Question

When Mcdonal's corp reduced the price of its big mac by 75% if consumers also purchase french fries and a soft drink. the company was hoping the novel promotion would receive its U.S. sales growth. It didn't. within two weeks, sales had fallen. Using your knowledge of game theory, what do you think disrupted McDonald's plans?

Answer 1

Think of all of the "players" and then think 1) how did McD think they would respond, and 2) how did they actually respond.

The players are: 1) McD corp, 2) McD's competitors, 3) McD regular diners, 4) non-regular diners.

For McD Corp to think their plan would work, they must have thought the promo would bring in non-regulars with no response by competitors or regular diners.

For extra credit, in your answer, discuss whether the players considered the promo to be permanant or temporary.

Lotta luck

Answer 2

Thanks Lotta, it helped