Thursday, April 10, 2014

McDonald's v. Taco Bell

McDonalds vs. Taco Bell
By: Jennifer Lewis


The debate between McDonalds and Taco Bell came to when Taco Bell released their new breakfast items on March 27, 2014. The $200 billion industry finally broke through in the biggest growth area (breakfast) selling their top three items: the crunchwrap, waffle taco, and cinnamon delights. The big name mexican restaurant wanted to join the competition for a $50 billion share in the breakfast business, now Taco Bell is a threat with the prices they have set. Considering that an Egg McMuffin is $2.79 and a Starbucks breakfast sandwich costs $3.45, with all of Taco Bell’s items being $1.00-$2.49, the competition will start to heat up.

Both companies competing with each other, Taco Bell created a campaign message using real life Ronald McDonalds discussing with the audience about how much they love the new breakfast, a move that has Mcdonalds making a price floor for their well known items. After viewing this, McDonalds posted a picture of Ronald McDonald bending down to pet a chihuahua symbolizing Taco Bell with caption “Imitation is the sincerest form of flattery”. Battling it out through social media, McDonalds decided they will bring forth a private good that is now free for all coffee lovers:

Nothing in life is free. Except Coffee of course! Make friends with @McCafe from 3/31-4/13, during breakfast hours.












Customers who are McDonalds lovers do not enjoy the fact that they cut off breakfast by 10:30am every morning (plans now discussing to extend time to 11:00am), U.S. sales have slipped 1.4% in the fourth quarter of 2013. But the management behind is not worried, for they hold about 25% of the market share while Taco Bell is just now entering the playing field. Taco Bell itself has had smooth sailing with an increase of 3%, but the Yum! Brands industry who owns it has seen a slip in other companies they manage causing some discomfort on how well the breakfast items will take off.  

Most nutrition experts never recommend to consume fast food. But the average adult should consume 20-25% of their calories at breakfast, which comes out to be between 300-450 calories total. The big name McDonalds three most popular breakfast items, egg mcmuffin (290), big breakfast (740), and hashbrowns (150) come to a total of 1,180 calories. Taco Bell’s new items discussed above make out to be 1,960 calories (660, 930, and 370). So if having to chose between the two, McDonalds has a healthier breakfast choice than Taco Bell.

Overall it comes down to the taste of the consumer, whether you like old fashion or brand new. In our own backyard consumers have a choice to make. No matter where you stop, the cost of breakfast will be under $10. When driving down Capitol Drive at 7 in the morning before school, do you want a classic mcmuffin or a daring crunchwrap?



39 comments:

  1. I was really intrigued when I saw this post. I had actually been wondering how McDonald's was handling their new competition with Taco Bell's breakfast. Their new breakfast items seemed to become very popular among teenagers since being released, although I couldn't understand how anyone could find a Taco Bell breakfast appetizing. Regardless of Taco Bell's attempt to compete with Breakfast food, I think McDonald's will win out in the end. Both are greasy and come with the promise of stomach ache, but McDonald's has owned the fast food breakfast title for years now, and as an example of consumer taste, I can't see myself driving through Taco Bell's drive through over McDonald's at 7 am. I'll stick with my Egg McMuffin, and the large variety of warm and cold coffee drinks. Taco Bell may be trying to play the same game, but they're just in a different ball park.

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  2. I think it was a smart move for Taco Bell to start serving breakfast. Beginning a new service is always a great way to get customers to come into your store and possibly revisit in the future. In addition the competitive prices are going to help Taco Bell claim a position in the breakfast market. I do think though that the calories of the meals aren’t much of a selling point unless one meal is significantly higher or lower in calories. Let’s be honest, if you’re going to McDonalds for breakfast you’re not exactly looking for a lean meal. Overall this move is certainly going to yield a large marginal benefit as customers are always looking for new quick way to get food.

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  3. With Taco Bell jumping into the mix, I can't say I'd expect to see much in the way of change of orders occurring at McDonalds. Both have prices that are cheap compared to other restaurants, and if someone prefers to have hashbrowns, per se, they'd go to McDonalds over Taco Bell unless they're really strapped for cash. However, I could see a switch if a more preferable version of a breakfast food is sold at Taco Bell, so perhaps McDonalds would need to increase their morning menu to compete.

