MARKETING DUNKIN DONUTS INDIA value than beverages. The coffeehouses will need to provide an extensive menu suited to local tastes in order to succeed (Tandon, 2011). India's coffee culture has changed the way young Indians socialize. It is common to see large groups of teenagers congregating at coffee shops later into the evening. Some branches

provide guitars for jam sessions. It has also helped facilitate the country's growing dating culture - having a girlfriend or boyfriend at a young age is frowned upon by many. With more than half of the country's population under 25, and a rising middle-class that is well aware of Western trends, Indian coffee consumption has doubled in the past 15 years since the first cafes were opened (Vaidyanathan, 2012). Competitor Analysis The Barista Lavazza chains of Italys Luigi Lavazza Spa and U.K.-based Whitbread PLCs Costa Coffee stores have a head start in the coffee shop market. A national chain, Cafe Coffee Day, operates stores serving cappuccino, latte and light food. Domestic chain Mad Over Donuts has thirteen outlets in Mumbai, four in nearby Pune and nine in the Delhi area. The coffeehouses will have to compete against McDonalds and Yum! Brands. Restaurants like McDonalds and Pizza Hut, with their extensive offerings in both food and beverages, provide a more holistic experience of a meal. McDonalds also revealed its plan to double the number of restaurants in India to 500 by 2014. Caf Coffee Day (CCD) plans to increase the number of its highway outlets from the current 5 per cent. The caf culture is beyond just serving coffee and CCD has a flexible format (Tandon, 2011). With 75 cafs, Costa Coffee master franchised in India plans to add 60-100 outlets every year over the next four years. Their focus is airports as the company considers them the most profitable. One airport outlet equals the business of four high-street outlets according to Costa

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Coffee. A crossover entrant is Hindustan Unilevers Bru. About four months ago, HUL extended its Bru brand to Bru World Caf, as a pilot project. With six cafs in Mumbai they plan to open 10 in the coming year in different formats. The biggest entrant in India is likely to be Starbucks. Coffee Bean and Tea Leaf operates in large retail formats typically 2,000 sq. ft in malls, highstreet centers and airports. They are interested in corporate parks that can accommodate 50010,000 people. Four such cafs are in the pipeline in Mumbai. There are similar plans for Delhi (Tandon, 2011). Lavazza leads in vending machines coffee sales. It acquired Barista, and Fresh and Honest vending machine business in 2007. It also services top hotels, large corporates and even individuals (Mukesh Ambani and Vijay Mallya who are business giants in India). At present, 5,000 Lavazza vending machines dish out 300,000 cups of coffee daily. The company also has high-end personal use coffee machines Lavazza Blue, launched in 2008, has sold 1,630 units. For retail caf leader CCD, 10 per cent of the business is from un-manned vending machines (Tandon, 2011). The main competitors are:

Cafe Coffee Day Barista Lavazza Cafe Java Green Coffee N U Costa Coffee Coffee Bean and Tea Leaf Mocha

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The cafe market in India is presently pegged at Rs 5,000 crore in which Cafe Coffee Day has the largest market share of 60 per cent as of now ( (Mohapatra, 2010). Lavazza enjoys a market share of 15 per cent in the country ( Press Trust Of India, 2012). Please refer to Chart 1 that shows the current market share.

SWOT Strengths: 1. Dunkin Donuts is known for the large variety of doughnuts, flavors and other baked items like donut whole treats, bagels, muffins and munchkins etc. 2. Dunkin Donuts uses 100% Arabica coffee beans and has its own coffee specifications, which are recognized by the industry as a superior grade of coffee. 3. The company to develop more loyal customers as well as to retain the customers offers discount cards and special deals coupons. 4. Dunkin donuts prices it products well in the competition, makes it more affordable to consumers. 5. Dunkin Donuts uses technology in the form of computer-aided product design. The chain uses technology in every sphere including store type to portion size to music to exterior experience and more. With all the possible restaurant and menu combinations made to forecast visits, spending and ultimately sales. This gives them an edge in analyzing what will work for them. Weaknesses: 1. The brand name is not as strong as Starbucks that attracts consumers. 2. Usually Dunkin Donuts does not promote itself as a place to sit and spend time which many Indians like. It mostly is promoted as on the go products.

