McDonald's, Burger King: Marketing Joe to the Average Joe (BKC, MCD, SBUX)
-
Font Size:
Abbi Adest submits: Are you tired of overpriced coffee that comes in unpronouncable sizes, infinite varieties and seems to be on sale at every street corner thanks to that ubiquitous green-logoed chain?
If so, McDonald's (MCD), Burger King (BKC) and Dunkin' Donuts have your number. The three chains are turning up the heat on their coffee marketing campaign directed at "the average Joe" who just wants a decent cup of coffee without having to put off retirement indefinitely. In other words, the blue collar/lower middle class demographic that is turned off by Starbucks' (SBUX) price range and image. The New York Times reports on this "class war in a coffee cup":
Burger King customers buying the new BK Joe coffee "don't want it to be complicated, like a chai half-decaf whatever," said Denny Marie Post, the senior vice president and "chief concept officer" for Burger King, a unit of Texas Pacific. "Our customer doesn't have that kind of money, frankly, and doesn't have that kind of profile. They just want it to be straightforward. This is not frou-frou coffee."
They may not want the snob appeal of Starbucks, but the challengers certainly want a bigger slice of the booming $8.4 billion retail coffee market. And that is just the amount sold in coffee shops. Starbucks accounted for $6.1 billion of the total in 2005, up from $3.7 billion in 2003.
In their pursuit of construction workers on their coffee breaks, these fast-food franchises are pushing as many non-Starbucks qualities as possible: low prices, simplified choice and even their lack of plush in-store seating:
Mr. Gilbert acknowledged the superior look of the Starbucks stores, many complete with plush couches, blond-wood cafe tables and soothing jazz piped through the speakers. But that is not what the "hard-working" Dunkin' customer wants, he said: "Our customers have stuff they got to do, and most of what they want to do is not taking place in our stores."
Interesting explanation for purposely not making your store as inviting as your competitor's. It's not often that you hear of retail chains actively wanting their customers to leave as quickly as possible. But who knows -- whackier marketing ideas have worked in the past.
The fast food chains may just find the Starbucks backlash strikes a chord in their demographic, and lights a spark under their drink revenues.
- Build-A-Bear Workshop, Inc. F2Q08 (Qtr End 06/28/2008) Earnings Call Transcript »
- Tupperware Brands Corporation Q2 2008 Earnings Call Transcript »
- Starwood Hotels & Resorts, Q2 2008 Earnings Call Transcript »
- UST Inc. Q2 2008 Earnings Call Transcript »
- Interface, Inc. Q2 2008 Earnings Conference Call Transcript »
Get Seeking Alpha Free Stock Alerts by Email!
Get Free Stock Alerts by Email!
-
Editor's Picks
-
Most Popular
- The Nature of a Crowded Trade: This Time It's Housing
- American Express Calls Investment Banks' Bluff
- Japan: Recession-Bound As Exports Slow?
- iShares MSCI Mexico: Surprising Strength South of the Border
- A Fed Rate Hike Won't Solve the Current Crisis
- Understanding Metastorm's IPO as an Investment Opportunity
- Full list of Editor's Picks »
- Three Stocks To Be Held To Infinity and Beyond »
- As WaMu, Wachovia Ready Earnings, Comparisons to Wells, USB Are Telling »
- Wall Street Breakfast: Must-Know News »
- Steve Jobs' Health: A Red Herring »
- Financials: How - And When - We Reached the Bottom »
- Four Long-Term Winners Selling at Deep Discounts »
- Apple F3Q08 (Qtr End 6/28/08) Earnings Call Transcript »
- Earnings Preview: Washington Mutual »
- The Agriculture Boom Goes Bust »
- Crazy Dividends »
- Apple's a Buy Under $150 »
-
Long Ideas
-
Short Ideas
-
Cramer's Picks
- Citi vs XTO Energy -- Cramer’s Stop Trading! (7/24/08)
- Potash Corp. Earns $2.82, a 220% Increase
- Mechel Drops 20% on Putin's Comments
- Auto Retailers' Ability to Pay Debt - What It Means
- Three Conservative Growth Industrial Picks: Adminstaff, Carlisle Companies and Illinois Tool Works
- Wait for August FFIEC Call Reports Before Taking a Long Position in Banks
- Now's the Time to Buy Something
- 3Com Corp.: Undervalued by Half
- Wachovia CEO's Insider Buying Is Another Indication of a Bottom
- Consumer Staple Stocks Are Not Always Safe Haven Investments
- Full list of Long Ideas »
- Collateral Damage From the War on Shorts
- Is the Gold Uptrend Over?
- Response to Raymond James' Q3 Conference Call
- eBay is a Not Com - Cramer's Lightning Round (7/23/08)
- Get True Religion - Cramer's Lightning Round (7/22/08)
- Principal Financial Group Vulnerable to Commercial Real Estate Softening?
- Increases in Shorting, Only for Some
- Is a Ban on Short Financial ETFs on the Horizon?
- Is There a More Efficient Shorting Tactic?
- Short Oil as a Long Investment
- Full list of Short Ideas »
- Citi vs XTO Energy -- Cramer’s Stop Trading! (7/24/08)
- eBay is a Not Com - Cramer's Lightning Round (7/23/08)
- Buy Costco, Get Sirius - Cramer's Stop Trading! (7/23/08)
- Soup Target; Cramer's Mad Money (7/22/08)
- Get True Religion - Cramer's Lightning Round (7/22/08)
- Copper Down Low - Cramer's Stop Trading! (7/22/08)
- Banks Hit Bottom – Cramer’s Mad Money (7/21/08)
- Ends In X - Cramer's Stop Trading! (7/21/08)
- Great American Companies – Cramer’s Lightning Round (7/21/08)
- Market Rotation Bolsters Financials - Fast Money Recap (7/18/08)
- Full list of Cramers Picks »
Most Popular Feeds
-
ETFs
-
US Market
-
Long Ideas
-
Alt. Energy
- Full list of feeds »
Hedge Fund Jobs
Job Seekers:
- Search jobs by category
- Get job alerts by email or live feed
- Apply online
Employers
- See all recruitment options
- Get applications online or by email


