McDonald's has a billboard in sight of Starbucks headquarters declaring, "four bucks is dumb." The burger chain has other billboards that target the coffee giant. When is Starbucks going to fire back? "We're not going to get into that conversation," says the company's chief marketing officer. "We're not going to get sucked into the, 'My coffee is better than your coffee,' price point type of coffee conversation. We're going to play at a much higher level." || Read "Starbucks won't slug it out in ad wars"
Of course they won't slug it out, SBUX does very little advertising period. I mean why does anyone think Howard went on the News with Katie? He just got a chance to get some free face time, thus saving oodles in advertising. I have to say that I have always been dumbfounded by SBUX lack of advertising. No school of business is going to ever suggest that. Sure the word is on the street(it travels slow though), but you can control what people think and want with advertising and it is money well spent. Just keep it somewhat classy not insulting like an infomercial. Do an ROI analysis and see for your self Howard, it is not an antique concept. So no they won't slug it out in advertising now, because they do not have the money. Now you will see the power of suggestion at work. Honestly their is no comparison to SBUX coffee products to McDonalds coffee products ,and their is no such thing (never has been) as a $4 "cup of coffee" at Starbucks. Sensationalism. Latte's etc are not a cup of coffee. Howard continues to sit on his hands and do foolish egotistical stuff, which now is a refusal to stick up for his product he so desperately refuses to "cheapen." Ronald McDonald is laughing at the mentality of that and says "why don't we cheapen the product for them, since they will not defend themselves." Wake up Howard, stand up for your product, your company and your Partners. McDonald's should never be a competitor for espresso drinks or coffee, because they use cheap product and slap it out without a smile. THAT is where you are different. Make it known, before it is too late.
Posted by: grass is getting greener | December 11, 2008 at 03:49 PM
ouch. how many more hits can Starbucks take? the workers are frustrated. sales are down. howard is clueless (or maybe brilliantly scheming about how the hell to get out of this fight before the k.o.). and this... at a certain point, the crowd's going to stop chanting for starbucks to get up off the mat. just stay down.
Posted by: soypsl | December 11, 2008 at 03:54 PM
funny... Howard's angina is for sure flaring up right now. He portray's a calm fella when sitting in a chair with Katie... too bad folks can't see the other side... the big screaming, crying baby that is Uncle Howie.
Posted by: Pat Nerr | December 11, 2008 at 04:26 PM
no body likes to work in 8 NE for fear of HS running into them in a bad mood, which is most always.
Posted by: beantheredonethat | December 11, 2008 at 04:47 PM
what is 8 NE ?
Posted by: | December 11, 2008 at 04:52 PM
Haven't had a cup of SBUX since July---McD's tastes pretty good and I don't think they fire their "partners" without paying for their unused vacation!Then force them to sign an overbearing legal release if they want their last paycheck and COBRA.
Posted by: snagger | December 11, 2008 at 05:04 PM
8 NE is the location where Howie's office is at the SSC (Seattle Support Center, or SBUX HQ)/ 8th Floor, North East side of the building. And, when he is marching the halls mad - watch the f-out. He got me the other day and complained for 20 minutes about "Why the hell is the Christmas Blend bag gold, why is it not Christmas red!!!" Oh, the life of a VP.
Posted by: Jim C | December 11, 2008 at 05:10 PM
Ummm, McDonald's cannot hold a candle to Starbucks coffee drinks. THAT'S what people go there for, a Tall White Mocha is my favorite. McDonalds is being pretty petty and childish. They're a BURGER place for the love of Pete! You don't see Starbucks selling burgers just to try and be something they're not. One thing I do know is they treat their employees VERY well. Whoever says that they don't obviously wasn't a good employee.
Starbucks sells excellent coffee drinks and they are worth every penny. I'll go to McDonalds if I want a Big Mac, (which I don't, ewww).
Posted by: notfoolish | December 11, 2008 at 05:35 PM
I LOVE STARBUCKS!
Posted by: PArtner | December 11, 2008 at 05:51 PM
No instead Starbucks sells mcmuffins...
