2.  Copyright 2004 Dunkin’ Donuts Espresso Launch: How Consumer Research Led to Success

3.  Copyright 2004 1 “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.” --The American Marketing Association “To deliver a higher standard of living…” --Anonymous Marketer WHAT IS MARKETING?

4.  Copyright 2004 2 195019611970 1974 1981 2001 PAST, PRESENT AND FUTURE

5.  Copyright 2004 3 WHY DO WE NEED MARKETING RESEARCH? Lots of ideas Little information How do we make the best go-to-market decision? What need states are driving consumers? Does it taste good? What should we name it? What will be our sales forecast? Who is our best prospect? What overall experience are consumers seeking?

6.  Copyright 2004 4 WHY DO WE NEED MARKETING RESEARCH? It is only through Marketing Research that "Power Brands" -- brands that layer emotional benefits onto rational product benefits to create a magical marketplace presence -- can be built

7.  Copyright 2004 5 A Consumer-Driven Model… Mindshare Unique versus Competition Competencies Key Consumer Needs Current Equity DEVELOPING SUSTAINABLE ADVANTAGE

8.  Copyright 2004 Our Espresso Research Road to Success

9.  Copyright 2004 7 THE ROAD TO SUCCESS  It was May 2000 when Dunkin' started down the path!  It all began with a Hot Coffee Attitude & Usage Study  Prompted discussion around our coffee messaging and platform offerings  Showed that our customers were visiting various coffee establishments  Identified differences in drivers between younger and older consumers  Provided data illuminating which consumers purchase espresso- based coffee products “most often”  Allowed us to examine espresso-based coffee consumers in terms of habits, attitudes toward Dunkin’ and other brands, lid / cup preferences, and much more

10.  Copyright 2004 8 IN THE BEGINNING…. Four Separate Pieces….. 1.Coffee A&U Results 2.CREST Trend Information (showing category & afternoon occasion opportunities) 3.Datamonitor Market Sizing: Annual Report (showing growth) 4.National Coffee Association Annual Report (showing growth) Lots Of Discussion Mixed Internal Feelings

11.  Copyright 2004 9  Forward to January 2002... see Intense Exploratory Research  Explored consumer attitudes around a potential expansion of our coffee platform: Boston and Chicago markets among Dual users  Qualitatively identified our position in the competitive arena  Identified critical cues around product themes, coffee process, coffee knowledge  Illuminated which consumers purchase espresso-based coffee products “most often”  Shed light -- very importantly -- on the challenges we would face! Again, research led to additional, critical questions: Does our brand have permission to enter this space? Would we seem “me-too?” THE ROAD TO SUCCESS

12.  Copyright 2004 10  July 2002... CREST Custom Overview  Custom analysis of espresso-based coffee drinkers  Confirmation of intense, continued category growth  Identification of regional, gender, age and income skews  Confirmation of daypart hypotheses  Confirmation of take-out percentages (carry out / drive thru) Team still faced critical questions, but the most important one became: What would be the opportunity cost of not entering the space?! THE ROAD TO SUCCESS

13.  Copyright 2004 11  Summer 2002... It’s a GO  MAKE IT HAPPEN mode begins! THE ROAD TO SUCCESS

14.  Copyright 2004 12  Learnings from all previous research projects were brought to the forefront again with a new brand action team  We not only  identified equipment (based on research that told us about the appeal of push-buttons / speed versus the appeal of restaurant quality cues)...  and fine-tuned product flavor options (based on what consumers told us they wanted!)...  and trained crews...  but also developed our all-important positioning THE ROAD TO SUCCESS

15.  Copyright 2004 13 This was paramount! The one place we could not fall down was during our construction of meaningful differentiators and the expression of emotional benefits that would resonate with our target audiences; thus, this learning phase involved even more intense exploratory work... in Boston, Atlanta, White Plains and LA. Our results guided us toward:  Cues... New cups/graphics/POP to communicate coffee credentials  “Democratization"  Simple names... not too sweet  “Taking the pretension out of Cappuccino” THE ROAD TO SUCCESS

16.  Copyright 2004 14 We validated our belief there was / is! a real need in the marketplace for a high quality, affordable, faster line of cappuccino and latte products without attitude (and high price tags) THE ROAD TO SUCCESS

17.  Copyright 2004 15  Phase 1 Research: Hot Lattes -- September 2002  Identified ideal level of sugar  Identified optimal milk type  Measured flavor appeal  Phase 2 Research: Hot Lattes -- October 2002  Examined, for example, whether espresso shot or sugar should be added first THE ROAD TO SUCCESS

18.  Copyright 2004 16  Beta Test Exit Interviews with Callbacks: October 2002  Purpose was to:  Understand levels of trial / awareness generated in-shop  Highlight any service / operational issues  Gauge reactions to products in the "real world" setting  Platform Market Test Forecasting (2002 in Portland, 2003 in West Palm Beach)  Exit interviews  General market phone survey THE ROAD TO SUCCESS

19.  Copyright 2004 17 LAUNCH THE ROAD TO SUCCESS

20.  Copyright 2004 18 Communication Testing, to examine:  How well our advertising was breaking through  How well our advertising was resonating with key targets  The extent to which our advertising was conveying salience and brand momentum WHAT HAPPENED NEXT?

21.  Copyright 2004 19 And then what did we do?  Hot Espresso Barrier Focus Groups (March 2004)  Hot Espresso Adoption Quantitative Work (March 2004) What will we do now?  Yet more intense communication testing... around Iced Latte  Yet more research to understand:  All coffee occasions  Always changing flavor preferences  Always changing and new segments of consumers  Create new and improved customer feedback loops THE RESEARCH ROAD NEVER ENDS!