The Battle of Bean Town
By George Anderson
When Dunkin’ Donuts at 715 Boylston Street in Boston found out about Starbucks’ promotion to give away free cups of coffee between 10:00 a.m. and noon today, it quickly shifted into gear to come up with a response.
What it came up with was free samples of its Turbo Hot coffee (made with a shot of espresso) as well as free cab rides for customers in downtown Boston in five bright pink Dunkin’ Donuts Turbo Hot Taxis. The taxi service will run from eight in the morning until six in the evening, according to a Boston Herald report.
Starbucks expects to pour roughly half a million cups of free Caffe Verona coffee (decaf on request) today at its U.S. shops. It also intends to take its campaign to the streets with sampling efforts through its “Venti Vans”.
Jim Alling, president of Starbucks U.S. stores, told The Associated Press, “We want customers from Seattle to Miami, from Boston to L.A., and all points in between, to visit us for a complimentary cup of the best coffee they’ve ever had.”
Moderator’s Comment: What are your thoughts on the Starbucks “National Coffee Break” promotion and Dunkin’s Donuts’ response in Boston? –
George Anderson – Moderator
I wanted to vote “both” or “all” but there was no choice.
All this excitement is going to get more people interested in coffee. As opposed to tea, or nothing. Caffeine is addicting.
Combine that with an air of free (perceived spoils from battle of giants), every one wins – (Like, not too long ago, giving out free tobacco samples on college campuses during special events!) – except for customers who will be buying coffee from every coffee seller there is, including grocery stores.
Yes Catherine, I’ll be happy to confirm that for you. Americans eat a lot of donuts for breakfast (but mostly washed down with diet soda to keep the calories down 😉
I made a special investigative trip down to my local Starbucks and got myself a free cup. At 11:45 am, the crowd seemed average. The staff was actively promoting the offering to customers, most of whom seemed unaware. Despite the barristas’ cheerful presentation, it seemed to be causing more confusion than anything. (Most customers usually opt for something fancier, so they appeared torn over the decision.)
So my assessment (based on a sampling of exactly one location in Upper Montclair, NJ) is that the PR benefits will only be there if it works without actually getting the coffee into the hands of many customers, since it doesn’t appear that it drove much incremental business. Or seen another way, it may have the effect of a small “thank you” to regulars who have spent half their kids’ college funds over the last 10 years on their caffeine habit.
Well it’s a midweek, midmorning laugh if nothing else. Just as Catherine wondered about the number of Americans who eat donuts for breakfast, I wonder about the number of Americans who will go out of their way for a free cup of coffee. Surely there would be more potential from passing trade being offered a sample as they walk. If Rick’s sample, small as it was, is anything to go by the offer of something that isn’t what customers came in for isn’t really gonna grab them. Maybe the pretty pink taxis would persuade people to go somewhere other than where they intended but I’m still inclined to think that it would have to be only the teensiest detour from where they were headed anyway. Or maybe I’m wrong about American habits as well and have become far too used to people over here who take freebies when thrust upon them but do not seek them out.
I imagine that all that will be gained from this exercise is a little free publicity. Our news hungry media will probably send crews to every Starbucks in the US to report that consumers were left standing in line for hours waiting on their free cup of coffee. Sorry WXYZ and KABC… the consumer won’t wait and you will have wasted your crew on another non-story!
Baseball fans – certainly those in Boston – are familiar with the original meaning of beanball, along with “chin music,” “brush-back,” “high & tight,” and “Linda Ronstadts” (blew by you). But this is a different kind of beanball in Bean Town. To paraphrase the theme song from the Beverly Hillbillies, “Black gold. Coffee, that is.” Or a song by Trick Pony called “Pour Me.”
The coffee business is basically weird, right? It’s hot water smooshed over some plant life. But, we’ve made it into a lifestyle issue in our own inimitable fashion. The bitter brew has multitudinous devotees, including yours truly. (Hello, my name is Doc, and I’m a grinder.)
This new kind of beanball, played for stakes higher than the World Series, is all about space, man. We are finally (FINALLY!) reaching saturation on caffeine filling stations, and it’s time for the major players to begin displaying the size of their, er, “antlers” in order to attract the largest herd of consumers to service. (Is that too many analogies?)
Who’s up for just sitting back and enjoying the show?
Interesting that they aren’t running it from 5:00 AM to 7:00 AM in the morning. As I understood the promotion from another report, it was to try and lure the ‘coffee break’ customer to their stores. It seemed that, from the report, that this was a time during the day where they were trying to improve business.
DnD’s reaction to the promotion is simply the wrong one. Trying to beat the giant at their own game never works. When you stick to your game, keep a laser focus on execution, and make continuous improvements, you find your customer to be less apt to be any more distracted by the competition than the media is today with this announcement.
Being as ‘media powerful’ as Starbucks has become, they can literally say they will do something, cause a stir, get their competitors off the mark and have accomplished their goal. They can do this while maintaining their laser focus on their objectives and by simply throwing something out there, whether they do it effectively or not accomplishing their goals.