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  4. This is a fantastic topic. When companies compete things could go both ways; extremely well or take a turn for the worst. Consumers sometimes like the competitiveness between companies because they think they are contributing to the side that they favor. Others don’t which could possibly drive away business for both companies. Personally I like both Taco bell and McDonalds so I contribute my money to both sides. I think that Taco bell adding a breakfast menu could possibly increase their income or it could just stay the same. Although I have not tried their new breakfast items, I assume that most people would like them. McDonalds may have to create something new and exciting to stay on top of Taco bell.

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  5. I thought this was a neat topic to address because the new Taco Bell breakfast has been all of the rage within the past month or so. When I heard Taco Bell was going to be serving breakfast, I never thought of it in a way like "oh now I have somewhere to go besides Mcdonalds" or anything like that. Although competition is inevitable for any company or business, I do not foresee this having too much of an affect on sales of Mcd's breakfast. McDonalds breakfast has been around for a while and has become a classic go to for breakfast, and consumers are going to go for classics forever. I think many people are rather skeptical of the Taco Bell breakfast, which could possibly pose as a huge disadvantage in sales for them. Although many people are/will dabble with the Taco Bell breakfast items, I think that the preferred taste will lie with McDonalds.

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  6. This was a good topic and when it comes to choosing where you eat I think that a lot people would end up going to McDonalds because the one thing that taco bell lacks in is choice. If you go to McDonalds you have a big menu to choice from and taco bell you have three items. Also a lot of people would end up going for the more healthy food.

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  7. While us consumers sit back and laugh while two businesses go head to head with each other we completely ignore the fact that it will do more good than just humorous commercials bashing on the other industry. When two companies go head to head their main goal is to appeal the customer more than the other company. It's basically completely up to us! People have always complained about McDonald's breakfast ending too early and now that Taco Bell has introduced a new breakfast, they are considering making the breakfast cut off time later. Along with advantages like these, prices may start to drop to appeal the customer to compete for the number one fast food spot in American's hearts.

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  8. This topic interested me a lot since I am looking to go into Marketing. I think that people would go to the cheaper place when thinking of where they want to eat breakfast because all they care about is price. Many people are in a financial crisis in our economy today and want to get the most for the least amount of money. Also, even though McDonalds is healthier, when seeing that the average adult should consumer 20%-25% of their daily calories during breakfast many of them won't care. It really does show how marketing change a persons choice in food. Nice job!

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  9. I think it's interesting that Taco Bell has now finally decided to join the competition for breakfast. Although I know they're doing this to try and keep up with the other fast food chains, I'm not sure if they're really going to be racking in as much money as they're hoping to. When I think of breakfast I don't usually think about Taco Bell, and I'm not sure if them serving breakfast is actually going to help the company. Like you mentioned earlier, other companies that the Yum! Brand industry own are starting to hurt. This makes me think that this breakfast menu may not last for long and Taco Bell will go back to what they do best, making tacos.

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  10. Fast food has always been a topic that allows people to spend money and gain money with cheap food that tastes great yet is unreasonably unhealthy for you. And since it all deals with price and whatever is cheaper is what will be bought, Taco bell is currently winning since its lowest in price and still tastes great. Mcdonalds and Panera will not only have to keep up with loss of buisness but maybe even have to lower their prices, it will be a big market change for the company and the consumers who join. Lot of different things that can happen

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  11. When I heard about taco bell breakfast the first thing I thought was no thanks because I enjoy coffee in the morning. However It never struck me, till now, that Taco bell is attempting to compete with McDonald's, but now that you have brought it up I would have to agree that Taco bell does pose a threat to McDonald's breakfast business due to the fact that breakfast costs lest at Taco Bell. However I wish you would have added some sort of information on the popularity of the Taco Bell breakfast to give us a better understanding of how big of a threat Taco Bell is to McDonald's.

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  12. This was great a topic to write about considering Taco Bells breakfast menu just came out. I would choose McDonald's over Taco Bell any day. I think it’s interesting that Taco Bell decided to have breakfast considering they are known for Mexican food. Although Taco bell might have cheaper breakfast McDonald's has more variety and they also have McCafe which has been very successful. I also think that McDonald’s breakfast options sound more appealing than Taco Bells. Overall I don’t think that Taco Bell will be as successful as they think with their new breakfast menu. They only have a few options that personally don’t sound so appetizing. The other thing is that Taco Bell is known for their Mexican foods and I don’t think its right that they should be selling breakfast.

