Taco Bell $2: A Restaurant Trade Promotion?May 14th, 2010 | Posted by in Menu Strategy | Pricing | Promotions
Taco Bell’s has launched its $2 Meal Deal, as described in USA Today. The deal is a taco or burrito, medium soft drink, and bag of Doritos for $2. Given the massive successes of McDonald’s Dollar Menu and Subway’s $5 Footlong, it seems likely that consumers will go for a deal at this price point.
The natural question is: how can they package this offer at this price point and still make money? The answer must be a great deal with Pepsico, supplier of the chips and drinks. Of course, the drinks are already high margin, but it makes us wonder what kind of arrangement they have on the chips. Regardless of the deal in this case, could other restaurants take advantage of branded supplier offers meant to discount but blow the doors off on volume?
This could be step one of bringing a more trade promotion approach to restaurant marketing. Creative restaurant companies ought to be thinking about tests they could run to push this idea forward.
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