Extra Value Meals is the customer’s choice of choosing one of the core options such as Big Mac, Quarter Pounder with Cheese, Egg McMuffin along with side orders such as French fries and beverages.
McDonald’s bundled pricing strategy (in Extra Value Meals) is its strategic initiative by offering discounts for core products coupled with other side orders. This helps the firm to optimize cost and increase the product value for its customers. Bundling pricing strategy increases efficiency of the firm thus reducing the distribution and subsequent marketing costs significantly. It is highly value-oriented. Consumers view this bundling pricing strategy as a choice among several choices.
It is true that individual items can be sold for profits however bundling pricing strategy also can reap profits in the long-run. There are two important benefits of bundling pricing strategy, namely- increase loyal customer base and returns on the cost of products in the long-run. In other words, bundling pricing strategy increases the sales volume, lowers the COGS (Cost of Goods Sold) thereby increasing the profit margins and great opportunities for acquiring new or potential customers.
Matrix comparing the individual and EVM prices:
|
Item |
Individual |
EVM |
|
Big Mac - $3.99 |
$3.99 |
$5.99 |
|
Quarter Pounder with Cheese- $3.79 |
$3.79 |
$5.79 |
|
Egg McMuffin $2.79 |
$2.79 |
$3.99 |
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