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Introduction: McDonald¶s has built itself into one of the largest multi-national restaurant chain in the world with its presence over 118 countries and more than 30,000 locations worldwide since its founding in the year 1940 by two brothers Dick and Mac McDonald at San Bernardino, California. McDonald¶s is the world¶s largest food chain serving around 47 million customers on regular basis thus making it one of the most expensive brand worth over $25 billion. The brothers opened the restaurant with the idea to have a reduced menu that would be able to be cooked at a fast pace and at cheaper rate which will eventually lead to higher turnover to the management. With this idea McDonald brothers cooked the first ever famous McDonald hamburger on 12th December, 1948. Since its opening, McDonalds have transformed itself into a brand which each and every person on this planet is familiar with and there is hardly any country left which does not have a McDonald¶s restaurant within its border. In the year 1954, Ray Kroc, a salesman with a milkshake mixing company came up with the idea to start the franchisee with the McDonald¶s brothers. Ray Kroc started the first franchise restaurant of McDonald¶s at Des Plaines in Illinois in 1955 and gave rise to the McDonald¶s Corporation and later taking over the control of the expansion of the McDonald¶s Corporation. McDonald¶s is one of the best brands world-wide and the main objective of the restaurant is continuously listening to the customer¶s demands and accordingly build its brand value. The marketing strategy of McDonalds is to identify the customer needs and meeting their needs in an efficient manner than the competitors and making such customers loyal to the McDonald¶s. The main aim is to identify the potential customers as not everyone will be happy with what McDonalds has to offer its customers. The likely customers are the key audiences which McDonald¶s target to increase their customer base. McDonald¶s uses strategic demographic segmentation of market with age as the main parameter to differentiate the customers. The market is of limited customers for McDonald¶s but they have following type of customer segmentation: Parent with two children: These parents visit McDonald¶s in order to treat their children. Children: Visit McDonald¶s as a fun place to eat at.
Abhishek Meshram 09048790
The items on menu are carefully monitored and new products are introduced on the menu and the older products are phased out in a very efficient manner in order to prevent cannibalization to increase sales. This adversely affects the company as the profits are reduced without achieving any increase in sales. The low price may sometime make the customer feel that the quality of the product is being compromised. The main motive of promotion in McDonald¶s is to make people aware of it products.together with friends. The new products are introduced taking into consideration the customer¶s ever changing taste and lifestyle. give a positive vibe about the product and to remember it in the future. The product is physical but the price have psychological connotation on the customer.Marketing Systems & Structures Business Customers: Who visit McDonald¶s because of its fast service and the food tastes good which can be taken away in car or office without affecting their business schedules. then there will be promotion and advertisements on large scale. The marketing objective of McDonald¶s is to break the long-term objectives into short-term objectives which can be used as benchmarks and these objectives can be monitored through feedbacks and the results are analysed then whether they are achieved or not. Marketing Mix at McDonald¶s (4 P¶s): Product: The main intention of McDonald¶s the beginning is to have a limited product width and product depth. for example if a new product is being launched in the market. Promotion: McDonald¶s use the right combination of media to promote its products and brand image. Thus utmost care is being taken at McDonald¶s while deciding the price keeping in mind the brand value and its integrity. The marketing and the resources required for the product depends upon the stage at which the product is. The most Abhishek Meshram 09048790 Page 2 . The menu is decided after a considerable amount of market research. Once the objectives are set then the focus turn to how to achieve these objectives using the available resources and acting in the appropriate manner. The most dangerous aspect of further price reduction is that the competitors can achieve the price reduction without any difficulty. Teenagers: They visit McDonald¶s because the food is cheap in here and they get to use the internet and have a place for get. Price: The in McDonald¶s is determined keeping into consideration the customer¶s perception about the product and value. The management in McDonalds also undertake a Product Life Cycle Analysis to determine at which stage the product is.
