McDonald's free coffee a response to Taco Bell Ronald McDonald ad

March 31, 2014

The breakfast battle has officially begun!

Team One - Ronald McDonald Team Two - Ronald McDonald? An army of them drafted by Taco Bell. Both are vying for a bite of your breakfast bucks.

Taco Bell featured a new ad with 25 men really named Ronald McDonald professing their love for the newly launched breakfast menu.

"This is Taco Bell's way of saying that there's a new breakfast player in town and there's no better way to do that than to go after the king of breakfast by market share, which is McDonalds," said Hayley Peterson, Business Insider reporter.

In a defensive play, McDonald's now announced they'll offer a free small cup of coffee to customers for two weeks starting Monday.

"We just launched the next generation of breakfast - it's not a two-week promotion. Clearly, our competition is taking notice and reacting," Taco Bell said.

"We've consulted with Mayor McCheese and he has confirmed that Ronald McDonald, in fact, still only chooses McDonald's," the hamburger chain responded.

The golden arches, taking their fight to social media, let the dog out, barking back with: "Imitation is the sincerest form of flattery." And letting the world know that they are the original. If you think things are sizzling, experts say it's just warming up.

"This is the first time Taco Bell has ever gotten into Breakfast, so they have to do it big, and they have to hit it hard. And they've said that this is their most extensive, biggest marketing campaign in their 52-year history," Peterson said.

The world's biggest hamburger chain announced Friday that participating U.S. locations will offer small cups of McCafe coffee at no charge during breakfast hours from March 31 through April 13.

McDonald's said that this is the first time it's ever had a free coffee event nationwide. Its McCafe product line, which also includes iced coffees and other drinks, debuted in the U.S. in 2009.

The Oak Brook, Ill., company is hoping that the coffee giveaway will bring in new customers. It's also a way to get existing customers to come in more frequently. And it's likely that those stopping by for a free coffee will be tempted to pick up a breakfast sandwich or other items while there.

Breakfast is an important component of McDonald's business, comprising about 20 percent of its U.S. sales.

Chains like McDonald's Corp., Taco Bell and Starbucks Corp. - which recently revamped its sandwiches - are all fighting for a piece of the breakfast market because people are increasingly buying breakfast on the go.

McDonald's coffee giveaway comes shortly after it reported that an important sales figure declined 1.4 percent at established U.S. locations in February. The chain blamed bad winter weather but also said that "challenging industry dynamics" played a role. The company has worked on adapting by making menu changes such as giving an option for egg whites in breakfast sandwiches and adding chicken McWraps to help appeal to those looking for fresher, healthier food.

For a long time McDonald's, which started offering breakfast nationally in 1975 with the roll out of the Egg McMuffin, has dominated the morning category. Rival Burger King came out with their breakfast menu in 1979 and others have followed. The latest is Taco Bell, which launched its new breakfast menu on Thursday.

But McDonald's is still a force - it's 31 percent of the category makes it the No. 1 player in breakfast, according to market researcher Technomic.

The Associated Press contributed to this report.

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