Is there a lexicon anymore American than "coffee and", or for that matter, "cup o' joe?" It's hard to imagine life without coffee. It is a ritual that is so much a part of us - whether it's getting the coffeemaker started in the morning or sliding into your favorite establishment for that much needed go-go juice.
"Coffee and" is taking on a much greater role in today's ultracompetitive marketing climate. The daily coffee sales battle is turning into a grind for many competitors including the category gorilla, Starbucks.
Yes, that venerable old Starbucks - with the mistress Siren in the logo calling out to all to partake in Starbucks for a slice of tranquility and respite in a busy life - is getting their can kicked all over the place! What has worked for years in the Starbucks empire is starting to crumble. Everywhere they look they're facing full scale assaults from Dunkin Donuts and McDonald's. Starbucks has announced over 1,000 store closings in less than two years.
Dunkin Donuts' tagline - "America Runs on Dunkin" is brilliant in the simplicity of its message. It understands that the majority of the people in this country just want good coffee that is priced reasonably and served quickly. These people don't have time to hang out for hours with their lap tops open pretending to be busy - they have to go to work. That is never more true than today. Dunkin is in touch with their customers and the realities of the economic challenges they face.
McDonald's is really biting into the Starbucks "brand experience" with their new McCafe coffee bars that are stealing market share from Starbucks with lower-priced premium coffees, lattes and cappuccinos - all served without the "attitude." Many say that McDonald's coffee is far superior to Starbucks in both taste and price point. Coffee is one reason, among many others, that McDonald's same store sales grew 7.2% in the fourth quarter.
Although Starbucks will still be a good coffee company, they are taking steps that were once unthinkable - employing a "coffee and" strategy. Better known to us as "value meals". This week, Starbucks unveiled their $3.95 value meal which will be rolled out on March 3rd. $3.95 gets you a tall coffee and breakfast sandwich or a tall latte and either a slice of cinnamon swirl or bowl of oatmeal. Consumers will save $1.20 per order. Awfully big of Starbucks CEO Howard Schultz! Will it work? After all, isn't the term value meal synonymous with rival McDonald's? Starbucks is going to great lengths not to call it a value menu by positioning it as a food and drink pairing.
This new strategy is being marketed as "Hello to a New Day." At Starbucks, it might as well be a whole new world instead. The $4 cup o' joe is out and competition is in. Value reigns supreme in today's marketing world.
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