The second tool that will be discussed is "Price".
According to Dibb et al., (2016), Price is defined as "The aspect of the marketing mix that relates to activities associated with establishing pricing policies and determining product prices."
A certain price is chosen in terms of location and the people around it. The price will slightly increase in an area where people can afford to pay much more, and therefore living costs will be more expensive and vise versa in poorer areas.
Customers are willing to pay that little extra if they know the good or service is of better quality and that it really works for them.
McDonald's original worldwide logo
McDonald's, the crazily famous American fast food restaurant chain has nearly dominated the whole world. By working nationally and internationally the fast food chain business is placed in more than 110 countries (McDonald's, 2016). This, of course, means that they have multiple currencies as well as different pricing depending on the countries that they deal with.
McDonald's adjusts the price accordingly due to the different geographical location. However, with the different range of products the business has, McDonald's set prices with a "demand based methodology" (What makes McDonald's, 2011). This means that there may be price variations from restaurant to restaurant "but in a way that offers the best value to the restaurants' individual customer base (What makes McDonald's, 2015).
It also comes down to the fact that price varies because in some areas, such as in high priced cities, people are willing and able to pay more, whereas in smaller places, they are going to charge less because it fits with the local consumers more reasonably.
Labour, and local taxes also play a role in the price they end up putting up for the public.
"For example, the average price of a Big Mac in America in July 2016 was $5.04; in China, it was only $2.79 at market exchange rates. So the "raw" Big Mac index says that the yuan was undervalued by 45% at that time." (The Economist, 2016)
Take a look at the price of a Big Mac all around the world! :
In the image below, it is clear that McDonald's is taking over the world, however, it wouldn't have such success if there weren't any customers! Regardless of all the hate, they must be doing something right!