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3. Unlike many established brands in the local market Dunkin Donuts does not have experience in serving the needs of Indian customers. Opportunities: 1. Franchise business is promoted in India and hence is a great opportunity for Dunkin Donuts. 2. Cheaper prices and positioning differently the products offered will attract the consumers. 4. Around 1,200 cafes have sprung up in India in the past 14 years, clocking an average annual growth of over 25 per cent in recent times (Mohapatra, 2010). There is a scope of setting up many more coffee stores strategically close to offices, colleges and shopping malls in the country. Threats: 1. People wanting to eat healthier food (low calorie/low carb). 2. Tea remains popular, with consumption rising from 562,000 tons annually to 837,000 tons in the last 15 years. The average Indian drinks now around 250 cups of tea per year. This is quite a low figure by international standards - in Ireland; for example, the average citizen drinks 1,000 cups per year - suggesting there could be room for further expansion (Vaidyanathan, 2012) 3. Other established coffee outlets in India providing competition. 4. The price of tea or coffee from a roadside stand is usually in the order of five rupees (about 10 US cents, or 6p), compared with around 80 rupees ($1.60) upwards for a cappuccino or equivalent. This price barrier makes the coffee shop culture mainly a preserve of the upper middle classes in India (Vaidyanathan, 2012).

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Market Strategy The first Dunkin' Donuts will be opened in South Extension I, New Delhi and thereafter fifty more will be opened across the country in the next four years. Dunkin will be serving the main Dunkin' Donuts menu along with dishes that appeal to the local taste. Dunkin will be positioned as an all-day eatery. Indian consumers want value and they believe that food offers more value than beverages. Younger consumer sees equal value for both food and beverage. The food will be western-centric but spicing will be Indian with sweet and savory, hot and cold options. As coffee will have competition the strategy will be to emphasis on all day food where other players are not focusing. The coffee drinking market consists of more younger and more affluent middle class. Dunkin Donuts strategy has to include catering to the middle- to upper-middle class. Even before the coffee chain revolution, coffee had a strong presence in South Indian homes. Typical South Indian coffee is a made with boiled milk and plenty of sugar, and is served in stainless steel tumblers. Many families drink more coffee than tea. Product: Dunkin Donuts product mix consists of a wide range of products that appeal primarily to coffee drinkers. Food items like croissant, pastas, and sandwiches are complimentary to coffee and are popular in USA. Their merchandising also consists of primarily coffee related products like coffee beans. The product mix has to include Coffees & Teas, Drinking Alternatives and Eatables. Coffee (Hot and cold): Cappuccino, Cafe Mocha, Cafe Latte, Espresso, Americano Latte, Frappe, Iced Cafe, Mocha, Espresso Shot

MARKETING DUNKIN DONUTS INDIA Other drink: Guava, Mango, Grape, Blue Curacao Strawberry Freeze Lemon, Peach, Mocha, Freeze, Lime Ice, Mixed Fruit, Guava. Teas: Assam, English Breakfast, Darjeeling, Earl Grey, Masala tea, Kashmiri tea

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Eatables: Vegetarian options and non vegetarian options have to be served. As beef is not eaten by the majority Hindu population non vegetarian is limited to lamb, chicken, seafood and eggs. Vegetarian varieties can include : Paneer Tikka, Cheese & Tomato, Kadhai Paneer Roll Chicken Masala Roll Tangy Tomato Pasta Non vegetarian options :Chicken Tikka, Smoked Chicken BBQ Chicken Croissant, Creamy Chicken Pasta, Omelet sandwiches Lunch and Dinner options: Fixed meals for vegetarian with 2 vegetables and rice or flat bread. There are 3 variations in these options that include lentil curry also. Another fixed meal for non vegetarians with one non vegetarian and one vegetarian option with rice or flat bread. In this also 3 variations are offered. Sweet eats: All varieties of donuts offered like, plain, cream filled, glazed which should be at least 6 varieties. Chocolate Fudge, Whipped Cream, Ice Cream Scoop, Walnut Brownie, Mocha Excess, Chocolate Excess, Dark Temptation, Chocolate Mousse, Chocolate Chip Muffin, Almond Raisin Muffin, Apple Cake. Product Serving Size for the drinks Hot Coffee and tea (3 sizes) 250 ml/ 300 ml/ 350 ml Cold Coffee ( 2 sizes) 250ml/ 340 ml Smoothies and other frozen juices (3 sizes) 250 ml/ 300ml/ 350 ml Dunkin Donut merchandise can be sold in the coffee outlets : Caps, T-Shirts, Bags, Mugs, Coffee Filters, Coffee Powders

