McDonalds free coffee
Posted in Commentary on November 19th, 2010 by Sacha PeterI find this “free coffee, any size, any time” promotion by McDonalds to be commercially interesting. What are they doing?
Are they getting customers addicted to caffeine?
Are they trying to put Starbucks and Tim Hortons on economically competitive notice?
Or did they look at the statistics from their previous promotion of free coffee (which was only given in the mornings, and in a small size) and actually determine that people buy other stuff with their free coffee, well beyond the marginal costs of serving such coffee?
This continual promotion of free coffee at Mcdonalds has been a very fascinating marketing approach, and I would be very curious to know what kind of data they gleaned out of this study.
I’m curious too – I’ve been seeing these billboards for it and wondering what the catch was. Of course, that’s like wondering what the catch is with any drug dealer giving you free samples.
“Are they getting customers addicted to caffeine?”
Or perhaps getting Starbucks and Tim Horton’s drinkers to switch?
A cup of coffee costs them … 5 cents maybe? On the other hand, they will lose the profits they otherwise would get (much > 5 cents per cup usually sold).
Another aspect: when one receives something, one often has an urge to do something nice back. This is one reason why free samples in grocery stores work fairly well (the person feels like they should buy something in return, in that case). So I wouldn’t be surprised if it boosts sales of other products significantly.
Starbucks can’t reciprocate fully without hammering their own profits.
In order to establish a new habit, you need to do repeat it multiple times. A one-off sample would not be enough for McDs to steal customers from the other players.
Starbucks don’t need to fight back – their brew taste way different than the McDs weak brew. But even then, Starbuck drinkers may check out McD anyways for the breakfast.
Addiction is all in the state of mind, from my experience all food are addictive. If a person is eating burger for a long time, missing a meal or two, individual mind will have a craving for it, same with rice or noodles. Is caffeine more addictive then tea or other drinks? People are addicted to drugs not due to lack of control over the substance, it is the side effect that force them to addiction, ie herion. You will have uncontrollable pain, runny nose and cramp if you stop taking it. Will caffeine have such side effect? From my experience is NO.
Interestingly enough, they are doing it again, except this time for one week (October 31 to November 6th) and only a small-sized coffee. I’m guessing they are doing this to blunt out Tim Horton’s espresso offerings.