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Why a Name Change Won't Help Dunkin' Donuts

The recent history of companies trying to shorten their name for branding reasons has not been overly successful.

In 2009, Yum! Brands' (NYSE: YUM) Pizza Hut briefly tried to market itself as "The Hut," which the chain's then-CEO said was an attempt to appeal to the "texting generation," according to CBS News. Consumers mocked the move, probably in part because trying to be hip is decidedly not hip, and at least a little bit because it brought up thoughts of obese space slug Jabba the Hutt from the Star Wars universe.

During that same year, Radio Shack attempted a similar branding campaign, trying to recast itself as "The Shack." That went so well that the company quickly dropped the new moniker before going bankrupt, reorganizing, and then going bankrupt for a second time.

Now, Dunkin' Brands' (NASDAQ: DNKN) Dunkin' Donuts has quietly been testing a name-shortening of its own. A soon-to-open California location will be branded as simply "Dunkin'," without the "Donuts" part of the name, reports Nation's Restaurant News.

Dunkin' Donuts is testing just going by "Dunkin'" at a new location opening soon. Image source: Dunkin' Donuts.

Why is Dunkin' Donuts doing this?

While "The Hut" and "The Shack" were misguided attempts to be cool, the coffee chain has a different idea. It's testing the shortened name to change how consumers perceive the brand.

"While we remain the number one retailer of donuts in the country, as part of our efforts to reinforce that Dunkin' Donuts is a beverage-led brand and coffee leader, we will be testing signage in a few locations that refer to the brand simply as "Dunkin'," according to a company statement to NRN.

And while dropping the word "Donuts" from signs seems like a major step, the company has been doing that in ads for quite a while.

"We have been referring to ourselves simply as Dunkin' in our advertising for more than a decade, ever since we introduced our 'America Runs on Dunkin'' campaign," the company continued.

It's a time of change

In addition to field-testing the name change, Dunkin' Donuts has been making other changes to its menu and its branding. That's being driven by slowing sales increases in the U.S., which have led the company to dial back expansion plans while it hones its model. CEO Nigel Travis spelled out exactly how he sees Dunkin' (Donuts) going forward,

"We are very excited about the progress that we have made on our multi-year plan to transform Dunkin' Donuts U.S. into a beverage-led, on-the-go brand," he said.

To accomplish that goal, the chain has been investing in improved technology and has been testing simplified menus. It has also gotten rid of combination deals in many locations, at least partly as a way to cut down on the items on its menu boards.

It's not about names

Dunkin' Donuts' brand positioning won't be changed because the company shortens its name. The change may not be mocked the way "The Hut," and "The Shack" were. Instead, the company's move will be a bit more like when another Yum! brand, Kentucky Fried Chicken, decided to go by KFC.

Consumers still associated the brand with fried chicken because, well, that's what it sold. Unless Dunkin' drops doughnuts from its menu (which would be a very bad idea), people will see it as a doughnut chain. That doesn't mean the company can't raise awareness of ifs expanded beverage options -- it can and it has -- but it can't easily change a long-held brand image just by shortening its name.

Technology and which products the chain chooses to promote are more likely to affect the company's future than a change in signage will. Being "The Shack" didn't make Radio Shack more relevant, and consumers still remembered that Pizza Hut sells mediocre pizza even when it was known as "The Hut."

Call it Dunkin', call it Dunkin' Donuts, or even refer to it as "Dunkies" as many in the chain's home market of New England do, and nothing changes. Or, to put it a different way, a doughnut by any other name would still taste as sweet.

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Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Dunkin' Brands Group. The Motley Fool has a disclosure policy.