Free java, no jive

August 10th, 2009 by Philip Brasor & Masako Tsubuku

mcdonald's coffee

You may have heard about McDonald’s free coffee deal. From July 24 to 30 a cup of joe cost 0 yen from 8 to 9 a.m. at all Kanto area McDonald’s outlets. Yes, that means you missed it, but McD will revive the deal for a week at Kanto area outlets at the end of August, but this time in the evening. In the meantime, if you live in the Kansai region, the campaign will take place there Aug. 14-20 and in other areas of Japan Aug. 21-27, in both cases from 8 to 9 in the morning.

Why does the fast food behemoth need to give away coffee? After all, McDonald’s is recession-proof. Sales of all its Japan stores in July increased 2.6 percent over sales in the same month last year and the company made record profits in the first half of 2009.

TV Tokyo’s nightly business news program said in a recent report that McDonald’s Japan Holdings is openly challenging Starbuck’s for a bigger share of Japan’s coffee shop market. About a year ago McDonald’s Japan installed more sophisticated coffee-making machines and came out with “premium” coffee for only 120 yen. It’s actually pretty good ? certainly not as good as Starbucks’, but as one of those consumers who avoids McD’s out of principle I would definitely say it works in the cost-performance department. Because McDonald’s already has a huge and faithful clientele, news of the new coffee’s high quality spread quickly in Japan. The music chart magazine Oricon conducted a survey that asked people, “Which coffee do you most want to buy?” McDonald’s came in first, followed by Starbucks and Doutour.

The free coffee experiment is considered a huge success. The number of visitors during the weeklong campaign increased by 45 percent, and a good portion of those people likely bought something to go with their coffee. Is this bad news for Starbucks? To some people that’s like asking if Dow Chemical is a threat to Monsanto. Regardless of the difference in quality, they’re both octopuses, so who cares?

BTW department: Harimaya, a manufacturer of rice crackers (senbei) and other high quality traditional Japanese snacks, offers free coffee all the time at its Harimaya Stations throughout Japan. You don’t have to buy anything, and you can even get free samples of their wares. The one in Kasumigaseki, just around the corner from the Toranomon subway station, is particularly nice. The main idea is to promote traditional Japanese snacks. Personally, I prefer tea with my rice crackers, and there’s free hojicha (roasted tea), as well.

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