Posted by: | December 11, 2008 at 05:52 PM
The last latte I had at McDonald's (which was months ago) the drink wasn't right after two attempts at making it. And I don't order a complicated drink. The only request that was not the "default" drink was my request for non-fat milk. I don't go to McDonald's for espresso just like I wouldn't be inclined to go to Starbucks for a cheeseburger. They each do their own thing well and the other guy's thing not-so-well.
Now when it comes to drip coffee, I think Starbucks could be missing it. Not that I'm a fan of McDonald's drip coffee but a lot of Americans are. I was sort of under the impression that Pike Place Roast was supposed to appeal to those coffee drinkers but I think in reality it appealed to neither those coffee drinkers nor the traditional Starbucks coffee drinker. It missed the mark entirely.
What if Starbucks offered a truly mild drip coffee ("Farmer's Brothers" bland) at a bargain price in a real effort to appeal to the McDonald's drip coffee drinker. They could still offer Starbucks' bolder roasts at the "premium drip coffee" price. Would that allow Starbucks a chance at really appealing to both the McDonald's coffee crowd and the Starbucks' coffee crowd? The concern might be that offering a discounted mild blend would erode the sales of Starbucks' other drinks but I'm not sure it would. I think most Starbucks customers are there because they want what Starbucks currently has to offer while most McDonald's/Dunkin coffee drinkers are not there because Starbucks doesn't have what they want (which is truly mild coffee at a fair price).
Posted by: SEADAVE | December 11, 2008 at 06:56 PM
If I want coffee, I go to starbucks. If I want a burger and fries? I'll go to...well, actually, I'll go to In-N-Out.
Posted by: Zipy | December 11, 2008 at 07:01 PM
The best idea is not to react to this - as soon as they react they will be acknowledging they are competition - which they are not.
Posted by: Chasin_Fat_Kids | December 11, 2008 at 07:23 PM
@ Jim C.
Is Howie really like that? lol @ "watch the f-out"
Honestly I think the lack of advertisements is rather ingenious. I mean how much buzz did the Nov. 4th SNL commercial create? (and if you worked that day you remember how insane it was!) I think because Sbux does not constantly "traditionally" advertise, when they do, it packs a MUCH larger punch.
Posted by: RawrBaristaLinds | December 11, 2008 at 08:27 PM
@RawrBaristaLinds - My reaction was that surely we have much bigger things to worry about than the color of the bags.
In any event, if I were Starbucks, I wouldn't respond at all to this. To respond, acknowledges they play on the same field as McDonalds. And when french fries start being an item to pair with coffee, well you know you've got bad news. And once you open your mouth to respond, sometimes there's no going back and you just with you'd kept your mouth shut to begin with. This is one of those times. The quality of the coffee at McDonalds says volumes.
Posted by: Melody | December 11, 2008 at 08:42 PM
Well, when it comes down to it, $4 *is* dumb....
Posted by: TruthInAdvertising | December 11, 2008 at 08:44 PM
Yep, Howie is like that. Everyone is cowered by him -- all his VPs and Directors. Most of them are suck ups anyway, especially that husband and wife team from P&G by way of Puerto Rico (although the Mrs. got her walking papers and is now at T-Mobile).
Posted by: Jack | December 11, 2008 at 09:19 PM
Whouda thunk?
Posted by: RawrBaristaLinds | December 11, 2008 at 10:10 PM
I tried a McD. It was not a pleasant experience.
Posted by: spence | December 11, 2008 at 10:53 PM
Do people not remember when McDonalds tried to compete with take out pizza? That didn't even last a full year. And frankly a custom made to order espresso and milk drink is more labour intensive then their normal fair. Every company tries new things to get an bit of profit from what is popular. Starbucks is selling oatmeal and multigrain rolls (oh wait, the mutigrain rolls are being cut due to lack of sales) in an effort to be health conscious. McDonalds had poor selling salads. Micky D's will probably go through the same trial period where the majority of their espresso drinks are being bought by the staff. Fast food burger joints deal with an entirely different demographics of customers then Starbucks. I personally expect McDonalds lattes to go the same route as the McDonalds pizza.