In the end, it won’t be ‘the best cup of coffee you’ve ever had’. What it will be is something that is likely executed very well. I never have visited Starbucks for their coffee, per se. I have visited for their ability to execute consistently time after time. I still order a ‘medium’ every time just for the fun of being rudely corrected that its a ‘venti’ or something like that. The clerk also seems startled every time when I simply order a ‘cup of coffee’. I think its expected that it be a three sentence explanation and they don’t know what to expect otherwise.
This is the cola wars all over again! It is great that these two competitors are slugging it out, however, Starbucks clearly has a national presence, where DD does not. Ironically enough, purchasing a cup of coffee from one of these retailers is not about price or taste so much as about the cache and convenience which they offer. Every street corner has a coffee shop on it and the public has plenty of alternatives to choose from. Pricing is not a factor, or Starbucks would not be growing at the pace it has been (despite lower-priced competition). Now, with the fast food chains slugging it out (like McD’s and their premium coffee), we can expect growth to slow somewhat. The real question will be to what degree, and at whose expense? Oh yeah, 10-12 a.m. is a slow time of day for the coffee chains, so this is a great PR point to attract interest from the general public for a minimal cost. Look out, the taste test commercials are next!
Personally, I’m not going anywhere near a Starbucks this morning. I actually had a meeting scheduled at one this morning and, luckily, I remembered the promotion and moved it. Mention the word free and things can get pretty ugly. While I live here in the Boston area, I won’t be riding in one of the pink taxis either. I can’t imagine what the line for those things will be like.
What I like most about what Dunkin’ Donuts did is they did something. I don’t think the “what” was near as important as doing something so that they got mentioned in the same story as Starbucks free coffee giveaway. I think a lot of companies would have not bothered to do anything since the coffee giveaway was only for 2 hours. But by responding in some way, they were able to grab on to some of Starbucks’ publicity.
And by the way, do that many Americans really eat doughnuts for breakfast, then? I thought that was just something the TV cops on Hill Street Blues did. Surely not….
I have a great idea for a coffee promotion. How about the ‘friendliest coffee shop in town’ promo. A store that won’t make you feel dumb if you don’t know the right coffee lingo. A promise to staff the store with behind the counter help that doesn’t act impatient when you can’t make up your mind, or roll their eyes when a customer asks, “What are the ingredients in that?” And, finally, act like they really want to offer you something special when they remind the customer to accept a new or punch their current frequent buyer cards. I don’t care how much the coffee costs or what special flavors are available. When the help acts like they are doing you a favor to serve the customer, I’m not interested in going there.
This is a promotion that is designed to bring people, hopefully for both companies it will be new consumers, into the locations. It is an attempt to get new consumers to experience both the product and the experience. If the shops are not up to handling the potential volume, this promotion could backfire. If the promotion only brings in the usual customers, then it is nothing more than publicity. There are always promotions and gimmicks, some better than others, and this is nothing more than 2 large companies tryin’ to make sure they are not “out-promoted.”
No big deal, I don’t drink coffee anyway 🙂
I think Dunkin’ Donuts response was more knee-jerk emotional than efficient & effective from a marketing standpoint. Yes, it’ll grab headlines and attention, but as David Ogilvy said, it’s not creative unless it sells. This will certainly have an effect on community and, one would hope, share, but if calmer heads had prevailed, I think the money (and it sounds like big bucks) could have been spent more wisely. (I’m still a loyal Dunkin’ Donuts drinker, and the fact that the nearest Starbucks is 60 miles from my Vermont home is fine by me.)
I don’t think potential customers showing up at Starbucks today will see it at its best. The promotion is bound to mean stores are packed to the gills, with queues, no vacant seats and a less than peaceful atmosphere. One good thing about Starbucks is its comfy leather sofas and chairs but I bet hardly anyone notices them today, never mind sits on one. The Dunkin’ promotion wins points for quirkiness.
Giving away Starbucks won’t change the taste. It isn’t about the coffee — it’s all about the coffee drinker. The Dunkin’ Donuts response is OK, provided they’re doing it to build community rather than share.
If D’n D has the dominant share, it will maintain its consumer base. But free coffee that is very good just may entice D’n D shoppers to stop in Starbucks, and then return to its D ‘n D.
We have to keep in mind, these are two different operations that we are discussing. Starbucks tends to be the ‘coffee experience’ retailer; and the leader in the market is more of the breakfast treat shop, that is tagging on its excellent coffee. By the way, Dunkin’ Donuts has an excellent promotion; while Starbucks is establishing, on a national basis, the coffee holiday period.
Dunkin’ Donuts could create a breakfast experience for the consumer, but it will take a different retail atmosphere and
message. Hmmmmmmmmmmm
I like it. At a minimum, it creates some excitement and energy in the marketplace – sending a message that Dunkin’ Donuts is a vibrant company that cares about its customer base and is not going to let the outsider just do what it wants. I’ve never met more loyal coffee/breakfast customers than DD customers, but Starbucks is obviously a juggernaut…if their hot food succeeds the bar goes even higher. A strategic response? Of course not. But an interesting tactic to send a message.
Both retailers lose. Escalating a battle where both companies give away their product or raise their overhead solves nothing. The hard part: how to stop the battle. What can be learned: it pays to anticipate your competitor’s response.