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  13. I never thought about how Taco Bell made a breakfast menu to compete with Mcdonalds. But it makes sense because whenever I see Mcdonalds and Taco Bell, Mcdonalds always has more people in the drive-thru and in the restaurant. Taco Bell needed a way to get more business so they did. When I first heard about the new breakfast at Taco Bell I thought it sounded pretty gross. But, it's obviously very popular! I do also think that Mcdonalds prices are a little high so Taco Bell did good with making the prices lower in order to get more business. Even though Mcdonalds has a bigger variety of breakfast items to choose from, most people would still prefer cheaper, especially now since the breakfast menu is new a Taco Bell, everyone wants to try it. Mcdonalds might need to lower their prices in order to keep their business in good shape. Mcdonalds is already considering to make changes in their cut off time. I know many people that complain that it only goes until 10:30 so maybe changing it to 11:00 would also help them.

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  14. When companies are forced to compete with each other the quality of their work increases because that is a main focus of capitalism. With McDonalds and Taco Bell both priding themselves as being cheap the two may get into a price war and compete with each other to have the lowest price. This is a benefit to the consumers as the quality of the food will remain the same yet the prices will drop as time goes on. Many fast food restaurants have now set the tone that in order to compete you need to be serving breakfast. We have seen that in order to compete more and more fast food restaurants are indeed joining the group and serving breakfast and I predict that more restaurants will do the same in the future.

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  15. When I first saw Taco Bell's new line for breakfast like the waffle taco, all I could think of was "really, they have gone that far down that they had to mesh up a breakfast just to make it look like a taco? pathetic." I don't care how much people "like it" Taco Bell ruined breakfast.

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  16. I really liked this topic because it's something that I haven't heard a lot about. I personally don't eat much Taco Bell, but the sound of their breakfast is gross. Its interesting once you take into account how many calories are in small meals. People know that McDonald's is unhealthy, but they still eat it because it is convenient. It's also interesting that Taco Bell is now becoming more and more like every other fast food company. They created a high calorie, addicting breakfast and started more competition from McDonald's. It will be interesting to see what the two companies do next.

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  17. This is a very interesting topic to discuss because it all comes down to personal preference. Some people might stick to the traditional McDonald's because that is what they are used to and aren't ready for a change and others might try the new, crazy items at Taco Bell. Personally, I think that Taco Bell's breakfast sounds gross. I wouldn't want to mix a waffle with sausage and eggs. That sounds gross. On the other note, McDonald's sales will still boom because McDonald's is the healthier choice of the two competing places. McDonald's also has their McCafe coffee during breakfast and that's a main reason consumers go there for breakfast over Taco Bell.

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  18. It is interesting how consumer expectations can have such an impact on the revenue a product will produce. Because Taco Bell has come out with something new—a new fad among consumers—their profits have increased. For both mc Donald’s and Taco Bell, it is important to look at what their consumers want, extended breakfast hours, good deals, and tasty foods. However, for the consumers, this competition is a good thing. Because of the competition, the prices will be lowered as both companies want consumers to buy their products, as well more additional bonuses will be offered and new menu items will appear. However, consumers must also look into the effects of consuming such high fatty options. Ultimately, with our free economy, consumers have the choice—Taco Bell or Mc Donald’s.

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  19. Being one to work at McDonald's, its interesting to see that we are more healthy than Taco Bell. It is true that we are competing with Taco Bell, our store manager has recently decided to keep serving breakfast until 11 am everyday instead of stopping at 10:30 am. In fact we are serving breakfast and lunch between 10:30 to 11 am. I personally think that Taco Bell breakfast sounds disgusting. Just simply because I don't like waffles or pancakes and I don't like to mix my breakfast. Sausage doesn't belong with syrup on it. I would much rather have a sausage egg mcmuffin than to have a waffle taco from Taco Bell.

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  20. It is interesting to see how many more places are giving the option of breakfast. With the change of taco bell now having breakfast there is a big derision. There will soon be more starbucks for cheaper but just as good quality and they will have many more customers because a latte is like 6 dollars and last only like 30 minutes. I think Taco Bell is smart in the way they are giving people what they want and for cheaper. In the end I think that Taco Bell will come out on top. Even if I like McDonalds better right now...

