The King of fast-food breakfast, no not Burger King, may have met his match with a new entrant into the market. Maybe not necessarily in sales but the media attention that Taco Bell has been able to garner since their rollout of breakfast this past April has been significant. This past quarter McDonald’s profits have slumped and sales have fallen worldwide. While not to say this drop is because of Taco Bell it may have been a factor in some markets. In the past McDonalds has been the clear controller of the fast-food breakfast market but more recently they have been losing some of their market power to other companies already in the fast-food market looking to expand into the AM market as well. Some investors are even warning against McDonalds as their shares are dropping. 
Many would agree that in order to disrupt the Mcdonald’s hold on the egg, sausage and biscuit market something drastic had to be done. Taco Bell took to their advertisements and actively called out McDonalds, saying roughly, “Yes we know McDonalds may be your go-to for on-the-road quick breakfast in the morning but Taco Bell has arrived with full force”. Their ad campaign featured some “real” Ronald McDonald’s of the world trying and thoroughly enjoying Taco Bell breakfast. With this very intentional jab at Mickey D’s Taco Bell has surely been successful in disrupting the fast-food breakfast conversation.
What is interesting here is that McDonalds saw Taco Bell as enough of a threat that they felt the need to fight back. While both restaurants are giving each other free press (any press is good press right?) McDonald’s is calling attention to the new kid on the block while Taco Bell is reiterating what we already knew; McDonalds sells breakfast. Though McDonald’s may take the position that Taco Bell’s stunt was just another way to remind that world about McDonald’s breakfast, in case we may have forgotten. In fact, McDonalds since has had multiple promotions of giving away free coffee in the mornings; a tactic usually used to just help get customers in the door. While Taco Bell’s entrance is not getting quite into the duopoly realm where McDonalds would really need to be concerned McDonald’s did “fight back” and has been keeping an eye on the new entrant understanding that Taco Bell is already an established name in the fast-food market and while, albeit small, poses a threat.
Now doesn’t all this taco-breakfast talk make you want to go out and try the Waffle Taco to see what all those Ronald McDonald’s are raving about?
One Comment
This sounds straight out of Hotelling — use jargon!! What sort of variation is there in ads? How long does a new product maintain its status as a “unique” (= pricey) product?
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