Updated October 3, 2012, 9:02 p.m. ET
By ANNIE GASPARRO And JULIE JARGON
The expectations is that consumers will be to purchase bagged "McCafe's" on the shelves of their groceries stores. This idea follows the suit of the strategy of one of their competitors in Dunkin Donuts. Filing for a trademark is not new for McDonald's. In recent years, Mcdonald's has filed for trademarking several of their most popular menu items such as the Mac Snack Wrap, the McDouble, and the McCruncher.
Conveniently enough, coffee consumption is vastly growing in the United States with over 58% of people over eighteen drinking it. This fact gives McDonald's even more motivation to expand their coffee brand. The opportunities for the success of the expansion is there. According to Starbucks, packaged coffee is $5.6 billion business in the United States
"A study last April by market-research firm CustomersDNA LLC showed that McDonald's coffee drinkers are more loyal than those who frequent Starbucks and Dunkin' Donuts."
The executives of McDonald's hope that their loyal customers desire for homemade McDonald's coffee will be able to increase their sales and profits, which as of recently have been suffering. In fact, McDonald's shares have fallen nearly 10% over the past year. Analysts have found different reasons for these hardships facing McDonald's such as the tradition brand competition among Wendy's and Burger King, but also more and more analysts are taking note of chains such as Panera. Panera and other similiar restaurants have marketed themselves as healthier, and thus ultimately better options than the fast-food chains. As a result, the health conscious customers seem to be leaning towards these options instead of McDonald's.
I believe that McDonald's file for the trademarking of their coffee is a step in the right direction for McDonald's. With the support of their fan base coupled with their global brand name they will have no trouble marketing or spreading the word about the introduction of their bagged products.
Their competitive advantage of cheap prices may also be a contributing factor to the success of this business venture. Although, drive-thrus in themselves are efficient enough, I think being able to have the coffee readily available at home adds a whole new dimension to their objective of gaining more of the coffee consumer market. Not only that, but I also believe that if people have the coffees at home they are going to want that coffee again if they drive by one of the thousands of McDonald's conveniently located on what feels like every street corner.
The constant image of the golden arches and the smell and taste of their enticing coffee, will leave a lasting memory either consciously or subconsciously on their consumers. They are going to want more coffee in the store and more coffee off the shelves. Lastly, after the progression of this idea comes into action McDonald's will be able to compete even more aggressively with Starbucks and Dunkin Donuts.
Topics discussed: Brand Competition, Trademark, Consumer Preferences
Wall Street Journal Article
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