New McCafes brew advertising battle with Starbucks

McDonald's goes cup to cup with Starbucks for a big pot of the coffee profits

• By Josh Salman
• Story updated at 7:47 AM on Friday, May. 8, 2009

Edgar Aroutiounian considers himself a coffee-holic.

The Jacksonville man goes out for a cup of Joe about 10 times each week, spending $3 per cup.

With money tight, Aroutiounian cut many aspects of his spending including going out to eat and to the movies. But he said things need to get very bad before he cuts his daily dose of coffee.

“It’s a good, cheap stimulant,” Aroutiounian said. “I don’t really spend money on too much else.”

More than 50 percent of all American adults drink at least one cup of coffee daily with 18 percent drinking gourmet brews, according to the National Coffee Association.

And now fast food chains want a piece of the pie, targeting coffee drinkers like Aroutiounian who regularly visit Starbucks.

McDonald's recently launched a new brand of specialty coffees, attaching its “Mc” prefix to all of the beverages. The McCafe is a line of cappuccinos, espressos and lattes.

The McDonald's corporation has been gradually adding the coffees to restaurants in specific markets for the past year, and Wednesday the drinks were incorporated into menus nationwide.

And the release came with a hefty advertising campaign. 

McDonalds wouldn’t disclose how much it is spending on marketing for the coffee, but the chain doesn't skimp on advertising. Last year, the restaurant shelled out $825 million in U.S. advertising, more than double the No. 2 fast-food advertiser Subway, according to TNS Media Intelligence.

The coffees are McDonald's largest product launch since the restaurant announced it was serving breakfast in the 1970s, and the advertising is beginning to reflect it.

“Throughout Northeast Florida we’ve been doing a lot of grass-roots efforts,” said Allison Garrett, McDonald's spokeswoman. “A lot of our work has been in public relations until this point, and our national campaign began May 1.”

Billboards along Florida highways picture the specialty drinks with the sayings “McCreamy,” “McDreamy” and “McSteamy” a play on characters from the popular TV show “Grey’s Anatomy.” 

McDonald's has multiple TV ads playing on the McCafe branding, one spotting the phrase “McCafe your day.”

The chain took it a step further with a direct attack at Starbucks, releasing billboards and bus ads that read “4 bucks is dumb.” However, most of these displays have already been taken down.

Starbucks fired right back.

The Seattle-based company, often referred to as the coffee king, unveiled a full-page ad in Sunday’s New York Times. Starbucks is focusing on newspaper and magazine ads to drive home the point of quality rather than price. 

The campaign may gain importance with Starbucks struggling as of late. The coffee shop plans to cut 200 under-preforming U.S. stores and 6,000 jobs by the end of its fiscal year at the end of September.

One new ad reads: “Beware of a cheaper cup of coffee. It comes with a price.”

The average McCafe drink is about 65 cents cheaper than Starbucks.

“A lot of people moving in [to the coffee industry] are talking about price points,” said Starbucks spokeswoman Bridget Baker. “We are about value and how the coffee is made and served. We think the customers that come to Starbucks everyday share those same values.”

Starbucks seems to be winning, with coffee drinkers in Northeast Florida.

Aroutiounian said he spends his $30-a-week coffee budget on Starbucks. 

For him, it’s not just about the coffee but the atmosphere as well.

“I also like to go to Starbucks and socialize with friends while I drink my coffee,” Aroutiounian said. “You can’t really do that at McDonald's.”

Mike Swanhart also prefers Starbucks.

The 30-year-old Jacksonville resident has cut back on his coffee drinking with the economy in a hard place, but he still goes out three times a week.

“I don’t know what they put in it,” Swanhart said, referring to Starbucks' blends. “I was pleasantly surprised with McDonald's new coffee, but I still prefer Starbucks.”

But the McDonald's ads have caught the attention of some.

Tony Russo said he’s never had the new McCafes, but he can’t wait to try.

“From the commercials, it looks really delicious and refreshing,” he said while sipping from a Grande Cafe Mocha at the Starbucks on Riverside. “I’m looking forward to trying it soon.”

STARBUCKS Launches 2D Barcode Through SMS Marketing

A Loyalty Program Worth Drinking To

Posted by michael on Apr 22, 2009 in Mobile Marketing

Be good to Starbucks and Starbucks will be good to you.

Generally speaking, that’s the theme with the coffee giant these days, as they continue to push a “loyalty program” based on 2D bar-code coupons deployed via SMS.

Starbucks has teamed with Codilink, a firm specializing in digital loyalty programs, to introduce the campaign in Guadalajara and San Luis Potosi, Mexico.

