Coffee War Between Starbucks And Mc Donalds
July 28, 2009
Coffee is the second largest merchandising commodity in the global market today. Its popularity as a beverage has been acknowledged by the trading community. Stiff competition prevails both in wholesale and retail markets as supply exceeds demands.
Unlike many other consuming products retail sales of coffee through millions of outlets are the lifelines that determine the fortunes of the market leaders. It is quite natural that such a highly volatile competitive environment invokes market rivalry. The contemporary scenario in the global coffee market is symbolic of this phenomenon.
McDonald and Starbucks are well known market leaders in the food and beverage segment. Both are universally recognized business icons. At a time when the global economy is experiencing severe stress consequent to the ‘meltdown’ and ‘recession’, even the well established leaders apprehend fluctuating trends that can make negative impacts on their fortunes.
They are contemplating on adopting new plans and strategies to cope up with the emerging situations. Aggressive marketing coupled with vigorous advertisement campaign are parts of the newly devised marketing strategies. And in the process, rivalry between the parties is nothing but logical conclusion of the ‘star wars’.
National marketing campaigns initiated by the companies are marked by novelties and originalities of their conceptual ideas and imaginations. Starbucks gives emphasize to the qualitative superiority of their coffee products. The general perception is that Starbucks is having a tough time to attract customers in view of the ongoing recession.
Their products are expensive than McDonald’s. Starbucks, the Seattle based coffee chain is identified by the consumers for their expensive products. Aware of this fact, the company is now embarking on a new initiative. They are exhorting the consumers through their advertisements, to go for best quality coffee notwithstanding the higher price tags. It is not a wise proposition to compromise on the quality of a beverage for the sake of a few pennies.
One important fact that Starbucks wants to highlight is the most superior quality of coffee beans they procure despite its prohibitive cost in the international markets. Those who cherish the taste, colour, flavour and aroma of the best quality coffee in the world have only one destination – Starbucks.
McDonalds play the economic card. Their products are cheaper and affordable to the cash-strapped public who struggle to cope up with the difficult economic situation prevailing in the world. They have introduced new versions of Lattes, Cappuccinos along with the most popular Mc Café. Slogans like ‘Mc café makes a better day possible’ are reaching the consumers day and night through advertisements. McDonald also announced substantial price discounts on their products.
Both Starbucks and McDonalds are waging ‘no holds barred’ tussle to capture the market. Newspapers, Billboards, Radio, Television and Internet are made use of abundantly to project their respective claims. As the coffee wars became more and more aggressive, both the companies exceeded their budgets for promotional campaigns.
There are allegations that the parties are indulging in unfair trade practices by using words and phrases which are tantamount to mudslinging. However such accusations are being denied by both the corporate giants. The fact is that certain corrective steps are being undertaken by both of them as measures of damage control.
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