MARKETING DUNKIN DONUTS INDIA Positioning: As most of the coffee outlets attract people in the 15- 30 age group the customers are

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students and young professionals. Dunkin Donut will be a place where people can enter anytime of the day and have food or drink. It will be an all day service food outlet where meals and snacks will be available throughout the day. Prices: Considering that Dunkin Donut is trying to target a market whose age range is between 18 and 35 years, a pricing policy appealing to this segment is needed. Extremely low prices act as a deterrent to some customers who might regard it as an indicator of quality, while very high prices cannot be afforded by most of the youth. But since many customers are young, their prices have to be able to attract them. An average range of prices will be $ 4 for all day sandwiches and snacks, $ 6 for fixed meals, $ 2 for a hot coffee or tea, $3 other drinks. The average price of Dunkin Donuts based on 75% food and 25% drinks comes to $ 4.38. Physical Appearance: a) Logo, Colors, Images: Dunkin Donuts logo is bright orange and pink in color. It is a very fun and youthful color. The logo features a steaming coffee cup beside the signature pink and orange colors. The introduction of a steaming cup strongly reflects a core brand belief that there is an emotional connection between coffee and donuts. The addition of a steaming coffee cup to the logo supports the companys belief that coffee and donuts go hand-in-hand. Presenting that image in India will give instant brand recognition and the colors being bright will attract the younger generation. b) Dcor and Architecture:

MARKETING DUNKIN DONUTS INDIA Dunkin Donuts internal dcor and architecture in all its cafs is standardized. The

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furniture includes chairs and tables that are light and easy to move. The seating in India has to be more relaxed and comfy as people like to spend more time in coffee shops. The concept of on the go drinks and food is not very popular unless people are eating from the food stalls on the street. The walls have to have color that reflects Dunkin colors. The doughnuts and other food products will mostly be prepared at the (warehouse- hub) which reduces the size of the store. The store size would be around 1000 square feet with the operational area around 200 square feet. 75% of the is used for customers. In other places like the railway stations or malls or smaller suburban cities smaller stores can open with area around 150 square feet. Place: Dunkin needs to cater to their target market with strategically locating outlet in New Delhi. The first store has to be in a place where there is a lot of traffic movement of the target customer. The stores should be located on the High street, Main Road and Family Entertainment Centers. Also stores in and around Malls, Cinemas, Colleges, and Offices etc. this endorses their brand image of a caf that appeals to coffee lovers of all ages. Dunkin along with Jubilant has zeroed on South Extension I, New Delhi based on population of executives, students and families, disposable income group of people who want to experience a new place, a busy retail area, rapid socio- economic development, commercially important and industrial city and the number of educational and corporate facilities. For the first store launch we have selected South extention I in New Delhi. This place is centrally located for school, office and college crowd. Many shoppers come here as there are many stores around. There is ample parking space as compared to other locations and the public transport system is very well organized here. Promotions:

MARKETING DUNKIN DONUTS INDIA Dunkin Donut has to have mass promotion campaigns in the Press, TV and Radio. Initially Dunkin should be placing advertisement in newspapers, outdoor billboards and radio.

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These are very popular with masses. TV advertisement on channels viewed by target customers like music channels, sports channels and youth oriented shows. Sponsorships of youth events in colleges and outside festivals will work very well as way of familiarizing the market with their products. After 6 months Dunkin can start collaborating with movie theatres where they can mutual promote each other through discount offers. Loyalty card of DD has to be started in the beginning with offers of complementary food or drink if the customer has had five paid drinks. Distribution of Stock The main warehouse supplying office located outskirts of New Delhi for the north zone in Dunkin will be 10,000 square feet. This will also supply to the upcoming stores in New Delhi and neighbouring cities in North India. The first 6 months or so Dunkin will be importing most of the Arabica coffee to maintain the quality. Since the contract will be flexible with Jubilant Food Works, the company will procure coffee locally and eventually roast them after approval from Dunkin Donut. India is exporter of best Arabica coffee and hence procuring locally will save cost. The local company has to research on product development, item development which along with the supply chain with the team of Dunkin Donuts. Human Resources Since the first store opened in Delhi will be opened in a space of around 1200 sq. feet with 75% of the space for customers. The staff needed is shown accordingly. Counter Staff: 3 Store manager: 1 Area Manager:1