Based on its preliminary success ( a 60 percent mobile coupon redemption rate) we will likely see the expansion of the loyalty program soon and to a powerful extent.

As you might expect, here’s how it works. Consumers are urged to text keyword STARBUCKS to short code 80080 to get a WAP link to download a buy-one-get-one-free 2D bar code mobile coupon.

As part of its loyalty program for existing customers, Starbucks is displaying in-store signage with a mobile call-to-action: text keyword VENTI to short code 80080 to opt in to receive various discounts and offers for coffee-size upgrades.

According to the company, it won’t be long before every Starbucks in North America is equipped with 2D bar code recognition software so that employees can read the mobile coupon directly from consumers’ mobile phones at the point of sale.

Starbucks just went from a “tall” to a “venti” on my coolness meter.

CEO's and Twitter: What they try to achieve through this medium

The Rise of the C-Tweet

Points to Consider for Twitter-Friendly CEOs and CMOs

by Jonathan Paisner

Published: April 21, 2009

Social media has obviously given voice to employees in ways that never existed before. Early corporate bloggers were often brand enthusiasts themselves and tended to "get" the brand a gut level; soon enough, voice and tone guidelines became more actively put in play to govern blog writing. But Twitter is different. The nature of the medium encourages users to transmit an interchangeable mix of musings about life, work, daily observations and whatever else. Employees on Twitter are either designated brand ambassadors or simply have personal accounts -- and these lines of distinction help offer guidance. But that line grays with the advent of the "C-Tweet." C-level execs are part-lead ambassador, part-celebrity. Twitter accounts can build a cult of personality and extend a dynamic that has long existed for top CEOs into a broader set of C-level executives.

Zappos CEO Tony Hseih has come to be considered the gold standard for CEO tweeting, thanks to a comfortable style that leverages both the brand he helped create and his own personal voice.

Photo Credit: Bryan Haraway

Among C-level execs, Twitter holds an allure as a seemingly simple vehicle to communicate thought leadership while staying connected to the market. Yet a daily supply of profundities in 140-character increments is a lot harder to pull off than it sounds. One natural obstacle blogs offered was the demand to actually have to write. Twitter is much less intimidating -- and the immediacy and ostensible intimacy of the platform may suggest that it is perfectly alright for executives to say things ranging from "Wow that was a delicious hamburger! Jalapenos, yum" to "Holding firm in my negotiations with Yahoo right now." And herein lies the greatest challenge of the C-Tweet: Where does the voice of the brand end and the voice of the individual begin?

Notable tweeting CMOs include Jeffrey Hayzlett of Kodak (@jeffreyhayzlett) and Barry Judge of Best Buy (@BestBuyCMO) -- each of whom ties his account closely to his brand. And each interprets the boundaries between the personal voice and the voice of the brand a bit differently. Of course, each brand has different social-media agendas that these executives are trying to push forward -- with variables ranging from the brands themselves and the strategic objectives to the audiences they serve (and aim to serve) and the styles of these individuals. Is there a blueprint for doing this right?

Tony Hsieh (@zappos), Zappos CEO, has come to be considered the gold standard for CEO tweeting, thanks to a comfortable style that leverages both the brand he helped create and his own personal voice. And he has gained a reputation for responsiveness and accessibility via Twitter that has come to epitomize the entire Zappos aesthetic. Padmasree Warrior (@padmasree), Cisco CTO, has also built a successful account on Twitter, finding that balance between business and personal that offers some good, relevant insight into the Cisco brand while putting a very human voice on a heretofore more removed role. While Hsieh's efforts are overtly endorsed by the Zappos brand, Warrior's does not carry the official endorsement of the Cisco brand.

As we see more such accounts in the rise of the C-Tweet, three things to think about:

1.The objective
An executive's objectives for a Twitter account are likely a mix of the brand's interest and self-interest. A simple rule of thumb here: If it is conspicuously endorsed by the brand (via the account name or use of the logo, for example), then the objectives should directly align with the vision and mission of the brand. If the brand is merely a description of the executive's occupation, there is more room for flexibility. And, with an endorsed account in particular, have a discussion with internal counsel to set up some basic legal guardrails before you jump in.

2. The commitment
Twitter is a hungry beast. If you're truly in it, you've got to tweet. Conventional wisdom seems to have it at somewhere between five to 10 tweets per day as the minimum for an active account with a healthy following. Generating 30 to 50 compelling, pithy statements (or links or retweets) each week may sound simple, but it can easily turn into a chore. Carve out time in the day to address this need -- to feed the beast without turning this into a distraction.

