From February 23 to August 24 this year, certain McDonalds hamburgers in China will be sold with a 50% discount. This means that you can buy Double Cheeseburger, Filet-O-Fish and McChicken burgers for RMB5 or about 60 US cents.
This discount is McDonald’s most important promotional strategy after the international “I’m lovin’ it” campaign which started in September last year.
With 600 outlets nationwide, McDonalds is lagging behind rival junk food purveyor KFC, who have more than 1,000 locations in China. Coincidentally, KFC launched a new product, a pork burger, on the same day that McDonalds began their discount promotion.
Is McDonald’s new price-driven strategy suitable for China’s consumers?
Last year, McDonalds gave up the “warm family” positioning which they have used for almost 50 years, and launched the “I’m lovin’ it” campaign in an attempt to attract younger consumers.
However, it seems that Chinese consumers were not lovin’ it at all: the “fashionable and cool” brand image didn’t do anything for McDonald’s sales. The conventional wisdom about China is that most consumers are highly sensitive to price, so decreasing burger prices is likely to be more effective as a marketing strategy than playing bad hip-hop music in their restaurants.
McDonald’s China is here.
-BM