Page 360 - Foundations of Marketing

O B J E C T I V E S
1. Explore issues related
to developing pricing
objectives.
2. Understand the assessment
of the target market’s Pricing Concepts and
evaluation of price. Management
3. Understand demand and
the price elasticity of
demand.
4. Become familiar with
demand, cost, and profit
relationships.

5. Examine how marketers
analyze competitors’ prices.

6. Describe the bases used
for setting prices.
7. Explain the different types
of pricing strategies.
8. Understand the selection of
a specific price. © Bikeworldtravel/Shutterstock.com
9. Explore the pricing of
business products.

M A R K E T I N G I N S I G H T S

McDonald’s Keeps Its Dollar Menu on the Marketing Menu

McDonald’s Dollar Menu is a customer favorite from higher than $ 1 , sales slipped. McDonald’s quickly
Portland, Oregon, to Portland, Maine—and beyond. returned to aggressively promoting its Dollar Menu,
Illinois-based McDonald’s rings up $ 27 billion in even adding new items, and sales rebounded. No
annual sales through a fast-food empire of 34,000 wonder McDonald’s is keeping the Dollar Menu on
restaurants in 119 countries. The Dollar Menu, with its marketing menu.
its budget burgers and bargain breakfasts, has helped Even though individual McDonald’s outlets make
McDonald’s retain customers whose wallets have relatively little money on Dollar Menu items, they
been hit hard by the economic slowdown. At the same typically earn a higher profit margin if customers
time, McDonald’s has had to pay more for ingredients buy extras like a large order of fries or a large soft
in recent years, and has passed along part of these drink. So the Dollar Menu isn’t just about selling
costs by raising the price of other products. dollar-priced foods: If it brings customers back to
Many fast-food rivals are using specially priced local McDonald’s outlets again and again, and boosts
menu items to attract price-conscious customers, sales of regular priced menu items, it can reinforce
adding to the market-share pressure on McDonald’s. customer loyalty, keep competitors at bay, and help
When the company briefly tried to put the market- McDonald’s support growth even in tough economic
1
ing focus on its Extra Value menu of items priced times.

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