Can McDonald’s win the coffee war? Not a chance.

Posted on Posted in Beloved Brands in the Market

Without a doubt, if there was a Marketing Hall of Fame, McDonald’s would be a first ballot inductee along with Disney, Apple, Nike and Coke. But, can they win on Coffee.  Whenever I’m in front of an audience, I name a brand and say give me the first word that pops in your mind. When I say McDonald’s, I get about 30 different answers–kids, Ronald, Fries, Big Mac, family, etc. I end up facilitating at the front of the room like it’s a brainstorming session. When I say the word Volvo, about 90% of the audience smiles and says “Safety” like they’ve passed their Calculus final.  

But here I sit, undercover at your local McDonald’s. This Mcdee’s has been remodelled as many have to be more of a “cafe”.  There’s a little bit of wood, a fake fireplace, two giant screen TV’s, acoustic music playing and some funkier chairs.  But it’s just after noon here, and there’s about 40 people in the “cafe”. Here’s my current estimate: 14 high school students, 8 college students, a construction crew of 4 guys in bright vests, 6 toddlers, 6 moms, 2 women “having coffee” and me.  

Can McDonald’s Beat Starbucks?  

Let’s use the model below that looks at the five connections a brand has to make and compare McDonald’s to Starbucks.

Slide1

Brand Promise: McDonald’s offers a really good tasting cup of coffee. In blind taste tastes, McDonald’s wins. Starbucks offers an escape from your busy hectic life. You can  order in Italian (Grande), the cool 23-year-old college kid knows your name and what you drink, you can sit in luxurious leather chairs, along with other people also trying to escape their busy lives, you can have an amazing Scone or cookie and you can have a cup of coffee. OK, you can tell I’m being sarcastic. But are you starting to get that people aren’t going to Starbucks just for the coffee? It’s an experience, not a product. Let’s go 1-0 for Starbucks.  

Strategy:  McDonald’s caters to every demographic from 2 years old having their kids meal and playing in the play land for hours to college students wanting a Big Mac on the way to the bar at 11pm and grandmothers having a coffee and a muffin at 10:15am. They have something for everyone. And now coffee. Starbucks specializes in coffee, with a trained barista that can customize your favorite latte. Barista’s are usually so proud of their experience at Starbucks, they proudly display it on their resumes. To show their commitment to the Barista experience, Starbucks systematically closed down every Starbucks for a day to ensure everyone was making it right. I’m going 2-0 for Starbucks.  

Story:  I have to give it to McDonald’s. They launched a great outdoor campaign absolutely slamming Starbucks with the Fourbucks is Dumb.  I loved it.  But here I sit in a McDonald’s and the price of a latte is $3.29. You’re right McDonald’s. It’s not four bucks.  It’s 3.29. I get to save 71 cents to sit with screaming toddlers and depressed teenagers that look at you funny.  And Starbucks has a few ads here and there, but advertising isn’t really their thing. Every time that your friend says “let’s meet at Starbucks” it’s an ad controlled by word of mouth. Most recently, Starbucks has started to slowly and quietly dominate the social media space. Tough call, but word of mouth endorsements from friends always beats a billboard, even if it’s a great billboard.  I’m going 3-0 Starbucks.  

Freshness and Innovation: McDonald’s has done something very smart with free coffee for a week or even up to 15 days a few years ago. They are leading with their strength.  However, the menu is small. It’s still early for them, but they need to show a bit of experience. But Starbucks has created some amazing deserts over the last few years and has had a lot of success behind their most recent blonde launch. Let’s give this one to Starbucks and it’s now 4-0.  

Experience:  Sorry, let me just take a break here. My butt is really killing me from sitting on these plastic chairs.  The teenagers are complaining about the Math exam they just wrote and one of the toddlers just threw her fries at her mom and is now rolling around on the floor screaming. And Starbucks is an escape from all this. Thank god. I have teens at home.  I went through the toddler stage. And my limbs could use a nice comfortable chair right about now. I’m going 5-0 Starbucks.    

Here’s the thing. I’ve never had a cup of coffee in my life. And yet, I go to Starbucks about 40 times a year, mainly to meet up with friends. And I love it. Out of these 5 connections, the most important to me seems to be the experience. The coffee has to be good. But the experience has to be exceptional. And the McDonald’s experience which I’m living right now is certainly lacking. I can’t even hear the acoustic music. God I need some peace and quiet.    

The original question I asked was “Can McDonald’s Win the Coffee War?”.  They’ll steal share, just by sheer traffic already going through their stores. But, I’m changing the question to “Does McDonald’s know what’s important to Coffee Drinkers?”

And please put back the arches.  Never be embarrassed of who you really are.  

For a presentation on how to write a Positioning Statement, follow:

 

Beloved Brands: Who are we?

At Beloved Brands, we promise that we will make your brand stronger and your brand leaders smarter. We can help you come up with your brand’s Brand Positioning, Big Idea and Brand Concept. We also can help create Brand Plans that everyone in your organization can follow and helps to focus your Marketing Execution. We provide a new way to look at Brand Management, that uses a provocative approach to align your brand to the sound fundamentals of brand management. 

We will make your team of Brand Leaders smarter so they can produce exceptional work that drives stronger brand results. We offer brand training on every subject in marketing, related to strategic thinking, analytics, brand planning, positioning, creative briefs, customer marketing and marketing execution. 

To contact us, email us at graham@beloved-brands.com or call us at 416-885-3911. You can also find us on Twitter @belovedbrands

Positioning 2016.112

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