Monday, February 1, 2010

McDonald's takes on Starbucks

While many retailers have lowered prices over the past year or so to retain a core-customer base, others have reaped big benefits by redefining its typical competition and targeting a new audience. For example, McDonald's is now taking on Starbucks by offering less expensive specialty drinks.

“Although McDonald’s has long promoted its dollar menu to reach its target demographic, the company started to take on a new community of consumers that were trading down,” said Sucharita Mulpuru, VP and principal at Forrester Research, during the session 'State of Online Retailing 2010.' “Instead, McDonald’s met them half way by trading up, and this worked really well for them.”

The idea of value messaging and offering the cheapest price around has worked retailers in the past, but many companies are thinking outside the box and gaining success by taking their veteran brands and trading up against new competitors, she added.

Case in point: How great is that McDonald's billboard?

(Image via

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