Will that be one McLump or two....wait, that would be tea, wouldn't it

Marketing consistency (another post regarding McDonald’s coffee)

After class last week, I’ve thought a lot about the comments from the McDonald’s marketing manager. A few things have been bouncing around in my head.

The reason for entering the espresso side of the coffee business was described by the McDonald’s marketing director as “60 Billion dollars”. Perhaps the forum was wrong to discuss that number. I tried but the timing was difficult. I wanted to discern whether a significant portion of that dollar value was the result of consumption from non-McDonald-izable customers. (new word, you heard it here first!) I realize that even half of that number is still desirable, but if the real number is 1/1000 of that number it may be a bad bet.

I suspect there are many Jazz loving customers who do know where Paraguay is, and who feel comfortable using French words. Might there be causality between loving jazzy styles and the willingness to part with 2 to 4 dollars for a cup of coffee? Where is the cause and effect logic that says there is a valuable market for a luxury product sold to NOT-luxury minded consumers?

I struggle with another piece of the logic also. The question was asked how McDonald’s’ will assure barista skill is high enough to make a good Latte. The answer is that machines are built that take the entire human element out of the process. All the worker must do is press a button. Whether or not the end result is equally tasty as a barista brewed concoction, the perception value is far lower for a machine produced product. Imagine how differently it feels to put a quarter into the coffee vending machine vs brewing your own coffee at home. Which is likely better? Not the vending machine in my mind. Now, these are undoubtedly macho high class “vending machines”, but the perception value is important. We know from the soft drink market that producing a cola that tastes as good as Coca-cola is easy. Taking their market share is another question altogether, the competition must overcome brand loyalty and quality perceptions. I didn’t think the McDonald’s reps were very forthcoming on this issue. They certainly know exactly what I’m talking about, and I suspect they have done the math as to what impact the machine concept has on their market.

I strongly doubt McDonald’s has any chance to take Starbucks customers. They just seem to be a totally different market segment. The remaining question then is, how could McDonald’s justify the cost of a marketing campaign based on exposing the differences between Starbucks and McDonald’s customers? Either the Starbucks customers are the target or they’re not. If they are, does McDonald’s truly believe that significant number of Starbucks customers are merely putting up with the inconvenience of hand made lattes in a sophisticated atmosphere simply because no fast food chain had yet provided machine made lattes in a loud and greasy atmosphere? If the Starbucks customers are truly not the target for the marketing, then I wonder how the message is imagined to expand McDonald’s market share.