January 23, 2008

Coffee war brewing

Fresh on the heels of the news that McDonald's is gonna start schlepping lattes, Starbucks has counterattacked with the announcement that they will try a pilot project where they will sell $1.00 coffees with free refills.

Read news story here

I think they're in big trouble. I realize they feel the need to try something new in light of lackluster sales lately, but lowering their prices is not the answer. Are people going to flock back to Starbucks again cuz of cheap coffee?

I read this post on an agency forum just yesterday:
"Brand preferences are never based on the products themselves, but on the "expectation of the experience" the product represents. Otherwise there would only be low priced products."
...He's nailed it. It really has little to do with the coffee.

Maybe what they should do is start selling burgers, fries and milkshakes.