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Big Mac

In Chapter 14 of the book we examined different pricing strategies.  Within the section on pricing strategies we introduced ‘price bundling’ and ‘psychological pricing’.  A good example of a company who use both of these strategies within their business model is McDonald’s. McDonald’s holds the largest market share in America within the Fast Food Industry.  Most of us are familiar with their products; The Big Mac, milk shakes and Fries are a few of the products that you will see on their menu.

 

Whilst every consumer can see the price of each individual product as they enter McDonald’s, it is also quick to see that they use the concept of price bundling.  Many consumers will simply order a ‘Big Mac meal’ or a ‘Happy Meal’.  The concept of offering more than one product as a deal and reducing the price, to encourage the consumer to buy more than one item, is known as price bundling. In addition to price bundling you often see McDonald’s using psychological pricing, with items costing 99p.