Here's the latest on dollar menu marketing strategies:
- McDonald's trimmed its dollar menu early in 2012...but sales lagged during the fall, so to increase traffic, it put the marketing focus back on the dollar menu ("good taste doesn't cost a lot"). McD's also included new low-price sandwiches and pushed "extra value" meals. The strategy worked: Revenue was up in November. Profits? No word yet. But remember that soft drinks, coffee, and other beverages are typically higher-margin than burgers. So a buyer who chooses a 99-cent burger and adds a cola to the order is helping to balance the profit picture for McDonald's and giving the fast-food chain a higher share of wallet at the same time.
- Wendy's is emphasizing its "Right Size, Right Price" menu, a dollar menu with an added tier of under-$2 items. This expands lower-price choices for customers and allows franchisees to promote higher-profit items, not to mention helping Wendy's compete more effectively with McD's.
- Sonic has "everyday deals"--a few budget-priced items in budget sizes. But the strategy is actually to move in the opposite direction, beefing up the premium sandwich menu. And Sonic offers happy-hour deals on discounted soft drinks, an interesting twist in light of the higher profits on drinks.