Dunkin’ Donuts and E.L.F. Cosmetics: Brewing Coffee & Style

Sometimes two (or more) businesses collaborate to promote their product or service, this is known as a brand partnership. It is always important to align the mission, vision, and objectives for each brand. Typically, brands that share values allow for more credibility; by combining resources, they can benefit from working together.

Marketing Segmentation

Market segmentation divides a broad market into a much more defined group based on their shared needs, behaviors, habits, attitudes, etc. By dividing and understanding these groups, businesses tailor their marketing strategies into their specific audiences for their product or service; ultimately so, this increases their efficiency and effectiveness. In other words, market segmentation allows marketers to focus on what they have and how they should spend their time to define their target market.

When collaborating with brands, businesses identify common audiences to tailor their messages for the purpose of maximizing impact for both businesses. Take for example Dunkin’ Donuts X E.L.F. Cosmetics in March 2022 titled “E.L.F. Runs on Dunkin’”. The E.L.F. cosmetics company launched a limited-edition makeup collection inspired by Dunkin’ Donuts – by their coffee and of course, donuts!

Both companies have common audiences, appealing to young consumers who enjoy looking fashionable and coffee. According to their website, “E.L.F. cosmetics has a vision to create a different kind of beauty company by building brands that disrupt norms, shape culture, connect communities through positivity, inclusivity, and accessibility” – what a better way than to do so with Dunkin’! Dunkin’ Donuts provides affordable and good coffee, and in my opinion, Dunkin’ has a little more playful flair to its products. 

The collection featured makeup items with names such as “Glazed for Days” lip gloss, “Donut Forget Putty Primer!”, and “Strawberry Frosted with Sprinkles Face Sponge”. The packaging, and probably my favorite part, incorporated Dunkin’ Donuts colors. The tagline of this campaign stated, “Wake up and makeup”, combing beauty and coffee culture. Since the audience was already very similar, they were able to market this campaign on TikTok and Instagram; this included contacting influencers whose content focused on makeup and/or coffee lovers – had I been a major influencer (and not shy in high school), I would have loved to receive this PR package. They also added their joint campaign design which is the E.L.F. X DNKN’ - representing their partnership.

Negotiation

Behind the scenes of creating these campaigns is effective negotiation. Brands must align in everything from the campaign, including their resources, strategies, budget, audience, the campaign itself, and more. The teams behind Dunkin’ Donuts and E.L.F. cosmetics likely negotiated packaging, design, campaign, messaging, and promotional channels to ensure mutual growth. Although I may not know exactly what happened in this meeting, what I can guarantee you is that both brands did their research on the other brand to understand their objectives, challenges, and potential objections.

For example, E.L.F. cosmetics may not have wanted an orange make-up brush since pink is also associated with their branding; but orange being the distinctive color of Dunkin’ Donuts, they incorporated the orange instead (please remember that this is hypothetical). This collaboration probably involved each brand coming prepared with clear objectives, potential scenarios of disagreement, and solutions to address their possible objections. By setting expectations they insured clarity on what they both wanted and minimized surprises or misunderstandings throughout the partnership. This establishes a clear purpose for the collaboration and creates a deeper relationship for both brands.

Using Empathy

Another key role and brand collaboration is having their businesses understand and connect with the audience. By focusing on the shared values and desire outcome of each brand, they can create a campaign or a message that resonates deeply with their audience or consumers. For example, in Dunkin’ Donuts and E.L.F. cosmetics demonstrated empathy and self-expression by creating a campaign that made their audience feel seen and valued. They achieved this through fun packaging, creative designs, product names, and relatable (and trendy) messaging.

Customer Loyalty

What does this have to do with the audience? For brand collaborations to be successful, there must be a relationship with their current consumers. By segmentation, brands gain insights to the specific needs, behaviors, and values of their audience. As mentioned, knowing this information is key to truly understand an audience, allowing them to feel appreciated and acknowledged. The example of Dunkin’ Donuts X E.L.F. Cosmetics developed a stronger relationship, especially to the younger Gen Z audience who value self-expression and creativity.

These types of brand collaborations are relevant because it encourages customers to feel more inclined to both (or more) of the brands involved. Such as Dunkin’ coffee lovers, who bought the Dunkin’ Donuts X E.L.F. Cosmetics collaboration, might tend to stay loyal to both brands since it made them feel valued. However, it is more important for these customers to remain loyal.

