?? When is Cheap Too Cheap? ??
Nick Rabin
Consumer Insight Expert - Helping Put The Customer At The Heart Of FMCG and Hospitality brands
I was intrigued by McDonald’s new meal deal: three items for ￡3, including small fries, a Cheeseburger, Mayo Chicken, Apple Pie, and the McFlurry range. It got me thinking, does this kind of deal fall into the rare category of “too cheap”? Why do I say that?
If you’ve ever done pricing research using the Van Westendorp pricing model, you’ll know about the critical question: “At what price is this so low that you start to question the product’s quality?”
So, if you can get these products for the effective price of ￡1 each, much cheaper than anything else on the High Street, how are they managing this? Either their margins are stripped to the bare minimum, or quality is being compromised to reduce costs.
There's no doubt this will drive massive traffic for McDonald’s. But at what point does cheap become too cheap, leading customers to question the quality of what they’re buying?
In today's competitive market, finding the right balance between price and quality is crucial. If you need to conduct any pricing research for an existing range or new innovation, feel free to get in touch! I have some awesome tools powered by Zappi that can provide the answers you need. ???
#PricingStrategy #McDonalds #VanWestendorp #MarketResearch #QualityVsCost #Zappi #BusinessInsights #ConsumerInsight #Marketing #McDonalds
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8 个月They know their market. We often have at least one 'unknown' when we suddenly feel the need for a Maccies, plus several picky kids, not to mention indecisive adults. I doubt anyone goes just for the ￡3 deal, there's always going to be more to the order. It's a ￡3 uplift in my humble opinion.
Customer Insight Manager at Feed It Back: The customer experience dashboard for hospitality operators #obsessedwithdetail
9 个月Interesting question! My view is the perception of walking in to spend ￡3 will turn into a bigger spend based on indulging yourself once in the door, especially with “judgment free ordering” from the kiosks, so in effect, it’s a “door buster” deal
Founder of Bridges to Growth??Fractional Marketing Director & CMO?? I'll help grow your brands and business, sustainably & profitably ??create more efficient ways of working??inspire & equip your teams to achieve more
9 个月This is brilliant! A fantastic way to drive additional footfall (c.f the Ehrenberg-Bass Institute Laws of Growth, and Kantar's Blueprint for Brand Growth) - and whilst customers are in there, there's a chance they trade up, and/or sign up to the app. I can't empathise with the fear of perceived poor quality. Those are all familiar products. Overall, I'm uh, loving it ??
Award-winning Leadership Communication Coach | Cultural Intelligence Trainer | Helping Global Leaders & Teams Amplify their Impact, Speak with Authority, Collaborate Across Cultures. CEO & Founder | Podcast Host
9 个月Great question!
McDonald's have always had a Value offer which is helpful to low income segments. They can do it at great quality.