Posted by: | December 11, 2008 at 11:01 PM
How is slashing our hours, and running understaffed stores a "higher level" get real. when are the baristas going to get a tiny bit of gratitude for the sacrifice were making this CHRISTMAS SEASON??
Posted by: brewmusic | December 12, 2008 at 12:12 AM
Howard is a maniac at SSC, and it started not too long after PPR and the Nelson Peltz squeeze. (Peltz looks pretty brilliant for selling when he did, don't you think?)
There's not a single person at SSC who doesn't believe that McDonalds are the biggest competition. Of course, they won't admit it publicly. Just like they won't admit PPR was a miserable fail.
Posted by: truth | December 12, 2008 at 12:14 AM
Zipy -- Amen to In-N-Out!
Posted by: barista lane | December 12, 2008 at 12:48 AM
The best idea is not to react to this - as soon as they react they will be acknowledging they are competition - which they are not.
----
Good call.
Posted by: non-fat americano | December 12, 2008 at 12:48 AM
when comparing the two brands, I see that Starbucks is the good natured, do-gooder who cares about others, is encouraged by community, and supportive of rich dialogue.
On the other hand, I think McD's is the slutty, cheap stepsister who is certainly competition, but maybe not one we feel we should acknowledge.
So I see it both ways- yes, they are competition, but in a dirty, cheap sort of way.
The only way to respond is to reinforce our brand message. In fact, I know you all are going to hate me for saying this, but oddly it reminds me of the Obama vs. McCain campaign.
Maybe we can take one from Obama's playbook and reignite our customers enthusiasm for getting involved in community, and being a beacon of hope and optimism. Of course, that would require our front lines to actually start caring again, and our back of house leadership to do so as well.
But, I can only be hopeful....
Posted by: comparethebrands | December 12, 2008 at 02:08 AM
Nobody does Starbucks better than Starbucks.
How many people go to study at DD or MCD or meet business clients?
That's right, enough said!
Posted by: BOSTON STARBUCKS REBEL | December 12, 2008 at 06:43 AM
Slutty, cheap stepsister? Can you get me her phone number?
I have had exactly one espresso beverage McD, and it was not so good. You get what you pay for, I guess. To be fair, the same holds true for the one watery espresso I had at a neighborhood indie shop. It was bad. Pass it every day, but no longer stop in its vast empty parking lot.
Posted by: Herman M | December 12, 2008 at 07:16 AM
---We did a taste test(BLIND), mcds agains our iced coffee....out of 9 baristas who did NOT drink iced coffee normally...all 10 liked mcds better...The only one who liked sbux was the regualar sbux iced coffee drinker...
Posted by: mikey | December 12, 2008 at 07:23 AM
It depends on what arena you place the competition... sure, McD's doesn't hold a candle to Starbucks coffee quality... operationally (financial and DT), McD's has a huge edge... and the numbers prove that.
However, if I want a 3rd place experience I go to Caffe Ladro or Cafe Vita... and tell my friends to go there too...
Posted by: Pat Nerr | December 12, 2008 at 07:56 AM
I think it would be great if Starbucks put out billboards that stated something like "Starbucks pays their american employee's a living wage"
Posted by: BiggB | December 12, 2008 at 08:41 AM
That would be great....if it were actually true.
Posted by: ex-sbuxmanager | December 12, 2008 at 09:48 AM
No lie, I enjoy McD's iced coffee. For me, and a lot of people, cost matters more than taste. Think of the stupid middle school girls who get frapps and such. They don't like the heavy coffee taste, hence why they get a frap! For them and so many more people, McD has the advantage because of price. They aren't looking for a 3rd place. They just want a sugary drink with their friends. You ignore a lot of your customer base when you think only of those people who have a very discerning taste for coffee in all forms.
Posted by: Nacho | December 12, 2008 at 09:54 AM
@ BiggB, hahahhahahhahaah. touche.
