Dunkin’ Donuts is using a mobile offer for free coffee to help make customers aware of the location services inside its application and to support its sponsorship of basketball team Orlando Magic.

A new coupon will be available every Monday through April 21 to customers in Orlando, FL, who have downloaded the app and turned on location services. The promotion is a good example of how national chains can leverage mobile’s contextual awareness to provide offers that are more relevant to customers.

“There is a lot more of this going on,” said Adam Lavine, CEO of FunMobility, Pleasanton, CA. “I think it makes sense for everybody to do.

“You don’t need to do an app to do this,” he said. “If you have an app, you should obviously be doing this, but if you don’t have an app, you can still essentially do this by publishing promotions out to Passbook.”

Mr. Lavine is not affiliated with Dunkin’ Donuts and spoke based on his experience.

Dunkin’ Donuts was not able to respond by the press deadline.

Monday Magic
Dunkin’ Donuts is an official sponsor of National Basketball Association team Orlando Magic.

The “Make Every #MonDDayMagic” program consists of a coupon redeemable for a free medium hot or iced coffee at Dunkin’ Donuts locations in the greater Orlando area.

The coupon is part of a broader program in support of the sponsorship that will include community initiatives, product promotions and events throughout the remainder of the 2013-2014 NBA season.

To redeem the offer, customers need to download the Dunkin’ Mobile App, open it and turn on location services, which enables users to find the nearest Dunkin’ Donuts location and view nearby locations on a map.

Dunkin’ Donuts ran a similar promotion in New England last fall when the Boston Red Sox won the 2013 World Series in baseball, with customers in Massachusetts, Rhode Island, New Hampshire and Maine able to redeem a free coffee offer in the app with location services turned on.

App support
The chain regularly supports its app through a variety of promotions and special offers  as a way to drive value for app users and encourage them to come back to the app frequently.

Dunkin’ Donuts also continues to build out new features and functionality for the app.

For example, the chain fully integrated its DD Perks loyalty program into the app earlier this month, enabling users to earn rewards and pay for purchases from their mobile phones (see story).

Location-based mobile coupons are a growing trend with marketers.

For example, retailers including Sears and Kmart made location-based mobile coupons a bigger part of their media mixes during the 2013 holiday shopping season (see story).

Additionally, when Pizza Hut updated its app last fall, it became the first in the pizza category to offer deals based on location (see story).

“The merchants are completely dependent on the ad networks to link location to offers, so doing a good job of location targeting is mostly a matter of vendor management by the merchants,” said Brennan Hayden, vice president of mobile at [x+1], New York.

“If the actual GPS location of the device can be used, the cost-effectiveness is tremendous. And it provides better value for the publisher also, since there are fewer wasted impressions, adding to the value for both buyer and seller,” he said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York