Latest / Best of Business / Bodo Lang: Massey University marketing professor on McDonalds lifting coffee prices for Super Gold cardholders

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Bodo Lang: Massey University marketing professor on McDonalds lifting coffee prices for Super Gold cardholders · Best of Business

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  Speaker 1: Heather do Andrew.
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  Speaker 2: Dickens One more Day Ago. Pensioners are not going to
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  Speaker 2: be very happy with McDonald's right now. The chain is
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  Speaker 2: changing their gold card coffee discount. The pensioners used to
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  Speaker 2: be able to get any size McAfee coffee for just
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  Speaker 2: three dollars, but now a medium will cost four dollars
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  Speaker 2: and a large five dollars. The price hadn't been touched
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  Speaker 2: since pre COVID. Bodo Lang is a marketing professor at
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  Speaker 2: Matta University and joints you now. Hello, Bodo, Hey Leindra,
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  Speaker 2: how are you good? Do you think this is going
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  Speaker 2: to roll up the pensioners or is this a small
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  Speaker 2: change that they'll live with.
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  Speaker 3: Look, I think any price increases never welcome, and pensioners
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  Speaker 3: certainly a frugal bunch on their backs, and so I
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  Speaker 3: think there will be some upset people, but I don't
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  Speaker 3: think it's going to make a huge difference to their
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  Speaker 3: consumption of coffees.
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  Speaker 2: To be honest, they're very good at making their voice heard.
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  Speaker 2: McDonald's net profit in New Zealand was one hundred and
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  Speaker 2: eight million dollars last financial gears. So does it really
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  Speaker 2: need to change the price of a cup of coffee
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  Speaker 2: for Algoka people or is this just this is just
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  Speaker 2: nasty and petty.
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  Speaker 3: Yeah, I guess it just depends on what happened to
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  Speaker 3: their raw ingredient prices, you know. And I think I'm
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  Speaker 3: a former business person, and I think we always have
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  Speaker 3: to be feared business. They have to run some sort
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  Speaker 3: of profit. But you know, if the costs have increased dramatically,
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  Speaker 3: then you know a price increase may be warranted. But
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  Speaker 3: there's some really interesting research, particularly from Europe that shows
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  Speaker 3: that many times price increases are well beyond the cost
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  Speaker 3: increases that companies expand, and so people just you know,
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  Speaker 3: companies just expand their margins.
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  Speaker 2: Basically, sure, great, fine, but reputational risk. Do brands risk
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  Speaker 2: losing customers with petty little changes like this?
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  Speaker 3: Absolutely? I think customers always have a reference price in mind,
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  Speaker 3: and coffee is one of those products where you will
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  Speaker 3: really notice the change because it's a product that's frequently
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  Speaker 3: and you know, three dollars or three twenty five I
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  Speaker 3: think it was is a very low point. I think
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  Speaker 3: everybody would recognize that, and you know, going to four
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  Speaker 3: or five dollars, as you sit in the intro, people
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  Speaker 3: will really notice that it's not just a marginal change.
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  Speaker 2: All right, But Alan, I thank you, marketing professor at
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  Speaker 2: Massi University.
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