Big Mac’s New Menu
McDonald’s cuts prices of extra-value meals to graduate from just a ‘snack joint’ to a lunch & dinner destination.
At a time when food prices are going through the roof, Big Mac is calling you for lunch and dinner that cost 25 per cent less than what you paid yesterday.
Beginning today, the world’s most ubiquitous chain of quick-service restaurants is reducing the prices of its extra-value meals – McVeggie and McChicken – to Rs 85 and Rs 96. The current prices are Rs 110 and Rs 120 respectively for a meal that consists of burger, French fries and soft drinks.
While the USP of McDonald’s all over the world has always been affordability, the move is surprising even by its own standards. But Arvind Singhal, Marketing Director of McDonald’s India (North & South), says it’s designed to increase the footfalls and increase the store utilisation. “Even the company’s board was surprised and asked us whether cutting prices at this point makes sense. But we have been able to convince them,” he says.
The rationale, Singhal says, is that McDonald’s has been known in India more as a snack joint. It is now keen to make its restaurants a lunch and dining option as well. Extensive customer feedback suggested that “people would come to us for lunch and dinner if we tweak the prices of our combo meals”, Singhal says.
All 165 stores will offer the extra value meal at the new prices from today and McDonald’s is ready with a new commercial which will go on air next week. The brief to the creative agency was clear: “Come to McDonald’s for your pet puja at an affordable price”.
Singhal says the basic idea is to encourage customers who come to McDonald’s twice a month to make their third visit. “The third visit will increase footfalls and that in turn will compensate us for the price cuts – that has been the McDonald’s principle anyway,” he says. And adding a breakfast or a lunch and dinner menu, longer hours of service, kiosks etc are all questions of leveraging the same area and rentals for deeper bill size.
With an average 3,000 walk-ins every day in each of its 165 restaurants, India is a significant part of McDonald’s worldwide network, but the restaurant chain wants to grow that number substantially. The average ticket size is small, but McDonald’s would prefer it that way as the strategy has worked in its favour. McDonald’s, which started operations in India in 1996, broke even last year and has started making profits.
McDonald’s has two joint ventures in India: One for the North and East and another for the West and South. The two companies collaborate on marketing (single creative and media buying agency), menu and supply chain management.
Amit Jatia, MD & JV partner, McDonald’s India (West & South), says the price cut move is a result of constant innovation around the marketing mix to build an emotional connect with the Indian family. The initial challenge was the perception of the brand being expensive. To overcome it, the brand started focusing on affordability, introducing its ‘Happy Price Menu’ at Rs 20. It then launched Drive Thru outlets keeping in mind the increasing number of car owners and the need for convenience. Then came the breakfast service, which is still on a trial run.
