Sample Business Essay on Developing a Market Niche

Developing a Market Niche

Dunkin’ Donuts has rapidly expanded into a national coffee chain competing head-to-head with Starbucks, the country’s leading coffee powerhouse. Dunkin’ conducted simple research to identify its target segment’s needs and serve them better. Dunkin’ and Starbucks target distinct customers who want entirely different products and services. While Dunkin has positioned itself to serve people of all demographics at a reasonable price, the coffee house recently upgraded its stores and introduced new menu items. Though Dunkin’ Donuts faces a highly competitive environment in the coffee industry, it has repositioned itself to stay true to the needs and preferences of its target audience.

Marketing Approach Taken By Dunkin’ Donuts

Dunkin Donuts uses a customer-driven marketing strategy, which entails components such as identifying the target market, reacting to their needs, and maintaining their loyalty to increase sales. Dunkin’ understands that it cannot make everyone happy all the time; hence it has segmented its market carefully. In the case study, the company targets a specific market segment: the average Joe. As such, the enterprises’ customers include more middle-income blue-and-white-collar workers across all ages, races, and income demographics (Armstrong & Kotler, 2013). After identifying its best target segments, Dunkin’ upgraded various elements of its marketing mix, including product offerings and physical stores, to enable it to position itself firmly among its target customers. By targeting a specific market segment, Dunkin’ can focus on serving its best customers better.

Best Practices in Marketing

The success of any business, whether big or small, depends on effective marketing. Companies with the most successful marketing campaigns understand their target markets and adjust their offerings to meet the market needs and preferences. Companies that identify their market segments and collect feedback through market research are likely to succeed in their marketing objectives. Through market research, Dunkin’ Donuts was able to identify its target segment, their needs and preferences hence serving them better. The research and development team continually conducts market research to identify new market needs and improve its customers’ restaurant experience.

Dunkin broke the mold by concentrating on a customer-driven marketing strategy. Specifically, Dunkin Donuts used marketing research to identify customers’ needs and respond to them accordingly (Armstrong & Kotler, 2013). The company’s research revealed that the customers preferred Dunkin’s atmosphere. Moreover, Dunkin learned that customers prefer affordable prices. Such customer information enables Dunkin to fully understand its target market’s needs and how best to meet them. Therefore, even as Dunkin upgraded its stores, it was careful not to alienate its traditional customer base since, as Schachter and Cheatham posit, developing and managing long-term relationships with the traditional customer base is a critical component of success in the modern business world where interpersonal contacts vary greatly (2015). Forging long-term relationships with customers enabled Dunkin to better understand its business objectives and thus deliver solutions in line with the strategic goals. The more Dunkin understood its customer base, the easier it was to devise appealing products and services.

Best Practice Research

Successful market research can furnish companies with the information they need to fine-tune their products and services. For decades, marketing research has kept Dunkin Donuts appealing and relevant to people worldwide. In the attached case study, the company conducted marketing research specifically to gain insights into customers’ needs, tastes, and preferences. The information gained enabled the company to understand its customers better. The result was that the company introduced new products and services to directly meet the target market’s needs better than competitors. The case study revealed that Dunkin Donuts followed the primary research approach. Dunkin directly collected information from the sources, who mainly included the company’s customers. It involves asking customers results-focused questions to determine business goals and objectives (Schachter and Cheatham, 2015). There are various primary research approaches used by businesses and organizations to collect information. They include interviews, surveys, focus groups, and observations. Dunkin Donuts conducted marketing research with the help of surveys.

The market research process involves three key steps. In the case study, problem definition was the first step of the research process. Dunkin Donuts wanted to understand its target market’s tastes and preferences so that it could serve them better. The second step involved choosing a research design. Dunkin followed the primary research method. Specifically, the company used surveys to gather relevant information about customers’ knowledge of the Dunkin brand, their satisfaction level, and preferences. The final step involved data collection and analysis. Dunkin collected and documented all the answers from the surveys. The information collected informed the company’s decision to upgrade and refine its in-store atmosphere and features in order to compete head-to-head with Starbucks. Due to this research, Dunkin’ gained in-depth knowledge of the customers’ overall purchasing behavior and attitudes (Schachter and Cheatham, 2015). The company learned that customers choose a coffee or doughnut shop based on three key factors: affordability, variety, and quality. The company’s business is built around these attributes. Dunkin Donuts realizes that it takes a commitment to market research to meet the customers’ expectations.

Dunkin’ Donuts Carved Out A Niche in The Market

Companies can employ various strategies to get ahead of their competitors. These strategies are often based on providing better products and services than rivals provide. One such company that has successfully managed to stay ahead of the competition is Dunkin Donuts.  Many Americans have sampled the Dunkin Donuts brand through many of its outlets spread across the country.  The Dunkin brand has carved out a niche in the market by positioning itself head-to-head with the nation’s largest coffee chain, Starbucks (Speakman & Ryals, 2012). According to the case study, Dunkin Donuts has started offering products and services that were previously exclusive to the Starbucks brand. For instance, all the Dunkin’ franchisees have redecorated their stores in the various Starbucks-esque color schemes, such as “Jazz Brew,” “Cappucino Blend,” and “Dark Roast.” Moreover, Dunkin’ stores have incorporated new atmospheres and in-store features commonly associated with the Starbucks brand. Such include cozy booth seating, digital menu boards, free Wi-Fi, and electric outlets for laptops. Though the company has made numerous changes, it has maintained its original vision so as not to alienate its loyal customer base. Dunkin’s latest attempts to re-brand itself are aimed at beating Starbucks.


Launching and growing a company in competitive markets is challenging. However, businesses can differentiate themselves and attract masses of customers by concentrating on a niche market. Identifying a niche market and fulfilling its needs can be an easy way for a business to thrive. There are three steps to developing a market niche. The first step is target audience selection. Niches are identified from the general market. The second step involves defining an underserved or unmet need. The target audience must be analyzed to establish gaps in the market. After identifying a target audience and the unmet need, a company must market to it. The marketing campaigns must target the chosen target audience to trigger their interest in the niche business idea.


Armstrong, G., & Kotler, P. (2013). Marketing: An Introduction (11th ed). Upper Saddle River, NJ: Prentice Hall.

Schachter, L. and Cheatham, R. (2015). The Keys to Key Account Management: What Great Looks Like.

Bacon, J. (2019). Categorizing and Selecting Key Accounts and Customers.

Speakman, J.I.F., & Ryals, L. (2012). Key Account Management: The Inside Selling Job. Journal of Business & Industrial Marketing, 27(5), pp. 360-69.