Archive for the ‘coffee’ category

Starbucks Bucks Mac Attack

August 5th, 2009

In announcing Starbucks’ recent quarterly financial results, CEO Howard Schultz announced that the company’s coffee sales have actually been helped by the efforts of McDonald’s to eat into its market share. It turns out McDonald’s actually got more people thinking about coffee, and that many of them decided to get theirs at Starbucks rather than McDonald’s.

This anecdote reinforces two long-established and still-relevant tenets of marketing strategy. First, if you suddenly face a new competitor or an existing competitor that decides to up its aggressiveness, it’s often a good thing. The stepped-up competition will raise awareness of your category, and if you’re good at what you do, you should benefit from the increased exposure. There’s no need to panic, and certainly no need to do something rash like slashing prices to defend your turf.

Second, if you decide to enter a new category or ramp up your aggressiveness in an existing category, don’t do it by attacking the market leader. Not only are you likely to help them by by virtue of the attention you generate for them, you’ll come across as a poor knock-off at best or a cheap-shot, low-blow artist at worst. Instead of making your story what’s wrong with the market leader, make it what’s right with you.

As the late rocker (and marketing maven) Jerry Garcia once advised, don’t try to make people think you’re the best at what you do; make them think you’re the only one who does what you do!

McCafé Advertsing: A Real Debaclé

May 26th, 2009

If the latest TV advertising from McDonalds’ McCafé coffees is any indication, this might be a good time to start buying stock…in Starbucks.

As everyone knows, McDonalds is targeting the Starbucks customer, which in and of itself might make sense if handled deftly. However, if they think their lame ads are going to appeal to the die-hard Starbucks lover, they’re apparently drinking immense quantities of kahlua and tequila along with their McCafé coffee.

Starbucks is many things, including extremely clever, and these new McCafé ads are anything but. In fact, they are possibly the least clever thing on TV right now; their inane conversion of “commute” to “commuté” (pronouced “comm-yu-tay”) and “cubicle” to “cubiclé” (pronounced “cue-bih-clay”) are not only neither amusing nor interesting, they’re virtual fingernails on a chalkboard.

The fact is that to make a serious dent in Starbucks’ market share, McDonalds needs to approximate or surpass not only the taste of Starbucks’ coffee but the cool aura of their brand image. From what I’ve heard, McCafé coffee tastes nothing like Starbucks’, and from what I’ve seen, they have even less of a chance of approaching the power of Starbucks’ brand equity.

In this economy, Starbucks is facing no shortage of significant challenges, but at this point it doesn’t look to me like McDonalds will be one of them.