Coffee Wars Development: Battle of the Blitz

McDonald's launched a marketing blitz today aimed at taking market share away from Starbucks through its line of McCafe drinks. The multi-channel campaign features TV and print spots with online components of a microsite and Twitter feed.  

Starbucks prepared for this battle by rolling out full page ads in this past Sunday's New York Times. The ads aim to reinforce the premium quality of Starbucks coffee and move consumer perceptions away from coffee as a commodity.

Price is McDonald's weapon which will be hard for Starbucks to overcome. They can really only hope that haven't permanently damaged their brand by introducing Via instant coffee in weak attempt to get down to their competitors levels - earnings tumbled 77% in the fiscal second quarter. This move might have proven to be its Achilles heel - McDonald's is entering the battle just as its opponent is slightly wounded.

Do you think the McBlitz will work? Will McDonald's emerge as the winner of this battle? Is Starbucks' brand tainted too much to ever regain market dominance?

--Stacy Cohen

The Problem with Price

The current economic recession has caused both companies and consumers to watch their pennies and focus on financial budgeting.  In fact, it is pretty hard not to see a television commercial, print ad or e-newsletter highlighting a discount in prices or a product that can help save money.  But as IMC practitioners understand, businesses not only must keep in mind the current customer needs, but also remember that it needs to continue to reinforce its brand’s promise, not just its ability to offer lower prices. 

Home improvement superstore giants The Home Depot and Lowe’s are currently riding a potentially treacherous slippery slope with their latest round of television commercials.  The Home Depot uses their familiar, uplifting music to introduce its new slogan “More saving. More doing.” while Lowe’s cleverly places a “t” in the form of a letterman’s jacket and telephone pole after its name to highlight that they provide the “Lowe’st” prices.  Both are vey time relevant, but are the commercials brand distinctive and identifying?  No.  Other than the companies’ familiar logos and catchy tunes, one could easily mistake one store’s lumber aisle for the other. 

Of course saving money is a leading motivator for customer behavior during these times and The Home Depot and Lowe’s are trying to play into this consumer insight.  However, it is still imperative for companies to understand that the recession will not last forever.  By not continuing to emphasize their differentiating features such as breadth of products (The Home Depot) and professional expertise (Lowe’s), companies risk losing long-term brand distinction for a short-term solution. 

-- Lauren McCabe