The economics (and biology) of free ice cream

From a fascinating blog post, cheekily quoted here in its entirety:

When McDonald’s introduced ice cream to its franchises operating in Indonesia, it faced a problem: many people had lactose problems and would not buy the product because it made them sick.

So what did they do? They gave ice cream cones away for free.

You’d be surprised at what people will consume when its free, regardless of the associated nausea. After repeated exposure to dairy products, the allergic reaction diminishes such that people can enjoy the dairy product without any significant consequences. So sure enough, after a while the target market in Indonesia had lost its intolerance. This made McDonald’s (and I suppose the Indonesians?) happy.

(thanks to Ryan Holiday for the tip)

Comments

[Mark Harrison]

I'm very suspicious of this, and wonder whether we're seeing the birth of a new urban legend?

As far as I can make out, sites written by people with actual medical training warn that:

1: Dairy milk allergy is an allergic (ie it causes an allergic reaction.) Lactose intolerance is something completely different, present in 90% of those of Asian descent, and has to do with a reduced level of the enzyme lactase.

2: lactose reactions INCREASE with the regular consumption of such products, not decrease.

If you're going to be giving statements like "After repeated exposure to dairy products, the allergic reaction diminishes such that people can enjoy the dairy product without any significant consequences" can you give some references beyond a single blog article written by a non-doctor?

[Chris]

That link doesn't work at the bottom.

[Paul]

Yeah, this one does smell a bit fishy. Not really in keeping the the concept of zero marginal cost either - there is a very tangible resource being used to create the good.

It's more an example of the fact that people will exact a cost on themselves to receive a free good they know to have a marginal cost and hence not a zero price. They believe they actually are getting SOMETHING for free, rather than something 'free' for nothing. Fine but important distinction.

[Tejvan Pettinger]

If you goto India, it takes along time to get used to the bacteria. A westerner will get ill eating raw fruit, whereas an Indian won't

[chris]

On the topic of giving things away for free…I was surprised to find out that Cliff’s Notes and Spark Notes are available for free online (I think you may be asked to pay to get hard copies or access to a non parsed up view). I think this is another great example of the non intuitive getting more (either though add revenue, .pdf sales and/or hard copy sales) thought giving things away.

[SCOTT SUMMIT]

MCDONALD'S HAS INCREASED THEIR PROFIT MARGIN BY CURING INDIA OF LACTOSE PROBLEMS. THROUGH THIS ACTION MCDONALD'S HAS OPENED UP THE WORLD OF DAIRY TO THE PEOPLE OF INDIA. ANY NATIVE OF INDIA CAN NOW ENJOY WHOLE MILK, RICOTTA CHEESE, AND SMETANA.

[Josh Bernoff]

As an ice cream lover who is lactose intolerant, I've always wondered why they don't have Lactaid vending machines in ice cream stores.

Forget free ... they could charge 50 cents for a 5 cent pill, easy.

[dog]

Next they should give French Fries away to Americans, and cure us of our fat consumption problems!

[Squared]

Chris,

Wondering if you could at least put some kind of note or disclaimer in this post. As the father of a then-toddler with a milk allergy who almost died in my arms after ONE ACCIDENTAL GULP of milk, I can state completely and utterly that the last thing people with true milk allergies can do is try repeated exposure. It could kill them. Repeated avoidance is what you have to do. Lactose intolerance is not really a food allergy and does not lead to anaphylactic shock and potentially death as a true milk allergy can. Heaven forbid someone somewhere reads your re-pub of the What I Learned post and makes a terrible mistake thinking it's OK.

Thanks, Chris.

-- Scott Anderson

[Shahar]

This story reminds me of the infamous Nestle milk substitute "marketing" scheme in Africa. The differences are of course huge, and I am not trying to compare the two. Giving away free illegal drugs is also a well known practice among drug dealers on the way to creating new addicts. I guess what I'm aiming at here is the lack of moral judgment in this short piece. regardless of milk-allergies or other acute medical problems I'd be horrified to hear that McDonald's (or any other vendor)is giving free ice-cream at, let's say, my daughter's school, thus creating a new generation of sugar fiends on the safe way to obesity.
Getting stuff for free is great, and I wouldn't mind a complimentary cone with my McDonald's meal once in a while. But sometimes I get the feeling that people hailing such steps as McDonald's Indonesia trick are too excited by the marketing aspect and tend to ignore its other implications.

[protondizayn]

Proton Dizayn; yetenekli web tasarımı uzmanları ve deneyimli teknik ekibi sayesinde sanatsal ruhunu teknik bilgisiyle birleştirerek, şirketinizin kurumsal kimliğini en uygun şekilde hedef kitlenize sunmakta, bilgiye ulaşmanın kolay olduğu etkili ve özgün web tasarımı projeleri tasarlamaktadır.
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Proton specialise in website design, application development, content management systems, e-commerce solutions, intranet & extranet development, graphic design and digital multimedia.
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[protondizayn]

Proton Dizayn; yetenekli web tasarımı uzmanları ve deneyimli teknik ekibi sayesinde sanatsal ruhunu teknik bilgisiyle birleştirerek, şirketinizin kurumsal kimliğini en uygun şekilde hedef kitlenize sunmakta, bilgiye ulaşmanın kolay olduğu etkili ve özgün web tasarımı projeleri tasarlamaktadır.
Proton is a professional web design company based in istanbul, offering high-quality websites and development services to clients in Turkey.
Proton specialise in website design, application development, content management systems, e-commerce solutions, intranet & extranet development, graphic design and digital multimedia.
www.protondizayn.com

[casto]

As an ice cream lover who is lactose intolerant, I've always wondered why they don't have Lactaid vending machines in ice cream stores.

Forget free ... they could charge 50 cents for a 5 cent pill, easy.

http://robin-strasser.blogspot.com/2008/09/robin-strasser-867.html

[kabin]

thanks...
Kabin
Konteyner