Starbucks goes “sophisticated and upscale”……?

In the you’ve-got-to-be-putting-me-on file, MSNBC and Starbucks just announced the launch of a special marketing initiative between the two companies whereby the Seattle chain will become a name sponsor of the cable news programmer’s “Morning Joe” show, with Joe Scarborough.

The deal allows for on-air Starbucks brand plugs, announcements, and visual references within the body of the weekday news-and-talk program. Future remote broadcasts may take place within Starbucks locations around the country.

Starbucks CEO Howard Schultz, in commenting on the deal, said the “Morning Joe” show makes great sense for his company, calling the audience “sophisticated and upscale.”

Let’s get this straight. With its business suffering in profound ways, with hundreds of stores closing, with its reputation as the place where the urban elite go for lattes, with millions of consumers forced to cut back on even small indulgences and others avoiding even the hint of conspicuous consumption as bad manners in a reeling economy, with the company doing everything it can to say its $4-per-cup image isn’t deserved, with all that……they’re now ballyhooing a deal to reach the posh and polished?

I'm only slightly kidding to wonder if they'd be better off doing a deal with NASCAR.

Will McDonald’s drink Starbucks’ latte?

Is it any surprise McDonald’s has brewed itself boldly into the coffee business? The McDonald’s menu has evolved dramatically since its founding 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 drinks pretty 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 premium coffee at McDonald's debuted, my wife’s comment after taking her first sip: "Starbucks is in trouble."

Success beyond accidents of the marketplace

Ron writes: It might be easy to dismiss McDonald’s strong sales performance as nothing more than the result of a heightened consumer desire for inexpensive food during tough economic times. But having worked with the company for more than a dozen years on a number of advanced analytic projects covering operations, marketing and HR, I know this is only one of a host of even more salient factors contributing to the very positive numbers coming out of McDonald’s. A recent story in the New York Times explains how the company has won over skeptical customers with its thorough, nearly obsessive effort to get things right. Here are a few of the key ingredients that have contributed to McDonald’s supersized success, even as the economy and the rest of the restaurant industry have struggled.

A clear, customer-focused goal: McDonald’s has single-mindedly united its people behind “Plan to Win,” an internal playbook that encourages employees to “focus on quality, service and restaurant experience rather than simply providing the cheapest, most convenient option to customers.”

Adjustments based on brutal facts: McDonald’s discovered that customers were becoming more interested in dining early or late, so stores were opened earlier and stayed open later. Executives “pored over data to determine what consumers were eating and drinking and where McDonald’s could expand to capitalize on changing trends.” McDonald’s transformed beverages from an afterthought to a central offering, resulting in higher sales and plaudits for its coffee quality.

Grounded, open leadership: McDonald’s selects leaders who have restaurant experience, not merely academic credentials. Jim Skinner, McDonald’s CEO, never graduated from college but rose steadily through McDonald’s ranks. He’s comfortable mingling with everyone from coworkers to restaurant staff. According to John W. Rogers Jr., a McDonald’s board member, Skinner has “created an environment where these guys have been allowed to shine.”

Patience: Some changes at McDonald’s took time to implement, such as rebuilding restaurants, improving employee training, and reconfiguring the drive-through. Luring skeptical customers back to the restaurant took years, not months. As McDonald’s president, Ralph Alvarez says, “The lesson there is, be patient.”