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McDonald's and Optimal Pricing Strategies
- fxtentacle 4y ago"Only an idiot would sell the same product to everyone at the same price." with some good examples.
- agd 4y agoSmall fries and a chicken sandwich wouldn’t count as a full meal for me, and I’m fairly skinny. The author might be saving money, but they’re also probably going hungry.
- have_faith 4y agoThat's 750 calories. Not the largest meal but not so small either.
- Someone1234 4y agoCalories are useful, but satiation is may be a better metric. Because a lot of calories come from sugars (sauce, and bread), it is hard to equate two items. Protein is the most satiating, followed by fats, and then carbs. For example: - BigMac: 550 Cal, 30g Total Fat, 25g protein, 45g carbs - McDouble: 400 Cal, 20g Total Fat, 22g Protein, 33g carbs So you're saving 30% calories, while only losing 12% of protein.
- agd 4y ago620 according to McDonalds. 220 calories for small fries, and 400 for a McChicken. https://www.mcdonalds.com/us/en-us/product/small-french-fries.html https://www.mcdonalds.com/us/en-us/product/small-french-frie...
- bl4ckm0r3 4y ago"Of course, it still is cheaper to make food at home. A chicken patty, a bun, and some lettuce and mayonnaise cost maybe a dollar or so overall. A small handful of frozen fries, far less than a buck. You just have to take the time to put it all together, which we usually do." really not sure where you can buy those items for a dollar, and if you can find them, not sure you should eat them.
- throwaway22032 4y agoI just bought 1kg of chicken breast in the UK for £6 from a local supermarket. I'm pretty sure it's cheaper in the US. And that's real chicken, not reconstituted shit. A kilogram of fries is like £1.
- throwaway290 4y agoFrom what I understand, British supermarkets are insanely cheap when it comes to food. You can't usually get even remotely similar prices in the US.
- refurb 4y agoThat hasn’t been my experience. Something were cheaper (converting GBP to USD) but it was usually only ~10%. Other things were more expensive.
- throwaway290 4y agoWhich store?
- refurb 4y agoI was just window shopping in a few towns in the UK. Local stores and places like Sainsbury. Comparing staple items to Safeway and other US stores. Prices may have change recently.
- throwaway290 4y agoSainsbury's is up to 2x the price for basic items (compared to Aldi, Lidl and Asda). Atomic Shrimp has interesting budget survival videos with 3 meals per day mostly from shopping value chain supermarkets, as well as direct comparisons between them.
- 4y ago
- danuker 4y agoCheaper than optimal -> not enough profit per sale, driving profit down. More expensive than optimal -> not enough sales, driving profit down.
- locallost 4y agoAgree, I am always annoyed when something like McD is the only option because it's really expensive for what it is. And then I am always repeatedly amazed that they get away with selling that and that people choose to eat it. I am definitely not a foodie and can eat a lot of things but McDonalds or Burger King etc are awful.
- memcg 4y agoPre-covid, I would often go to McDonalds and order two Sausage McMuffin with Egg. If you keep your receipts and fill out the online survey, they were buy one get one free. So, $2.12 with tax for 2 English muffins, 2 sausage patties and 2 eggs. I would write employee names on the receipt and give glowing reviews of individuals. Apparently, managers would read the reviews aloud to their teams, so I got creative.
- xeromal 4y agoMcDonalds was surprisingly responsive to one of my surveys. I randomly thanked them for having a free EV charger at their location that I would use for a few hours but always bought a meal or coffee from them when I did. They called me up and thanked me for the kind comments and sent me a box of a coupons, lol.
- wrboyce 4y agoCuriously I have had quite the opposite experience with them when trying to get a complaint resolved. I ordered a chicken nugget meal, but was delivered a (chicken nugget) box full of gherkins. Eventually I gave up chasing them as it really wasn't worth my time anymore.
- bonestamp2 4y agoContact the store directly.
- thenipper 4y agoTo be fair, that’s a kind of amazing screw up. Like… do they even have gherkins at McDonalds?
- wrboyce 4y agoSorry, that's my bad. I mean pickles, I called them gherkins as a kid and it… stuck.
- bonestamp2 4y ago
- Closi 4y agoI think the title is a little strange - nothing in the article actually talks about optimal pricing strategies. > [Graph] - The most efficient merchant charges the optimal price for each customer - the highest each customer is willing to pay. The graph doesn't show that - it actually shows how to maximise revenue while offering a single price point for all customers. In reality, this isn't the optimum way to pick a price though - because you probably want to optimise for profit rather than revenue (and these price points aren't likely to be the same). > [There are multiple items at different price points, and...] It struck me, though, that this was an excellent example of optimal pricing I wouldn't call this pricing actually - I would call this ranging. Pricing is the exact pounds and pence put against an item, while ranging is the idea of offering different products and services to meet different segments. Mr Monopoly Man might not want a $1 hamburger, but might settle for an ultra-mcdonalds-premium-delux, so ranging that higher-end product helps the company appeal to wider demographics. But 'having different products and making them different prices' isn't usually considered a pricing strategy.
- zeroonetwothree 4y agoThe article is all over the place.
- Danieru 4y agoWant to really save money at McDonald's? Don't mind what employees might think? Be us a large-ish family ordering 5 hamburgers and 2 Chicken Crips (a chicken burger). Wife gets a full meal set because she is loved. Total cost of about 1500yen, or 12usd. For an extra 70yen you can supersize the fries. But by bit I up the number of hamburgers. I think my record is 8. I am waiting for the day they refuse my order. An individual hamburger is quick to make, but order enough and you could exhaust the stock of cooked patties. If I remember right it's ten patties per tray. With two trays in rotation. Thus a single order of 20 hamburgers could cripple the production line for 5+ minutes.
