Contributers: Hannah Ake, Jasmine Alanis, Samantha Bennett, Lindsay Ruongrat
Ian Kelley, CEO and owner of Sugar Shack Donuts, opened the shop in June 2013 in his hometown of Richmond, VA. Ian’s vision came to life when he stumbled upon a building for lease near the same area he coached soccer. This building later became the first and original Sugar Shack location offering a variety of fresh, specially crafted donuts, and coffees, and other specialty drinks (Sugar Shack Donuts, 2018). Sugar Shack became an instant hit, and the company was able to expand into more than ten locations throughout Virginia.
What sets Sugar Shack apart from competitors is their mission to keep each store locally operated, and their focus and commitment in community. Each Sugar Shack location is unique to its surrounding area. Sugar Shack uses fresh, locally grown ingredients in their recipes, supporting local farmers, but also adding a unique factor in each item they serve. Certain ingredients are only available seasonally, or in specific regional locations.
The donuts and coffee are made in small batches, throughout the day, to ensure the freshest possible product. Not only does Sugar Shack offer a variety of traditional donuts, such as glazed, chocolate, or sprinkled, they have become known for their inventive and quirky donut flavors. To name a few, you may find a donut on the rotating menu that could be a maple donut with bacon pieces on top, a mint mojito donut, or even a “Samoa” donut. Specialty drinks include: fresh ground coffee, espresso drinks, and teas.
Sugar Shack opened its location in Fredericksburg, VA in September 2015, just around the corner from University of Mary Washington’s campus. The donut spot quickly became popular amongst local college students and residents of the area through word of mouth and by offering special sales promotions. They have managed to integrate themselves into the community, seamlessly.
Sugar Shack’s marketing mix includes word-of-mouth, social media, sales promotions, and sponsorship of community events. To learn more about effective marketing strategies and consumer habits, four UMW students conducted a focus group in Marketing Research on Sugar Shack, with the expertise and assistance of Professor Kashef Majid. Qualitative analysis revealed five themes while conducting the focus group. Eight focus group participants expressed opinions related to awareness of Sugar Shack, sales promotions, loyalty, alternatives and competitors, and overall perceptions of Sugar Shack.
One of the key themes the focus group revealed was awareness. Many of our participants expressed their awareness of Sugar Shack as being mostly from word-of-mouth. UMW students who had previously been to Sugar Shack, heard about it from a friend or fellow student, and most were not aware of other locations. The awareness aspect coincided with the level of knowledge related to sales promotions and how they discovered the shop.
To understand Sugar Shack’s current marketing strategy, students were asked about knowledge of sales promotions held by the shop. Students who were unaware of sales promotions, had also never been to Sugar Shack or only visited one time. One student mentioned going with a friend and seeing a special promotion they had that day, but would not have known about it otherwise.
The frequency of visits to Sugar Shack varied amongst the focus group. Loyalty was evaluated as a theme to describe the frequency of visits by the participants. Many students said that they would not go to Sugar Shack alone; they are more likely to go with a group of friends. Loyalty to Sugar Shack varied amongst the students. Being right around the corner from UMW, one student said she would walk all the way there for a donut, but another student said they would only go there to get donuts for a special occasion.
To understand the position of Sugar Shack in the Fredericksburg market, students were asked about the shop and used comparisons to other donut shops in the area. This helped to understand alternatives and competitors to Sugar Shack. One student mentioned the lighting in Sugar Shack to be very bright, as opposed to Starbucks where the lights were dimmer. Another student appreciated the freshness of Sugar Shack over other competitors, such as Duck Donuts. The uniqueness of Sugar Shacks donuts presented a competitive edge over the others, making presentation of their donuts a key ingredient in their marketing strategy. Price emerged as a sub-theme in understanding their position. Many students agreed that pricing of coffee at Sugar Shack was high for the quality compared to other more established shops, such as Hyperion or Agora.
The last theme that emerged during the focus group was perceptions. Perceptions of Sugar Shack varied, based on different experiences. A few of the focus group members mentioned improving seating both indoor and outdoor to make a more pleasant experience. Participants also expressed a “locally owned” feel that they get from going to the shop, but the one thing that stood out throughout the group was the impressive, unique, handmade donuts.
