Eateries in Korea stick with high-price marketing to lure consumers

Visitors line up to buy hamburgers in front of the Gangnam branch of the U.S. burger chian Five Guys, which opened its first store in Gangnam, southern Seoul, Korea on June 26. [Photo by Yonhap]

Eateries in South Korea are using high prices as a marketing strategy to lure both high- and low-income consumers that each want good quality meals and a feeling of satisfaction.

U.S. burger chain Five Guys that opened a store in Gangnam, southern Seoul, on Monday, was crowded with customers despite the high price.

A simple hamburger at Five Guys with only one patty costs at least 9,900 won ($7.6). The average price of other items is between 13,400 won and 17,400 won.

Five Guys isn’t alone.

Restaurants are using high prices as a marketing strategy to boost demand.

Gordon Ramsay Burger restaurants have individual burger prices ranging from 20,000 won to 30,000 won. The most expensive 1966 Burger has a 140,000 won price tag.

Super Duper, a premium handmade burger brand, also offers its cheapest Super Single Burger for 8,900 won.

Observers note that the ultra-high-priced burger marketing is the phenomenon of income polarization.

High-income earners want high-quality burgers, while low-income earners feel satisfaction when they take a selfie enjoying an ultra-expensive burger.

The traditional burger places, like McDonald’s, however, are facing setbacks as expensive handmade burgers gain popularity.

McDonald’s Korea posted an operating loss of 27.8 billion won last year despite a 14.6 percent on-year increase in sales that reached 995 billion won.

“Even luxury fashion brands do not openly engage in ultra-high-priced marketing as it creates a sense of discomfort,” said a retail industry insider. “The ultra-high-priced marketing in the food and beverage industry has become excessive.”

Korean food manufacturers, in the meantime, are moving to cut prices under government pressure to lower the costs of daily food products.

Korea’s top ramyeon maker Nongshim Co. announced Tuesday that it will cut the price of its flagship Shin Ramyun by 4.5 percent and Saewooggang shrimp flavored snack 6.9 percent from July 1.