Look out Starbucks, here comes the McCafes’ to South Korea:

Forget Starbucks and Coffee Bean, says McDonald’s. Or at least, that’s what the burger giant is punctuating in its latest local ad blitz, which sends one key message to consumers: cheap coffee can be good.

Promoting its new line of cappuccinos, lattes and mochas, the world’s largest fast food chain has come out this week directly challenging coffee-shop chain leaders Starbucks, Hollys and Coffee Bean in a bid to steal a piece of the lucrative java market.

South Korea is one of the latest countries to be added to McDonald’s McCafe marketing mix, as the golden arches chain has been expanding its cafe-style brand in the U.S., Latin America, Europe and Asia since 2003.

McDonald’s biggest edge over its well-established rivals is price.

McCafe’s Americano, which costs 2,000 won, is 20 to 30 percent less expensive than those from other makers, and McDonald’s is making sure consumers know about its value with its aggressive media campaign, airing television commercials and plastering posters featuring the drinks at subway stations and bus stops.

The ads take a direct aim at Starbucks and Coffee Bean, saying, “Forget the star and the bean.”  [Korea Times]

For those that have never tried a McCafe’ the coffee is actually quite good and much more of a value then Starbucks where in my opinion the quality of the coffee has been steadily degrading over the years.

Could the McCafe be the answer to the Starbucks Economy Theory?