Themes and Results
Although the findings from this focus group are complex and limited in that we only had eight participants, it is important to discuss the implications. In order to measure awareness, we asked “Have you guys heard of Sugar Shack? And if you have, how did you hear about Sugar Shack?” (Bennett, 2018). Every single person stated that they heard of Sugar Shack through word-of-mouth except one person who hadn’t heard of Sugar Shack until participating in the focus group. This proves how effective word-of-mouth really is, especially for smaller and close-knit communities such as the University of Mary Washington and the surrounding college heights neighborhoods. Additionally, we found that many of our participants thought that the Fredericksburg location was the only one in existence due to the strategic local feeling it gives to customers. This level of awareness is not crucial, because as University of Mary Washington students, we all live and/or spend a lot of time in the Fredericksburg area. A few of our subjects knew there were more locations but did not know where, and two knew of the one in Richmond.
However, in combination with the theme of sales promotions, most of our participants were not aware of Sugar Shack’s fun promotional opportunities. We asked, “Have you guys seen on social media, or anywhere, of promotions they have? Are you aware that they have promotions?” (Bennett, 2018), and one participant responded with, “I’ve heard that they have promotions, but I haven’t seen them for myself. But, I’ve been there before with friends who said they have a free donut of the day” (Leckrone, 2018). There is undoubtedly a large population of Mary Washington students who take advantage of the creative and very generous sales promotions that Sugar Shack offers on a daily basis. However, this focus group has proven that not everyone is fully aware of them. We then asked, “Has anyone seen someone do the strange things required to get a free donut? What was your experience?” (Bennett, 2018), and one response was, “one was like if you’re wearing the color of a cow, or like if your name starts with a ‘J.’ I would just go with my friends so I could get a [free] donut” (Exum, 2018). None of our participants claimed to have participated in Sugar Shack’s sales promotions; however, this was probably due to lack of awareness of how simple it is to get a free donut.
In an attempt to learn what might entice consumers to come to Sugar Shack more often, we asked some questions about loyalty and interest. First, we asked “what would entice you to go to Sugar Shack more? Is there a specific promotion you would take advantage of? Would you guys like Sugar Shack to be mobile? What stops you from not going to Sugar Shack?” (Bennett, 2018). One response stated, “when it’s just you or like one friend I don’t really think to myself, I’m going to Sugar Shack…because, I know if I go I’m not going to get just one. And, if it’s just me and like maybe one friend, and like a whole like six things of donuts, I’m going to feel [really] bad about myself and… I’m going to come off like, a crazy sugar crash, and have a headache” (Adams, 2018.) It is common knowledge that donuts are not healthy and with America’s current health trend, many people are trying harder to avoid heavy food like donuts.
With Sugar Shack’s specialty being donuts, we found that some people avoid going there alone and would prefer to go in a group so they can order a half dozen or so, each pick one and not feel so guilty for stuffing their face with a donut. We believe that this is because donut eating has suddenly changed from a secret guilty pleasure to a social event. Jacob Adams also went on to say that “bringing donuts in for work…that’s a good time [for them], but that doesn’t happen but like once or twice a year, maybe” (2018). This statement also tells us that donuts are often enjoyed in groups of people, in a work or social setting, or even an event of celebration. We found that the majority of our participants would rather go to Sugar Shack to purchase a half dozen or more donuts to share, rather than one or two, because it makes the trip worthwhile. We wondered how consumers would feel about Sugar shack expanding their menu; so, we asked, “if Sugar Shack was offering nutritious things like, bagels, fruits, to go with their donuts, would you consider going to Sugar Shack more?” (Bennett, 2018). In response, the entire group simultaneously nodded their heads and said “yes.”
The consensus of the time of day our participants are most likely to go to Sugar Shack is quite widespread. A few said they would “settle” for donuts on their way home from dinner in downtown because it is convenient, especially when walking back to campus (Exum & Adams, 2018). Bryce Brown stated that he is most likely to go in the morning time but would be interested in a “sandwich or breakfast meal,” rather than just a donut (2018).
When we asked, “After a night of drinking, if they were still open, would you consider going to Sugar Shack to get all the different types of things they have there, like specialty drinks, or donuts? Is that something you would be interested in at 2 in the morning?” and our participants seemed intrigued of the idea but do not think it is something they would actually take advantage of. Jeffrey Leckrone said that “getting a donut is always an impulsive thing…[but] if the option is there…then more people might go” (2018). Since consuming alcohol clouds judgement, some people may be more impulsive which could lead them to wanting a donut in the middle of the night. However, keeping the store open that late may not be feasible as it would increase costs, meaning that it probably would not be worth it due to lack of full commitment. Through these findings, we believe that the current hours of operation are fitting for the type of business Sugar Shack is. We also asked our participants if they would consider purchasing from Sugar Shack more often if they delivered. None of them were super enthusiastic about the idea, plus it can be costly to incorporate delivery service to a smaller chain such as this one.
