Pricing

Price of any entity can be called the amount of money or goods for which a thing is bought or sold. 

The price of a product may be valued equivalent to what it costs a consumer.
For a consumer, price is the amount of money invested equal to the value to be enjoyed/benefits of purchasing a product, as compared with other available items.

The concept of value has been already expressed in one of the previous posts as:

(perceived) VALUE = (perceived) BENEFITS – (perceived) COSTS

A customer’s motivation to purchase a product comes firstly from a need and a want:e.g.
• Need: 'I need to eat'
• Want: 'I would like to go out for a (combo) meal tonight'
The second motivation comes from a perception of the value of a product in satisfying that need/want (e.g. "I'd really love a Mc'Donalds").

The perception of the value of a product would almost always vary from customer to customer, because perceptions of benefits and costs vary.

Perceived benefits are often largely dependent on personal taste (e.g. spicy versus sweet, or mayonnaise versus ketchup). In order to obtain the maximum possible value from the available market, businesses try to ‘segment’ the market – that is to divide up the market into groups of consumers whose preferences are broadly similar – and to adapt their products to attract these customers.

In general, a products perceived value may be increased in one of two ways – either by:
(1) Increasing the benefits that the product will deliver, or,
(2) Reducing the cost.
For consumers, the PRICE of a product is the most obvious indicator of cost - hence the need to get product pricing right. 

This is exactly what Mc'Donalds has got right in India. They have identified that the age group doing most of the purchasing from them would be kids and teenagers with a purse limit that is not really very high. For a fact, prices offered by the brand are almost half those in the United States. This is compensated very smartly by the company by modifying the portion size in India. Served portions of burgers are relatively much smaller than those served elsewhere. That is how Mc'Donalds can still stay afloat in the competition even after pricing its food at a much lower rate than other players in the market.

Another phenomenal thing about our favorite product, the combo meal is that it is one of the very rare 'rather filling meals' which comes to the consumer in that 200 rupees range which is not really a pinch to the wallet for the value it provides. This kind of pricing also draws in other classes of customers and families (because yes-treats and parties are so much more economical-and they decorate the restaurant for you!). So when we are done with this long-short marketing session, lets switch off the internet for a while and then you know where there is a celebration!