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Happy Hour is static surge pricing.
> Happy Hour is static surge pricing. Happy Hour is incentive pricing to try to get customers to come in earlier than normal.
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Happy Hour is static surge pricing.
No. Surge pricing = increase price in response to demand with a goal of increasing profit margin Happy Hour = decrease price of specified items at specified times to drive demand and increase sales volume
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> Happy Hour is static surge pricing. Happy Hour is incentive pricing to try to get customers to come in earlier than normal.
Surge pricing is also incentive pricing to try to get customers to come in earlier than normal.
While I actually like surge pricing in situations like a natural disaster or New Years Eve (e.g., gets more drivers/suppliers on the road), as proposed by Wendy's it's a very poor anti-pattern.
One is a loss-leader, the other is not.
Edit: This is exactly why I usually quote the person I'm responding to (I failed to do it here). Their current message is not what they originally posted, they edited it and pretty much repeated what I said.
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> likely to send business to McDonalds Wendy’s is doing this in order to compete with McDonalds, which has been pushing up prices much faster than inflation for several years in a row… and McDonalds has publicly claimed it’s not hurting their business. https://www.businessinsider.com/mcdonalds-price-hikes-puttin...
McDonalds has every incentive to insist to its shareholders that price increases do not impact business performance. any onlooker --even Wendy herself-- who thinks otherwise is deluded. McDonalds is routinely lambasted on social media and in memes for its recently gilded pricing. the quality just is not there. I suspect actual sales are flat, or in decline as a response to the price increase. The alternative to scald…
It's the same reason why prices keep going up at the grocery store. Those companies know you're going to buy groceries anyway and most people are going to buy the name brand instead of the store brand.
Where McDonald's runs into trouble is if their prices get so high that you might as well just go to a sit down restaurant instead. Five Guys and Smashburger are getting pretty close to that territory especially with the tipflation added onto their already high prices.
The other risk for McDonald's is that somebody else will try to replace them as the replacement level[0] restaurant. If your customers are choosing you because you're the cheapest and fastest restaurant then you can't afford to have a competitor undercutting you on price or speed. That's why it's so surprising to me[1] that McDonald's would be raising their prices aggressively. Even if they improved the food quality dramatically, they're not going to be able to move their brand up market because their existing reputation is well established.
[0]: https://en.wikipedia.org/wiki/Value_over_replacement_player (McDonald's is basically the restaurant equivalent of this baseball analytics concept)
[1]: I virtually never eat at McDonald's so I was completely unaware that they've been jacking up their prices. I don't even know where my local McDonald's is without checking Google Maps.
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No. Surge pricing = increase price in response to demand with a goal of increasing profit margin Happy Hour = decrease price of specified items at specified times to drive demand and increase sales volume
Surge pricing doesn't only apply to increasing price.
Surge pricing, as the definition of "surge" suggests (1), is a subcategory of dynamic pricing where the price is increased in response to higher demand.
(1) https://dictionary.cambridge.org/us/dictionary/english/surge
It seems insane to me to market this as "the food costs extra at certain times of day" rather than "Happy Hour-- 20% off!"
Happy hours are designed to increase demand.
Surge pricing is designed to capture some of the value that high demand loses to limited supply.
I agree with your framing, but 20 hours of happy hour is a tough sell for PR, but worth getting right.
I also disagree with everyone here saying people will just go to an alternative restaurant, when the entire point is that all the drive thru’s are already full during these periods.
This is not going to be well-received by their customers and is likely to send business to McDonald's and Burger King instead. They also really shouldn't be doing "suggestive selling" whether with humans or machines. Just shut up and take the customer's order rather than trying to talk them into ordering something. Nobody likes when stores or restaurants do that even if it "increases metrics" because some people choo…
> likely to send business to McDonalds Wendy’s is doing this in order to compete with McDonalds, which has been pushing up prices much faster than inflation for several years in a row… and McDonalds has publicly claimed it’s not hurting their business. https://www.businessinsider.com/mcdonalds-price-hikes-puttin...
It's crazy to me to think that no one else out there thinks like me? That these companies can just confidently do this and succeed doing it?
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Surge pricing is also incentive pricing to try to get customers to come in earlier than normal.
It is not the same. One is designed to incentivize a behavior (come around more/earlier), the other is designed to reduce the behavior by disincentivizing it (don't come around when we're busy). While I actually like surge pricing in situations like a natural disaster or New Years Eve (e.g., gets more drivers/suppliers on the road), as proposed by Wendy's it's a very poor anti-pattern. One is a loss-leader, the other…
And happy hour isn't a loss leader.
[dupe] wasting our time OP More discussion a few days ago: https://news.ycombinator.com/item?id=39514464
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