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  21. This right here is the benefit consumers receive from competition. Each restaurant is going to have to take on new advertising techniques and strategies to outdo the other company. Now, many people will be receiving free coffee for near a month all because of Taco Bell's latest commercial. The competition is good though because people need choices and of course, businesses need competition.

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  22. This is very impressive. Why did it take so long for Tbell to come out with their breakfast? McDonald's had a lot longer but why didn't more fast food places come up with that idea? Did They intentionally wait this long so they could have a comeback against the golden arches?

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  23. It will be interesting to see if taco bell is able to steal some of McDonalds customers. Also will Taco bell keep their breakfast hours longer than 10:30? If they did they might be able to steel some of McDonald's business. However, It might be hard for taco bell to get started in this area.

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  24. Taco Bell did very well with selling their product. They really wanted to get in the top spot with breakfast and they could possibly do it. I never had a Taco Bell breakfast but I believe it will be a long time until they are the top breakfast fast food restaurant.

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  25. Personally I like Mcdonalds better. me and my friends spend way too much money there considering how much I work and how little time I have to cook food. I am excited to see how this competition plays out in the long run. Honestly though I don't care if breakfast gets extended to 11 because I work way before that anyways. And I'm kind of suprized that McDonald is healthy even though it isn't healthy for you but In all honesty I have a high matabalisim now anyways so that docent matter either. But im interested in how this plays out.

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  26. The fact that each competitor is using their advertisements to make fun of and challenge the other is actually the best thing ever. Think about why we have this type of government in the first place; being in a country of capitalism, the consumers benefit. Because of this competition, prices are being lowered and new products are being made. If another company decides to create a breakfast menu, we, as consumers, would benefit even more! So when the businesses strain to outdo each other, we can just sit back, relax, and enjoy our capitalistic benefits.

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  27. To put it plain and simple, taco bell seen a chance to amount to greatness and they took it,. Not only bringing in vast amounts of revenue from introducing new menu items, hyping it up greatly, but also keeping the prices low enough to completely defeat their competition. The ingenues idea they had from the start was to put the new items out for free, giving the consumers a sample or a taste if you will, of their new items and bringing in new consumers because it was free and when they got there attention, they kept it with the low prices they presented the public, completely capitalizing over any competition such as McDonald's.

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  28. You bring up a good topic Jenny. McDonald's has had market control for years and now the demand for taco bell breakfast has certainly grabbed people's attention. As of right now, many people are contemplating and trying to decide whether the marginal benefit is worth the marginal cost at Taco Bell. Like Jenny said, "Considering that an Egg McMuffin is $2.79 and a Starbucks breakfast sandwich costs $3.45, with all of Taco Bell’s items being $1.00-$2.49, the competition will start to heat up." It makes sense that the most cost effective breakfast is Taco Bell. If Taco Bell's crunchwrap is a success (in my opinion it is) then the substitution effect will take place; however if Taco Bell is not good enough people will resort back to the classic breakfast at McDonalds.

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  29. These two companies may be giants in their respective fields but going head to head is a whole different thing. This could be a good thing for everyone or it could turn out badly for everyone. Ideally the benefits will go to the consumers. However there is always a chance that nothing will change at all. In that case the consumer does not really benefit, but neither does the company. Watching these two go for better income will be an interesting sight

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  30. It will be very interesting to see if McDonald's will continue to compete with taco bell in the fast food breakfast business. McDonald's indeed has extended their breakfast hours until 11 am, but will they cut prices and/or make deals to drive consumers away from the new Taco Bell breakfast? It will be very interesting to watch what happens. Also, it was very surprising to me that the calorie levels of McDonald's breakfast foods are normally less than Taco Bell's. If this gets out on commercials there may be a noticeable decrease in demand for Taco Bell's breakfast.

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  31. I agree that McDonalds should expand their breakfast time, even if it's only a 30 minute difference. It would expand their sales because breakfast items usually cost much more than the dollar menu items, so the extra time would be making them more money. I admit that I didn't know that breakfast was the biggest fast food meal, mostly because I hardly eat breakfast myself. But now, thinking about how many people are on the road heading to work in the early morning, there must be a huge portion of them stopping at the drive-thru for a quick bite to eat. I now understand why Taco Bell decided to enter the breakfast field - it's a huge profit.

