SERVING UP HYPE, NOT SAVINGS : MCDONALD'S CAMPAIGN 55 TRIMS SANDWICH PRICES, BUT ONLY IN COMBO MEALS.

Byline: Glenn Collins The New York Times

Is McDonald's Campaign 55, the company's new price-cutting gambit, really such a big deal? The answer may depend on which side of the counter you are on.

By now, most of America has probably heard about the campaign, named for the year in which McDonald's began burger-flipping under Ray Kroc. Starting today, the world's largest perpetrator of fast food will sell Egg McMuffins, Sausage McMuffins and other breakfast sandwiches for 55 cents. And April 25, even the flagship Big Mac will be marked down to that price.

But customers expecting to pay just 55 cents without buying a more expensive combo meal will find disappointment under the Golden Arches.

In most of the country, that bargain Egg McMuffin would be packaged with hash browns and a small coffee for $1.79, down from the $1.99 those items cost Thursday. On the range of value combos, the saving to customers would work out to about 12 percent, according to David J. Adelman, a securities analyst for Dean Witter Reynolds. And since such purchases may amount to only a third of McDonald's sales, Adelman calculated that overall, the promotion would result in a mere 4 percent price cut.

The competition among fast-food giants has always been as much about appearances as reality - a lot, in fact, like a three-ring circus, with ever-new, ever-more flashy show stoppers needed to keep the crowds coming into the tent. Toy giveaways, movie tie-ins, glitzy ad campaigns and new food products have all done the job.

For much of the last 10 years, price wars - value-pricing campaigns, in industry jargon - have often occupied the center ring. And with Campaign 55, the McDonald's Corp. seems to have come up with the latest twist: creating the veneer of value pricing, and all its attendant marketing ballyhoo, without undergoing a deep markdown that would erode its profitability. The 55-cent sandwiches are the heart of the ``My McDonald's'' national television campaign, budgeted at more than $200 million, that is also being kicked off today.

McDonald's motivation is clear. Key players in the $100 billion fast-food industry have learned a painful lesson after years of price wars: It is disastrous to get too many customers hooked on a steady diet of rock-bottom prices.

``Price-cutting works for a while, and then it doesn't work any more,'' said Adelman of Dean Witter. ``It is the most barbaric way to drive sales.''

The new program, by contrast, ``is just a single-item promotion,'' said Ron Paul, president of Technomic Inc., a restaurant consulting company in Chicago. ``This is not a new product, not an across-the-board price reduction - in fact, this is nothing more than a campaign.''

The goal, then, is to create an impression of value without giving away the store. But will enough customers bite? If they do, Campaign 55 would join the industry's pantheon of great marketing efforts.

McDonald's would have to go a long way just to top itself. The company's successes include not only price-cutting triumphs but also a formidable mix of advertising and promotional coups. These range from the classic ``Two All Beef Patties, Special Sauce, Lettuce, Cheese, Pickles, Onions on a Sesame-Seed Bun'' commercials, which began in 1975, to the 1979 innovation of the Happy Meal. Just last year, McDonald's had its most successful promotional tie-in, with the Walt Disney Co.'s ``101 Dalmatians.''

When it comes to value pricing, Campaign 55 will have to measure up against such crowd-pleasers as Taco Bell's 59-cent taco in 1988; the introduction of Wendy's Super Value Menu in 1989, which to this day offers a variety of 99-cent items, and Burger King's 99-cent offerings of the chain's popular flame-broiled Whopper.

There have also been new-product introductions, which have turned an entire chain around, as when sales for Pepsico's Pizza Hut system grew a phenomenal 14 percent, at stores open more than one year, in the second quarter of 1995, following the March rollout of its $9.99 Stuffed Crust Pizza. The new pizza drove overall sales up 22 percent and operating profits up 68 percent during the quarter.

Taco Bell's move in 1988 ``was a wake-up call,'' Paul said. It drove up sales a hefty 16 percent in stores open more than a year, and pulled all of Taco Bell's competitors into a price-cutting frenzy that has never fully abated. McDonald's, in fact, was perhaps the best imitator. In 1991, the chain brought out its Extra Value Meals, bundling a sandwich, fries and drink for a combination price that ranged from $2.49 to $2.99. Despite the stagnant Gulf War economy, which flattened fast-food profits, the Extra Value Meal drove up sales that first year by 6 percent and profits by 7 percent.