MacKenzie Schill
Mrs. Straub
AP Econ
28 February, 2017
Shamrock Shake Season
Now that winter is coming to a close, and March is right around the corner, America is are ready for the white snow to turn to green grass, just like they are ready for their vanilla shake order to turn to a green, minty charm - or in other words the unveiling of the Shamrock Shake from McDonald’s. This mint-flavored favorite has been only been available nationwide since 2012, selling over 35 million beverages. (LedBetter) Every year people anticipate its return for months, hoping to rekindle their long lost relationship with this seasonal phenomenon. Those who are not American fast food lovers, and have not experienced the delight of the Shamrock Shake, might wonder what makes this drink so popular compared to the rest? The truth lies beneath the economic components that partner with this special treat. The scarcity, seasonal trends, and company popularity are all factors that play a part in making the return of McDonald’s Shamrock Shakes so successful.
(Billboard advertisement for McDonald’s Shamrock Shake)
Many people may think that the return of the Shamrock Shake is every March, but to McDonald’s fanatics and lovers, the real return was in 2012. This was the recent release of the minty drink but it was originally introduced in 1970 as the St. Patrick’s Day Shake. However at this time, in the mix of an oligopoly, McDonald’s was no where near what is is today. So the delicious drinks name wasn’t catchy enough and was scrapped from the menu just a few years later. Since the growing and popularity of the franchise, McDonald’s tried a more alliterative route changing the name to Shamrock Shake. Now that McDonald’s is the leading fast food restaurant in the world, the total revenue and quantity sold has increased solely on the fact that McDonald’s is the restaurant offering them. (Top) Other fast-food restaurants offer trade-offs original products like vanilla, chocolate, and caramel beverages, but nothing unique like the Shamrock Shake. This also ties into McDonald’s being the “popular choice” which influences where people choose to spend their money, and alters consumer expectations.
Even though McDonald's is so popular, the scarcity of Shamrock Shake definitely adds to its extremely high demand. McDonald’s uses a strategic pricing and limitation plan to make to ensure there is not too much of an input increase, which would cause marginal output to decrease and result in diminishing marginal returns in Shamrock Shakes. Therefore there some minty desserts accessible all year, but McDonald’s niche is m their delicious minty shake is not available majority of the year, and consumers are only able to enjoy their favorite drink over a one month period. This low supply creates a very high demand, especially following the eleven month drought, shake lovers are at their peak withdrawal and are willing to purchase a higher quantity even at a higher price. Since the drink is only available for a limited time, the decision of whether to offer the beverage at individual stores is up to the franchise owner. While most choose to offer this restricted drink, some do not which turns the US McDonald’s map into a frosty green patches of have and have-nots.(McDonald) The limited supply actually upsets customers is specific areas since the demand is so high. The Los Angeles area is a notable Shamrock Shake deadzone, with heartbroken seekers from across southern California. One customer said “My kids are very sad!” while another said “[they are] heartbroken, why has [McDonald’s] done this to us!”(Purtill) This only goes to show that only provided this drink over a specific time period increases the demand which overall increases the popularity of the product and total revenue for the company.
The scarcity of the Shamrock Shake really is determined by the seasonal characteristics that play a part in McDonald’s profit of Shamrock Shakes. Since there is a high opportunity cost because the shake is only offered one month out of the year and they could sell it for longer or all year, the seasonal impact of March and St. Patrick’s Day comes into major effect. This has to do with the demographics of America since nearly 127 million people celebrate St. Patrick’s Day which means that about 51.2% of our popular celebrates this holiday. (Kiernan) And of course it accompanies purchasing green foods and products. McDonald’s decided to take advantage of the Patties Day celebrations and trends because when March rolls around, buyers are already seeking green oriented foods, and beverages and decor.
All in all, due to the scarcity, seasonal cravings, and company popularity, McDonald’s Shamrock Shakes have become an extremely popular early-spring beverage. It is estimated that McDonald’s will sell over $150 million of Shamrock Shakes this March as they are offering new varieties like: the traditional mix McDonald’s vanilla custard with green mint-flavored syrup, a chocolate version featuring two layers, a chocolate shake on bottom and the mint-custard mix on top, a Shamrock Chocolate Chip Frappe which is a mixture of mint syrup, mocha, and caramel frappe, and lastly Shamrock versions of hot chocolate and frappe, which simply add the mint syrup to both beverages. (DeJesus) The shake-up in the menu will attract even more customers and make McDonald’s Shamrock shake that much more exclusive.
