• About Tom Dougherty

    Tom Dougherty CEO, Stealing Share

    Tom Dougherty is the President and CEO of Stealing Share, Inc., and has helped national and global brands such as Lexus, IKEA and Tide steal market share over his 25-year career.

    An often-quoted source on business and brands, he has been featured recently by the New York Times and CNN, discussing topics ranging from television to Apple to airlines.

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McDonald’s free coffee is the response to Taco Bell

Just a few days after Taco Bell unveiled its “Ronald McDonald” spots, McDonald’s has responded. Does it have a new campaign that takes Taco Bell head on? Does it remind us why the McDonald’s brand is still relevant?

No. It’s offering free coffee.

McDonald’s, which leads the fast food category in all dayparts (breakfast, lunch, dinner and late night), has responded by offering its breakfast customers a free 12-ounce cup of coffee.

This is a desperate attempt by McDonald’s to ensure its market share, which has been slipping in recent months. McDonald’s still leads, but new competitors have been entering the breakfast market in recent years and giving consumers more options. That has resulted in decreasing market share for McDonald’s, even in other dayparts.

Enter Taco Bell and its Waffle Taco, launched by a brilliant campaign featuring men named Ronald McDonald preferring Taco Bell. I wrote about that ad in more detail last week, and discussed the reasons why it will work for the 50-year-old restaurant.

McDonald’s may respond with its own ad soon, targeting competitors or making its brand more important. That would be smart. Offering McDonald’s free coffee isn’t. It’s just a silly ploy that actually makes McDonald’s look ridiculous. (I bet the Taco Bell offices in Irvine, Calif., are full of laughter today.)

mcdonalds-CoffeeWe can all yuck it up at McDonald’s expense, but it still is in the position to win back market share – and beyond. The road it’s taken in recent years is to market product, not brand. It has become all about dollar meals and new menu items that only resonate occasionally. McDonald’s has basically been doling out the same messages at its competition.

That, in a vacuum, is a fine strategy when you are the market leader. But that only works if the competition is doing the same. It only works until the competition (in this case, Taco Bell) takes you head on and offers up marketing that is a true reflection of the customer.

That’s what has been missing from McDonald’s in recent years. Who is the McDonald’s customer? Who do they aspire to be and what does it mean when you choose McDonald’s over the competition? Those are the questions McDonald’s needs to ask now that Taco Bell has sent a shot over the wall that says even McDonald’s most aligned customers (the ones who share a name with a McDonald’s icon) are leaving.

McDonald’s will need to re-set itself in this increasing competitive world and it has the resources (and history) to do it. If it doesn’t, its sales will continue to slump and the Waffle Taco will replace the Egg McMuffin.

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