Defense

The Great Breakfast Battle

4 Apr , 2014  

Every once in a while you see two strong brands crash into each other in a desperate struggle for market share and customer loyalty.

These Great Competitive Battles are always fascinating to watch and you can usually get some pretty good deals as the fight goes on.

In the United States, April will feature a GCB between Taco Bell and McDonalds.

Taco Bell made the first move by launching a new line of breakfast products including a Waffle Taco and the AM Crunchwrap.

To announce the new menu, Taco Bell found 25 people named Ronald McDonald and used them in a new advertising campaign. This generated a ton of publicity.

https://www.youtube.com/watch?v=2ESaThNFxgQ

McDonalds wisely decided to fight back. The chain is the leader in the fast food breakfast segment; this is a huge and important business.

So McDonalds announced that it would be giving away free coffee for the next two weeks. I suspect McDonalds will also heavy up advertising support and encourage restaurant managers to deliver particularly good service over the next month.

It is all going to make for a very interesting April. Taco Bell will likely respond with deep discounts on its new breakfast items. McDonalds will then follow with even bigger discounts.

McDonalds is in a strong position to win this battle. Taco Bell has always struggled at breakfast. I’m not certain a Waffle Taco is really going to catch on. The entire imagery of the breakfast launch isn’t consistent with the broader Taco Bell brand.

McDonalds needs to defend ferociously for the next two months. After that, Taco Bell will have to assess its results. If sales are disappointing Taco Bell will retreat; the brand can’t keep investing in driving trial for months. It is simply too expensive.

Taco Bell might have made one notable mistake in its launch. Attacking Ronald McDonald was a clever idea but it forced McDonalds to defend. If Taco Bell had focused on a different creative concept, McDonalds might have ignored the launch; McDonalds doesn’t want to defend. There isn’t a lot of profit in free coffee.

Directly attacking a strong brand is never a good idea.

Taco Bell took a risk and now McDonalds is fighting back.


3 Responses

  1. Gulnihal Uygur says:

    I think it takes Taco Bell more than naming a bunch of guys Ronald McDonald to win the breakfast battle. It sounds like a tough job to get people to eat tacos for breakfast. It is especially hard in a country where eating habits are skewing towards healthy food. Had they come up with something sounding “healthy”, my guess is they’d had a better chance to get a bigger share in the breakfast market.

  2. Eric J. says:

    I imagine this not only generated a ton of publicity for Taco Bell breakfast, but also for McDonalds breakfast. Attacking a competitor by naming their very famous spokesperson over and over again likely does more for the McDonalds brand than it does for Taco Bell. In fact, I could really go for a sausage McMuffin right about now…

  3. “Directly attacking a strong brand is never a good idea. ”

    I’d say “rarely” rather than “never.” A #2 brand sometimes has the opportunity to attack, which creates a conceptual duopoply, drowning out brands 3, 4, 5, etc. Avis never caught up with Hertz, but they did convince a lot of people that those were the only two choices….

Leave a Reply

Archives

Conversation Across the Site

  • Bonnie Halpern { Thank you so much for another wonderful webinar. I attend the in-person event every year in NYC. I am so happy that you had a... }
  • Tammy Williams { Always enjoy your perspective, Tim, thanks for sharing your insights and expertise. It's truly going to be an interesting game! }
  • Katherine E Brown { It really depends on the fair and the kid. Our local fair has 80% feeder pigs bought from auction or a local person or two... }
  • Todd { Thank you for this insight, Professor. Students rarely have any insight into the mind of a professor or teacher at any level. Come to think... }
  • Mark Sheldon { Very interesting. Thank you and I think your analysis is generally correct. The one thing I would add is that in a small zoom class... }
  • Marty { Ford , built for change ? This is the company Hank almost bankrupted by refusing to replace the model T }
  • Read more Comments »

Collaborate with Tim

Tim helps companies around the world build great brands. To schedule a program or event click here. To learn more about Tim’s books, click here.