Every quick service restaurant (QSR) chain, whether Indian or global, is offering a special price menu. What’s with this? Do they make money at these levels? How important is price?

- Rekha Mudaliar Shetty, Mumbai

Rekha, price plays a big role in the QSR business. A very big role, really.

Pricing is the new stimulus in this category. A stimulus to trial, consumption and repeat. In the QSR category, where eating out options largely offer the same ambience, the same quality standards, the same standardised service and literally the same everything, the food and beverage on offer is not the distinguishing factor anymore. When it comes to make a choice where to park yourself as a youngster, price leads the way.

A QSR that offers eats at Rs 25 and a basic drink at Rs 15 is the new location of choice. At every QSR there is a killer-draw dish and therefore price is the edge.

QSR players have understood this right, and are playing around with it. Not only are exciting price points being put together, but combo offers are also the norm. Many QSR players are burning holes into their typical margins on F&B in a bid to compete for customers in numbers.

Let's remember, numbers cause buzz, and buzz in return create more customers. Price is, therefore, considered part of the virtuous cycle at play in QSRs today.

I, however, do believe that what started as a short-term tactic has assumed the dangerous avatar of being more of a long-term lure. This is risky.

Let’s remember that a typical QSR cannot really afford such a price war that erodes into its typical price margins, as contemplated in carefully laid out country business plans.

The effort in the QSR segment today seems to be to lure in the largest numbers of consumers, get them captive and sticky, and hope that this large mass generates buzz that translates into brand stardom.

In the bargain, the effort is also to erode the margins of competitors. When a KFC is offering an Rs 25 price point, a McDonald’s and a Dominos cannot but have the same price point at their outlets. In the bargain, margins are getting eroded everywhere in this segment.

I do believe this is a dangerous trend. To an extent, this pricing tactic, and sadly, a subterfuge strategy, is predatory in many ways. The bubble will burst, later than sooner.

Marketers need to wake up and smell the disaster they are brewing. At times it is easy to think that this disaster is being brewed for your competitor. You never know when and how it can take a bite of you.

Also, such promotional pricing offers can be double-edged swords and can often dilute the brand equity of the parent brand.

Women in advertisements are still a stereotype. Why and for how long?

- Nalin Mehta, New Delhi

Nalin, the stereotype continues because a nation gets the advertising it deserves. The nation is still not ready to rise above its large-scale imagery of the male as the leader of the pack. The man is the earner in this imagery. The woman is the spender. The earner dominates.

New advertising has tried to break out, but these breakouts are far and few. These efforts are in the niche categories at the top of the pyramid of consumption rather than in the categories that are more mass.

Watches and jewellery at the top end see a different imagery. Categories that are largely hedonistic in their consumption patterns can afford to break out of the mould. Not others. Not yet. Most others don't.

With Kingfisher Airlines burnt out, would I be right in saying that Vijay Mallya is a burnout?

-Vijay Chakravarty, Hyderabad

Vijay, you share the name Vijay, and you know there is victory etched in that very name.

Name apart, I do not agree. Vijay Mallya’s war chest of funds, and more importantly his war chest of business intent and savvy, is not to be underestimated. The man has built and consolidated on the Vittal Mallya foundations very well. He has leveraged funds, relationships and business-savvy right through.

Therefore, do expect a revival, possibly in the space of real estate and every kind of sport there is to leverage. The idea of the future is to possibly leave back not just money, but powerful businesses of the future.

I will not write Mallya off just like that. In many ways, the liquor business is a business of the past, just like the high-burnout aviation business and the low-interest engineering and fertiliser business.

One needs to wait and watch as he rises once again from the shadows of the old businesses, some defunct, and some sold to profit!

(Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc. askharishbijoor@gmail.com )

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