From concept to (big) mouthful: how McDonald's third-pounder came to being


Have you ever sat in a McDonald's Corporation (NYSE:MCD) outlet around lunchtime on a weekend and just watched? Chances are you'll see a family or two, and chances are, the young children will be in possession of a hamburger Happy Meal. And if the family you're watching is anything like mine, or my colleague's, you'll see a pregnant mom (that's me) or dad, with an empty Quarter Pounder wrapper, hungrily eyeing the last bites of the child's burger.

Maybe it was a sight like that that prompted franchisee Scott Frisbee, whose family owns 17 McDonald's restaurants in and around Anaheim, California, to develop the idea that McDonald's needed a premium burger. Maybe it was those ubiquitous commercials for the "six dollar burger" at rival Carl's Jr., a unit of CKE Restaurants, Inc. (NYSE:CKR), and the fact that his menu had no competitive item. Maybe he was just hungry. Either way, the progress of McDonald's Third Pounder from concept to its appearance on California menus is remarkable for its speed -- not to mention its success.

At $3.99, the burger is the most expensive sandwich the company has ever offered -- seemingly counter to McDonald's place in the country's subconscious as the cheapest place to get a family meal. At 720 to 840 calories depending on options, the sandwich seems contrary to America's hopeless striving to become healthier. And after a string of less-than-stellar new menu items in the 80s and 90s, the fast food chain had slowed to focus on its menu standards -- so however did this come to fruition so quickly and to such obvious acclaim?
Neither McDonald's or Frisbee care to explain the answer to most of the obvious questions, how this burger can exist in a world that wants to use healthier oils and reduce its waistline. It is, after all, a few decades since "Hungry Man" was all the rage. But when you look a little closer, when you start getting out your game theory boards and watching the ping-pong of products in the burger marketplace, you realize: this was meant to be. It had to be.

The burger, which uses Angus beef and a denser bun ("more of a roll flavor," says Scott), is the very opposite of your concept of a fast-food burger -- small, no-frills, almost slider-esque. But that's really the point. McDonald's is losing customers to places like Carl's Jr. and the Jack in the Box, where premium burgers are being positioned as category killers. In another market, casual dining restaurants are siphoning off the customers who "graduate" to more beefy -- and expensive -- options.

And, who are McDonald's two target markets? One of them is the teenager and young adult market, the kind who are hanging out in McDonald's at 4 p.m. and at 4 a.m. This burger is for those in the demographic who are about to graduate to Red Robin or Chili's, but I don't think that's the major focus. The other market -- and far more important to McDonald's success -- is the young family market. The ones who don't go to Red Robin because the kids won't sit still, and who wants to pay $5.95 plus tip for your three-year-old to suddenly declare he HATES mayonnaise and won't touch any of his burger? The ones who are watching the commercials that attempt to make them feel good about their choice -- made because they're too busy, or broke, or stressed out to go anywhere nicer or cook at home. You've seen the ads, the ones which position McDonald's as a way to spend quality time with your kids. (Subliminal: not only should you not feel guilty for going to McDonald's, you should feel great! You're creating memories!)

In a word, this burger is for the dads. (And, in my case, the pregnant mamas, although I don't think that was really the reason the top brass in McDonald's board room put their rubber stamp on the concept.) They're hungry, and they're driving. You might be appealing to mom's guilt, but dad? Let's go straight to his belly. It's a strategy that's a few thousand years old, and it's still going to work.

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Last updated: February 10, 2012: 05:38 PM

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