Coffee dispute: why does McDonald's VS Starbucks McDonald's sell coffee?

What do you think of a brand that is not a coffee attribute and suddenly sells coffee? Most of the reaction was strange, why did he sell coffee? Can he ever sell Starbucks? Maybe we all think it's impossible, but in fact, the brand has made a move in the market. A brand that does not sell coffee, has launched a challenge to the core brand selling coffee, and has caused the other side to panic, this is McDonald's.

McDonald's is doing a good job in fast food. Why does he sell coffee? Tang, president of McDonald's USA. Thompson once explained, "in the past, we used to use drinks as appendages to dinner, but now we want someone to come to McDonald's to drink our coffee." "the speed of our service is first-class, the location is convenient, and the value we provide to our customers is unmatched by our competitors," he said. " This passage does not say why we want to sell coffee, but it shows us the great ambition of McDonald's.

McDonald's sells coffee sets and says it has become popular in the United States, making Starbucks restless. It is reported that now in the United States, a consumer wants a cup of white chocolate latte, not to Starbucks, but to McDonald's coffee bar. It is said that as early as March 2007, the US Consumer report reported that McDonald's espresso is more popular than Starbucks in both taste and value, which does not look good for Starbucks. But at least there is no danger for Starbucks to learn in the Chinese market.

Starbucks boss Schultz also admitted that although Starbucks has 87% of the US boutique coffee market, while McDonald's is less than 1%, he does feel the threat from McDonald's.

The threat comes from the taste of McDonald's coffee, okay? Or something else.

As we all know, McDonald's is an enterprise focusing on catering, and the core is fast food, which essentially changes people's original understanding of catering service, because it has machinery and equipment that can be mass-produced, changing the media of the industry and forming a new form of customer self-service. It doesn't matter now. In fact, its impact on the fast food industry is revolutionary. This is only the superficial performance of McDonald's. For the boss who controls McDonald's, the change of many media in the fast food industry is only a matter of excellence, while Zhuo is similar to the real estate rental industry. McDonald's headquarters basically does not specifically operate fast food business, but operates small bosses in a franchise way. What McDonald's headquarters does more is to figure out which area will be the most popular place in a city in the future. after the demonstration, it will buy the land it likes and build a fast food restaurant, then look for a franchise partner to rent the fast food restaurant to him. Collect franchise fees from partners and rents for this commercial boom. This is the other side of its commercial nature. Of course, there are many factors to study the success of McDonald's. No matter how many strategic ideas behind his success, one thing is clear: McDonald's does not sell coffee.

Why does McDonald's sell coffee?

Since McDonald's doesn't sell coffee, why does he sell coffee? According to the US market bulletin, about one in five Americans drinks coffee every day. According to the New York-based National Coffee Association, the market will grow by at least 4% a year between now and 2011. Coffee will become the most popular drink besides water, and coffee sales in the United States, including restaurants, coffee shops and other channels, will reach $29 billion, an increase of 50 per cent from 2006.

McDonald's has to be impressed by the size of the coffee market and the success of the taste of its coffee products, which is one of the reasons why McDonald's decided to fight a vigorous expansion war in the coffee beverage market to challenge Starbucks, the leader of the coffee chain.

From this point of view, McDonald's entry into the coffee market is really unable to withstand the temptation of market interests, and even does not hesitate to dilute its integrity in the category. People not only have to ask, what on earth does McDonald's want?

Starting from the trend of large market interests, it is understandable for ordinary businessmen to attack the service content that is not the core of the brand. After all, small businesses, based on the pursuit of profit, do not have a long-term mind, what do they do to make money? But McDonald's is different. How could he do such an irrational thing? Is that what he's going to do? The pursuit of profit is right, the pursuit of long-term profit is the core. Although coffee is not the core product of McDonald's, it can also be sold, so that McDonald's brand can play a greater market role and carry more products, and this product is in great demand. McDonald's can control production, why not launch this service in time.

In fact, McDonald's launched the so-called gourmet coffee in February 2006. in the beginning, McDonald's increased the supply of various coffee drinks and chicken pie sandwiches in its storefront. such as fresh milk coffee, chocolate coffee, foam coffee, espresso and fresh milk, but also added sweet tea, Farabee, smoody and bottled drinks and other products. So that McDonald's brand audience can find their favorite in a wide variety of coffee products and dairy drinks. At the same time, in terms of price, McDonald's drinks are about 50 cents lower than Starbucks, while quality is guaranteed. In McDonald's view, the guarantee of quality, the abundance of products and the right price are the best competitive weapons. It turns out that sales at a McDonald's franchise restaurant climbed 8.1% in one month, mainly due to the addition of coffee drinks and a hearty breakfast.

