Shouldn’t we value price more, like these two giants do?

I love it when price is being treated with care to ensure a brand’s long term success. As greed – unlike what the movies will have you believe - is seldom good. Two companies that apply price as the pivotal instrument it can be, are McDonald’s and Burger King. How their menus and order screens are engineered is marketing science at its purest.

But that’s not what I want to talk about right now, I want to talk about pricing agility.

Last spring when riding to work it struck me that Burger King had below menu offer on a huge billboard on the motorway.

I know I thought to myself: “Whoa, that they can produce this for such a price. Hats off.”

On the same day, in the evening, when I was clicking through some channels I stopped at this McDonald’s add and directly thought to myself: “They’re stretching it, this will hurt, if they keep on doing this.”

And indeed, I didn’t see this price often anymore afterwards, after this initial flight. Likely because the price gap was just too big and consumers price/value perception for McDonald’s changed and started impacting their behaviour. I did see a lot of McDonald’s ads with the 5,95 price as below; likely to convince the people, that they’re still making the best choice.

I even spotted bus stop billboards for their coffee, with the price in CAPITALS (2,95). Wondering why they did that… 😉

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This is a great example of understanding the importance of price as a key marketing lever. Both Burger King and McDonald’s understand how precious the value perception of their brand and assortment is and they are continuously adapting to the environment (competition, inflation, import tariffs, scarcity in resources, …) and by doing so reaping the rewards from their value perception of which their pricing is a key component, already for decades.  

So, I encourage everyone to value price more. Both in what it means to your clients and what it does to your sales. Obviously, at Haystack we have the experience and tooling to collaboratively build pricing strategies that can make the difference for your existing services and innovations! 

And what is great: we listen to the market, so our data science team (shout out to Johan!) developed a novel middle option, taking into account the advantages of conjoint but not going ‘all the way’, to be able to even faster deliver market share results.

So to stay within the fast-food analogy, we have a balanced portfolio, suiting to all your strategic pricing questions. And what is nice, we just launched the Big Mac:

1.     Double Quarter Pounder: all types of conjoint, expanded with your market share data to see the volume/value impact of your pricing portfolio changes

2.     NEW! Big Mac: A new module to integrate within your regular concept-product testing. Allow yourself the opportunity to see market share changes at different price levels. Not as big as a full-on conjoint but it does deliver the critical share data one needs to make pricing decisions.

3.     McD Hamburger: known modules, such as price sensitivity meter, Gabor Granger, spontaneous price perception, etc.

Healthy pricing, just a call away. ☎️

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