McDonalds just put up a huge sign in front of the Starbucks headquarters office in Seattle that says, “Four bucks is dumb,” and at the bottom it says, “…now serving espresso.
This sign is displayed on 140 billboards in Western Washington, according to the Seattle Post Intelligent.
This is one of many campaign strategies that McDonalds has taken up since the start of the fall of the famous coffee company, Starbucks.
But is McDonald’s really doing better than Starbucks?
McDonalds has reported a 7% increase in profit in its global market. However, the burger company is also feeling the effect of recession as it recorded 4.5% profit in its American market compared to places like Europe where it has seen 7.8% and the Middle East where it has seen more than 13%.
Also, McDonald’s repurchased over $1.3 billion of its stock.
Starbucks has continued to see a decrease in profit.
Last quarter, it recorded over 90% decrease in profit. This happened after it announced the closing of 600 stores in the US. The coffee company says it will not retaliate to McDonald’s aggressive advertisements.
The chief marketing officer, Terry Davenport addressed the billboard issue in an investors meeting last week. “”We’re not going to get into that conversation. We’re not going to get sucked into the, ‘My coffee is better than your coffee,’ price point type of coffee conversation. We’re going to play at a much higher level,” he said.
In comparison to the price of coffee at McDonalds, a 12-ounce cup of coffee at Starbucks is form $1.40 up, which is 10 cents more than that of McDonalds. Also, a small latte at McDonalds costs from $1.99, while that of Starbucks starts from $2.45 to $3.15.