To learn about their behaviors while visiting Sugar Shack, we first asked, “who would you go with? What other people would entice you to go to Sugar Shack?” (Bennett, 2018). Zachary Mayhall said “it’s definitely something you would go with your friends. Which I’ve done before…I’ve also gone as a date. I wouldn’t go by myself, I would feel more guilty about eating a giant ring of cake by myself” (2018). Once again, it is clear that consumers are much more likely to go with at least one other person than to go alone. Donuts are a fun treat, they’re not for every day consumption, which may explain why people tend to go in groups or pairs. Even though Sugar Shack does serve coffee and other specialty drinks, it is not what they are known for and some consumers may not even be aware of this. Additionally, if a consumer is going to spend $4 or $5 on a coffee, they would prefer to go somewhere they know and trust; humans are creatures of habit.
Finally, to measure how long consumers may spend at Sugar Shack or similar places, we asked, “when you go to a donut shop, are you staying at the donut shop, or getting your drinks and donuts, and walking out? (Bennett, 2018). This seems to depend on the motivation for going, as well as the store. If someone goes in with a group of friends to grab a snack, they tend to hang out there. Or, if the weather is nice and they bring a date, they will most likely sit outside at Sugar Shack to spend time together. However, if someone happens to be walking by and decides to grab a donut and a coffee they will most likely take it to-go, especially if they are alone.
We asked focus group members about their most memorable experience at Sugar Shack to measure their perception and how they associate Sugar Shack to emotions. Caitlin Exum described visiting the shop in the winter, “I remember one time, it was like snowing, and it was really cute. The donuts were fresh, and I got one with a gingerbread man on it, and it was so cute. It just felt very [nostalgic]” (Exum, 2018). Other focus group members shared that Sugar Shack’s donut presentation beat out its competitors, “Of all the donuts I’ve ever had, these look like the most majestic. They have candy on top of them, and glaze running down. And that’s a full piece of bacon on there. That’s terrific! You can tell someone in the back put that on there. You know what I mean. That didn’t come out of the freezer or wherever else. I appreciate that. I appreciate the artistry” (Adams, 2018). There was a general consensus among participants that Sugar Shack was known for its presentation and quality. Their donuts invoke positive memories and emotions; participants beamed as they shared their stories on visiting the shop.
The majority of our participants when asked, “Who would you go with? What other people would entice you to go to Sugar Shack?” (Bennett, 2018), agreed that Sugar Shack is place you go with your friends. “It’s definitely something you would go with your friends. Which I’ve done before, let’s hang out and get a donut. I’ve also gone as a date, just kind of stopping in kind of thing. I wouldn’t go by myself. I would feel more guilty about eating a giant ring of cake by myself” (Mayhall, 2018). One participant disagreed with the date statement, “I probably wouldn’t go as a date, because there’s really nowhere to sit outside. And I feel like it’s really weird to sit outside a lot of the times there, because it’s like right on the street, everybody’s coming in and out really quick” (Exum, 2018). We found that the lack of seating did hinder the perception of Sugar Shack for our focus group participants.
On numerous occasions, a lack of seating was mentioned during questioning. “Part of the problem is… there really [is] no sitting area inside the restaurant” (Mayhall, 2018). “The only place to sit, like we were talking about, is outside. It was an old gas station and it’s next to the gas station, the only place really to sit is on those benches right outside. And you’re right off the road” (Adams, 2018). Caitlin shared her input on the seating as well, “…You know how I said that I go there a lot at like night time, and being a woman, you get yelled at by cars, and stuff, so if there were places to sit inside, maybe I’d stay. But I do like get a donut and run” (Exum, 2018). A lack of seating did bring out a negative view of Sugar Shack, but at the same time, those that criticized the seating also stated that it does not change their loyalty or frequency to Sugar Shack.
On the theme of competitors and alternatives, our group found that one student was completely unaware of Sugar Shack’s presence, but this was due to the fact that he only drove down Route One. He also only knew of one of Sugar Shack’s competitors, Duck Donuts, because it is located on his commute to school. “Honestly, I didn’t even know it existed. Like, past Duck Donuts, I didn’t even know there was another donut shop out here” (Dubnowski, 2018). He also stated that he doesn’t support Duck Donuts, “I don’t really go to get donuts or anything, but if I do, I’ll go to Giant and get a 12 pack of Krispy Kreme’s” (Dubnowski, 2018). Another participant stated that, “…Duck Donuts is super bright and almost looks clinical. And, then you have Krispy Kreme, which looks like a factory for donuts, which is basically what it is. But then, like Starbucks is darker, it’s not gloomy. It’s more tranquil.” (Mayhall, 2018). What we learned from this is that Sugar Shack’s competitors all have negative perceptions associated with them.
