Good thoughts.

McDonald's understands the important role of each of its assets and how they work together to fulfill consumers' needs and expectations.

Boiling this down into six steps makes the McDonald's story look easy, but it's not. Especially with an organization that has so many moving parts; operations, franchisees, front line employees, managers, menu management, financial management, marketing, and a plethora of business partners.

Few companies have as big of a daily challenge as McDonald faces in balancing excellence in operations with appropriate messaging to delivering a holistic branded experience. This is where most players in the category stumble and where McDonald's excels.

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Good operational moves and message by Starbucks. They still have a large footprint. If they deliver on the execution of the food and position it as a value, they have shot.

But I have to ask, "what coffee pipe are they smoking?" The chain is staying with its tactic of long-form newspaper ads in the New York Times, Wall Street Journal and USA Today to support this push? 

The majority of their customers read those news sources on-line, not in print. Sure those publications still have a circulation and Starbucks will get exposure from them. But isn't Starbucks interested in maintaining some semblance of relevance with their core customer? 

Do they not see all the people in Starbucks comfy chairs sucking up the free wi-fi and flipping through their smart phones?

Perhaps this report was missing details to the planned campaign. If the roll out just consists of long form print ads in newspapers, all anyone can say is, "WAKE UP AND SMELL THE COFFEE!" 

In the same way that it would have been much better to have gotten food right a few years ago when people were knocking down their doors for their coffee, so too would it have been better to fix their approach to selecting appropriate media.

Success breeds complacency. The "we'll get to it when we need to," always bites you in the ass. Starbucks is playing catch up, but they're still living in the past.

McDonald's is rolling out more premium coffee, Dunkin' is pushing out beyond their core markets, Starbucks is left with no choice, this has to work for them.

The previous comment by Starbucks' Chief Marketing Officer, Terry Davenport, arguing that, "the exposure McDonald's is bringing to the category will bring new consumers and Starbucks should be able to snare them when they have more cash to spare," can only ring true if Starbucks is relevant enough to warrant the premium when they have the extra money.

McDonald's has significantly more locations, especially with Starbucks closing stores, and a better price. What McDonald's doesn't have is the ambiance and the relevancy with the core Starbucks customer

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Best Buy Survey: Apps driving smartphone adoption, 40% of consumers plan to upgrade to a smartphone within 12 months 

  We have stated in major publications like Ad Age, Adweek, Businessweek, WSJ among others that within the next 12 months, the smart phone will be the number one way consumers access the web.  This survey proves it.  Cell phones outrank computers 3 to one.  For smartphone penetration to exceed computer penetration 1/3 of the market would need a smart phone.  The numbers are already approaching the 1/3 mark and according to the Best Buy survey, purchase intent of all who do not have a smart phone is 40% will buy within the next year.

With the smart phone becoming the #1 way people access the web, every marketer needs a smart phone strategy.

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Great points!

One additional thought, smart phones will soon be the #1 way US consumers interact with the web, based on smart phone penetration and the fact the cell phones outnumber computers by 3x. That means the web is always with you, knows where you are through GPS, and is involved in the majority of your personal communication.

Regulators should have no power or authority to constrain the internet as doing so is an invasion of privacy and freedom of speech. They should be empowered to enforce Federal Laws that pertain to the public in general that are not internet specific.

 

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Mobile will soon be the #1 way that the US accesses the internet, given smart phone penetration and the fact that cell phones outnumber computers 3x in the US.

Google knows that. That's why they launched Android. That's why they're pushing for the release of the 700 Mhz spectrum which would be super-high speed and virtually everywhere, and is now available due to television's migration to HD. Google is also asking for an open platform on that spectrum where the consumer can decide at a moments notice who their connection provider is, making wireless connections a low rung commodity that everyone can afford.

An omni-present spectrum that's always on, at super-high speeds, that's low cost and everybody has access too wherever they are, will lead to a plethora of video based, rich media web content on your mobile device.

Apps like Deal Chime, that offer customers coupons and savings based on geo-based location and retailer specificity have their place. As do video tools like Klickable, that allow customers to click on items they are viewing in a video for links and more information. These and other specialty tools will all play an important role in the high speed hand held driven web.

But, with all the added content, always available, Google will be needed more than ever and it's dominance will continue into the mobile world.

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Could it include Deal Chime?

Hand held will become the #1 way consumers access the web in the next 12 months in the US, simply based on smart phone penetration and the fact that cell phones outnumber computers 3 to 1. On-demand video viewing is already available on phones.

As access and speed to the internet accelerates, the 700 MHZ spectrum just vacated by broadcast television and now available alone will exponentially increase rates on hand held and computers to speeds that will easily download movies and on-demand products at a moments notice.

Given that, Netflix really doesn't have a proposition to survive. The studios themselves will begin releasing first run features for premium prices on the internet.

The only model for Netflix to survive is to buy in to a product like Deal Chime or other geo-based coupon tools that know where consumers are and what they are purchasing. These tools have the CRM capabilities to deliver offers and even special purchase bundles that include movie downloads.

"Spend $200 at Safeway and view a first run movie tonight," will become a common offer.

As will straight downloads directly from Studios.

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We've found through our research and experience that consumers do not believe advertising. Advertising makes them aware and curious, but it does not build trust. 

For high involvement products consumers' research includes discussions with trusted family and peers on-line and off, through opinion boards in the blogosphere and comparison tools on brand websites.

