SEASON 2024
MCDONALD'S VS PEPSI:
SUCCESS & MISSTEPS
PEPSI UNSUCCESSFUL
PRICING STRATEGY
Elasticity of Demand
Consumers might react negatively to smaller product sizes coupled with higher
prices because they feel they are getting less value for their money.
Pepsi started a “shrinkflation” campaign against products from companies such
as PepsiCo, Nestlé, Unilever,… that had shrunk in size but cost more.
⇒ Banners were placed in aisles for PepsiCo products such as Lay’s, Doritos, 7UP
drinks and Lipton tea, advising customers: “We are no longer selling this
brand due to unacceptable price increases.” (Dyer & Keane, 2024)
MCDONALD'S
SUCCESSFUL PRICING STRATEGY
Gradual Price Increases
McDonald’s
has
incrementally
raised prices, about 10% annually
over the past two years.
This strategy has helped the
company boost revenues without
causing an immediate, significant
drop in customer volume​
Menu Diversification
Offering a diverse menu with a
range of price points helps cater to
different segments of the market.
Understanding Consumer Behavior
McDonald’s
targets
a
broad
demographic, including low-income
consumers who are sensitive to
price changes.
REFERENCES
Dyer, G., & Keane, B. (2024, February 12). McDonald's, Pepsi's junk price gouging
affects
its
sales.
Crikey.
Retrieved
May
16,
2024,
from
https://www.crikey.com.au/2024/02/12/mcdonalds-pepsi-price-gouginginflation-cost-of-living/
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