In response to the questions, “After a night of drinking, if they were still open, would you consider going to Sugar Shack to get all the different types of things they have there, like specialty drinks, or donuts? Is that something you would be interested in at 2 in the morning?” (Bennett, 2018), many participants agreed that donuts and Sugar Shack were not the first thing to come to mind after a night out like the one described. “Yeah, I’ll want to go to like Taco bell” (Reynolds, 2018). “I don’t know if I’ve ever come back from the bars downtown and really thought to myself “After a night of drinking, I really want a donut” (Adams, 2018). This was useful to know, because it means that in this situation, Sugar Shack is not losing any business to its competitors.
Again, there was a general consensus that Sugar Shack stands out from its competitors or alternatives, “Once you go inside, there’s no way it could be a big chain. It doesn’t feel like the way a McDonald’s feels. Or like Krispy Kreme. Or Duck Donuts. I know where Duck Donuts came from, I’ve been to their original location, they all look the same. Sugar Shack has that board in there of all the things going on in the local area, which you don’t really see at Duck Donuts, or other places” (Mayhall, 2018). Sugar Shack manages to be a chain that blends into its environment, and they are successful at that based on the responses we received.
When asked, “do you take presentation into consideration when choosing a donut?” (Bennett, 2018), a participant responded, “I would say wholeheartedly. Since I’ve been to both Sugar Shack and Duck Donuts, my one experience going to Duck Donuts here, would be the last one. Like if you look at the icing it’s not coming off it’s not falling off. As she eats the actual donut the icing goes with it. It’s not like she can take it off like it’s a bun or something. I’ve had that happen at Duck Donuts when fresh made donuts you can take the icing off the whole thing it’s not even attached. I would say if it looks gross; I’m not going to eat it. It’s a donut, let’s call it what it is. It’s not healthy it’s not nutritious. It’s kind of already gross. So, it shouldn’t look gross. I had my first bacon donut 4 or 5 years ago, and I thought it was going to be terrible. It was excellent! The presentation really does matter. If it looks like someone put zero effort into then I’m going to put zero effort into paying for it” (Mayhall, 2018). The respondent also later continued with, “…With Krispy Kreme or Duck Donuts you can tell if it’s been reheated…” (Mayhall, 2018).
When asked about coffee related competitors, “A lot of you guys are drinking coffees, where do you go when you’re going to go out for coffee, and how do they compare to Sugar Shack, if you’ve ever tried their coffee?” (Alanis, 2018), respondents mentioned Hyperion, Starbucks, and Agora. “It really varies where I am. If I’m in Old Towne, I’ve been to Hyperion. I have a friend that works at this other place that has a bar in it” (Mayhall, 2018). Jacob added, “If I’m to pay $4 or $5 for a cup of coffee, whatever it is, if I’m on Route 1 or whatever I’m going to Starbucks, or if I’m downtown I’m going to Hyperion. That industry as kind of like, already been established. If I’m going to pay that money, and not have it at home, there’s not really another place that I’m going to go to. It’s like I know what I like. I know what I’m comfortable with. Having lived here for the majority of my life, it’s hard because it’s not really my opinion. It’s the opinion of my parents, my friends, my grandparents. If you’ve lived here long enough, if you’re going to go pay a crazy amount of money for coffee, those are kind of the two places you’re going to go. It’s pretty established. (Adams, 2018).” Emily built off on that and agreed, “If I’m going to walk downtown I’m either going to go to Hyperion, or Agora. Hyperion for the atmosphere or Agora for the familial tides and stuff like that” (Exum, 2018). This showed us that Sugar Shack is not a favored destination for coffee or drinks, but this does not deter participants from their loyalty to Sugar Shack.
Discussion and Recommendations
The themes we chose were awareness, promotions, loyalty, alternatives and competitors and perception of Sugar Shack. We started with awareness. We noticed very quickly, at the beginning of the focus group, that several people had heard of Sugar Shack but had no idea what it actually was. There was one student who had not even heard of Sugar Shack until Dr. Majid mentioned it on the first day of class. Sugar Shack prides themselves on advertising through social media and word-of-mouth. They want to stay a small family owned business and they felt the best way to achieve this was by keeping advertising simple.