For lower involvement products, brands that make connections to influencers, adding value with easy to use tools to make comparisons and educated decisions that can be shared with others are pulling ahead. Right now, 2/3 of all US consumers make a list before they go to the grocery store and this list is heavily influenced by price and product opinions found on-line.

Furthermore, the penetration of smart phones in the US means that within the next year, phones will be the #1 way consumers interact with the web, as cell phones outnumber computers 3 to 1. This will only fuel the use and influence of web and social media. 

The customer has a very powerful advertising filter, the truth, and conventional media is part of the mix, but alone, it doesn't work. 

Here's a look at current media and where it is potentially migrating.

TV - 
A tool like Klickable, that's already in use, enables viewers to click on items they are watching in a video for more information and even links to purchase. Klickable has metrics that identify when and where people are clicking, providing opportunity for immediate and automated optimization. As TV content migrates to the web and on-phones, it's possible that the conventional "TV" spot will no longer exist. In-program messaging will be replaced by product placement that demonstrates the product in use. Clicks and surround the screen sponsored messages with links for more information will provide uninterrupted, sponsored programming.

Print -
New tools like Deal Chime are already replacing the FSI with alternative out-of-home and geo-based web media designed to reach the customer when they are in "purchase mode," delivering 10x the audience for the same cost. A single coupon on an FSI is being replaced with Deal Chime's varying coupon and promotion messages delivered via the web and phone, based on geography, consumer behavior and retailer specificity.

Local TV, Radio, Newspaper, Out Of Home, Yellow Pages and Direct-Mail -
Search Engine Optimization, Web-based PR, Electronic Outdoor, Events, Geo-based Social and News Sites, In-Store, Shopper Marketing, Phones and E-mail are all making it easier to reach specific consumer demographics when they're in purchase mode even while they're shopping in the store.

If it sounds like rocket science, it is. That's why Accenture, Microsoft, Google, IBM, cell phone engineers, developers, programmers, data miners and specialty think tanks and shops with globally ranked research facilities are all now in the game. 

There's still room at the table for "the branded message and media." But the table is getting crowded and a seat requires accountability.

 

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 Alice.com and retailer's own digital offerings on mobile will change the way consumers shop, as they will have best prices in hand, while they're shopping. 

If they want the better price and it's not in the store they're in, they don't have to drive for it, they can have it delivered.

Additionally, Deal Chime which is already in the US market provides geo-based coupons and values specific to shoppers identified needs, adding to to the value equation by coupling best price with best coupon offer, and personalizing offers based on consumer experience.

So now, instead of getting competitive coupons based on purchases after paying at checking out, consumers can get best coupon offers before purchase. 

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 Alice.com and retailer's own digital offerings on mobile will change the way consumers shop, as they will have best prices in hand, while they're shopping. 

If they want the better price and it's not in the store they're in, they don't have to drive for it, they can have it delivered.

Additionally, Deal Chime which is already in the US market provides geo-based coupons and values specific to shoppers identified needs, adding to to the value equation by coupling best price with best coupon offer, and personalizing offers based on consumer experience.

So now, instead of getting competitive coupons based on purchases after paying at checking out, consumers can get best coupon offers before purchase. 

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Unlike Burger King, McDonald's, Subway and Starbucks all dominate in distribution with gigantic retail footprints.

McDonald's and Subway are doing well in the recession because they have tremendous values you cannot miss, they're literally everywhere. Starbucks has not fared well, closing locations, and reducing prices on their super premium priced coffee, killing their margins and offering nothing of real value other than discounts that leave their coffee still more expensive than other offerings.

How is that relevant to Burger King? Burger King will never catch up in footprint, unless it merges with another player like Wendy's and it hasn't focused on values.

Burger Kings has done a good job of bringing in the Super-Heavy Users, males who eat in store multiple times per week. They've done so with a distinct flavor and attitude that has built a core audience. 

But strategically, that means they have fewer customers who spend more with them. So when those customers have to cut back, it's bigger impact for Burger King. Their competitors have larger user bases and are less dependent on each individual customer. By Burger King not focusing on value menus, which should be fairly easy to do, they haven't been fulfilling the needs of their core audience, who is more financially strapped.

When McDonald's decides they wantto be in a new business category or offering, they retrofit their stores and marketing clout to deliver results. They single handedly are going after Starbucks right now with their coffee initiative. They see the vulnerability, and they are moving accordingly.

It would not be overly difficult for McDonald's to create healthier sub sandwiches, which they've tested several times, or to roll out flame broiled burger options.

If they had to choose amongst the two, sub sandwiches on the surface looks like the best option. Until you look at McDonald's real clout, location and value. Subway alone and its collective sub brethren outnumber McDonald's locations and they're very competitive on price.

A flame broiled McChicken, McRib, Filet O' Fish, Quarter Pounder and Big Mac could overnight bring Burger King to it's knees, especially as value menu items in substantially more McDonald's locations.

Flame broiling could also be an operational nightmare for McDonald's. Sort of like "Made To Order" and "Coffee Bistros." "Made To Order" brought McDonald's operations back to excellence and at the time was a page out of Burger King and Wendy's operation books. Coffee Bistros are up and running and will secure McDonalds dominance in breakfast. 

So Burger King, get busy on values before McDonald's eats your lunch. 

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