Posted by: supahvisah | December 12, 2008 at 09:59 AM
And one more thing. I often put price before quality. I would rather sit in my dorm room with my friends and make crappy mochas then go somewhere (Dunkin included) and pay $3 for one. I know my espresso isn't high quality... it comes from a $30 Mr. Coffee steam machine. Yet somehow, saving hundreds of dollars over a year is important to me and my friends. And ya know what, we still get the caffeine and tastiness we want. Starbucks, no one needs you anymore, espresso machines are becoming household appliances. Everyone is learning how to make their own stuff. And now with your management the way it is..... well, good luck to all of you baristas in your search for a new job.
Posted by: Nacho | December 12, 2008 at 09:59 AM
You are delusional if you don't think mcdonalds is competition for Starbucks. I know this may come as a shock, but there ARE actually places in this world where there are not Starbucks! Wha?? Yeah, really. Shocking I know. And um, there are places in this world where people prefer black drip coffee to what they think is nothing more than a bunch of steamed milk. And $4 IS dumb. If I could even get a Starbucks for $4 anymore. Well, actually, I think my standard double tall latte may still be $4. Anyhow, I digress... it really doesn't matter, I prefer my Peet's drip, then my at home made espresso, then Starbuck's if I am desperate but since there aren't any Starbucks in this crazy place I am stuck in... I go to, gasp, McDonald's (for drip, I'll admit, their espresso drinks always taste like they have turned to me). My whole point here being, not everyone is a 20 something, urban, wanna be yuppy... who knew?
Posted by: Miss Lee | December 12, 2008 at 10:26 AM
Ahh but Miss Lee I think you've just really described who the real competition is: The small independent or smaller coffee chains. They're harder to quantify because so say Zokas Coffee takes away 2 customers in a day from Starbucks, and Peets 5 customers in a day, and Intelligensia 3 customers in a day ... in the aggregate this is very damaging to Starbucks. At times I've drifted towards indies myself even ...
Posted by: Melody | December 12, 2008 at 10:41 AM
Starbucks' competition is anyone with a coffee pot. However, they have chosen to combine their product with heaping doses of branding to try to create perceived differentiation.
But at the end of the day, it is just coffee.
Posted by: truth | December 12, 2008 at 11:16 AM
Howie is NOT the leader Starbucks needs in this day and age.
Every beverage IS competition for Starbucks - McD's, Dunkin, 7-11 . . . Starbucks is a BEVERAGE company, not a coffee company.
Bad economy: price is numero uno concern, Starbucks fails to make the grade.
Pike's IS Starbucks attempt to meet those competitors on their grounds (blander, boring coffee).
ANY well-roasted local coffee prepared correctly beats ANY Starbucks coffee hands down, every time.
And finally, perception is reality and the perception of Starbucks being the best there is has changed now that the BS is wearing off.
j.
Posted by: ensenadajim | December 12, 2008 at 12:53 PM
I used to love Starbucks. The tasty drinks, the smiles from the pretty barristas, but then they god big.
And they all god drive-threws. Two things happened 1) They started scraping the bottom of the barrel for employees. 2) Their restaraunts with drive-threws starting paying too much attention to the drive-threw patrons instead of the walk-ins. (I assume they have metrics that measure the amount of time per customer)
So now my typical Starbucks experience is standing in line for 5 mintues for w burnt cup of coffee and having the oblivious ridiculous looking associates tell me that the coffee isn't read and asking me if I could wait. No, I can't wait I have REAL job. I am not some student hanging out in a coffee house all day.
I stick to McDonald's tasty coffee's and iced coffees, not to mention their much faster more pleasent service.
P.S. Get some managers in there. It's like the blind leading the blind. McDonald's always has an easily recognizable manager right up front to iron out any customer problems.
Posted by: Daniel | December 12, 2008 at 01:30 PM
Daniel,
I work at Starbucks but I completely agree with you. Even though I try to keep the coffee brewed, it is so difficult to always get to it especially when there's only two people on the floor and we have a whole list of other things to do.
