On A Conspiracy of Hogs: The McRib as Arbitrage

Seems you're missing the point - McDonald's says nothing about WHY because it creates a mystique around the product, and it's available for only a short time each year. Marketing 101 - get people to talk about WHY which simply creates demand (maybe not demand from you, but from a significant paying percentage of your readers). The vagaries of the marketplace such as the variations in pork prices (did you do a similar chart for beef, or for chicken thigh meat in McNuggets?) are usually fudged in corporate accounting, and the actual price of source material doesn't directly affect the selling price unless there is a significant difference.

That we're all talking about this is the point. We're creating a demand for a mediocre and savory product that is a bit different than the expected offerings. Some of us will bite. If only 2% (or pick a single-digit percentage) of us buy the product, that increases sales by at least 2% (and, because the product is a "premium" product, it probably increases the per-sale average significantly more than that). Pork prices are almost irrelevant, in most cases. It's merely about average sales, and number of sales.

Posted on November 22, 2011 at 12:52 am 0