Brittany Knowles

Toan Tran

Irene Kim

Jan Quiocho

Jose Rivadelo

Yezheng Zheng
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I. Abstract

All across America, donut stores are found on almost every street you drive past due to their

growing popularity nationwide. Donuts are a highly consumed product that most people indulge

in regularly, whether it be on their morning commute to work or a late night craving. This treat

serves a very wide market, but the industry is highly competitive due to the abundance of stores

that exist in the donut industry. Therefore, certain marketing strategies must be used to

differentiate each donut store from the rest and to retain repeat customers.

Sugarboy Donuts is a family-run establishment located in Frisco, Texas. First opened during

the month of October 2016, Sugarboy Donuts is fairly new to the Frisco area and is searching for

a marketing strategy that will keep customers coming back for more. The current goal of this

business is to gain market recognition and create a client base that will last for the long-run. In

order to develop a marketing strategy that suits this business particularly, research has been

conducted to gather data about the current market that is being served. Based on the data

collected from customer surveys, a narrower market has been determined and marketing

strategies will be strongly directed towards students, daily commuters, and families.

II. Introduction

Sugarboy Donuts will primarily serve donuts, but will also offer a variety of other items.

There will be a wide selection of pastries available until as late as 8:00 p.m. at night, unlike other
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donut stores that usually close before 2:00 p.m. We will offer a large range of assorted pastries

such as clair cakes, kolaches, jelly-filled donuts, blueberry baked donuts, cinnamon rolls, etc.

Not only will Sugarboy Donuts provide a broad variety of donuts and pastries, but these donuts

will differ from competitors due to the process in which they are made. Unlike competitors such

as Dunkin Donuts and Krispy Kreme, our dough is placed inside of a proofer to make the donuts

softer and fluffier.

Besides donuts, there will also be a beverage selection on the menu which will consist of

coffee, tea, and smoothies. For coffee-drinkers, there will be three different flavor options:

caramel, mocha, and hazelnut. Americano espresso shots will also be offered. There is also a

variety of options to choose from as far as how the customer wants their coffee to be prepared.

Coffee can be served hot, iced, or blended. As far as tea goes, Sugarboy Donuts offers bubble tea

and green tea. There will be three flavors of green tea: peach, pomegranate, and mango. For

smoothies, there will be green tea, honeydew, taro, mango, and peach.

Background Facts:

4 Ps of Marketing (Product/Place/Price/Promotion)

It is important to have a wide range of products to choose from in order to fulfill

customer needs and wants. A large product selection will ultimately lead to repeat visits due to

the accommodation for various preferences. Therefore, Sugarboy focuses on breaking previous

perspectives of traditional donut shops to form a new trend in the donut industry. Sugarboy aims

at grabbing a larger market share by staying open longer and offering more modern/unique food
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and beverage choices such as cronuts, bubble teas, customized orders, and a wider variety of

breakfast options.

Unlike competitors, Sugarboy Donuts will take pride in giving each and every customer

something that satisfies their desires individually by providing the option of customized orders as

well. These orders must be made in advance depending upon quantity and requests. Providing a

customization option will allow customers to get the exact product their wanting instead of just

choosing a generic option from a limited menu. Instead, they will receive a product that suits

them personally. This option is great for social gatherings and events.

Sugarboy Donuts is located off of Eldorado Parkway in Frisco near many suburban

neighborhoods and schools, consequentially resulting in a large student and family based market

segment. Due to this location, this store receives many customized orders for student/teacher

events. Eldorado Parkway is also a main road in Frisco, causing many commuters to stop at

Sugarboy Donuts for a quick breakfast before work.

The price of these products range from $.79 cents to $ 4.99 depending upon the item

ordered. Due to the various options offered, prices vary based upon differences in products

allowing customers to pick and choose depending on their budget and needs. The average pricing

specifically for donuts alone is equivalent to the average pricing of Dunkin Donuts which is $ .99

cents per donut. Since Sugarboy Donuts is relatively inexpensive, it is a great place to stop when

feeding large groups or when trying to save money. In other words, this price range suits families

on a budget or students on a tight allowance very well.

Sugarboy also offers special promotions that apply to every customer. A large portion of

these offers are specials that are meant to grab the attention of customers who enjoy saving
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money. First, we focus on delivering EDDM (every door delivery mail) which include three

coupons to choose from: (1) a free glazed or chocolate donut, (2) 50% off our signature menu

items, or (3) 50% off our beverage menu. This promotional method will be very beneficial for

measuring the return rate of customers with EDDM. Since this store is open all day from 4:30

am to 8:00 pm, another big promotion that Sugarboy is offering during the first few months of

opening is happy hour donut specials. Until the end of December, Sugarboy will be offering half-

off of most donut selections from Monday through Thursday between 3:00 pm and 5:00 pm in

order to target afternoon business. Sugarboy Donuts also have active SNS accounts for Instagram

and Facebook to upload new specials and photos of fresh made gourmet treats to entertain and

appeal to customers on social media.