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In the American market, McDonald's coffee sales rose 20% from the launch of boutique coffee in February 2006 to June 2007, while coffee sales including hot coffee, iced coffee and specialty blended coffee rose 34% in 2008. In this way, the good reputation of McDonald's coffee has retained new consumers and stimulated sales of other products. McDonald's launches new coffee products, which can bring sales and promote the linkage of related products, killing two birds with one stone.

Tang Thompson, president of McDonald's USA, even said confidently, "We will gradually transform our beverage products from the original food-following business to the dominant business, making it the purpose of consumers' visit." Our speed, the convenience we provide, and the value we can provide to consumers all make us difficult competitors to be reckoned with.

One of the reasons is the huge profit, the second reason is the pull of related products, and the third reason is to change the catering business to dominate the business to seek a larger category market.

What is Starbucks panicking about?

According to common sense, the expert is not afraid of the layman, and the veteran is not afraid of the novice, but this does not seem to be the case with Starbucks this time. It's really a bit of an expert to be afraid of a layman, and an old hand is afraid of a novice. So, what is Starbucks afraid of? According to the principle of brand management, it is very successful for a brand to represent the category. This brand represents this category, and this category is this brand. If a product or service achieves this level, it is very difficult for him to fear the so-called competition, because all competition will not have a good result, let alone from outside the layman.

From the brand recognition of Starbucks, we know that it is the largest coffee chain in the world, with strong brand influence and strong sticky target audience. Its network coverage and sales of products and services are also second to none. In a sense, Starbucks is the representative of the interests of the coffee category, who can threaten him. In fact, the market is broken by routines. In many cases, competitors come not from peers, but from Cheng Yaojin, who was killed halfway. What Cheng Yaojin brings to the overlord is, first, suddenly, unexpectedly, and then the coming momentum is surging. It's a bit of an unstoppable posture.

Judging from the competition between Starbucks and McDonald's, McDonald's is a blow to Starbucks, which means that you can no longer sell coffee, and I want a piece of the pie. In fact, McDonald's appeared in this posture. According to the Wall Street Journal, in order to sell coffee, McDonald's restaurants in the United States will have a position called barista. Since then, McDonald's nearly 14000 restaurants in the United States will set up coffee bars for consumers to taste cappuccinos, lattes, mochas and Frappe drinks (similar to Starbucks Frappuccino) carefully prepared by baristas. The increase in menu content is the largest in McDonald's in nearly 30 years, and it can be seen in general.

An internal document also shows that McDonald's plan will further increase the company's current annual sales of $21.6 billion by an additional $1 billion. McDonald's will provide customers with a variety of high-quality coffee, such as Ladis, Muha, Cappuccino and espresso, with a variety of flavors to add. Consumers say that McDonald's coffee prices are 50 cents lower than Starbucks.

At the same time, although Starbucks is the representative of coffee category, it has a stable consumer population. But it can't stand the rising prices of dairy products in the United States, and the growing number of coffee shops has led to increased competition. But the biggest worry may come from McDonald's cross-border competition, other small restaurants can be ignored. Because McDonald's is a related enterprise with the same competitiveness as Starbucks, whether in terms of brand, service, product, quality, or target audience perception and customer stickiness, McDonald's can easily compete with Starbucks. For McDonald's, it only needs to change a little bit of management and technology to provide products and services comparable to Starbucks, which may be the main reason for Starbucks panic.

This kind of panic, Starbucks Chairman Howard. Schultz also felt: "We know very well that we have created a very attractive business." Whether other companies account for only 1% of the market or large companies want to occupy more of the market, they can learn from and copy our approach. We are defending now, and we will succeed in defense. " There is confidence and helplessness in this sentence. I think this helplessness is more for McDonald's.

In fact, a year and a half after McDonald's launched its first coffee brand "very Coffee" in 800 stores across the United States, it has launched a limited number of trial brands of sweet tea coffee and iced coffee, and will gradually launch coffee products in all chain stores around the world. If coffee is sold in 30,000 McDonald's restaurants around the world. The invisible pressure of Starbucks has increased so much that Starbucks can't help but be afraid. There is a strong network on one side, low-cost products on the other and related audiences on the other. How should Starbucks respond to these three forces? No other moves have been seen, and it is said that Starbucks wants to try to launch a coffee with a price of only $1 in the US market, and it can also offer unlimited refills to customers to cope with McDonald's competition.

