Orbell Communications

Communicating Your Message

Premium pricing boost McDonald’s profits

Posted by jorbell on October 22, 2009

After I posted on the topic of price testing and how low prices don’t always encourage sales another example of how offering premium products can boost profits was reported today.

Article source: BBC Business

Selling more expensive burgers has helped McDonald’s third-quarter profit climb 6%.

The fast-food restaurant chain’s global net income for the June to September period rose to $1.3bn (£760.7bn), from $1.2bn a year earlier.

McDonald’s said new more costly products, such as the Angus Third-Pounder burger, were popular with US diners.

Read full story

This demonstrates how using a clever pricing strategy can attract and retain new customers. While people are generally eating out less often during the economic downturn McDonald’s have clearly seen opportunity where they can persuade potential customers that they don’t have to give up entirely on good food.

Obviously the whole eating experience is not the same as a posh restaurant but it is a convenient halfway house. While some cut back others are beginning to see their situations improve with each group will meet in the middle with a quality product that suits both their pockets and their perceptions of their personal circumstance and that of the McDonald’s corporation.

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