Week 9 EOC - $10 McDonald's Burger

The way McDonald's could possibly sell a $10 burger is to create value. As our book states, "Value-based pricing, also called value pricing, is a pricing strategy that has grown out of the quality movement. Instead of figuring prices based on costs or competitors' prices, it starts with the customer...The basic assumption is that the firm is customer driven, seeking to understand the attributes customers want in the goods and services they buy and the value of that bundle of attributes to customers." (McDaniel, 283) We all know that McDonald's has always been concerned with the customer and their experience with their company. People will pay for what they think is a good value. If McDonald's were to come up with a burger that people believed to be worth $10, it would sell for that. Carl's Jr. sells a burger for $6, and McDonald's actually recently came out with their new burger that they charge around $7 for, which isn't that far away from $10. If premium ingredients are used, you will be able to set a premium price. Burger Bar right here in Las Vegas has a burger that they sell for $5000! And people actually buy it! So is it really so weird that McDonald's would be able to sell a burger for $10? No. "Customers determine the value of a product (not just its price) relative to the value of alternatives. In value-based pricing, therefore, the price of the product is set at a level that seems to the customer to be a good price compared with the prices of other options." (McDaniel, 283)