Next, we discussed sales promotions. Sugar Shack is known for their unique promotions that include people doing strange things to earn a free donut. For instance, one day Sugar Shack will ask customers to do 20 jumping jacks for a free donut, or if you come into Sugar Shack dressed up for Halloween you can earn a free donut. Most of our focus group members have never taken part of these sales promotions or have never witnessed anyone do strange tasks for a free donut. Only one member said she went to Sugar Shack with a friend who wanted to participate in the promotion, but she did not partake herself (Exum, 2018).
Loyalty is very important when it comes to small family owned businesses. One focus group member mentioned that he likes Sugar Shack but does not go very often because he does not feel great after eating it. He gets a sugar high and then comes down from that high and gets a headache. When asked if Sugar Shack sold other items besides donuts, such as breakfast sandwiches, fruit cups, or more nutritious items, would they go more frequently, the group all answered yes. Something else we noticed was the time of day our focus group went to Sugar Shack. A lot of our participants tended to go in the evening. When most people think of donuts they think of breakfast time, but our focus group members tended to go in the evening to get a donut for dessert or a snack after being downtown. We also found it interesting that many of the focus group members who did not eat Sugar Shack said they would eat their donuts more if they delivered. Whether it be UberEATS, Grubhub, or Sugar Shack’s own delivery person, our members said they would eat the product more if it was brought to them.
Several focus group members reflected on the perception of Sugar Shack. One member mentioned he likes the look and feel of the restaurant but, he does not like that he cannot sit down to eat his donut inside. He felt as though he did not put much thought into the perception of Sugar Shack because he spent so little time in the business. The biggest perception that everyone agreed on was that Sugar Shack has a small family business feel. Several members went on to add that they liked how Sugar Shack had a board with the upcoming local events and local news. Others went on to say they liked the chalk art that was all around the restaurant. The group agreed that a good effort was put into the quality of each individual donut. Several group members went on to say they hope to see Sugar Shack more involved in the community, agreeing that Fredericksburg is a close-knit community and being more involved would be good for business.
While Sugar Shack did not originate in Fredericksburg, the business was adopted by the people of Fredericksburg as one of their preferred donut shops. Ian Kelley, the CEO of Sugar Shack, takes pride in buying local fresh ingredients for their donuts and coffee and being involved in the community. Sugar Shack is also known for their products being as fresh as possible. Very small batches of their products are made throughout the day to ensure freshness to the customers.
This entire process of running a focus group, transcribing, writing a paper, and presenting in front of the CEO of Sugar Shack has certainly been a learning experience. Although the initial conversation was difficult, as soon as the group started talking, everyone became more comfortable and started giving detailed answers to the focus group questions. New marketing related questions developed based on the answers that were given by the group. After the first 15 minutes, we moved through the task smoothly and thoroughly, because people became more involved and engaged in the topic There were a few focus group members that did not answer very many questions and therefore we did not gather as much information as we would have liked.
Recording the focus group conversation was the most challenging part of the assignment. One team member took on most the transcribing duties. She was, by far, the fastest typist and had done this sort of work in a previous job. The task of transcribing was made more difficult because some members mumbled during the discussion and it was challenging to understand what they were saying. Other members talked very quickly and the recording had to be re-winded to catch what the fast talkers were saying. Writing the paper, however, went smoothly. Transferring the information into a well thought out report was just a matter of planning and evenly dividing up the work. The knowledge gained through this project was substantial. Learning how to properly ask marketing related questions will help those of us in the future, and gives us a new respect of those that lead focus groups professionally.
Adams, Jacob. (2018, September 17). Sugar Shack Focus Group. Interviewed by S. Bennett. [Video]. Fredericksburg, VA.
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Brown, Bryce. (2018, September 17). Sugar Shack Focus Group. Interviewed by S. Bennett. [Video]. Fredericksburg, VA.
Dubnowski, Jacob. (2018, September 17). Sugar Shack Focus Group. Interviewed by S. Bennett. [Video]. Fredericksburg, VA.
Exum, Caitlin. (2018, September 17). Sugar Shack Focus Group. Interviewed by S. Bennett. [Video]. Fredericksburg, VA.
Leckrone, Jeffrey. (2018, September 17). Sugar Shack Focus Group. Interviewed by S. Bennett. [Video]. Fredericksburg, VA.
Mayhall, Zachary. (2018, September 17). Sugar Shack Focus Group. Interviewed by S. Bennett. [Video]. Fredericksburg, VA.
Sugar Shack Donuts. (n.d.). Retrieved October 16, 2018, from http://www.sugarshackdonuts.com/