I personally feel as if people overcomplicate what it takes to make someone feel good, and in my experience, it does not take much. The way companies like to show their care for you is mainly with a CRM (Customer Relationship Management software) where they will provide you with extra discounts or my personal favorite: freebies.  When companies send you an email saying “happy birth month! Get a free (something), limited time only”, it makes you feel good, I know it makes me feel appreciated. I go on a freebie hunt to Starbucks, Dunkin’, Crumble, and all these other places that offer me a free product/service. This may not seem like much, and it might be overlooked by a lot of people, but it is likely one is and will remain a loyal customer of the product/service when they get special rewards as such.

In addition, the companies have so much information based on what you have purchased. Many companies will send you an email after buying a product saying, “We noticed you like this product (or left it in your cart) … we also have this product we think you might like”.  Sometimes, it might not even be this direct. Dunkin’ Donuts has a social media account, I am referring to the one on Instagram, and they post products all the time; however, lately their posts have been engaging so many people, because they are often memes. This sort of communication connects with younger viewers and for most, especially if they never had that product, would be inclined to try it. Ideally, they like the coffee, they like the brand and remain consistent with their purchases of that company.

Many companies also hold a contest of some sort, and although most of the time they are “free”, you have to ask yourself “what is free?”. People love to win movie tickets, concert tickets, merchandise, etc.; but in order to win, you need to read the fine print. Instructions usually tell you to add your phone number, and email, provide a U.S government ID, be over the age of 18 or 21, follow certain accounts on social media, must be public on social media, comment under the post, and other restrictions. By providing all of that information, you have successfully managed to be on their list, giving them permission to email you and segment you for future marketing campaigns. Dunkin’ Donuts held a Soundtrack of Summer Sweepstakes in July 2022, and the poster enticed so many consumers to sign up; in other words, many people willingly gave their information to Dunkin’, engaged with Dunkin’, were made aware of limited time deals to then purchase Dunkin’, were likely to spread the news to their friends, and remained connected to Dunkin’.  A one-time participant can turn into a regular customer if the strategies, personalization, and other marketing efforts work efficiently and effectively.

In my opinion, what people want and look for the most, is a feeling. When Dunkin’ partnered with E.L.F. cosmetics, they gave a sense of belonging and self-expression. How many times have you smelled a tasty desert and remembered how good the moment you were in was? Notice how I’m not talking about the desert itself. In this campaign people chase that feeling of feeling confident and it is the brands responsibility to continue that feeling throughout the duration of the collaboration. When the campaign is over, most people still rely on the brands to make them feel this way in an individual manner; thus, this helps create a loyal customer.

Pricing

There are different types of pricing strategies that brands can use to create mutual benefits for both or more collaborating companies. In the example of Dunkin’ Donuts X E.L.F. Cosmetics, they likely used a mix of bundle pricing, dynamic pricing, and psychological pricing.

Companies can sell their products at a certain price, but when bundling items—especially with products from other brands—they can highlight the combined price of individual items versus what the bundle will cost. This strategy ensures customers see a clear advantage to purchasing the bundle because it offers more value at a lower cost per item. For example, in the Dunkin’ Donuts X E.L.F. cosmetics campaign, consumers felt they are getting a lip gloss and a refillable Dunkin’ Donuts cup for less money than if purchased separately.

Additionally, many companies consider competitor pricing and use dynamic pricing to adjust costs based on market and customer demand. For collaborations like Dunkin’ Donuts X E.L.F. Cosmetics, they likely investigated competitor markets and took note of how much they cost and if there is success in their competitors’ products.

Lastly, creating these collaboration bundles often establishes an emotional connection with the audience, which encourages them to make a purchase. This is where psychological pricing plays a role—it targets human thinking and psychology to boost sales. For instance, if the Dunkin’ Donuts X E.L.F. Cosmetics bundle costs $49.99 instead of $50, it makes customers perceive it as a better deal, even though it is literally just a penny of a difference. Similarly, the limited-time nature of the collaboration creates a sense of urgency, prompting customers to act quickly to secure the exclusive items.

Pricing is a very delicate matter because it needs to appeal to both the brands audiences without alienating them because of a cost mismatch.

Brand collaborations can capture the attention of the audience by staying true to their values and finding brands that align with their values. It is also important to make the audience, and consumers, feel important and acknowledged. Nowadays, people crave authenticity and meaningful connections, and that is what will make any consumer loyal.