Is McDonald (NYSE:MCD) forever cheap?

Market positioning is important for any company or brand. It’s an important strategy to identify a market opportunity and cater to it. The positioning is often based on market research or segmentation and is carried out with the intention of increasing sales volume as well as, to create brand recognition.

In order to have a competitive edge, the company needs a new strategy. However, such strategies may go against a company slogan. Similar has been the case with McDonald (NYSE:MCD). McDonald (NYSE:MCD) is known for its cheap meal deals delivered quickly. Due to certain complaints and unforeseen costs, McDonald (NYSE:MCD)’s tried to expand its menu with premium sandwiches, salads and beverages but that hasn’t played well with their customers.

McDonald (NYSE:MCD) officials have revealed that straying away from their original strategy hasn’t gone in their favor. Not only has the increasing competition contributed to this situation, but also the current economic situation as well as the income gap between classes. It seems like the rich are eating out more, whereas the poor and middle class can’t afford that luxury. According to research by the NPD, it seems like the restaurant traffic has been stagnant throughout the year.

It looks like things in general have been bad for the overall food industry, but McDonald (NYSE:MCD)’s took a much bigger hit, with sales and customers figures dropping rapidly. The low price factor is no longer its competitive edge, as customers are now willing to spend extra money for a decent meal. McDonald (NYSE:MCD)’s food is now termed as lousy according to a Consumer’s report where McDonald (NYSE:MCD)’s was ranked lowest among 21 fast food chains, and its burgers as not that great.

But it doesn’t end here. The customers at McDonald (NYSE:MCD)’s have also complained about unfriendly staff and slow service. This could be due to introduction of fancy beverages and sandwiches that require extra time and effort to prepare.

At this stage, it seems like a bad move to increase prices, but McDonald (NYSE:MCD)’s seems to have confidence in this new strategy. The company has expanded its menu with a wider range of sandwich toppings and other additional beverages. And other deals and meals have also been subjected to additional few pennies. It seems now that the Dollar Menu is no more a Dollar Menu.

McDonald (NYSE:MCD)’s competitors have taken this opportunity to also increase their prices, and some competitors like Burger King (NYSE:BKW) have gone as far as coping McDonald (NYSE:MCD)’s menu as well as their promotional meal deals. All this in an attempt to lure customers away from McDonald (NYSE:MCD)’s and into Burger King (NYSE:BKW) outlets. It has been a fairly easy task for them as McDonald (NYSE:MCD)’s customers are already dissatisfied. At this point raising prices will harm McDonald (NYSE:MCD)’s more than expected. What sells McDonald (NYSE:MCD)’s more is, its reasonable prices along with tasty food and good customer service. Repositioning according to company’s need instead of the market just might not be the right way to go about it.