- seanmcdirmid 4y agoIt doesn’t take that long to cook more meat as long as the grills haven’t been taken down for cleaning. During rush hour they are doing way more volume than that, it’s just the staging cabinets are in between someone who is cooking meat and someone who is assembling product. Chicken nuggets and chicken paddies are much slower to cook, 4 minutes or so rather than 30 seconds it takes to cook a run of 10 to 1 meat.
- sergers 4y agothat is really cheap compared to here(canada). just for 2 chicken burgers, + 1 hamburger, its about 12USD i have to always ask for my food made "fresh", otherwise you run risk of getting "old" food. the one closest to my house is always slow, wait 5+ minutes for old food... or wait 10-12 minutes for "fresh" (quarter of the time we still have to complain about it being old/dry). i know plenty of people who do this always, so i guess always backing up the line. really i dont think it backs up much anything as most mcdonalds appear to be overly staffed with people doing nothing at times standing around.
- throwaway09223 4y agoIn the 90s McDonald's had a 29 cent hamburger promotion on Wednesdays - most stores had a 20 burger cap per order. My friends and I would all go with about $7 and each order 20 hamburgers. There might be five of us, each ordering 20 burgers, for 100 burgers total. They happily filled the orders. It didn't take that long at all. We would do this just about every week.
- huitzitziltzin 4y agoPrice discrimination is a central feature of economic life. Everyone from airlines to your university to Uber does this. The kind you are most familiar with is the quantity discount from buying a larger package size at the grocery store.
- zeroonetwothree 4y agoBut it’s also cheaper to transport and produce larger package sizes. So it’s not purely price discrimination (I don’t know how much is). I think the canonical example is actually coupons.
- Closi 4y agoIt's important to note that this isn't strictly price discrimination too - it's actually product segmentation. Price discrimination happens when it's the same product sold at different prices (e.g. senior discount for movie tickets) - but actually there IS a difference between a $1 burger at McDonalds and one of the $7 premium ones.
- zeroonetwothree 4y agoI don’t know where this person live buts here in CA there’s no way to make a chicken sandwich for “less than $1”. The chicken alone is probably $2-3. Actually fast food restaurant margins on the “entree” items are extremely low. Also, not everyone wants to spend 30 min extra to save $2. I guess he acknowledges this at the end but it’s only after berating dumb people for shopping poorly the whole post.
- SoftTalker 4y ago> Actually fast food restaurant margins on the “entree” items are extremely low. Yes, the largest margin is in the drinks. Mostly municipal water. The fries are in the middle. Potatoes are cheap; there's some prepraration that goes into the final product but it's still just one ingredient and pretty minimal labor in cooking and serving. The sandwiches have the lowest margin. Multiple ingredients from different vendors, and the most labor to cook and assemble.
- jefftk 4y ago> there’s no way to make a chicken sandwich for “less than $1”. The chicken alone is probably $2-3 The McChicken patty is about 2.5oz before cooking. I see the cheapest chicken breast as $3.49/lb on Instacart, so a bit cheaper in person, but that would be $0.55 for the chicken.
- msrenee 4y agoThe store doesn't tend to sell 2.5 oz of raw chicken at a time.
- jefftk 4y agoThe article has: Of course, it still is cheaper to make food at home. A chicken patty, a bun, and some lettuce and mayonnaise cost maybe a dollar or so overall. A small handful of frozen fries, far less than a buck. You just have to take the time to put it all together, which we usually do. Making food at home is the ultimate price point for stingy folks, and our default mode of operation (and one reason you can retire on a lot less than you think - my next blog entry). There's nothing in there about needing to buy food one meal at a time, and if you're trying to live cheaply to retire sooner you're likely buying relatively large packages and freezing/refrigerating across multiple meals.
- csomar 4y agoHere is another trick, if you don't like McDonald's food but are looking for a working place: Some McDonald's locations have incredible working/seating setups. They are usually the newer McDonald's. The coffee is good enough, there is some "reasonable" pastries and the management seems to tolerate working for 3/4 hours on a single coffee / pastry. Bonus: They have fast Wifi (though I do tethering for security reasons) and power outlets. Some of the McDonald's I have been to are fairly empty. Like maybe a customer or two in a hour. This is the US where everyone is curbside picking his fat meal. Your workplace is being essentially subsidized by these guys, since the math would not make sense for the place.
- rmbyrro 4y agoRant totally unrelated to the article content: Why do so many websites insist on using such small font sizes? I zoomed in to 200% to read this comfortably... It's awful having to do this all the time.
- fma 4y agoI never found the app buggy. Some of the deals are pretty damn good. Free large fries with $1 minimum order...so of course you get the $1 drink and a burger off the value menu (McDouble, etc). A whole meal for $2.50... Or if I want a tasty treat I'd get the free McCafe with any purchase and get an apple pie. $1.50 for espresso drink and a dessert? And all those purchases add up for reward points. Their deals change all the time and the above mentioned aren't there anymore as exactly mentioned, but there's a 6 piece Nuggets for $1 minimum purchase... I also know I'm not the only one who does this for "optimal" pricing as one time at the drive through I hit the wrong coupon, the cashier rattled off the price before inputting my code...and had to correct himself when the price came up and looked at me dumbfounded wondering why I didn't optimize my order.
- puffoflogic 4y agoAt the bottom of this article the author is still peddling the vaccine hoax (the scientifically discredited notion that the covid-19 vaccines did anything to stop the spread). Not a good look.