MARKETING DUNKIN DONUTS INDIA Regional Manager:1 Support Staff: 5 (including accounts staff) Marketing: 1 (per city) Supply: 1 (material and food in each state/territory) Finance: 2 (each territory/state) HR manager: 1 (all India having a team of atleast 5) Training: Team of 5 (All India) Recruitment & Selection: Dunkin Donuts needs to collaborate with its joint venture partner during recruitments.

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This is an essential step as it would provide base to what the brand wants to project and it needs the right people to show that. The main sources of recruitment are: i. Walk- Ins ii. Referrals Iii. Placement Agencies iv. Personnel advertisements in newspapers, websites. The store staff has to be hired by the following process: i. Collection and review of Resume ii. Personal interviews with H.R. Manager iii. Personal Interviews with Area Manager Training & Development: Dunkin Brands University operates in Braintree, MA, formerly known as Dunkin Donuts University. The training center recently spent $2.7 million to update the exterior and interior of the university. This is the place where the brands franchisees and managers train to

MARKETING DUNKIN DONUTS INDIA run Dunkin Donuts and/or Baskin-Robbins restaurants. The staff from India, a team from Jubilant Food Works has to go to this place for training and learning the service culture. In the university six full-time training professionals deliver and implement the main course by using different learning techniques, including classroom instruction, hands-on lab activities and elearning modules.

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On average, about 600 students attend the University each year in groups ranging from 6 to 35. New franchises from all over the world have taken courses at this facility. The training facility is also committed to environmental sustainability, and has an energy management system, energy efficient lighting, a white membrane roof, advanced heating and air conditioning systems, cardboard recycling receptacles and a storm water management system to help protect the local watershed (Dunkin Donuts, 2011). Financial In 2004, to buy a Dunkin Donuts franchise cost somewhere between $400,000 and $500,000. Depending on the location, it could go up to a million dollars or more. The franchisee was expected to come up with a down-payment of 25 per cent, the rest came from bank financing. Some of them got their first store for $75,000 or $100,000, with a down payment of around $30,000. (Profits, which ran about $25,000 in the early years, had gone up in 2004 to at least $35,000 per store on the low end and up to $100,000 on the high end). (Rangaswamy, 2007) The local franchisee company has to pay Dunkin Donut a country opening fee. Every time a store will be opened there will be a store opening fee with a royalty which is to be paid on sale. The life of the contract has to be 15 years with an option to extend it for another 10 years. Dunkin Donuts has estimated a total capital expenditure of Rs 100 crore ( $19.20 million) for

MARKETING DUNKIN DONUTS INDIA this fiscal that includes opening new stores and setting/relocating warehouse/manufacturing

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centers for the Indian market. Initial cost will be dominated by ingredient cost for the first 12-15 months. Below is the financial expense estimated for the current year. As we did not have much information about operating this in India we have based our calculations on assumption of franchisee business in USA. According to the calculations the breakeven monthly sales needed is $ 88,440. Sales COGS Gross Profit Labor Cost Franchise Fee Utilities Rent Advertising Loan Payment Net Profit $704,000.00 $211,200.00 $492,800.00 $211,200.00 $41,536.00 $21,120.00 $72,000.00 $120,000.00 $167,127.07 -$140,183.07 $880,000.00 $220,000.00 $660,000.00 $264,000.00 $51,920.00 $26,400.00 $72,000.00 $120,000.00 $167,127.07 -$41,447.07 $1,100,000.00 $275,000.00 $825,000.00 $330,000.00 $64,900.00 $33,000.00 $72,000.00 $120,000.00 $167,127.07 $37,972.93

In the first year the COGS is higher due to import of coffee from USA. After 6 months it will planned to be procured from India to reduce the cost. The advertising expenses are very high as mass media has to be approached and the target customers have to be reached in every medium possible. Extensive media coverage requires a lot of funds to be allotted in this area. In the coming four years we have decided to continue with the same budget to be aggressive in

