McDonald's makes their money the same way any other
big companies makes it: by centering their attention on their
regional markets, setting prices to
compete with other places in the market, and making as much money as
possible while still looking attractive. McDonald's is better in that they have smaller pricing
zones than say a
gas station, which (notoriously)
zone their prices according to where in town the
gas station may be. Something just down the
road, but more convenient for
rich people may be 3 or four cents more than something in a
poorer section of
town. To the
business-minded, this is a fair and
sensible business technique.
McDonald's recently bought out the
highway contract for the state of
Massachusetts. What does this mean? It means that there are no more
Burger Kings on this stretch on the
Pike, but are all McDonald's. Are the prices higher on the
pike than what they are simply right off the road on an
exit? You had better
believe it. However,
McD's thinks that you are willing to pay for the
convenience of food right there. They have you captive.
Amusement parks are the same way.
In
Holyoke, where I live, there are three McDonald's: One in a large
mall, one in a
suburban area, one in a poorer
downtown urban section. The prices actually go in that order. You can get an entire meal
downtown for about 4 dollars and some change. At the mall it can cost you up to six. Why? Because that's what the
market can
bear for that food.
McDonald's is
lucky in that they do not have sit-down menus.
Menus allow people to stare at
prices and to gauge how much a
meal will
cost. You cannot
tinker with menus too much, because
patrons become
familiar with them, and would know if they are being
jilted into paying
more.
McDonald's makes their money (at no matter what the prices are set) by the differences in
profit margins between items. My girlfriend's
father used to be a
manager at a
McD's. He told me that they don't make much on a
burger. Maybe ten to twenty-five cents after
everything on a hamburger; a little bit more than that on a
cheeseburger. The specialty
sandwiches are fairly
profitable as they are higher-ticket items. The
apple pies? Not much. The other
small stuff? Not a heck of a lot. However, it is really the
drinks that make it a profitable
company. You pay a dollar for a drink that cost them roughly ten
cents, if that. You super-size your meal, adding on between 40 and 60 cents, adding 5 cents in fries and two cents in drink. The drinks are where they make their
money, even in
free refills. To get your five dollars in soda, you'd need you and your entire thirsty
soccer team for some time hitting those
machines.
People don't really think about it, but
fountain soda is one of the most
inexpensive parts of a fast-food
restaurant, and yet one of the most
profitable. Regardless of what the price is set at,
McDonald's uses its clever pricing to set a higher
value on a meal with more
drink and more
fries, something that can be
suggestively sold at a higher price.
Suggestive sale and
upsale are HUGE parts of any
customer interaction job. That's where the
money is made.
McDonald's doesn't
McRape your pockets, you buy right into it, and they know it. They don't keep too many secrets about what they do, or about how much things cost. What does it matter to you? You are not going to go to
Wyoming to get a
cheaper burger if the one down the street in
Western Mass is
fifty cents more. You are stuck there, and you'll gladly pay their prices, because it's a
value, but only because they tell you it is.