McDonald’s is positioning itself to take over the coffee market. With an advertising budget of $100 million, they want to attract consumers tired of spending too much of their budget on coffee at Starbucks. They’ve been successful so far, and it’s true that Starbucks is losing ground. However, it’s important to consider that while both companies are selling coffee, only one is selling the experience – discussing politics and art just doesn’t work as well in a McCafé, if you ask me.

WalMart and Target are facing a similar battle. WalMart has always competed on cost, and Target has been slightly more upscale, with a focus on quality. Newer WalMart commercials focus on the fact that the consumer is buying the same product that’s offered in other stores (like Target), but that their prices are lower. Target commercials, on the other hand, while definitely promoting value, are trying to raise the appeal of the Target brand. By incorporating high-end designers in their stores with low-cost capsule collections (in housewares, apparel, and shoes), Target is offering consumers a high-quality experience while still offering low prices.

When taking all four of these companies into consideration, it’s important to find which most readily compares to your business now. You might be a McDonald’s, who can take advantage of price wars by offering lower costs in a new market. You could be a Starbucks, who might have to take a back seat during these slow times, but who will remain strong in the future because of your specific appeal. You could also be a WalMart -  a company with a loyal base who comes to you for prices, who can appeal to new customers by offering comparable goods to people looking to cut costs. Maybe you’re a Target – you can improve the quality of your product without raising costs to keep your consumers and attract new ones looking to get the most out of their money. It’s likely that these four companies will still be doing well ten years from now (though of course nothing is certain), and companies can definitely learn from their strategies and differentiation.

By Mary the Intern