Starbucks Reacts to the Competition (interest, make money, investing, fees)

[UpperPeninsulaRon]

McDonalds recently announced that they were getting into the higher end market of coffee by introducing Starbucks style coffees in their stores. I thought that the plan was a good one, especially in light of a tightening economy to be able to draw customers away from Starbucks. I now see that Starbucks is going to offer a $1 coffee with refils.

Starbucks tests $1 cup of coffee - MSN Money

I think that they are are starting to feel the pressure and responding in the right way. This is an interesting marketing battle. What are the thoughts on this marketing strategy?

[shannon94]

Yeah ....Starbucks throws so much coffee away during the day that they know they will only make money on this one!! And so far they are only doing it in Seattle..........

[aaauger]

I went to a McCafe (modeled after Starbucks) in Hong Kong in mid-2006. I wondered when it would reach the US. Maybe McD's was waiting for Starbuck's Achilles' Heel: a recession.

[Crew Chief]

We really love our local Starbucks; the Baristas all know us and treat us like valued customers. We've NEVER felt like that at McDonald's. HOWEVER, as much as we love their coffee, we're less than impressed with Satbuck's baked goods. We actually enjoy Egg McMuffins and Mc Ribs at the Golden Arches, although we don't go there that often anymore.