Wireless Internet at McDonalds - pricing, promotion and publicity.

Essay by oldcowhandUniversity, Bachelor'sA+, October 2004

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Services, such as wireless Internet service, present a unique marketing challenge for organizations. Any service has four main characteristics that companies must address in their promotion and pricing plans: intangibility, inseparability, variability, and perishability. This plan uses a pricing and promotion strategy that adjusts the controllable factors of the wireless service to cope with, and even exploit, an uncontrollable environment. Price and promotion are essential components of an effective marketing strategy and are an integral part of the marketing mix. The goal of promotion is to affect behavior, which can take the form of informing, persuading, and reinforcement (Griffith, 2004). Promotion builds customer awareness and communicates information to potential customers to influence their attitudes or behavior (Perreault-McCarthy, 2002). The strategies presented herein address the pricing and promotional initiatives necessary to deploy an effective marketing campaign for McDonald's wireless Internet service offering.

Pricing Strategy

Pricing is a crucial part of the marketing mix.

The obvious pricing benchmark for the McCafé wireless service is the Starbucks/T-Mobile offering. However, using Starbucks/T-Mobile as a pricing guide is dangerous. Worldwide, research shows that prices are highly variable and declining, with the largest percentage decreases in the United States (Broad Group, 2003). In Asia, one of the future expansion channels for McCafé and a harbinger of technology trends in the U.S., providers slashed prices by over 14% in 2003 in a market where monthly service already averages less than $20 per month (Broad Group, 2003).

Consistent with its food service product message, McDonald's should compete on price. The wireless hotspot service provided by Truckstop.net nationwide offers service at over 500 locations and caters to similar consumer markets as McDonald's. Truckstop.net's service, and others like it, provides a better price benchmark. With the low cost structure outlined previously, McDonald's has sufficient room to price wireless...