3. The exit strategy
Admittedly, this is a tough one -- considering the lifespan of Twitter itself and the questions that may exist around its own future. At the end of the day, an executive's account will be more of a reflection on him or her than it is on the brand. Executive impermanence is a fact of life -- and while creating deeper connections between a brand and its key executives can have tremendous value for partners, customers, analysts, employees and investors, an executive's inevitable departure along with several hundred thousand Twitter followers is likely to sting a bit. A strong Twitter following is becoming a brand asset -- and succession planning for the future of this asset is an important consideration. It may be worthwhile to try to mirror an executive's Twitter following within a more overtly corporate account. Or perhaps encourage junior executives to build their own followings, assuming this does not conflict with the points above.

Twitter is yet another example of where brands have to accept a loss of control. In this case, it is not about putting the brand in the hands of the market but in the hands of the people for whom the brand is their livelihood. A certain amount of letting go is a necessity. We will undoubtedly see a few missteps in C-tweets, and we'll learn and move on. Ultimately, the medium may change but basics of branding still apply -- both for the brands themselves and for their executive stewards: Be true, be relevant, be transparent, respect your brand and your customers, don't make a promise you can't keep.

~ ~ ~
Jonathan Paisner is brand director at CoreBrand. He works with Fortune 500 clients in areas of brand architecture, strategic alliances and brand messaging. CoreBrand clients have included Cisco Systems, AT&T, Internet2, ADP, TV Guide, American Century Investments and BearingPoint.

Understanding Marketing: Through A Sexual Means...

So, this linky was sent to me, I don't usually post anything like this, however, I thought it was a really analogy to describe the differences in propaganda. I think any of my ad colleagues would agree. Enjoy! ~Omarr

---

Understanding Marketing

From Jokes-O-Matic.com

You see a fabulous girl/guy at a party. You approach them and say, "I’m fantastic in bed."

That’s Direct Marketing.

You’re at a party with a bunch of friends and see a fabulous girl/guy. You have one of your friends approach them, point at you and say, "She’s/He’s fantastic in bed."

That’s Advertising.

You see a fabulous girl/guy at a party. You approach them to get their telephone number. The next day you call and say, "Hi, I’m fantastic in bed."

That’s Telemarketing.

You’re at a party and see a fabulous girl/guy. You get up, straighten your clothes, walk up and pour them a drink. You open the door, pick up their bag after it drops, offer them a ride, and then say, "By the way, I’m fantastic in bed."

That’s Public Relations.

You’re at a party and see a fabulous girl/guy. They walk up to you and say, "I hear you’re fantastic in bed."

That’s Brand Recognition.

Burger King Finally Gets Snubbed For Edgey Ads

BK to Revise Ad After Complaints From

Mexican Official

Diplomat Says Spot for Texican Whopper Offends Citizens, Flag

By Rupal Parekh and Emily Bryson York

Published: April 14, 2009

NEW YORK (AdAge.com) -- Controversy bubbling up from Burger King's Whopper advertising has finally gotten a little too hot for the marketer.

The fast feeder has agreed to revise a campaign created by Crispin Porter & Bogusky and airing in Europe for the Texican Whopper, after a Mexican diplomat called it offensive to Mexicans and damaging to the country's image.

The 30-second spot and print ads feature an American cowboy alongside a small lucha libre wrestler donning a cape that resembles the Mexican flag. Blogger Laura Martinez, who contributes to Ad Age's Big Tent, criticized the spot on her own blog.

The work is part of a European push for Burger King's Texican Whopper -- a twist on the chain's classic Whopper sandwich that's only available abroad. (In case you were wondering what it is: a flame-grilled patty topped with chili con carne, spicy jalapenos, onion, crispy lettuce and Cajun mayonnaise, all on a sesame-seed bun. A double Whopper with two patties is also available, as are Texican onion rings, which are like the standard ones but served with a spicy Mexican salsa.)

According to media reports in Mexico, Ambassador Jorge Zermeno penned a letter to Burger King's Spanish operations stating the "advertisement denigrates the image of our country and uses improperly Mexico's national flag." He noted that Mexico has strict laws barring the defamation of the flag.

BK: Revision coming ASAP
"Burger King Corp. values and respects all of its guests as well as the countries and communities we serve," a Burger King spokeswoman said in a statement. "With regard to the Texican Whopper advertisement shown in Spain and the United Kingdom, it was our intention to promote a product whose culinary origin lies in both the American and Mexican cultures, and was meant to appeal to those who enjoy the flavors and ingredients that each country offers." She added that revised creative will be on air "as soon as commercially possible."

