Coffee War Analysis

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Coffee Wars Analysis

By Allie Goulet and Tina Guo
10/23/12

"I pledge my honor that I have neither received nor provided any unauthorized assistance during the completion of this work" In order to properly declare a winner of the Coffee Wars, we believed it to be essential to first analyze all three brands using various Brand Management tools. View pages 1-9 for our initial analysis. Background Information

| Dunkin’ Donuts | Starbucks| McCafé |
Founded | 1950 in MA | 1971 in Seattle| 1993 in Australia| Mission| “Make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores” | “Our mission is to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time”| To make McCafé the beverage destination that offers worthy and rich flavored beverages | Area served & global distribution| Restaurants in 36 US states & in 31 countries (by 2010);9760 global points by 2010| More than 17000 stores in 55 countries| Over 1500 stores worldwide| 2011 total revenue | $ 96224 in U.S. + $3870 international ($ in thousands)| $11.7 billion| Reports indicated that an average of 15% increase in sales boost from McCafé | Other notable financial information| Segment profit: $ 70708 in U.S.; + $3180 international ($ in thousands)| Net income: $1.2 billion| Since 2009, McCafé has helped McDonald’s grow its coffee sales from 2 percent of U.S. sales to more than 6 percent| Average price per coffee| $1-$3.5 range| Range from $2-$5| $2 to high-$4 range| Average cups of coffee sold per year| More than 1 billion cups| Around 4 billion cups (average price: $2.1)| Unknown| Coffee sourcing:| 100% Arabica coffee beans from Central America, South America and other regions for proprietary blends| Ethically sourced morethan 80% of coffee through C.A.F.E. Practices| Coffee beans from central and South America, and also Indonesia while the Premium Drip Coffee blend comes from the mountains of Columbia, Guatemala and Costa Rica| Coffee related awards| #1 in “Customer Loyalty in Coffee” for past five years (source from 2010 report)| “No. 1 Best Coffee,” Fast Food and Quick Refreshment categories (2009-2011)  “No. 1 Most Popular Quick Refreshment Chain”(2009-2011)   (company website)| | Product type sales| Unknown| %75 in Beverage; 4% whole bean and soluble coffees; 19% food; 2% coffee-making equipment & other| Unknown|

Brand Identity & CVP
| Dunkin’ Donuts| Starbucks| McDonald’s (master brand of McCafé endorsed brand)| Core Identity| Product quality: Good taste, freshly made every day; highly-differentiated donuts and breakfast sandwichService: Fast (grab-and-go), self-service, accurate, friendly and cheerful; at convenient locations | Product quality: Good-tasting, high quality, richly brewed, ethical-sourcing coffeeService: genuine and cheerful; | Value offering Consistent food quality at affordable priceService: Fast, accurate, friendly and hassle free service at convenient locations Cleanliness: the operations are always spotless on both sides of the counter| Brand as a product| Product scope: Coffee/beverage donut; bagel; muffin; breakfast sandwich (extensive offerings); consumer goods (ground coffee)Quality/value: Good taste, freshly made daily; differentiated donuts and breakfast sandwich; 100% Fair Trade CertifiedTM espresso lineUsers: Mainly people who like the quick service, and some families, but serves a wide clientele| Product scope: Beverage (coffee as the core); Food; coffee-making equipment; whole bean & soluble coffees; consumer goods products (ie ground coffee, instant VIA, bottled beverages, ice cream, etc)Product attributes: Strong coffee, unique offeringsQuality: Good-tasting, high quality, richly brewed coffeeUsers: retail consumers age range 18-44; mostly middle – high median income households| Product scope: fast food, hamburgers, children’s...
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