It can be difficult to prioritize when you can hear your DM's voice shouting in your ear even though they are not there.
Coffee should be ready at all times, there really is no excuse for this. Unfortunately, no one in Seattle knows enough about store operations to consider going back to one hour hold times and keeping labor intact to keep coffee brewed when it runs out or expires.
Until Starbucks learns to let their store managers actually run their own stores, I would keep on enjoying that cup of McDonald's coffee.
Posted by: | December 12, 2008 at 03:42 PM
Most Starbucks Corporate owned stores have at least 4 shift supervisors and one store manager. Most Starbucks store managers work at least fourty if not more hours a week to run a successful store.
I understand your concern for having to wait on your coffee...because quality is something to be compromised these days...but you are ignorant to say that some of the people behind that counter do not have real jobs.
I work 40-60 hours a week at my store...I give my job my heart and soul and manage my team coaching in the moment on the floor and off the floor. I get paid the same amount as those with a "real job" do...and actually could you please define "real job" to me.
I know its hard to believe that one might enjoy a "real job" since you are so miserable in your current state and life...at least I can generalize this since you have chosen to construct an entire statement of generalizations.
I addition to that, go back to school and get a degree so that you can learn that "threw" is the past tense to the verb "throw" and has no relation to the word "through".
thats all.
Posted by: m | December 12, 2008 at 03:43 PM
insert ? after "define real job to me"
Posted by: m | December 12, 2008 at 03:44 PM
Ok Daniel... you have a real job? Learn to type and write correct English. Then start criticizing others.
Posted by: | December 12, 2008 at 03:54 PM
I'm a store manager and work about 33 hours per week. whats the big deal.
Posted by: us | December 12, 2008 at 05:45 PM
Good, bad or indifferent real business people know that if anyone is selling or serving a product "coffee" they are your competition. Good business people know this. Everyone, regardless of your personal opinion needs to be thought of as the competition, because everyone who buys a cup of coffee from MD's, Dunkin or whoever is selling their swill instead of buying it from Starbucks just gave their money to another company and not you. You need every customer, your regulars will not keep you a float and give you comp growth, you need new customers daily to increase traffic. Not to be alarmed and say they are not in your league is foolish because they just pocketed the money from the customer that went to their place and not you, so who wins?
Maybe if more of you thought like operators you would get off your whinney high horses and make an impact. If it was your coffee house that was fighting to survive and your name was on the line to pay the bills, you would cut labor as well and be concerned about anyone selling coffee.
Posted by: TheCompetition | December 12, 2008 at 09:01 PM
How about a boxing match Ronalad McDonald vs. H. Shultz?
Posted by: | December 12, 2008 at 09:07 PM
This is dumb, why would starbucks sink to their level? If someone charged people $1.50 for a cup of shit I guarantee there'd be some sucker who would buy it.
Anyway,the real world is sadly a place where coffee does run out! Get over it! When coffee runs out on people I at least give them a discount. At McDonalds do they discount you for having to wait for chicken nuggets? Hell no! Welcome to the real world!
How does a store manager get away with working 33 hours a week? What do they pay you a salary for?
Posted by: Jack Java | December 13, 2008 at 01:15 AM
A free press can of course be good or bad, but, most certainly, without freedom it will never be anything but bad.
Albert Camus
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Posted by: urivyFreesy | December 13, 2008 at 05:45 AM
ANY advertising is good advertising. I love how everyone else ends up paying for Starbuck's ad campaigns (Duncan, McD's :)
ANY attention is good attention. The time when people stop talking about you is the time to pick up your toys and go home.
Staying quiet will only make the rest of the competition yell louder.
And a cup of coffee at Starbucks in my area is only $1.65 with cup discount... not $4.00.
Posted by: Ettal | December 13, 2008 at 12:32 PM
Ettal,
I'm sure you already know this, but for those who don't...I think everyone is referring to the espresso/milk-based beverages and frappuccinos when they say "$4 cup of coffee" and not drip coffee.
Posted by: | December 13, 2008 at 02:53 PM