Representatives for Crispin, which handles the chain's advertising in the U.S., and in certain global markets such as the U.K., Germany and Spain, declined to comment.

If any agency is accustomed to controversy it's Crispin, and particularly when it comes to its Burger King client (just last week it angered advocacy groups over a "SpongeBob" BK commercial), so the vow to revise the Texican Whopper creative work is an unusual move.

Signature style
Burger King's contentious marketing has become a signature of its brand, and in some cases has helped boost the fast feeder's sales.

"Whopper Freakout" was a series of documentary-style ads and accompanying web video in which Burger King workers told consumers the Whopper had been discontinued. The ads drove buzz and resulted in a double-digit sales increase for the sandwich in late 2007 and early 2008.

Another campaign last December, christened "Whopper Virgins," met with more resistance though, and seemed to have less of an impact on sales and positive buzz for the brand.

Local issues in global society
The larger issue debated by those in ad circles revolves around just how local "local executions" of global campaigns really are in an increasingly globalized society, particularly in cases when the work is deemed offensive.

One year ago an ad for Absolut vodka created by TBWA provoked the ire of American bloggers, after a print ad that ran only in Mexico as part of the international "In an Absolut World" campaign inflamed U.S. anti-immigration factions, detonated racist comments and called for a boycott of the vodka. The campaign was later pulled.

Denny's Trots Out Another Freebie - Advertising Age - News

Denny's Trots Out Another Freebie - Advertising Age - News

Denny's Trots Out Another Freebie
Chain Asks Customers to Bring in a Friend for Breakfast

By Emily Bryson York

Published: April 01, 2009

CHICAGO (AdAge.com) -- If it worked once, why not again?

That seems to be the thinking behind another promotional stunt from Denny's. The fast-casual restaurant is asking its faithful to bring a friend who could use a free meal, positioning the freebie as a "random act of kindness" it "hopes will spread across the country." Friends loyal enough to bring a friend April 8 between 6 a.m. and 2 p.m. can score a free Grand Slamwich for their pals when they spring for a Grand Slam.
Denny's: Grand Slamwich
Denny's Grand Slamwich is being introduced with a giveaway.

Denny's plans to drum up interest with a TV spot, breaking tomorrow, from agency Goodby, Silverstein & Partners. It will also have "prime placement" during next Monday's NCAA basketball championship. The chain is taking the opportunity to introduce the Grand Slamwich, a grilled sandwich made with potato bread, scrambled eggs, shaved ham, hash browns, bacon, mayo, American cheese and a "maple-spice" spread, for $4.99. Denny's original Grand Slam is eggs, pancakes bacon and sausage.

The chain is building on a February giveaway that drew 2 million people, and appeared to increase buzz for Denny's, according to Brand Index. Denny's drew attention to that promotion with its first Super Bowl ad . These stepped-up marketing efforts followed the chain's decision to move its creative business to Goodby last December, from Publicis Mid America, Dallas.

According to TNS Media Intelligence, Denny's spent about $71 million in measured media during 2008. That's up about 13% from an $63 million during 2007. The figures do not include internet or national spot-radio ad spending.

In an interview with Ad Age following the giveaway, Denny's chief marketer, Mark Chmeil, said the chain's hot line had been nearly overwhelmed with grateful consumers. "We didn't realize how much people would appreciate it," he said. Mr. Chmiel added that Denny's used the opportunity to show consumers how much the restaurants had changed since their last visit: They now have a new late night menu and breakfast to go.

"Denny's was absolutely blown away by the tens of thousands of e-mails and phone calls we received from customers thanking us for our generosity at a time when stories of corporate greed scream from the headlines. The stories we heard made us literally cry ... they were so moving," Denny's CEO Nelson Marchioli said in a press release.

Such giveaways seem to be part of a growing body of marketing that fills a consumer need, as opposed to efforts that entertain or are tied to a specific cause. KFC, for instance, announced plans last week to fill potholes in four U.S. cities. After starting in the company's hometown of Louisville, Ky., up to three more cities will be selected at random.

"This marketing effort fosters trial of our brand new Grand Slam product, the Grand Slamwich, and it once again helps people who could use some good news right now," Mr. Marchioli said. "We want to continue to connect with today's consumers who we know have lots of choices and limited dollars ... we want there to always be a reason to visit Denny's."