(Photo of the original Shamrock Shake along with the new beverage offered this March)
Works Cited
DeJesus, Erin. “Brace Yourself: New Shamrock Shake Flavors Coming to McDonald's.”Eater, Eater, 6 Feb. 2017, www.eater.com/2017/2/6/14521142/mcdonalds-shamrock-shake-chocolate-new-flavor. Accessed 27 Feb. 2017.
Kiernan, John S. “St. Patrick’s Day 2016 By The Numbers.” WalletHub, Evolution Finance , 16 Mar. 2016, wallethub.com/blog/st-patricks-day-statistics/10960/. Accessed 27 Feb. 2017.
McDonald, Andy. “Here's Everything You Want To Know About The Shamrock Shake. And Some Things You Don't.” The Huffington Post, TheHuffingtonPost.com, 14 Mar. 2015, www.huffingtonpost.com/2014/03/14/shamrock-shake-information_n_4916266.html. Accessed 27 Feb. 2017.
Purtill, Corinne. “The annual search for the McDonald’s Shamrock Shake is a map of heartbreak and triumph.” Quartz, Quartz, 17 Mar. 2016, qz.com/641937/the-annual-search-for-the-mcdonalds-shamrock-shake-is-a-map-of-heartbreak-and-triumph/. Accessed 27 Feb. 2017.
“Top 10 Largest Fast Food Chains In The World.” The Mysterious World, 25 Nov. 2016, themysteriousworld.com/top-10-largest-fast-food-chains-in-the-world/. Accessed 27 Feb. 2017.
Ledbetter, Carly. “McDonald's Shamrock Shake Is Back!” The Huffington Post, TheHuffingtonPost.com, 20 Feb. 2015, www.huffingtonpost.com/2015/02/20/shamrock-shake-coming-back_n_6721620.html. Accessed 27 Feb. 2017.
It is a super smart business strategy on McDonalds behalf to limit the Shamrock shake season. It is comparable to other seasonal goods/services like haunted houses. The off reason of the product creates buzz and build-up to its return that people are willing to spend higher prices and consume higher quantities when it returns. Other fast-food corporations have tried adding mint-based products like you mentioned, but I think the uniqueness and advertising of the "Shamrock shake" gives McDonalds an advantage over its competitors. Its additional varieties of the Shamrock shake can only further this competitive edge.
ReplyDeleteThe limitations of the shamrock shake is a typical marketing scheme, because it increases the demand from consumers by making it limited time. From personal experience, I am not exactly a huge fan of the shamrock shake, but always feel the desire to purchase one every shamrock shake season. The demand for the shake creates a positive economic impact on McDonald's, because they do indeed increase their sales from the additional product, but may even be drawing consumers to purchase other goods that typically would not visit McDonald's. Overall, I feel that the demand derived from the shamrock shake is economically smart for McDonald's.
ReplyDeleteThe art of the Shamrock Shake has also been an intriguing one to me. When McDonald's rolls out the ads for these magical treats, everyone around me craves this delightful snack. For some reason, I've never really found a desire for these green shakes. I know, sue me, oh well. But I've always found it very interesting how everyone also buys overloads of these goodies when they are around during March, yet McDonald's takes away probably one of their most profitable products during the month of March. Why don't they just keep it around? But after reading your article, it all came full circle to me. The famous saying "distance makes the heart grow fonder" really came to me. If the shamrock shake was always around, the demand for the product would go down as it was around longer, then not making enough money for McDonald's to keep it around. So therefore, taking the love away from their consumers, creating distance between the consumers and the shamrock shake, makes their hearts grow fonder for the shake of the Irish.
ReplyDeleteI wouldn't call Shamrock Shakes an Art. They are just a flimsy marketing scheme that entice millions each season, its success does lie in the fact that it exists for like two months. This pushes it up as a luxury good and an increased demand of the good leads to higher profit. And I agree with Redmon when he suggests that if the shake was around all year there wouldn't be that time constraint to buy it leading to a decrease in demand and in turn profit.
