Starbucks hits back in coffee culture war People were shocked when McDonald’s, the chain more popular for burgers and fries, announced they were going after the elite coffee market. It was seen clearly as a missile aimed directly right into Starbucks profitable business niche.

Entrepreneurs and Generation Y regularly gather at Starbucks for meetings and relationship building. Both these cultures are also within McDonald’s target demographics however cultural members had been walking under the green circle more than through the golden arches.

Evidently McDonald’s move was effective as Starbucks is now firing back with a marketing campaign clearly aimed at the restaurant giant.

An undisclosed number of Starbucks in Seattle are test marketing two of McDonald’s mainstays: the dollar menu and free beverage refills.

Okay, so it only includes one-product, the small, or “short”, coffee, it is still a significant change in the way coffee shops operate. There is not price parody as McDonald’s cup is 50% larger, but it is the first time a major coffee-driven chain has provided free refills.

Now we’ll watch to see if Starbucks is able to attract McDonald’s frugal economic culture.

Labels: Business, Gen-Y, Generation

  ¶ 1/25/2008