MARKETING DUNKIN DONUTS INDIA media. Labor cost is high in the first year and thereafter it will be as per assumption of 30% breakeven. In 2012 the sales of $640000 annually with an average price of $4.38 per unit sales shows that on an average 146118 units yearly have to be sold. This in turn makes it 12,176 monthly and 405 units daily. The market share estimated after the first year is expected to be 15% as per Chart 2. Conclusion Dunkin Donuts a worldwide franchisee chain launching its first store in New Delhi, capital of India is projected to be a successful brand and show profits in the coming four years. The coffee drinking market potential is huge in India and to cut in the market Dunkin Donuts will not only sell coffee but by positioning itself differently as an all day eatery will be able to

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attract its target customers. Dunkin Donuts estimates to capture 15% of the market share by the year end.

MARKETING DUNKIN DONUTS INDIA References

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EconomyWatch Content. (2010). Indian Economy. Retrieved April 2012, from Economy Watch: http://www.economywatch.com/world_economy/india.html?page=full Press Trust Of India. (2012, March 26). Barista Aims at Threefold Rise in India Revenue in Three Years. Retrieved from Business Standard: http://businessstandard.com/india/news/barista-aims-at-threefold-rise-in-india-revenue-in-three-years/469047/ Coffee Review. (n.d.). Coffee Reference Section:Coffees from India and the Pacific: India. Retrieved March 2012, from Coffee Review: http://www.coffeereview.com/reference.cfm?ID=75 Crabtree, J., Fontanella-Khan, J., & Jopson, B. (2012, January 30). Starbucks Plans $80m Indian Joint Venture. Retrieved March 2012, from Financial Times: http://www.ft.com/cms/s/0/901708e0-4b55-11e1-88a3-00144feabdc0.html Dunkin Donuts. (2011, September). Multi-million Dollar Training Facility is Dedicated to Educating Dunkin Donuts and Baskin-Robbins Franchisees, Crew Members and Corporate Employees. Retrieved April 2012, from Dunkin Brands News: http://news.dunkinbrands.com/dunkin+brands/dunkin+brands+news/dunkin+brands+cele brates+grand+opening+of+dunkin+brands+university.htm Ernst and Young Private Ltd. (2010). Doing Business In India. Ernst and Young, India.

MARKETING DUNKIN DONUTS INDIA HT Correspondent. (2012, 8 February). Jubilant Foodworks Q3 net up 56%. Retrieved April 2012, from Hindustan Times: http://www.hindustantimes.com/businessnews/CorporateNews/Jubilant-foodworks-Q3-net-up-56/Article1-808674.aspx International Trade Administration. (2010, September). U.S. Franchise Trade Mission to India Mumbai, Hyderabad, and New Delhi. Retrieved April 2012, from Federal Register: https://www.federalregister.gov/articles/2010/09/24/2010-23963/us-franchise-trademission-to-india-mumbai-hyderabad-and-new-delhi Mohapatra, D. (2010, July 21). Cafe Coffee Day Looks Beyond South India. Retrieved from

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Business Standard: http://www.business-standard.com/india/news/cafe-coffee-day-looksbeyond-south-india/401971/ Nahra, N. (2010). Global Marketing for Hospitality Executives. USA: McGraw Hill. Rangaswamy, P. (2007, May). South Asians in Dunkin Donuts: Niche. Journal of Ethnic and Migration Studies , 33, pp. 671-686. Tandon, S. (2011, September 10). A New Brew. Retrieved from Businessworld: http://www.businessworld.in/businessworld/businessworld/content/NewBrew.html?storyI... The Influence of Culture on Consumer Behavior. (n.d.). Retrieved 2012, from Free Online Research Papers: http://www.freeonlineresearchpapers.com/impact-culture-consumer-behavior Vaidyanathan, R. (2012, Febuary 8). Coffee v tea: Is India Falling for the Cappuccino? Retrieved 2012, from BBC News Magazine: BBC News - Coffee v tea: Is India Falling for the Cappuccino?

MARKETING DUNKIN DONUTS INDIA Appendix

24

MARKETING DUNKIN DONUTS INDIA Chart 1

25

Present Market Share Percentage

25

Caf Coffee Day Barista

15 60

Others

Chart 2

Projected Market Share Percentage

15

Caf Coffee Day

50 25

Barista Others Dunkin Donut

20