Will McDonald’s drink Starbuck’s latte?
Is it any surprise McDonald’s has brewed itself boldly into the coffee business? The McDonald’s menu has evolved dramatically since itsfounding days in the 1950s, back when it was a simple spot to get a burger, fries and a drink. The company has adapted to shifting consumer tastes, wants, and demands, and has become a major player at breakfast, in chicken, in snacks, salads, and more. There have been a few flops along the way, but in the last six years, McDonald’s menu innovations, better service, and improved atmospherics, have pulled in new customers and boosted profits. Now, thanks largely to Starbucks, Americans now crave fancy coffee drinks, and want them for breakfast, in the afternoon, and even after dinner. It’s no surprise McDonald’s is seeking to capture all these newly evolved coffee cravers. McDonald’s mochas, lattes, and cappuccinos have gotten positive buzz; even people who prefer Starbucks have given the McDonald’s drinkspretty high marks. And coffee drinkers who get their caffeine fix at McD’s can pocket the savings over the same drink at Starbucks. In recessionary times, that’s a powerful advantage. One survey found that 60% of consumers will trade to McDonald’s if the coffee drinks are cheaper and made faster. There’s also the convenience factor – you can grab a latte while picking up a happy meal for your kids, in a part of town Starbucks hasn’t yet hit, or on a road trip. Starbucks is fighting back against the McCafe invasion with an ad campaign focusing on quality adherence; they’re also experimenting with a breakfast value menu and one dollar coffee. However, we’re betting plenty of consumers will choose McDonald’s premium coffee along with its iconic food offerings over coffee at Starbucks accompanied by its made-off-premise bakery items and microwaved sandwiches. On the day ...
The camera never lies…
...but lots of people do, especially when they’re talking to researchers or otherwise responding to surveys. A part of it might be attributable to the Lake Wobegon effect, from the mythical town of Garrison Keillor, where it is said all the children are above average. More technically, another driver is social desirability bias. This is where the respondent wants to provide an answer that will be looked at by others as favorable. • A recent poll asked Americans who they voted for in the last election. This poll showed Obama thrashing McCain by more than 20 percentage points -- far greater than the actual Obama margin of victory on Election Day. • When people are asked if they voted in a presidential election, the percentage of self-reported turnout is inevitably 10-20 percent higher than actual turnout. • About 40 percent of Americans say that they attend church regularly. Counting and tracking methodologies used to determine true church attendance found that about half that number can actually be found in the pews. • A number of years ago, a survey found that upwards of five million people claimed to be New Yorker magazine readers—an unlikely number given that circulation was barely above half a million. People want to be on the winning team, and want to look virtuous and smart. So when we ask them to self-report, we often get responses that are wildly inaccurate. Researchers are exploring tools such asanonymous online polling and expressionless computer avatars in order to obtain more accurate survey results. But no matter how sophisticated surveys become, there is no substitute for the careful capture of actual human behavior, as we do with video-enabled behavioral analytics to see into the realities of shoppers in the shopping aisles.
The focus group: Dying a slow death?
How much useful information can you get from a room full of twelve people being paid $75 to eat cookies and talk about a product, place or campaign? According to a recent Catharine Taylor column in Social Media Insider, the focus group is dead. Taylor points out that focus group testing failed to predict customer outrage over Tropicana’s packaging change, the complaints of baby wearing moms about a Motrin advertisement, or the howls of protest over the Sci Fi channel’s name change and Facebook’s new terms of service. According to Taylor, focus groups are “contrived” and encourage companies to listen to “customers who were either not invested in their brand very much or not invested in it at all.” Taylor comments that “the very idea that a focus group is valuable is ridiculous -- when compared with the real conversation taking place among the people who really care about your brand.” Is Taylor right? Can the focus group, often as stale as the potato chips served to participants, really be replaced by following the conversations of brand loyalists on blogs, Twitter, and Facebook? Focus groups can indeed be a problematic way to get information. Participants are often distinguished more by their desire for a cash stipend than by their insights. Some people habitually lie about their background and past participation in focus groups in order to gain access. There is little that is natural or realistic about a forced discussion conducted in a bland office room. Often the companies conducting focus groups have a desired result, and interpret the data selectively to support their preferred outcome. However, as participants in the lively comments following Taylor’s post point out, the marketers can’t only listen to the opinions of the most intense fans garnered via social media channels, because they could be overly intense ...
Message to retailers: Stop hyperopia now!
Is the American consumer dead or just dormant? An incessant barrage of news reports suggests that we have officially begun a new age of frugality, trading shopping mall binges and dinners out for saving accounts and home cooked meals. Shoppers are clipping coupons, switching to store brands, and picking out cheaper cuts of meat. The tried-and-true, knee jerk way for retailers to appeal to the newly frugal customer is to compete on price by issuing coupons and holding yet another sale. An intriguing article today in the New York Times suggests they might want to pursue a smarter alternative. According to the story, we are experiencing a rise in a phenomenon that consumer psychologists call “hyperopia,” or excessive obsession with preparing for the future. According to the piece, we’re likely to regret our excessive frugality. “People feel guilty about hedonism right afterwards, but as time passes, guilt dissipates. At some point there’s a reversal, and what builds up is this wistful feeling of missing out on life’s pleasures,” according to Ran Kivetz, a professor of marketing at the Columbia Business School. The story reports Kivetz and a colleague found that consumers who were asked to imagine how they would feel about their purchases in the distant future shortly before Black Friday spent more money and bought more indulgent items than consumers who were asked to imagine how they would feel the following week. In the fable of the Grasshopper and the Ant, Aesop described “two types of people: the virtuous Ant who saves for the winter and the improvident Grasshopper who’s punished with starvation.” Another consumer study found that even the most disciplined Ants found ways to “pre-commit to indulgence” -- more than a third of participants selected a less valuable spa gift certificate instead of cash so that, as one ...
