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MBA652 Week 1 Discussion Questions

MBA652 Week 1 Discussion Questions - For my product I have...

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For my product, I have chosen the McCafe beverage offerings from McDonald’s, including premium coffee drinks and frozen coffee drinks known commonly as frappes. McDonald’s marketing campaign for their McCafe products is an excellent example of a market penetration strategy. Market penetration strategy refers to a company's efforts, "to gain dominance in a market in which it already has an offering" (Kerin & Peterson, 2010, p. 7). One of the main ways this is accomplished is by attracting buyers from competitors. Beginning in June, 2009 (Abelson, 2009), McDonald’s began gaining significant ground on the two coffee giants Starbucks and Dunkin Donuts. They accomplished this over time by offering equivalent beverages at low prices, while advertising new products excessively and promoting with free coupons. Additionally, McDonald’s created an ad campaign targeting, “more sophisticated consumers” (Patton, 2011). According to a June 2009 report in the Boston Globe, McDonald’s spent $100 million promoting McCafe products as it worked toward penetrating the Starbucks and Dunkin Donuts gourmet coffee market (Abelson, 2009). This position is further supported by an interview conducted with McDonald’s Chief Financial Officer Peter Bensen. During the January, 2011 interview, Bensen credits the popularity of the McCafe products for McDonald’s growth in 2010 (Collins, 2011). In summary, McDonald’s chose to improve one of their existing products to offer something their customers were previously more likely to buy from a coffee shop. Combined with this improvement, they promoted the product heavily and used their extensive distribution resources to get the product on the street through 32,000 international stores (Skinner & McKenna, 2010).
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