Monthly Archives: October 2013

McDonald’s Gets Creative

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McDonald’s plans to implement change through its menu and promotions to attract customers

In recent studies, researchers have found a decrease in consumer demand of fast food chain restaurants, due to the increase of health awareness and advances. McDonald’s is a prime example of a fast food restaurant in dire need of innovative customer attraction’s to maintain their profits and income. In this article written by Bloomberg’s Leslie Patton, McDonald’s creates a new business plan targeted towards a younger population, testing out a “Loyalty Program”. This program allows customers to electronically apply for rewards such as free food, coupons, seasonal promotions etc. They also test products that teenager’s find popular as a way to draw them in and keep them in. Furthermore, the company is promoting a healthier menu, optioning salads instead of fries in their value picks meals and non-fat milks, juices and fruits in their happy meals. It is a slow process, however, it is one that is greatly needed in the fast food industry, perhaps giving McDonald’s a competitive advantage in the fast food field. Businesses and markets are constantly changing with new technologies advancing, newer products arising and markets expanding. This is a great example of a large-scale company adapting to these changes and implementing programs instantly to attract and accumulate consumers.

 

A New Tea Party

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Activity of antioxidants found in tea’s help the prevention of chronic diseases

 

Market research is seeing a revival of the once historic beverage known as tea. Many Canadian’s are now seen enjoying a humble cup of their preferred teas, thus opening the market to big tea chains like Teavana (vastly owned by Starbucks), as well as Canadian enterprise David’s Tea and other brands.

Due to new scientific research exhibiting tea’s cancer-fighting antioxidants, speciality tea shops have made a vast growth in entering the new and demanding market. Ultimately, the reinvention of tea leads consumers to wonder whether the era of coffee has begun to crash. Howard Schultz, CEO of Starbucks, clearly believes otherwise, as he invested $600 million in order to own 300 Teavana chains, with 59 of the stores locations found in Canada.

This, in my opinion, is indeed a mass movement towards a greater exchange. There is more to be found outside the “core coffee business” and if done correctly, can veer many company’s towards great customer satisfaction and prosperity. However, as a tea fanatic myself, it is questionable whether the tea companies are ethical in the way they produce and clean their leaves. Associated with the mass production of tea is the mass production of residing pesticides found in tea cups. Once dried, leaves must be washed in order to reduce this from happening, and hopefully, these companies will provide consumers with pesticide-free teas.

 

Sources :

http://www.cbc.ca/thecurrent/episode/2013/11/12/from-starbucks-to-davidstea-why-big-business-is-betting-on-tea/

http://www.cbc.ca/news/business/rising-tea-sales-drive-profits-for-beverage-chains-1.2424091

 

Starbucks’ New Launch

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Starbucks has always been famous for its brand-imaged coffee, marketing its products to caffeine fanatics. However, as the distribution of consumer coffee choices diversifies, Starbucks is attempting market penetration, branching out into the food industry. In an attempt raise profits, the company has substituted its pastries for baked goods from LaBoulange in American franchises. Food has long been known as the “achilles heel” (Sara Senatore, An Evolution of Starbucks Food), of Starbucks. Food sales have remained stable for the past three years. According to Sanford Bernstein (analysts), the introduction of Starbucks’ new lunch and dinner products from LaBoulange, hopes to increase food profits in the U.S from 19% to 30% by Fall of 2014. The main objective of this economic expansion is to diversify Starbucks’s brand beyond its coffee reputation. As more and more coffee shops are evolving in the market, Starbucks needs to increase its gap and maintain its number one position in the coffee shop industry.

Starbucks to introduce La Boulange into certain locations

Nonetheless, bringing food into the picture may not benefit the company in ways they are anticipating. Consumers are looking for quick, easy and convenient ways to get coffee. With this in mind, Starbucks must recognize what brought them to the top of their market board. The original concept they built their brand on and continue to strive upon since 1971 is coffee. Sometimes, simplicity is the ultimate sophistication. Should Starbucks should stick to the status quo and focus on what they are competent with and well known for? Or should they fight to attain a new, unknown market that may potentially be unprosperous and unattainable?