Marketing Systems & Structures important aspect of McDonald¶s is that it knows it target customers it is serving then effectively communicate with customers and send the message it wants to deliver. Promotional loyalty: Few customers remain loyal to the product even though they have to pay a higher amount for the product than other alternatives in order to acquire a social status and also the give recommendations to family and friends to make use of the product. The McDonald¶s delivers a hygienic place. Monopoly: These firm practice monopoly and acquire considerable amount of customer base till the time a new competitor with similar product enter the market. good environment and great service to its customers. price is the only factor determining the customer centrality. Looking the current world scenario full of credit crunch and the falling economies. Each organisation have strategic plans to maintain the customer focus and accordingly the organisation decides on which level the loyalty of customer is towards the organisation. the customer remains loyal to the organisation. (Principles and practice of marketing). Their behaviour can be dangerous to the target or potential customers. It is rightly said that 1 percent decrease in price can lead to Abhishek Meshram 09048790 Page 3 . Price is the only factor in the marketing mix which generates revenues for the organisation whereas other factors in marketing mix add to the cost to the organisation. Inertia Loyalty: The customer falls under this type of loyalty in order to escape the cumbersome work of finding an alternative to the existing product even though there may be many benefits of switching the product but the inertia prevents them from switching. Disloyalty: The dissatisfied customers come under this category and they can bring about bad publicity to the organisation. The customer is loyal till the time they change their lifestyle. The loyalty of the customers can be differentiated into following types: Price loyalty: as long as the organisation is the price leader in the market. Place: McDonald¶s does not consider place as just a physical location but as a medium of encompassing the with all the variety of process required to deliver the product to the end customer. This type of customer loyalty can be seen in the banking sector where the customer remains loyal to the bank for most of his lifetime. McDonald¶s caters to the needs to all types of customer from rich to poor and without any age barriers.
Customer centrality is the view of the customer¶s needs and this need is the starting of all the decision making process within the organisation. Literature Review: Being customer-centrality in organisation means the ability to continuously learn from its customers and to respond in an appropriate manner to what we learn is the motto of each employee in the organisation. needs and wants and must constantly track changes in them so that the organization can respond to subtle shifts as quickly as they occur´ (Kotler and Andreasen. It is the whole business. The resources. He said. Value added pricing strategies: This is the strategy adopted by McDonald¶s which focus on cutting down the price of the product so that the price is competitive in the market. 1991. ³Marketing is so basic that it cannot be considered a separate function. seen from the viewpoint of its final result. products and services should be utilized in an appropriate manner according to the organizations plans and strategies and meeting the customer¶s demands. that is from the customer¶s point of view. Unless the organisation gives value to the customer there will not be any value from customer in terms of money in return. ³An axiom of new product development efforts is that to be successful.´ ³Since the consumer is central. 2000). Crawford and di Benedetto. management realises that it must have a profound understanding of consumer perceptions. The idea of customer centrality can be credited to Peter Drucker.5 percent increase in revenues to the organisation. A product must satisfy customer need´. (Voss and Voss 2000. The price decided by the organisation should add value to the customer perceived satisfaction. The strategy is to add value added features and services to complement the price of the product which encourages the customer to buy the product and feel the value being added in the form of satisfaction being derived from consuming the product. The strategy of McDonald¶s is to offer set of kid¶s meal or a pack of meal at a lower price than buying individual items to eat at higher price.Marketing Systems & Structures approximate 12. The main aim of customer centrality is to create value for the true customer. Abhishek Meshram 09048790 Page 4 . 54). This strategy helps McDonald¶s to achieve a higher sales volume. p.
Product availability: The duty of the organisation is to provide the products in right quantity at the right time to satisfy the customers. According to Narver and Slater (1990) customer orientations is the extent to which the organisation is capable of understanding its customer¶s needs. the user will also require the instruction manuals to operate the device. The distribution channel of the firm should be efficient to make the product reach the final customer in a cost effective way. The customer centrality is a matter of understand the customer need and fulfil them instead of just producing goods and making the customers buy them. The marketers usually try to hide the drawbacks of the product from the customers as it can have counter effects on the sales but the customer can get the information from other purchaser and user of the product. Taking example of a mobile phone. he purchases that product but with the price there also comes a signal of quality. The customers can have following type of generic needs: Current product needs: the customer buys the product according to the usage and features of the product and derives benefits out of it. Thus a strategy of lowering the price can prove harmful to the organisation and lead to reduced revenues. There is a perception in the mind of customers that a highly priced good is of high quality and vice versa.Marketing Systems & Structures The method of maintaining good relations with the customers has been followed in business for a very long time and this relationship is based on thin thread of commitment and trust. Desired pricing level: the consumer expects to pay lowest possible price for the product he wants to buy. Price is a psychological connotation to the customer. They may have needs on the basis of quantity of goods they buy and also they may face problems on the usage of product. Information needs: Sometime the customer purchase a product just out of curiosity in order to find out the advantages and disadvantages of using the product. Future needs: forecasting the future needs of the customer is an essential element of customer orientation. Abhishek Meshram 09048790 Page 5 . He will desire to pay only that amount which he thinks is reasonable for the product. he may resent from answering even though the firm is just being helpful to the customer. Thus it is mandatory to provide information of product in an appropriate manner and format and the information should be true to the product. The marketing research aims in determining the future needs of the customers but sometimes when constantly asked about the future needs to the customer. If the customer perceives that the price is fair for the product.
