The price is a really important element of the marketing mix in fact is the simple element that brings money to the company. Moreover pricing is an important determinant according to only the company but also the customer. Customer when purchasing a product had already the price that are welling to pay to by the product. The danger of using low price is that internal and external information regarding the firm.
McDonalds has a specific strategy for pricing: they decided to develop a local strategy and not a global one. They adapt their prices according the country and the location of the stores within the country. In fact we can prove this thank to the big Mac Index calculated every year by the Economist : the price differs according the economic activity of the country. (cf the graph where we can see the comparison of price of Big Mac in 2012 between different countries)
The company selects the right price according to the market they have a special pricing process to put in place order to determine the price. This Process is based on different criteria
Supply and demand
Evaluation of the competition
Production cost
Quality of ingredients
Furthermore most of the restaurants are franchises so prices of meal depend of the director. He will decide which commercial strategy is the best for It’s establishment.
In addition McDonalds has adopted a strategy based on package make people consumer more. In fact in they mind they will have a better price if they buy the menu (Sandwich, fries, beverage)
Instead Which of just the sandwich. In this way McDonalds obtains a shopping basket more important.
Finally in some countries McDonalds adopted the concept of “small price” by offering an item for 1$ or 1ϵ (a burger or a dessert)