McDonald's McCafe

In Indianapolis, Indiana, customers at the new McCafe enjoy a latte and fresh pastry after shopping in the trendy Lincoln Park-like region, the artsy section of the city, near the attractive trail. Open since January of 2003, this unique coffee shop, situated adjacent to a traditional McDonalds, appeals to the upscale people who might not want to eat in a chain fast food restaurant or shop at chain retail stores (Carlson 2003, p.1). The prices are low, and the new bistro dTcor is pleasant. The service is crisp and flawless. But is this McDonalds? It is the purpose of this paper to evaluate the marketing program of McDonalds with particular reference to the new McCafe concept.

With a clear focus and successful mixed variable marketing, McDonalds is ranked first among the top ten fast food burger brands, holding 43.1 percent of the market in both 1999 and 2000 (MacArthur 2001, p.9). McDonalds has more retail outlets than any other merchant in the U.S., the largest purchaser of beef, buying 5 percent of the entire U.S. potato crop, and 2 percent of all the chicken (Love 1995, p.3). McDonalds dominates the fast food industry world wide, but the marketing strategies do not receive a lot of attention. The corporate aspect of McDonalds seems to prefer to remain somewhat anonymous, relying on fabled tales of the legendary founder, Ray Kroc. McDonalds executives do not participate in trade shows and refuse to join industry associations (Love 1995, p.2).

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been open since January of this year, and it is unclear from available sources, whether there are any other McCafes open in the U.S. at this time. McCafe is essentially a coffeehouse similar in appearance to other specialty coffee cafes throughout the county. The McCafe concept has been well-tested in the Far East, and because of McDonalds' resources, influence, and competitive strength, it can afford to try a new concept (Castle 2001, p.4). The McCafes are usually located next to a regular McDonalds but offer foods and drinks that are more upscale, but not so much as to be a threat to the McDonald's family fare next door. The pastry menu is extensive, including cheesecake, carrot cake, tira misu, scones, strudel, biscotti, and croissants. The coffee brand is Lavazza and can be brewed and mixed in any number of appealing ways (Castle 2001, p.5). Logically, with McDonald's position slipping somewhat in the food market it makes sense to diversify somewhat, to shift gears to include the adult market, the workers who stop at Starbucks for gourmet coffee on the way to work. For a brief moment, when McDonalds started the McCafe movement, Starbucks executives were worried (CEO 2003, p.3). However, according to the new executive,

Category: Business - M