Is this the solution to the problem?

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Comparison of the Competition between McDonald's and Starbucks

In order to understand the situation, let's analyze the competitiveness of McDonald's and Starbucks.

When it comes to McDonald's, most people think of Big Macs, cheeseburgers, milkshakes, cola and cone ice cream. When it comes to Starbucks, people think of fragrant coffee with exquisite desserts and the elegant environment of wireless Internet access. One is mainly about "eating", the other is about "drinking", the other is about "fast" culture and the other is about "slow" culture. How do they compete?

Let's meet Starbucks first.

For coffee drinkers, Starbucks is a familiar name, which originated from the protagonist of Moby Dick Moby Dick, the masterpiece of Herman Melville, an outstanding American literary master in the 19th century. In 1971, Gerald Baldwin and Gordon Pork opened the first coffee bean and spice store Starbucks in Seattle, USA. In 1987, Howard Schultz (Howard Schultz) spent $4 million to reorganize Starbucks, promoting the transformation of Starbucks into an Italian cafe and running Starbucks entirely on its own ideas, giving the company a lot of momentum.

On June 26, 1992, Starbucks was successfully listed on Nasdaq, known as the cradle of high-tech companies in the United States. In August 1996, in order to seek broader overseas development, Starbucks made great efforts to open up the Asian market and entered Taiwan and mainland China. With strong capital backing, Starbucks' operation has skyrocketed, expanding rapidly at the rate of opening a new branch every day. Since it went public in 1982, its sales have grown by an average of more than 20% a year, while its profits have grown by an average of 30%. After more than 10 years of development, Starbucks has evolved from a small mermaid in Seattle to a "Hulk" with nearly 10,000 chain stores in more than 40 countries and regions around the world. Starbucks shares climbed 22-fold, surpassing big companies such as General Electric, Pepsi, Coca-Cola, Microsoft and IBM. Today, Starbucks has become a first-class retailer, roaster and owner of first-class refined coffee in North America, and its rate of expansion has been talked about by the world's top business magazines such as Fortune and Forbes.

Let's get to know McDonald's again.

In 1937, the McDonald's brothers started a humble drive-in restaurant in Pasadena, east of Los Angeles, and quickly succeeded. Later, due to a large number of imitators, business was depressed. In 1938, the two brothers closed the car restaurant and switched to fast food, which soon came to life. In 1953, a man named Foss paid only $1000 to the McDonald's brothers to obtain the McDonald's franchise, and then approved more than a dozen franchises. In 1954, as a McDonald's franchise agent, Crocker handled the transfer of the franchise for McDonald's brothers. Crocker set the royalty at $950, and he soon portrayed McDonald's as an excellent company, so Crocker is often regarded as one of the founders of McDonald's. In 1961, McDonald's brothers transferred all McDonald's to Crocker for $2.7 million. In the following 30 years, McDonald's fast food restaurant became the fastest growing world enterprise because of Crocker's good management. McDonald's fast food restaurant is recognized as the leading brand of fast food restaurant in the world because of its warm atmosphere and franchise system.

Through the above introduction, we will find that what is McDonald's? On the face of it, he is a fast food restaurant, he is the medium that has changed the catering industry. Thus formed the unique core technology and distinct form and huge demand. From the inside, he is still a real estate developer. In fact, it is McDonald's machinery that standardizes the mass production of hamburgers that makes its entire service value chain run fast, while real estate developers are in another sense.

McDonald's has a strong brand, a ubiquitous network, a precise target audience, and is a leader in popular catering.

McDonald's can become the largest number of restaurant chains in the world because of the change of its core media. What he provides is by no means a delicious food that can satisfy our happiness, but only a fast food to solve the temporary hunger. The reason why he has created a leading position in the fast food industry that is popular all over the world is due to its unique self-service and standardized mass production equipment. It is also the core of McDonald's to become the first brand. In the fast food industry, McDonald's has established a new form and formed a huge demand standard.

Standardization makes consumers feel that this product is very secure and safe, in line with their own expectations, and can accurately consume their own needs, such a distinct form is difficult for other products to form. This is also one of the nuclear weapons sent by McDonald's. McDonald's with a strong brand can carry more products, both relevant and irrelevant are possible, and coffee products are between relevant and irrelevant.