Market Description

In the Frisco area alone, there are at least five other donut stores within the same

proximity as Sugarboy Donuts creating a market environment that consists of pure competition.

Therefore, the donut industry is a very aggressive market to be involved in, especially when

located in a suburban area. Amongst competitors, the largest competition that Sugarboy Donuts

faces is Dunkin Donuts due to their highly recognized brand and their late night hours. There is a

Dunkin Donuts located 3.4 miles away from Sugarboy Donuts, off of Preston Road. However,

based on the online reviews for this specific location, customer service lacks significantly. In

order to stand out from this large chain donut store, focusing on customer service and efficiency

is vital. Treating every customer with care is the key to winning business over Dunkin Donuts.

Also, emphasizing the fact that Sugarboy Donuts is family-owned and operated will definitely

appeal to the market base in this specific location.

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In order to achieve efficiency and obtain an advantage over competitors, there are two

POS machines allowing for a smoother, faster payment and ordering process. One of the main

goals of Sugarboy Donuts is to satisfy every customer by making their visit as quick and pleasant

as possible. Investing in multiple POS systems helps employees quickly access customer

receipts, easily correct any possible errors, and rapidly process customer payments. Employee

training will also emphasize the importance of customer service, so that each and every customer

will walk out with a smile on their face. With this in mind, positive word of mouth should result

from this, creating a free marketing platform that will spread fast. Unlike Dunkin Donuts,

Sugarboy Donuts is significantly smaller in scale, therefore the marketing budget is a lot tighter

than its biggest competitor. Due to this, positive word of mouth will be heavily relied on, making

great customer service an essential.

Customer Base Description

During the weekdays, the majority of customers are students and commuters as opposed

to the weekends where most of the clients are family-based.

Middle school and high school students average roughly about 50% of Sugarboy Donuts

customer base due to their afternoon business between the hours of 1:30 pm and 8:00 pm. Many

of these students are involved in sports and enjoy visiting the store for cold beverages and

refreshers after class, as well as after school snacks. We cater to this specific market segment by

offering happy hour donut specials between 3:00 pm and 5:00 pm in order to increase business

during the slower hours of the day. Many of these students enjoy stopping in for a treat with

friends and usually stay to study or spend time with their peers as a way to get out of the house.
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This specific age group ranges between 14 and 18 years, with a relatively even split between

genders.

Commuters usually visit Sugarboy Donuts between the hours of 6:00 am to 8:00 am

while on their way to work. Some commuters order large quantities in order to bring donuts back

to the office for coworkers and peers. This specific market segment is usually in a rush to work

so efficiency is very important. Most commuters are trying to be in and out of the store as

quickly as possible so that they do not hit rush-hour traffic. This group consists mostly of males

between the ages of 35 and 54 years.

Due to the high concentration of suburban neighborhoods around this stores location, the

majority of Sugarboy Donuts customers during weekend days consist of families. Since most

parents in this area are off of work on Saturdays and Sundays, they enjoy taking their children to

get breakfast on weekend days specifically. This particular group of customers consists of

children between the ages of 3 to 8 years, as well as fathers and mothers between the ages of 30

and 40 years.

Questions Explored:

One of the main questions that we want to eventually answer for Sugarboy Donuts is

How can we compete with other businesses with a larger name than Sugarboy Donuts, such as

Dunkin Donuts? Since leading donut stores such as Dunkin Donuts and Krispy Kreme contain

the majority of this industrys market share, Sugarboy Donuts must create marketing strategies

that allow them to compete and maintain a profitable share of the market.
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Another question that we seek to answer is How can we improve advertising strategies

on a lower-income budget? Since Dunkin Donuts and Krispy Kreme are large-scale chain donut

stores, their ability to advertise is a lot more flexible than Sugarboy Donuts. Therefore, we must

discover methods of advertisement that allow us to compete against large donut stores without

costing a significant amount. Based on the data collected, most customers learn about Sugarboy

Donuts just by driving past. Our goal is to find a way that will attract customers to visit our store

through more efficient methods such as advertisement and promotion, rather than just location

alone.

The last question we would like to explore is, How do we maintain a regular customer

base? Once a customer visits for the first time, we want to discover a method that will work as

an incentive for their return. One way that has been considered is creating punch cards that

encourage customers to come back into Sugarboy Donuts multiple times and rewarding them

with a free drink or donut for their loyalty. This will also aid with our attempts to compete with

other donut stores located in the same area. The goal we hope to achieve is customer retention

and increased monthly visits.

