Why Does McDonald’s Give Free Coffee?

Free Coffee at McDonald’s

Published Date : January 27, 2013 ADawnJournal.com

No, McDonald’s or other coffee retailers do not give away free coffee because they are nice folks. The old adage “there is no such thing as free” still applies in modern days. Although it looks like retailers are giving away coffee absolutely for free, their Return on Investment (ROI) is fetching more money in the long term than they are losing money for offering free coffee in the short term. Today, I will simplify free coffee giveaway campaigns so you can see behind-the-scenes reasons for giving away free coffee.

Brand Awareness – Think of it as an advertising campaign to promote brand awareness. Most people know McDonald’s for Big Macs and McNuggets – hardly anyone knows them for their coffee. And brand awareness is even more important when McDonalds is comparatively a new player in the coffee war in a country like Canada where people are religiously loyal to another coffee chain like Tim Horton’s and don’t mind driving 4 miles in minus 40 degree Celsius extreme cold weather for a cup of Tim Horton’s.

Dramatic Publicity – People love free stuff and the word will spread faster (that there is free coffee) than any other form of advertisement. I noticed even my 80-year-old dad somehow found out about it when McDonald’s ran their free coffee campaigns and started going to McDonald’s twice daily to grab his free coffee. The publicity and attention you get by giving away free coffee is priceless.

Habit Forming – It is possible that if you do something for a few days, it becomes a habit and then it becomes even harder to break the cycle that you have been doing for the past few days. When McDonald’s is making you take a trip or two daily for one to two weeks to pickup your free coffee, a good percentage of customers will not be able to discontinue that trip once the free promotion is over and will become long-term or lifetime customers.

Return the Love – By nature, we humans are emotional and prone to return the love and kindness given to us. After enjoying free coffee for a week or two, some of us will be psychologically inclined to develop a brand loyalty because the coffee restaurant treated us nicely and generously by providing free coffee.

So you see, what seems to be a simple cup of free coffee on the surface is not that simple at all. Retailers know how our minds work (they have highly-paid psychologists and behavioral scientists working round the clock to get inside consumers’ minds) and they are right to assume one cup of free coffee today will turn into many cups of paid coffee in the future.

Is Renting Expensive in Toronto?

Toronto Rents Are Reasonable?

There are various reports and research ranking the best cities in the world. And one thing you’ll commonly see is that Toronto always ranks high, usually staying in the top ten, regardless of which ranking you look at. Mercer Quality of Living Survey, PricewaterhouseCoopers (PwC) Cities of Opportunity report, and the Economist Intelligence Unit are just a few to name.

However, the striking difference between Toronto and other top class cities are what you pay to rent there. Another recent report published by RentCafe mentions that Toronto is 13th out of the 30 top financial centres in the world, but it only has the 26th highest rent among the top 30 cities.

If you live within an hour commuting distance from downtown Toronto, in Etobicoke for example, renting a one bedroom apartment can cost $900 and a 2 bedroom for $1,200. Rent in Midtown, which is about a half an hour commute from downtown, you will be paying $1,400 for a one bedroom and $2,000 for a two bedroom. In downtown, a one bedroom apartment can go for $2,000 and a two bedroom can go for $3,000.

Keep in mind that these examples are not to be taken as a sure thing. There are price fluctuations in the same area or even in the same building, as various factors such as location, floor, view, square footage, and many others elements play in determining rent price.

I have made a video on this and you can watch it by clicking here (Is It Expensive to Rent in Toronto?) or on the top left picture. After watching, it is up to you to determine whether the world’s best place to live (Toronto) is expensive to rent or not.