Next, let's take a look at the competitiveness of Starbucks. In my opinion, Starbucks can also be called the first brand, because it has subverted the service of coffee products in a certain sense. what is the traditional way of making coffee? It is whether it is right to cook slowly over low heat, while Starbucks is a fast-food-style fast-cooking method, a change in the way coffee is made. In fact, the media of coffee product service category has been changed, and the core service mode of coffee industry has also been changed. The change of media makes Starbucks unconsciously shift the center of consumer demand from products to services, and then from services to experience, successfully creating a "coffee religion" with the characteristics of "Starbucks experience". Coffee products are offered quickly, but consumption patterns are slow. It is this sense of contradiction that gives Starbucks a medium that others do not have. Due to the change of the core media, it brings about changes in consumption patterns and demand.

Starbucks represents a category, and its brand association is clear. Starbucks sells coffee, but consumers do not come to Starbucks to drink coffee, but to enjoy a way of leisure, or enjoy drinking coffee. For coffee sellers, the point of success lies not in coffee but in the process of consumption. Starbucks products are not only coffee, coffee is just a carrier. It is through the carrier of coffee that a unique style is transmitted to customers. To a large extent, the consumption of coffee has become a kind of consumption on the perceptual cultural level. what the cultural communication needs is that the environmental culture created by the coffee shop can infect customers and form a good interactive experience. The way of brewing coffee makes Starbucks sell more than it sells, making Starbucks the number one brand in the industry. So, there are consumers through the huge glass windows, looking at the crowded streets, gently sipping a strong coffee, producing a kind of "yuppie" pleasure experience mood, so that consumers who are busy in urban life find another kind of space to rely on.

From the perspective of consumer atmosphere, Starbucks wins with slow, quiet, sense of place and sense of space, corresponding to McDonald's fast, noisy, convenient and casual. From the perspective of service products, a complex, a specialist; from the scale of operation, one is the world's largest fast food enterprise, the other is a subdivision of the coffee industry the world's largest chain brand. One is diversified operation, the other is specialized operation; in terms of competitive strength, McDonald's is of course stronger than Starbucks; in terms of the consumption attribute of its products, one is an excellent place to sell coffee, and the other is not the worst place to sell coffee. McDonald's is weak only from the perspective of selling coffee.

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McDonald's Coffee is hard to succeed.

To be honest, almost most people share my judgment. It's impossible for McDonald's to beat Starbucks in a short period of time. It's a long battle. It may even be a kind of internal friction, which will have a great impact on McDonald's own brand. Of course, there is also a possibility that a layman like McDonald's will join Starbucks to sort out its inherent problems and form a state of concurrence and stalemate.

Judging from the characteristics of the products, Starbucks coffee is usually strong and easy to attract customers to become addicted. From a service point of view, Starbucks service content is relatively monotonous, although in addition to coffee also provides desserts and simple lunch, but the main sales are still coffee, although he has added some flavors, Starbucks quarterly sales growth of 10%, but this is not a long-term solution. In fact, Starbucks is a professional brand, decentralizing the core support points of the brand must be a wrong strategy.

The dislocation between McDonald's and Starbucks is obvious.

1. McDonald's is fast food, Starbucks drinks slowly; one is fast satiety, the other is long tasting. One is to solve the functional hunger, one is to bask in the mood to enjoy, one values the function of the product, and the other not only looks at the function of the product.

2. The deep fragrance of a coffee shop is the smell of fried chicken legs and French fries.

3. One is the target group mainly for children and adolescents, and the other is the target group for white-collar workers of the company.

4. One is a place for quick satiety, and the other is a place for talking about things as needs.

All of a sudden, coffee sellers offer fast food, fast food sellers sell coffee, and related products form cross-border sales to each other. Who can win the ultimate victory? as a result, it is certain that no professional can sell well.

Coffee is the jingle of coffee when stirred by a metal spoon. When you work an all-night shift and feel dizzy but have to attend an important meeting, a cup of steaming, fragrant coffee is undoubtedly the most appropriate adjustment. It has not been tested whether drinking coffee will go crazy, but most white-collar workers' love of coffee is "cool". The action of drinking coffee elegantly and skillfully has almost become a "photo" of all white-collar workers, and coffee has become an accessory of Office imperceptibly. No wonder, when people realize more and more clearly that they are living on a life train called "running", coffee has become the best drink to relieve "stress". In this milky, sweet and bitter liquid, people who work and live nervously find a suitable excuse to exchange information with each other, release grievances and absorb warmth from each other. Thus obtained a kind of ebullient life sentiment, lurking behind this sentiment is the recognition of freedom and unruly, is the rebellion against the regular life of Office.

