Cheeseburger Challenge

Topics: Hamburger, Price, Marketing Pages: 1 (272 words) Published: March 21, 2013
ASSISGNMENT: Watch the video at the following link, and answer the following questions: http://abcnews.go.com/Video/playerIndex?id=6808680
1) What was the issue that McDonald’s had to evaluate and resolve? As commodity prices skyrocketed in 2008 (beef, cheese, and fuel) McDonalds had to reevaluate its price of the double cheeseburger on the extra value menu. The primary concern was elevating the price of the double cheeseburger would take it off of the extra value menu, and possibly cost McDonalds a valuable customer base.

2) How did the company make their decision?
The company utilized a value taskforce to research how to keep customers happy, while solving the cheese crises. Through customer focus groups the taskforce found that many customers wanted their double cheeseburger, even if the cost was driven up.

3) What was their decision?
McDonalds found that two parties were of primary concern, those who wanted the double cheeseburger to stay, and those who did not want to pay a penny more for the product. The company chose to placate both parties by raising the price of the double cheeseburger by 19 cents, while creating a new hamburger (McDouble) to keep the cheaper customers happy.

4) What can we learn about how to handle our future marketing decisions as we consider how McDonald’s handled this challenge? The basic premise of this challenge was how to keep the customer happy. This is the number one question any company should have as priority one. The use of an integrated research team performing surveys of focus groups, and other valuable research should be a cornerstone to any future marketing strategy.
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