The Ultimate Goal:

The ultimate goal that Sugarboy Donuts is seeking to achieve is improvement upon

advertisement/promotion, as well as obtaining market recognition that eventually leads to a loyal

customer base that visits frequently. Since this is a new establishment, Sugarboy Donuts is

currently in the introductory stage where they must attempt to become known and recognized in
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the Frisco area. The majority of our customer base occurs through random walk-ins as opposed

to strategic marketing strategies that usually result in a larger amount of business. Due to this, the

main goal we are seeking to achieve is increasing our promotions and advertising in order to put

the word out about Sugarboy Donuts. We want to learn how to specifically target our customer

base without relying on walk-ins alone. Therefore, we are developing marketing strategies that

will pull customers into our store by offering more deals/specials, sending out more fliers,

creating reward programs, and providing excellent service in order to facilitate positive word of

mouth.

Sugarboy Donuts is also searching for a better method to respond to competition since

they must survive against huge corporations such as Dunkin Donuts and Krispy Kreme. The

main competition that Sugarboy Donuts must face are highly recognized businesses in the

industry, therefore we must seek an aggressive way to compete. Since larger corporations are

usually less focused on their customer and more focused on the profit gained, the fact that

Sugarboy Donuts is a family-run establishment could be a large advantage in this particular area.

Therefore, emphasizing the fact that this store is a mom and pop business in our advertisements

and promotions will give Sugarboy Donuts a welcoming and authentic appeal as opposed to our

main competitors.
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III. Data

While seeking answers to our main questions, we began conducting marketing research in

order to collect data that will support our future marketing endeavors. Our method of retrieving

the data we were searching for was accomplished through conducting customer surveys. We

distributed these surveys on a volunteer basis amongst checkout. When someone was paying, we

would politely ask each customer if they minded filling out a quick survey. The main variables in

this survey were age and gender of customer, frequency of visits, preferred products, and time.

Most of the questions asked on this survey were based on food and beverage preferences so

we could discover which products were the most successful. There were also basic demographic

questions involving age and gender in order to narrow down our overall market and find out who

visits the most frequently. The last question asked was how the customer heard about Sugarboy

Donuts so that we could get an idea of where the majority of our business was coming from and

while we were conducting this survey, time was paid close attention to in order to assign peak

business hours.
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Advertisement
Online
Friends
Fliers Amount

Drive by

0 20 40 60 80

Types of Donut Time

50 80
40 60
40
30
Female 20 Female
20 0
Male Male
10
0
Cream filled
Old Fashioned Baked Other

Drinks
60
50
40
30 Female
20 Male
10
0
Always Mostly Sometimes Never
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IV. Analysis & Results

Based on the results found from the survey we conducted, we discovered the following:

a narrower market

product preferences

peak hours

where most of our business has been coming from

After analyzing the results from this survey, we found that the majority of our market consists of

students under the age of 18 and commuters between the ages of 35-54. Also, based on

observation, we discovered that a large amount of our customer base consists of families.

When analyzing product preferences, we found that most people prefer the old fashioned donuts

that Sugarboy Donuts serve, therefore this should be a product that is produced at a higher

quantity and is also marketed more. Jelly-filled donuts are also very popular based on the results

determined in this survey. Therefore, marketing efforts will be targeted towards these items

specifically.

As we assumed, breakfast times between 6:00 am and 10:00 am involved the highest amount of

business. Breakfast time was clearly Sugarboy Donuts peak hours, but we are finding ways to

improve other business hours by offering promotions during certain times, such as happy hour

donut specials.
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We also discovered that the vast majority of our business comes from random walk-ins rather

than marketing efforts. 73% of our client base claimed to hear about us through driving past our

store. After discovering this information, we seek to increase advertisement in order to pull

more business directly.

Survey Problems

The main problem faced during the conduction of this survey was lack of time for most of our

morning commuters to take the survey. Many of these customers were in a rush, therefore they

refused to take the survey. This problem may have slightly skewed the results, but we learned

from observation alone that commuters were a large part of our business traffic.

Also, since only 100 surveys were distributed, our results might not be the best representation of

our whole customer base, especially since this survey was conducted within a limited time frame

and the store hasnt been opened long enough to forecast future business seasons.

V. Conclusion

Overall, after extraneous research and data analysis, we discovered that Sugarboy Donuts

lacks in advertisement. In order to improve business, we plan on handing out more flyers to

other local businesses, utilizing social media accounts more effectively, and promoting more

specials to gain market recognition in the Frisco area.

After performing these surveys, we also found that most of our customer base consists of

students, commuters, and families that live in nearby suburban neighborhoods. We intend on
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segmenting this market specifically by directing our marketing efforts towards these three

specific groups. One way to direct our marketing strategies towards these customers would

be advertising and emphasizing that Sugarboy Donuts is a family-run establishment that

actually cares about its customers, making this business stand out from their large corporate

competition. Also deals and specials will be promoted that specifically cater to this market

segment.

The main limitation that Sugarboy Donuts must face is making a small budget go a long way.

Main competitors have better financial means to attract customers through advertising and

promotion, therefore we must rely on positive word of mouth heavily to influence our

business. Due to this limitation, customer service is the one essential key that will

differentiate Sugarboy Donuts from the rest and will need to be a constant presence.