Word: thompson
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...McDonald's USA president Don Thompson insists the company has been planning the rollout's timing for over two years and that McDonald's is not specifically targeting Starbucks. "We don't need to talk about someone else to justify our business," says Thompson. McDonald's is just trying to grow, he says, by capturing share in a high-margin sector - specialty coffee - that has shown consistent growth. Whether you believe the company's motives or not, the bottom line is that McDonald's seems positioned for success...
...found that over 60% of respondents said they will trade down to McDonald's coffee if the drinks are cheaper and made faster. Given the company's pricing history and the likelihood that the McCafé system will be quicker than Starbucks baristas, consumer sentiment is trending its way. Thompson says that, to date, the McCafé drinks have produced profits in the test markets...
...with McCafé coffee in your hand. That's kind of cute, but why don't the ads highlight the company's one major advantage over coffee competitors: price? With consumer spending still weak, shouldn't McDonald's be explicitly broadcasting its bargains? "Here's what everyone implicitly understands," Thompson says. "With our supply chain and the leverage we have, the products are going to be more affordable than other coffee offerings out there. What is less implicit is the taste. So what we are trying to do is help everyone understand that, No. 1, it tastes great...
...customers don't respond, however, Thompson promises they'll be reminded of the value. "We are not going to sweep under the rug the affordability aspect," Thompson says. "This is a long-term awareness campaign. You will see everything from taste, indulgence, convenience and price point across the body of work that will be presented over the next couple of years." Yet the company has so far resisted franchisees that have been too explicit about price. Last year in Seattle, a group of McDonald's franchisees ran a billboard that read, "Four Bucks Is Dumb," a clear shot at Starbucks...
...Thompson of McDonald's naturally disagrees. "We want to be a beverage destination," says Thompson. "For us, growing markets with great margins is the place to be." McDonald's will always have the Big Mac. But does anyone want a latte with their fries...