Creating Value through Product Decisions
I love Wendy’s. As a caterer, used to eating an amazing variety of foods, it seems silly…but I love it. For as long as I can remember, I’ve always ordered the same thing, a Jr Bacon Cheeseburger with no mayonnaise and extra ketchup. Years ago, it was on the $.99 value menu…what a deal! There was no other place in town where you could get a burger with bacon for $.99. Well, I should have known that my excitement wasn’t going to last forever. I still remember the day I wen through the drive-thru and saw my sandwich listed for not $.99 but $1.29. I wasn’t happy. As a caterer, I knew that sometimes food costs increased, necessitating pricing increases in order to maintain margins. However, I still wasn’t happy. I was paying more for the same sandwich.
Because I still enjoyed the Jr Bacon Cheeseburger, I still bought it, even though I wasn’t thrilled about the extra $.30 plus tax I had to pay. Compared to other fast food restaurants, it was still a relatively good deal. Then one day, I went to Wendy’s and was surprised by another price increase. This time, though, it was different. The price was up to $1.59 but there was a note on the menu that said “Now with Applewood Smoked Bacon.” Being in the food business, I was well aware of the applewood smoked bacon trend that was now reflective in the lower end restaurants. But the question was…would this ingredient change be worth the increase in price? To my surprise, it was! The bacon was crispy and very tasty and well worth the extra $.30. Wendy’s made a great decision which, from a marketing standpoint, positively affected them in two ways.
First, the company was able to increase the quality of its product by choosing better raw materials. With the hundreds of choices out there for inexpensive food, they chose to differentiate themselves by incorporating better quality ingredients. Even their other menu options have been tweaks for quality. This increases the overall VALUE perception of the brand because their products now have an inherently better makeup.
Second, the company’s decision positively affected profits on that food item. They were already paying for bacon and I’m sure that the better quality bacon was not $.30 more expensive than the old, rubbery bacon. So this decision was a win-win…better food for customers and better margins for the company.
In the wedding world, we all try to provide products and services of value to our clients. What product and service decisions can you make that will increase quality or better your margins? How will the PEOPLE you serve be affected by these decisions?
Featured Image by El Gran Dee