Innovation is the buzzword on the lips of brand managers, marketers and CEOs across the globe. In the era of commoditisation, new products and services that consumers value are a way that brands can differentiate themselves and grow in increasingly saturated markets.
We have been keeping our eyes peeled for exciting innovations that have been popping up in the market – from pioneering new start-ups to established players trying new things.
In this, the first in a series of new blog posts, we are looking at how established multi-nationals have innovated in their respective sectors.
Virgin territory for one of the world’s best known brands….
The association of McDonald’s with burgers and chips is an instant and obvious one when you think of the world’s biggest fast-food brand.
However, in the late Noughties, McDonald’s recognised that it could attract new customers, at different times of the day, by tapping into a potentially highly lucrative territory – the coffee market.
The move was a bold and risky one for a business that was thriving doing what it did best – affordable and convenient fast-food. Would the new coffee offer cohere with the brand’s existing product range? With Costa, Pret and Starbucks leading the ‘coffee revolution’ on Britain’s high streets, was there demand for a McDonald’s cup of coffee?
In 2007, McDonald’s started selling high-quality freshly-ground coffee for the first time. Significantly, the price of a small cappuccino undercut the cost of a comparable cup in Pret and Starbucks.
By 2010, McDonald’s had become the biggest coffee seller in the country. It sold 84 million cups during that year –more than established rivals like Costa and Starbucks. Whilst affordable pricing and the brand’s greater physical presence on our high streets has undoubtedly contributed to the range’s success, McDonald’s successfully asserted its credentials as a quality coffee outlet and reinvented itself to appeal to more affluent consumers. Crucially, it has succeeded in attracting new customers at traditionally less busy times of the day – morning and afternoon.
What examples have you seen of other multi-nationals expanding their product range into new areas? For better or worse?
Next week, we’ll be looking at innovative new start-ups that are shaking up the market – stay tuned!
Sources: NPD, Allegra, The Independent
This entry was posted on Friday, 24 Aug 2012 at 3:08 pm and is filed under Branding, General, Innovation.
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