McDonald's Fate after the Launch of Taco Bell Breakfast

Preparing for the Taco Bell breakfast launch on March 27, Taco Bell marketers were the pioneers of many new and memorable advertising techniques. Besides being the first brand to take advantage of Snapchat, Taco Bell used promotional tactics such as the Taco Bell Breakfast Phone. The phone was sent to 1,000 Taco Bell lovers. People were instructed to keep the phone on them 24/7 in order to receive missions and win special prizes. Many of these missions involved them tweeting and promoting the breakfast items on social media, essentially just giving more publicity to the launch.

Then there has been the infamous Ronald McDonald commercial all over TV and the Internet. Taco Bell found 25 men, named Ronald McDonald from all around the United States, to endorse its breakfast products in a witty commercial clearly challenging McDonald’s.

These breakfast products that the Ronald McDonald’s promote include:
-A.M. Crunchwrap- Scrambled eggs, a hash brown, cheese and bacon, sausage or steak in a flour tortilla

-Waffle Taco- A waffle wrapped around a sausage patty or bacon, with scrambled eggs and cheese, served with a side of syrup 

-Bacon and Egg Burrito- Bacon, scrambled eggs and cheese wrapped in a flour tortilla
-Sausage Flatbread Melt- A sausage patty topped with cheese wrapped in a flatbread and grilled

McDonald’s originally launched its breakfast menu in 1975 and it currently makes up 20 percent of its U.S. sales. But now, Taco Bell’s breakfast could threaten this revenue stream for McDonald’s. After McDonald’s reported a 1.4 percent sales decline in February, the question is will Taco Bell’s breakfast continue to effect McDonald’s sales in the future?

It is still too early to determine the long-term results, however an immediate war has broken out between the two food chains. One aspect of the fast food breakfast competition that Taco Bell will likely capitalize on is that its menu is available 30 minutes longer than McDonald’s menu. McDonald’s stops serving at 10:30 a.m. and Taco Bell will serve breakfast until 11 a.m.  McDonald’s president, Jeff Stratton, even told the Associate Press, “that cutting off breakfast on the weekends at 10:30 a.m. "doesn't go very well" with people in their 20s and 30s in particular.” Therefore, the company is looking into a way to serve both lunch and breakfast at the same time in its limited kitchen space.

In addition, McDonald’s has been trying to combat the Taco Bell breakfast launch by offering customers a free small coffee during breakfast hours from March 31 to April 13. However with this only being a two-week stunt, I do not see it having a lasting effect on customers beyond April 13.

I believe fast food breakfast-goers will be excited to try Taco Bell’s new products, especially following the successful promotional campaigns. This may give Taco Bell an initial jump in revenues. However once all the advertisements and hype over the breakfast have calmed down, I think many customers will go back to their normal ways. Even if Taco Bell succeeds in capturing a portion of McDonald’s customers, Taco Bell only had $7.6 billion in sales in 2012 compared to the $10 billion McDonald’s made in sales from breakfast alone that year. Consequently, if Taco Bell converts some McDonald’s customers to Taco Bell breakfast lovers, McDonald’s will inevitably still rule the fast food world.

By Becca Boehringer