Therefore, coffee is a release of cultural attribution, from the product quality point of view, is different from the core needs of fast food. Fast food is mainly to meet the basic needs of people's life, and the purpose of eating more reflects the basic nature and compulsion of consumption. The basic characteristics of modern fast food, such as fast production and sale, convenient consumption, quality standards, simple service, balanced nutrition and low price, are more reflected in the basic necessities of society and the popularity of consumption. the simplicity and rapidity of service and the low cost and quality of operating price.

McDonald's, which takes fast food as its core position, is a completely aggressive way to sell coffee. The target population, consumer environment, and product quality are all a little twisted, that is, to put it another way, to create cross-border marketing in order to capture the behavior of crossing the boundary. to create new growth points. If he can sell successfully, it will really subvert the new pattern of coffee terminal marketing.

Cross-border operation may be regarded as innovation in the automotive product category, but in the catering industry, success is subversion.

The successful McDonald's itself does not have the category association of coffee, coffee can be used as a supporting service for fast food, but can it become a new bright spot? Judging from the current situation, this is highly unlikely.

No, McDonald's has a huge sales network, the support of relevant target groups, and a better method of low-cost control. As soon as the product is launched, some people will consume it, but it is not easy to make coffee another brand attribute of McDonald's.

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In my experience, McDonald's Coffee may have the following results:

First, with its strong brand influence and network channels, it can quickly open the market and win the awareness of the target population on product quality. In the product function card, achieved good results. At this time, for McDonald's, it is only one more product, which does not mean anything. Under the strong influence of the main product hamburger, it can attract some consumers with demand at 00:00, and it is impossible to form the mainstream.

Second, McDonald's coffee does not have the opportunity to form a category, it can only be an important product in the fast food hamburger category. And his consumption environment and atmosphere will not have a positive impact on Starbucks, just as there are many Shangdao coffee in addition to Starbucks, they are just a supplement to Starbucks as a competitive system, and so is the addition of McDonald's.

Third, McDonald's coffee can be a fast-growing product in its products, attracting an audience is only a branch of after-dinner drinks, can not be independent into a coffee brand. In fact, the same is true of McDonald's ambitions. What they value is not the profitability of individual coffee products, but the marginal effects of coffee. After McDonald's fully introduces the new product of coffee, revenue from cakes, refreshments and breakfast will grow exponentially. Coffee is just a catalyst product for McDonald's. How can it challenge Starbucks?

Fourth, whether Starbucks sells a kind of culture or a more single-minded spiritual consumption, not a functional consumption. To be honest, Starbucks coffee is not so good if it is functional consumption, but it is not a functional consumer product. And McDonald's is an authentic functional product, at least for coffee, for now, it is more to play the role of beverage, but also the level of the low-end market.

Fifth, the establishment of the brand is the performance of focus cognition, to prevent flooding, new product development and brand can also form a focus of cognition is correct, McDonald's is a well-known brand, brand awareness is relatively clear, such as his association is happy, happy Even the launch of a slightly quieter product like coffee will not affect its brand influence, but I don't think there should be much extravagant hope for much, but it is more realistic to be the driving force behind other products.

6. The Chinese market is a face-saving market and a follow-up market, and the gathering of people is still relatively clear. At least for now, there will not be the kind of impact that the American market has on Starbucks. Not many people will come to McDonald's because they want to drink coffee. What's the difference between McDonald's coffee, which is usually brewed in a pot, and that brewed at home or office?

In the Chinese market, the growth of McDonald's coffee can only be the result of hamburgers and other major products, and it is clear that McDonald's cannot advertise its coffee products.

The core of brand creation is to form categories, and the core of cross-border marketing is to create new categories so as to form new competitiveness. McDonald's is already a representative of a category, and there is no need for him to destroy the image of this category. No matter how many innovative products and services it launches, it will add points to this category, not reduce it. That is, the temptation to destroy Starbucks through the temptation of not huge interests, but also have to build another category system, but not in the current fast food category to build a new brand of coffee, this is not in line with the consumer industry to learn, of course, will not succeed. As for Starbucks, it is necessary to stabilize its position and concentrate on its own service. In terms of product types, service forms, consumption space, brand experience, target population mining, strengthen awareness, enrich culture, strengthen brand potential energy, especially do a good job in cost control, according to McDonald's current measures, it is difficult to move its status.