Pricing Startegies for Mcdonald
PRICING STRATEGIES
Global pricing is one of the most critical and complex issues that McDonald’s faces since price is the only marketing mix instruments that create revenues while all other elements entail costs. A multinational company such as McDonald’s also faces the challenges of how to coordinate their pricing across different countries because of the fact that a company’s global pricing policy may make or break its overseas expansion efforts. In this case, McDonald’s is using Value-Pricing Strategy whereby its offer just the right combination of quality and good service at a fair price to their consumers.
There are main drivers which affecting the McDonald’s global pricing such as the company goals, the company costs, the customer demand, the competition, and lastly the government policies. As for the company goals, McDonald’s have determined which goals that they want to achieve which are to gain a satisfactory Return on Investment (ROI), to maintain market share and to meet a specified profit goal by putting priority for each goals. The McDonald’s pricing strategies also been influenced by the company cost. Before setting up the price, McDonald’s considered all the relevant costs of manufacturing, marketing and product distribution. The pricing strategy that been used by McDonald’s are cost-plus pricing which is by adding the international costs and a markup to the domestic manufacturing cost.
As for the factor of consumer demand, it involves the buying power of consumer which is the key consideration in McDonald’s pricing decision. The countries with low income percapita pose a dilemma because consumers in such countries are far more price-sensitive as compared to the develop countries. Take for example, the differences of income level and exchange rates in United States and Indonesia whereby what is considered cheap in U.S is not affordable for the consumers in Indonesia. Thus, McDonald’s had implied the different prices of their products for different
Global pricing is one of the most critical and complex issues that McDonald’s faces since price is the only marketing mix instruments that create revenues while all other elements entail costs. A multinational company such as McDonald’s also faces the challenges of how to coordinate their pricing across different countries because of the fact that a company’s global pricing policy may make or break its overseas expansion efforts. In this case, McDonald’s is using Value-Pricing Strategy whereby its offer just the right combination of quality and good service at a fair price to their consumers.
There are main drivers which affecting the McDonald’s global pricing such as the company goals, the company costs, the customer demand, the competition, and lastly the government policies. As for the company goals, McDonald’s have determined which goals that they want to achieve which are to gain a satisfactory Return on Investment (ROI), to maintain market share and to meet a specified profit goal by putting priority for each goals. The McDonald’s pricing strategies also been influenced by the company cost. Before setting up the price, McDonald’s considered all the relevant costs of manufacturing, marketing and product distribution. The pricing strategy that been used by McDonald’s are cost-plus pricing which is by adding the international costs and a markup to the domestic manufacturing cost.
As for the factor of consumer demand, it involves the buying power of consumer which is the key consideration in McDonald’s pricing decision. The countries with low income percapita pose a dilemma because consumers in such countries are far more price-sensitive as compared to the develop countries. Take for example, the differences of income level and exchange rates in United States and Indonesia whereby what is considered cheap in U.S is not affordable for the consumers in Indonesia. Thus, McDonald’s had implied the different prices of their products for different