Recently, I opened a magazine and noticed a four page glossy advertisement from McDonalds. The interesting thing about the ad is that it had nothing to do with hamburgers, Big Macs, or fries. Instead the spread promoted the fast food chain's new speciality coffees.
In a lot of ways, it makes sense for McDonalds to aggressively pursue the coffee market. Some may want a cappuccino that falls below Starbuck's price point. McDonalds are also located all over the place (I've been told that if you're looking for a good location for a business, see where McDonalds is as that spot has been heavily researched.) so access is not a problem. And, the company already had a lot of fans of its traditional coffee (Except those who claimed in lawsuits that they were burned by the hot liquid but that's another story).
This will likely be a good example of a company extending its brand into new areas. As thing stand, I'm doubtful that it can generate much more revenue through just hamburger sales. So a company looks to see what other services it can deliver.
McDonalds has long tried to expand its product line and sometimes it hasn't worked out so well. Remember McPizza and the McDLT?
Widening a brand can be a risky proposition as is mentioned in the book, Brand Failures: The Truth about the 100 Biggest Branding Mistakes of All Time. To find out more about the book, click here. I found it to be an enjoyable read. It's easy to see, in hindsight, how many bad product decisions were made. Of course the need for more market share has long seduced executives into going too far away from what they do well.
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