Week 4 Assignment: Hypothesis Testing Paper (Section III)

Carla Spivey

Week 4 assignment: Hypothesis Testing Paper (Section III)

According to statistics brain, the total amount of coffee drinkers in the United States is 100 million (statistics brain). From that 100 million, 30 million prefer to drink specialty coffee drinks like; lattes, mochas, cappuccinos, etc. ("Coffee drinking statistics," 2014) For most people on the go, the question is where do you go to buy a good cup of coffee? Most people will go near and far to satisfy their thirst for a delicious cup of freshly brewed coffee. There are many franchises in the United States that sell coffee; however the most popular are Starbucks and Dunkin Donuts.

Dunkin Donuts was founded in 1950, while Starbucks arrived decades later, in 1971. Not only is Dunkin Donuts is the eldest of the two, it is also the smallest chain with approximately 10,000 stores in 32 countries. On the other hand, Starbucks has more than 17,000 stores in 55 countries, so globally Starbucks is in the lead (SMITH, 2012). According to daily finance, the average cup of coffee at Dunkin Donuts cost $ 1.79, whereas Starbucks cost $2.29, which is a difference of $.050(daily finance, 2011). One thing to keep in mind is that prices vary depending on the region; however it is evident that Starbucks coffee costs more. In fiscal 2013, Starbucks consolidated revenues reached a record $14.9 billion, a 12 percent increase over last year starbucks.com. 2013). For the full-year 2013, the company had franchisee-reported sales of approximately $9.3 billion (Dunkin Donuts, 2013). Dunkin Donuts has earned the No.1 ranking for customer loyalty in the coffee category by Brand Keys for eight years running (Dunkin Donuts, 2013). Consequently, Starbucks has won many accolades as well, including “No. 1 Best Coffee,” Fast Food and Quick Refreshment categories Zagat’s Survey of National Chain Restaurants – 2009‐2011. One of the "Most Admired Companies in America" Fortune – 2003-2012,"Sustainability Design Award" Global Green USA – 2011 and a host of other awards(Starbucks.com, 2013).

Even though Dunkin Donuts has loyal followers, Starbucks is more favored. (Starbucks.com, 2013). Both offers a variety of coffees such as; regular, decaf, lattes, cappuccinos, iced coffee, mochas, etc. Starbucks has over 30 blends of coffee and Dunkin Donuts just over a dozen, but depending on your budget and taste buds will determine what coffee franchise is best suited for you. Each has an atmosphere that appeals to particular crowds of people. It seems that Dunkin Donuts is more “fast food” and appeals the blue collar worker, while Starbucks is more upscale. Perhaps its Dunkin Donuts simple bright and airy décor or it’s easy to understand menu or the fact that their coffee is made to order that is appealing, let alone it is affordable. In contrast Starbucks is shower with a café lounge feel, where people come to sit and socialize for hours. In addition, their menu is more complex than Dunkin Donuts, and your coffee is not served to order, but an individual has to add any extra ingredients like sugar, cream, milk, etc. “According to 2011 analysis from Rasmussen Reports, their phone survey found that 57 percent of coffee-drinking Americans express an at least somewhat favorable opinion of Dunkin' Donuts, including 20 percent with a very favorable view of the chain. In contrast, 49 percent of American coffee drinkers regard Starbucks at least somewhat favorably, with 14 percent who have a very favorable opinion. Thirty-four percent of coffee drinkers hold an unfavorable opinion of Starbucks, versus 22 percent who think unfavorable about Dunkin' Donuts” (Choi, 2012).

Table 1.1 Rasmussen Report (for PowerPoint also)

According to the most recent study conducted by poll daddy, 73 percent of Americans preferred Starbucks over Dunkin Donuts and 54.5 percent preferred to drink regular coffee. Overall Starbucks coffee is a stronger brewed coffee than Dunkin Donuts, which is a lighter blend. For the most, people prefer to drink a robust cup of coffee than a mild blend. With all the various flavored blends of coffee on the market, regular is the most favored in comparison to decaf and other flavored coffees.

References:

About us. (2014). Retrieved from http://www.dunkindonuts.com/dunkindonuts/en.html

Choi , C. (2012, April 02). Do coffee drinkers prefer Dunkin' donuts to Starbucks? Retrieved from http://www.bundle.com/article/do-coffee-drinkers-prefer-dunkin-donuts-starbucks/

Coffee drinking statistics. (2014, 01 01). Retrieved from http://statisticbrain.com/coffee-drinking-statistics/

Our company. (2014). Retrieved from http://www.starbucks.com/about-us/company-information

SMITH, A. (2012, 21 06). Comparing coffee brands – Dunkin’ donuts vs. Starbucks. Retrieved from http://kompareit.com/blog/2012/06/21/comparing-coffee-brands-dunkin-donuts-vs-starbucks/

Thau, B. (2011, 01 25). The perks of brewing versus buying coffee. Retrieved from http://www.dailyfinance.com/2011/01/25/savings-experiment-the-perks-of-brewing-versus-buying-coffee/