While going to Boston this weekend to watch the Deacs play Boston College, we stopped at plenty of fast food places throughout the duration of an incredibly long weekend. Before getting my food, I am always wondering, which one of these meals would give me the best value, just like I know the fast food corporations are trying to gain the most value from each of their meals. I know how much food I get for my dollar and they know how much the cost of goods is and the difference in their final price of the meal. This thought often crosses my mind, "on which one of these meals does this restaurant make the most money? What margins are the slimmest for these retail giants?"
McDonald's has made it quite easy for me to figure it out now that their world famous Monopoly marketing scheme has started. They give all of their value meals 2 chances to either win free food, or win a game piece on the drink. Then they have certain meals that get 2 more chances on the packaging of the food. Consumers see this and are happy to switch from a meal that has some smaller margins or lower inventory levels to a meal that gives them a better chance to win something that has already been funded by their original purpose due to the low price of these items on the menus with the most common prizes being either a medium fry or a parfait.
The other prizes of trying to win a car, entertainment system, cash, etc... are so rare, that the chance of getting all of one color actually makes McDonald's more money from the people trying to get the same prize, but still consumers switch from perhaps their meal of choice for every other month of the year, to gain a perceived advantage over the others in the population that are striving for the same prize. They spread millions of every piece but one in each category, so the chances that winners turn up, are slim to none for the more involved prizes.
"the odds of winning even the smallest cash prize is about 1 in every 91,000. Most of the other prizes are less likely than winning millions of dollars in the lottery."
http://racquetsportatlas.hubpages.com/hub/Secret-to-Winning-McDonalds-Monopoly
I was shocked to see this happen around half of the orders that I overheard while sitting and eating my meal. "What is the extra Monopoly menu?"... "Oh!! I'll take that combo then!!!" People would switch to get the extra chance to win and the extra chance to pull 2 of the little stickers. Then I realized how much was added to the experience of going to McDonald's by just giving people a chance to feel like they were going to get rich quick, much like the adrenaline rush from playing the lottery. With one pull of a sticker, or one scratch of a coin, you could leave all of your troubles behind, and McDonald's fully grasped that with their promotion by adding this value to their customers.
Roddey Player
I did my marketing communications industry analysis on the fast food industry, and one of the promotional campaigns we studied was the Monopoly campaign. It has been extraordinarily successful and is brilliantly designed. It's designed where the most popular prizes are things such as small fries and a small soda. Not only do those prizes require consumers to enter McDonald's again, but the consumers will more than likely order additional items than their free fries. They will probably order another Value Meal that partners with the game with the hopes of winning more free fries. I also found that because the $1,000,000 prize is an annuity and not a lump sum, it only costs McDonald's around $90,000 in terms of real dollars. Their marketing and finance people really know what they are doing.
ReplyDeleteGreat post!
ReplyDeleteI think that another element may the fact that playing is somewhat thrilling. I have never seriously thought I could win any sweepstake or lottery prize, but I know that I have sometimes played with friends just for the pleasure of playing. I think that this opportunity is adding to the value of the meal you order while at McDonald’s; in a sense, you buy yourself a tiny chance of winning a big prize, a more reasonable chance of winning a small fries, but you also buy yourself the certain joy of playing.