If we learn nothing else from the fast food and drink industry it is that complacency has no place in the business world, even among global brand leaders. A trend has emerged whereby large fast food and coffee retailers are expanding their brand model into new areas in order to capture new market opportunities and extend their customer offering.
Listen To What Your Customers Are Saying
Often, an expansion of an original brand offering is the result of a brand trying to remain relevant to the customer and their ever evolving tastes.
Starbucks, arguably the largest and strongest coffee retail chain in the world recently began rolling out a new concept for the brand: Starbucks Evenings. This expansion of their original strategy sees the coffee giant expand their offering to alcoholic beverages along with small plates of artisanal food.
The concept is a response to customer feedback calling for more options to relax in store in the evenings. Starbucks’s expansion of their food and beverage options aims to create a new occasion for customers to visit their stores. By engaging with the customer, Starbucks captured valuable insight into the changing needs and behavioral trends of their customers and expanded their brand offering accordingly.
Increasing Loyalty and Increasing Revenue
The success of McCafe demonstrates McDonalds ability to listen to customers and a willingness to make them happy. The brand identified that their customer’s were coffee drinkers but went elsewhere for their coffee purchases, as McDonalds coffee was deemed lesser in quality. McDonalds responded in steps; first by introducing 100% Arabica beans for their coffee to produce a better quality coffee and provide credibility as a quality coffee provider. Then introducing Iced coffee to the menu before launching the McCafe brand expansion.
By listening and responding to customer feedback the brand succeeded not only in enhancing the brand experience for their customers, but through the expansion of their brand offering, McDonalds succeeding in capturing a valuable share of the coffee market.
Expanding Your Brand To Strengthen Its Positioning
Progression is important for any brand and Starbucks Evenings aims to evolve and enhance the brand experience based on what the customer are telling them.
While this expansion of the brand is being communicated as being a customer-centric strategy, the move serves a dual purpose. Not only are Starbucks aiming to satisfy the evolving needs of their loyal customer base, the expansion of the brand experience leaves them less dependent on the increasingly competitive coffee chain market. If the expansion is successful, the brand will enjoy a stronger position in the minds of their target customers and be less susceptible to the effects of direct competition from other coffee chains.
The Starbucks move might look like the brand is deviating from its core business, but the strategy is not unlike that undertaken by McDonalds when they first introduced breakfasts to their menu. The brand identified an untapped market in the breakfast sector and then worked to change customer’s perceptions of the brand as a plausible breakfast provider. Years later, and McDonalds has redefined the market as a profitable route for fast food brands.
McDonalds are a great example of a brand that constantly looks for fresh ways to expand the brand to increase growth and market reach. Without deviating from their core brand values, McDonalds has expanded the brand into unlikely avenues and succeeded in exploiting previously untapped markets in the fast food industry.
The brands latest move McDonalds “Nocturnivore” is a response to changing customer habits and potentially lucrative unexploited dining times. Just as Starbucks is trying to open up a low-traffic daypart with alcohol sales, McDonald’s is testing a “Breakfast After Midnight” menu for the relatively untapped “fourth daypart” — between 2 and 5 a.m. The “Nocturnivore” menu and campaign is promoting late-night dining of not only dinner but also breakfast items. Less than 1 percent of total fast-food traffic comes in during those hours, but 1 percent is still 1 percent.
Sometimes the market share we need can be created rather than earned. Listening to our customers or redefining markets can open up huge possibilities for new revenue channels, new market relevancy or market repositioning.
• What could you do with your present brand offering to expand your current reach beyond the obvious status quo and grow your market share?