Learn from Japan's McDonald's to develop 70 billion of the money-making skills.

In Japan, the same Big McBurger is bought in Tokyo and bought in the countryside of Yamagata Prefecture, but the price is very different. Yukuki Harada, president of McDonald's in Japan, carefully studied the acceptance of prices by customers in different regions and set different prices, miraculously increasing McDonald's revenue by 100 billion yen in times of recession.

In the face of the recession of the domestic demand industry, can we only bow our heads and "sink"? Yukio Harada, president of McDonald's in Japan, does not throw in the towel so easily.

Harada, an engineer born in IT, once rebuilt Apple computer in Japan. One year after joining McDonald's, it turned into a profit since 2004. since then, revenue has continued to grow for three consecutive years, with total revenue reaching 240.2 billion yen in the first half of 2007. About NT $70 billion), an increase of 13.1% over the previous year.

In just three years from 2004 to 2006, the revenue of McDonald's in Japan increased by about 100 billion yuan, surpassing that of large takeout food chains such as Yoshino, Rodolun Coffee and Moss Burger, which was described as "magic of Harada."

Commodity prices vary greatly from place to place

"Harada Magic" actually comes from independent thinking, looking for ways of innovation, not blindly following the trend, not following others. For example, in 2007, when the economy in Japan slowed down, instead of cutting prices and competing because of the recession, he raised prices against the trend! "regardless of economic indicators, income, rent, and living standards, they all vary according to regional characteristics. Therefore, it is very strange that the whole country sells at the same price. If you want to maximize profits without reducing the number of customers, the best pricing should vary from region to region. "Harada said.

Among all the takeout chains in Japan, no matter which branch of which brand they go to, as long as the menu is the same, the price of the product will of course be the same. Harada wants to subvert common sense and adopt innovative strategies.

Harada sets different prices for the same product according to different regions. In Tokyo, Osaka, Kyoto and other important cities, a total of 1255 stores have greatly increased their prices, but in areas such as Miyagi, Fukushima, Yamagata, Totori and Shimane, which are considered "rural", prices have been reduced in 130 of them.

For example, the big Mike package, which used to sell 580 yuan all over Japan, has become 640 yuan in the price increase area, up 60 yuan, or more than 10%, but in the price reduction area, it has become 560 yuan, 20 yuan cheaper, and the price has dropped by about 3.6%.

Harada said, "in addition to analyzing the growth rates of consumer prices and county residents' income, transportation costs, and personnel costs in different regions, we have also spent a year analyzing billions of receipts over the past five years to thoroughly investigate consumers' buying trends. "

Subvert cost thinking and target customers

To put it simply, the key to whether McDonald's increases prices or not is not the cost, but the "price sensitivity" (price acceptance) of customers in different regions, and then the "demand-oriented pricing". Harada conducted a survey on the prices acceptable and affordable to customers in various regions, and then determined the local prices through the leadership of McDonald's headquarters in Japan.

Harada stressed that if the cost is completely passed on to the price, it will not only rise by 60 yuan. "in Tokyo Heart, if the increase in cost is directly reflected in the price of the product, customers will leave us. "

The hourly wage paid by McDonald's in the metropolitan area is about 200 yuan higher than that in the suburbs. In terms of store rent, according to the announcement of land price on January 1, 2007, the commercial zone of Tokyo rose by 14%, while the suburbs fell by an average of 2.8%.

"if the price is set only according to McDonald's own needs, it will fail. It is necessary to make a thorough research and judgment on the balance between customer emotion and profit before the regional pricing can be carried out smoothly. "Harada said.

The system was introduced in June 2007, and in July, the total revenue of all McDonald's restaurants in Japan still grew by 8.8%, and the number of customers grew by 9.5%. Based on these results, McDonald's in Japan accelerated the actual operation of the plan and increased prices in three stages. as a result, 90% of the country's 3840 stores became price increases.

With regard to regional differential pricing, a McDonald's manager said, "it's not surprising." In the past, McDonald's profits were structured by local restaurants with higher unit prices, while metropolitan restaurants with lower unit prices were supported by customers. There is a reason for setting different prices according to local differences. "

About 1.4 billion people patronize McDonald's in Japan every year, which will enter a new era of fluctuations based on "current prices". If the differential pricing strategy in this region succeeds, it is bound to set off a wave of follow-up by other chain food industries.