ReplyDeleteConsidering the incredible amount of money that shamrock shakes make in the short amount of time that they are released to the public you almost wonder if McDonalds could make more money leaving the shake on the menu all year or maybe have it be released for a few months in the summer as well to make some more money. I would think that the demand would stay high, but possibly with it being of access to people so much it will not give them as much desire to buy them because they are out year round. I also see other food places trying to find as close of a copy of the shamrock shake as possible to try and take some money, but I feel that the original shamrock shake will not be topped.
ReplyDeleteIt is a great business model to limit the output of a popular item. This insures that it will be in constant demand. If the shamrock shake were to be in stock year round people would eventually get sick of it, but just before people get sick of it, McDonald's takes it off of the menu ensuring people will be craving it when it returns to the menu the following year. This is a strategy of many businesses, they will come out with an exclusive or limited time item that is only available for a certain amount of time. Causing demand to skyrocket.
ReplyDeleteIt is interesting to me that after the huge success of the shamrock shake I have not seen stronger pushes by other companies to follow this trend. While it wouldn't make sense for drink companies such as Starbucks to do this since their mint items are usually sold in November-December, it could be a viable strategy for companies like Wendy's or Burger King that offer similar products to McDonalds.
ReplyDeleteThis was a great post! In my opinion, I think the shakes taste like disgusting toothpaste, but because it is such a rare item and only sells for one month, I think that is the only reason the demand is so high. There are many similar drinks like these year round, but McDonald's is always the most popular item as you said and many people will for sure increase their expectations if they are constantly hearing the name "Shamrock Shake". Even though I don't personally like the shake, I have in the past bought one just to try it; I did this because it was the only time I could throughout the year, and my opportunity cost for the year of 2015 would be that I never tried a Shamrock Shake!
ReplyDeleteI personally am a fan of the Shamrock Shake and believe that the scarcity reason you stated definitely accounts for the demand that McDonald's is met with once they announce their annual arrival. I'm not sure how the introduction of the new flavors will impact their sales if they also become an annual item, but this year I believe sales will starkly increase because of the curiosity these new items bring about for customers. There has been positive and negative feedback regarding them so time will only tell if they are a long-term increase in sales for the company.
ReplyDeleteI agree with you that the demand is very high for shamrock shakes because they are offered for only a month out of the year. It does surprise me, however, that it only used to be at a few McDonalds. I also don't think that the demand for them would be so high if they were offered year-round, which is most likely a big reason for them to do that, other than the St. Patrick's Day theme.
ReplyDeleteThe brand name that McDonald's has had for many years is the idea of food in a very fast manner. However over the past 25 years more and more companies have entered the industry and this has caused McDonald’s problems. As of recently McDonald’s developed a unique product that has redeveloped their brand name when the month of March comes around. The demand for these always causes an increase in revenue for McDonald’s each year. Although I am not a big fan of Shamrock Shakes, the economic impact that they have on local economics and the overall GDP is significant and it brings up the conversation that McDonald’s would be better off in the long run if they sell the shakes longer than just the month of March.
ReplyDeleteI think for McDonald's to keep being so successful and keep being the number one fast food as well as keep expanding it will take things like the shamrock shake. It is a niche item for a short period of time that attracts customers. Most of the time people will not go to Mcdonald's to just get a shake so I think it is marketing genius. I think long term they should create more seasonal items.
ReplyDeleteSeasonality definitely creates demand for products that would be a lot less dramatic otherwise. Similarly to how Starbucks pumpkin spice lattes are always a highly anticipated fall favorite, customers purchase these products for the hype just as much as for the actual value. Artificial rarity is created by the company as they can control the supply, so customers feel that they have to get the product before it is gone. Unlike a commodity, customers have the mentality that if the don't buy the product soon, they may never be able to get it, at least until the next year. Another aspect of the Shamrock Shake and other seasonal food popularity is their presence on social media. Because so many people constantly update their Snapchat stories and other platforms with their current activities, people want to be part of the trends that they see their friends participating in. All of these factors turn a simple product release into a highly anticipated event.
ReplyDeleteI think that McDonald's is genius for only offering the Shamrock Shake limited time. This makes consumers more likely to purchase a shake since they will be unable to any other time of the year. On the other hand, I do not understand why certain stores would choose not to carry the shake along with the other limited time items. The demand for them is so high that it seems like a wasted opportunity when a McDonald's does not sell them.
ReplyDelete