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  32. McDonalds and Taco Bell have always been competitors. And now that Taco Bell has began selling breakfast foods, they are even bigger competition to McDonalds than any other fast food establishment. To expand their sales, I agree that McDonalds should expand breakfast time. It makes more sense. Allowing more time for breakfast, allows more people to come in and buy it which in turn gives them a profit. But to compete with Taco Bell, they can't only just extend the time they leave breakfast cooking. Prices are going to have to change in order to compete with their new and improved competitors.

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  33. McDonald’s and Taco Bell have been in competition for as long as I can remember. It doesn’t help that most Taco Bells and McDonalds are either right next to each other, or right down the street. The commercial that Taco Bell used to campaign their breakfast was clever I suppose. But I don’t know if any of those Ronald McDonald’s even owned a McDonald’s. I think they just found random people named Ronald McDonald and wrote them a check. Now the two are really competing especially with the free coffee, the new deals that are coming out, and both selling breakfast until 11. But I just can’t see Taco Bell outselling McDonalds for breakfast. Taco Bell only has four or five items on their menu. In order to compete with McDonald’s, they are going to need to broaden their horizons.

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  34. Going off of what Kaylah was saying, it really doesn't help these two businesses to be located right next to each other on capital. With both businesses also having a drive through, it just makes it easier for people to get their breakfast in the morning. It really just depends on which item you want from which place, and also how long the lines are. McDonalds does a better job at keeping up with the rush hours then Taco Bell, so if you are in a hurry, you will probably most likely go to the McDonalds instead of the Taco Bell, unless you prefer one place over the other.

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  35. I do not know if somebody has already brought this up but I am wondering if McDonald's is actually enforcing a price floor rather than a price ceiling? Considering the two are easily confused I am led to believe they have actually installed a ceiling. A price ceiling forces them to sell at lower than equilibrium rate which could then lower their prices to around Taco Bell's. A price floor however means that they are forced to sell above equilibrium price which would further the difference between the prices resulting in an even greater profit loss. An key component in this economic debate is the non price competition. Although the price is a determining factor, the advertisements have played an important role in influencing the consumers. This is a prime example of non price competition and showcases the current economic state of American consumerism.

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  36. It is interesting that Taco Bell now has a breakfast. It's kind of weird when you think about it. I did like Taco Bell's commercials! I thought it was clever using Ronald McDonald :). Anyway now that Taco Bell's breakfast has been out to the public for a while I heard that it isn't that good- that the food is disgusting. This could probably lead to a decline in Taco Bell's profits causing them to eventually get rid of the breakfast.

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  37. Right from the beginning when Taco Bell came out with the knew breakfast items I wanted to try it and I thought also that McDonald will have a decrease in there breakfast purchases. I will also love McDonald's food but I have tried Taco Bell's breakfast and I do have to say it is good tasting. Even though McDonald's is losing money now they will most likely come out with a new think and everyone will want that. People who enjoy seeing what the company's have to offer will just go out and buy what ever is new and taste good. I say this because it is just like a high school fling and it will be over and done with in a couple of months.

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  38. This battle goes far beyond Mcdonlds vs Taco Bell, it goes all the way up to Pepsico vs Coca-cola. These to corporations have been battling it out for years to gain dominance in the fast food sector of the market. Taco Bell's recent breakfast menu is will slowly allow them to gain popularity based on the face that the customers like the items and come back for more. If this doesn't happen, Mcdonals, with their already experience breakfast menu, will gain back control very fast and once again leave Taco Bell, and Pepsico, in its tracks.

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  39. On the contrary, to what people said about it doesn't make sense to put McDolands and Taco bell next to each other but it does. It makes like a center hub of businesses people will go to to spend their money. Just like about how many times we want to go out to eat with friends and we say "Like just go to capital then decide what we want to eat" Everything is there. Not just restaurants but businesses too. So with all that traffic there that there more then enough demand for more then one restaurant. At the same time having more then on restaurant is good for not just them making money but us. They have to keep their prices reasonable or we will across the street for something better

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