Need a Pothole Filled in Your City? Call KFC - Advertising Age - News

Chain Offers to Repair Streets in Exchange for Leaving Its Mark on Pavement

By Emily Bryson York

Published: March 25, 2009

Taken from Ad Age. 3.25.09

CHICAGO (AdAge.com) -- Don't be surprised if you see Col. Sanders out filling potholes. In an unusual cause-marketing push, KFC is tackling the pothole problem in Louisville, Ky. in exchange for stamping the fresh pavement with "Re-freshed by KFC," a chalky stencil likely to fade away in the next downpour.

While KFC seems more suited to pot pies than potholes, the company is likely to build a reservoir of goodwill among the general population.

"This program is a perfect example of that rare and optimal occurrence when a company can creatively market itself and help local governments and everyday Americans across the country," said Javier Benito, exec VP-marketing and food innovation at KFC. Louisville Mayor Jerry Abramson noted in a statement that budgets are tight for cities across the country, and finding funding for road repairs is a dirty job. "It's great to have a concerned corporation like KFC create innovative private/public partnerships like this pothole refresh program."

The KFC program appears to be part of a growing body of consumer-service marketing that connects in a meaningful way. This past holiday season, Charmin provided a public restroom in Times Square for the third year running. The company has also developed an application for iPhone and BlackBerry that helps consumers find toilets when the need arises. Samsung has installed electrical charging stations in many major airports to help travelers stay connected while in limbo.

Creating goodwill
Perhaps most importantly, while KFC seems more suited to pot pies than potholes and efforts like these are unlikely to sell chicken sandwiches in the short term, the company is likely to build a reservoir of goodwill among the general population -- particularly when they arrive at the pothole they've gotten used to swerving around.

Jens Bang, president of Cone, a Boston-based cause branding and corporate responsibility firm, said that recent scandals on Wall Street and in the banking industry have built up consumer skepticism, and "corporate marketers have to be concerned about building trusted relationships with their core stakeholders." Given the state of things, Mr. Bang said that corporations are looking to cause marketing for a variety of reasons. "Marketers are looking to use cause marketing or cause branding to look for opportunities to do a few things, build brand equity, enhance reputation. And it's also a big benefit to morale, it's a big help in recruitment and retention."

"Fresh" campaign
KFC decided to "Re-fresh" city streets as a tie-in to its new "fresh" campaign, which focuses on food quality. "It was always our plan to make our hometown of Louisville the first city for the program," KFC spokesman Rick Maynard said, adding that pothole-fixing season was an additional impetus. "The mayor was very excited about the program and even stopped by yesterday afternoon when the crew was refreshing the first bunch of potholes."

In addition to the Louisville project, KFC has issued an open offer to U.S. mayors to tell them about the state of their city streets and request assistance. The chain will select as many as four more cities at random for pothole assistance.

Some marketers have made more overt efforts to help the disadvantaged. Starbucks spent a week in New Orleans with its store operators in an effort to rebuild the city. The organization donated about 400,000 community-service hours and was quickly repaid in scads of free media. Shoe company Toms built its business on the premise that for every pair of shoes purchased, one would be given to a child in a developing country. The company planned to donate 200,000 pairs of shoes in 2008 alone.

The Brewers Look to the Dollar Menu to Deliver Value...

Taken from PartnershipActivation.org

Friday, March 20, 2009 at 07:56PM

Are you looking to make your events more affordable for fans? Are you looking for new ways to spike concessions sales?

The Milwaukee Brewers are responding to the concerns of their cash-strapped fans by recently announcing that they will offer a $1 menu concession stand at Miller Park during the 2009 season. The stand, which will not be open for every game during the season (including the team's season opener against the Chicago Cubs), will offer hot dogs, a 12-ounce soda, a 24-ounce tub of popcorn, a small ice cream cone, and a large cookie all for $1 apiece.

The Brewers can afford to offer such a deal because the team's ticket sales initiative has been so strong heading into 2009 - the team reached one (1) million tickets sold faster than at any other time in team history (despite the current economic decisions).

The dollar menu initiative is a great way for the team to sincerely demonstrate its appreciation of the commitment the team's fans have shown in the past few months despite all of the economic hardships. However, Brewers fans looking to capitalize on this great value can expect long lines throughout the season with the team slated to only offer one (1) stand for consumers to take advantage of at Miller Park.

With the 2009 baseball season set to begin in just a few days, expect the Brewers' dollar menu initiative to be modeled throughout the industry. The San Diego Padres recently announced that they will be offering a "Five for $5" concessions initiative in 2009 where consumers can receive a regular hot dog, a 22-ounce soda, a medium bag of popcorn, a small bag of peanuts, and a large cookie for just $5 (providing $8-$10 in savings for consumers). Check back for more price point promotions being implemented by MLB teams at the concessions stand!