The Road To Premium Fast Food Begins With a Promotional Price
LOS ANGELES, October 10, 2012
(Off the menu)
– One of my favorite fast-food items is Carl’s Jr.’s Big Carl burger, which the restaurant chain launched in August 2009 to combat McDonald’s Big Mac sandwich. I order the burger almost every time I go to Carl’s. However, I may never have tried it had it not been for the burger’s initial promotional price.
When the Big Carl was first introduced, it was priced at most locations at $1.99. Coupled with a marketing campaign highlighting the facts that it offered more meat than the Big Mac and was cheaper, I was sold. The Big Carl became my burger of choice.
The price of the Big Carl stayed between $2 and $2.50 for several months, to the point that I would just buy them without even looking at the price. Then a couple of weeks ago, I was looking randomly at the menu and saw the current price of my favorite sandwich:
It was an increase of more than 50% from what I was used to seeing. And you know what I did?
I bought it anyway.
Know why? Because by that point, my relationship with the Big Carl had been established. To me, it was worth the premium price.
What I’ve just described is a perfect example of promotional pricing succeeding. Promotional pricing is important in the restaurant industry, but especially so in the quick-service area where all major chains feature value menus. You can introduce premium products to those who look for cheap fare, and you can get us to pay premium prices. But it’s incumbent upon the fast-food chain to make the first move and offer the product at a low initial price.
Now let’s take Carl’s Jr. new Sweet Potato Fries, which the chain introduced earlier this summer. A large order of these fries goes for $3.29. That’s way too much! Sure, I may like them. Sure, they could very well become my side dish of choice. But I can’t justify paying a high price for a product I’m just now sure of. It’s that simple.
It’s not easy for any restaurant chain—whether it is quick-service, fast-casual or casual—to launch a product that’s both popular and profitable enough to stay on the menu indefinitely. But promotional pricing is a good first step. If you offer it—and offer it low enough—they will come.
Nevin Barich is the Food & Beverage Analyst for Industry Intelligence Inc. You can get him to eat pricy fast-food burgers if you initially offer a promotional price. He can be reached at firstname.lastname@example.org
Related News: this box contains exclusive content that is accessible only to Industry Intelligence subscribers. Click a link to learn more.
- Chipotle to offer US$3 burritos, bowls, salads and tacos on Oct. 31 from 3 p.m. to closing for all customers who are wearing costumes for Halloween
- Popeyes announces offering of the US$4 Wicked Good Deal, consisting of twisted, thin chicken strips, choice of side, buttermilk biscuit and dipping sauce; meal available throughout October
- Pizza Hut offering two medium pizzas of any recipe with any toppings for US$6.99 each for the month of October in celebration of National Pizza Month
- Dairy Queen's US$5 Buck Lunch deal now an all-day offer for a limited time through Oct. 31; the offer--which launched in 2013--includes an entrée, regular fries, a 21oz. beverage and a DQ sundae
- Dunkin' Donuts announces offering of medium hot coffee for US$0.66 on Sept. 29 in celebration of National Coffee Day