3/02/2006

McDonald's...the Next Starbuck's?

Upon reading the heading from this article, I stopped for a moment and thought, what? Apparently McDonald's will soon be marketing a new high end coffee as a way of competing with other gourmet coffee producers, such as Starbuck's, etc. While this tactic from Wal-Mart could improve their coffee sales, I don't see it as any real threat to Starbuck's. In fact, perhaps McDonald's decision to sell fine coffee will offer their existing customers an added perk. Similar to what the article states, I don't think McDonald's choice to offer gourmet coffee will give it much of a competitive advantage, because other places such as Starbuck's, focus primarely on coffees, whereas McDonald's is more specialized in its fast, cheap, and tasty meal solutions. I suppose only time will tell whether such a marketing strategy from McDonald's will prove profitable.

4 comments:

Brooke said...

I agree with the article as well. McDonald's has always been known as a quick, cheap, fast-food restaurant. While customers that already choose to buy their coffee at McDonald's along with their morning meal may like the upgrade in coffee, I highly doubt McDonald's will win over any new customers based on their coffee alone. However, if this gourmet coffee were to accompany a completely new line of gourmet foods, McDonald's may be able to bring in a new crowd of customers.

Ella said...

I saw the new TV advertisement for McDonald's new coffee just the other day. I agree that McDonald's won't be a direct competitor with Starbuck's since a cup of Starbuck's coffee costs more than an entire breakfast combo at McDonald's. However, if McDonald's provides an upscale coffee at an affordable price this new idea might be successful. Let's just hope no one spills it this time!

zoe said...

I agree that McDonald's won't be drawing in too many new customers with its new high-end coffee, but think it is a great benefit to those who like to grab a quick, cheap, hot meal in the morning. The customers will now be able to enjoy a nice hot cup of of joe that doesn't taste like it's two days old.

Dr. Tufte said...

One thing that may be behind McDonald's thinking is that they have a long history of profiting from senior citizens meeting for coffee there in the morning - after all, coffee is a high margin item. Perhaps they are losing some of this business to Starbucks. Also, they are focusing on brewed coffee - which appeals to an older clientele - rather than espresso styles that require more personal service.

FWIW: I saw that they have rolled this out in Cedar City already. I'm not sure what the rush was ;)>