A Frothy War is Brewing

May 6th, 2009 by Bud Hanson

As many of you know I have posted often on the Starbucks brand, a leader in creating an experience around what was once a commodity. In fact authors Joe Pine and Jim Gilmore use them to explain how products evolve through an economic progression as they move from commodity to true brand experiences and create consumers willing to pay for those experiences along the way. The Experience Economy -a seminal read on the topic, is definitely a book that should be on everyone’s shelf.

McDonald’s has been testing their proverbial stir stick in the coffee cup for a while and now seems to be brewing up a storm with the launch of their McCaf é. As I try and discern McDonald’s marketing strategy, it seems to be all about price and convenience. No shocker coming from the pioneer of the value meal. Starbucks won’t be going down without a fight however. While they can probably match McDonald’s on convenience and location having a pretty similar footprint of stores- they seem to be very protective of the premium price (or economic progression) they have created.

A piece on the Starbucks marketing can be seen here. It’s a nice warm and frothy (shot in high-def btw - very nice quality) 5 minute piece with Howard and some baristas talking about the Starbucks experience and why it’s better. Said differently, why they need to defend their turf that they have earned over the last forty years.

Someone once said, “A rising tide floats all boats”. McDonald’s may be the pirates coming aboard the Starbucks ocean liner. My only advice to Starbucks is to play your game - don’t play McCafé’s. If you react to a price strategy against a formidable player in that space like McDonald’s - you’ll come up a cup short. Tell your story and let consumers decide.

Pardon me while I enjoy my Dunkin’ Donuts home brew.

Posted in story telling, community, experiental marketing | Care to comment?

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A Frothy War is Brewing

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