This up-selling and cross-selling is done by skilled sales person when he thinks that he has established a considerable of confident relationship with the customer. Loyalty of the customer is the source of all the profits to the organisation. McDonald¶s have always focused on improving the customer experience rather than reducing the cost unlike other organisation. It is the idea of making the customer spend additional amount by stimulating his spending desire for more value. But at the end building a brand image on the basis of loyalty by customer has some long lasting effect as it is difficult to replicate. This has helped McDonald¶s to achieve a greater scale of customer retention.Marketing Systems & Structures The above mentioned generic needs include all types of customers from commercial consumers. According to Gupta et al. Customer retention can be done by penetrating the market to maximize the value of the current market customer. customers buying on behalf of family and friends and business organisations having a customer like relationship. People usually prefer McDonald¶s because it delivers quick service in a very clean and hygienic environment. McDonald¶s took utmost care during the time of recession by looking at what the customer expects from the brand. The competition on the basis on price is short term till the time the competitors responds. customer retention is as much as 5 times more effective than cost cutting. So McDonald¶s invested a lot in maintaining this image in the eyes of its customers and also by making investment in hiring hostesses to look after the children of the customers in the restaurant. Customer retention has become an extremely important aspect in the business. Customer can be retained into the business by giving him what the organisation has promised and also by effective interaction with the customer. In McDonald¶s the sales person tries to up-selling method of market penetration by trying to persuade the customer to purchase a richer version of product in question. When a customer becomes disloyal to the organisation it is the time to make and improve the value delivery to the customers and preventing them from defecting the organisation. Crossselling is also done to make the customer buy more products like µFrench fries with burger¶. The effective marketing strategy is necessary to ensure growth and the customer must be kept aware of the promises the brand makes. Abhishek Meshram 09048790 Page 6 .
Putting the customer first is an easy concept to understand as it is obvious that if a customer gets a bad treatment he is surely going to someone else who is going to serve him better. The firm must have a great deal of value in understanding the customer expectations in the long run. The consumer is independent whereas the company is dependent on the consumer for its survival. maximizing shareholder¶s wealth and have not successfully integrated the modern concept of value creation. Most of the firms usually describe their performance in financial terms at the end of the year rather than showing the customer satisfaction ratings and the customer retention level and other things related to customers.e. The customer always expects a neat and clean experience when he enters the McDonald¶s restaurant. The directors are probably right to fulfil foremost the customer needs as the customers are the only stakeholders which fund the other stakeholders of the company. Meeting the need of the customer is not the end in itself but making the customer agreeing to part with the money is more difficult. But the concept is difficult to apply. The strategy of the organisation should be establishing a relationship with the customer. It is the duty of Board of Directors to provide value to the customers and providing value to the customer is only a step in the entire process of shareholders value creation. Marketing in McDonald¶s the focus of the organisation will always be delivering value to the customers. The concept of customer centrality is easy but in reality it is difficult to implement completely. Peter Doyle in 2000 has explained the idea of customer centrality in his book Value Based Marketing. The concept of customer centrality is difficult to implement in real life as the management has to take care of needs of other stake holders also. which is going to last for lifetime of the customer and give a high level of meaning to the relationship. The main difficulty is to reason the concept of customer centrality.Marketing Systems & Structures Conclusion: The consumer is the most important person in the business and it is the consumer which decides where to place the brand in their life. The companies need to create a great amount of insight in to the lives of customer and understand their personal life. He has argued that most of the companies in modern world are still stuck to the age old paradigm of profit making with a new meaning to it i. The company directors have the responsibility of fulfilling foremost the expectations of the stakeholder whereas the personnel managers have to take care of the needs on the employees in the organisation. Being Abhishek Meshram 09048790 Page 7 .
B. Englewood Cliffs. P. A.. D. and Andreasen.just-food.G. Secret to an organisations success is to deliver the value to its customers and by reminding the employees of the organisations that whatever the customer says the latter is always right. Principles and Practice of Marketing. (1990) µThe effects of a market orientation on business profitability¶.. 1pp67-84.3sc. upenn. 6) http://www. Harlow: FT Prentince Hall. Priciples of Marketing.edu. And Wong. Strategic orientation and firm performance in an artistic environment. and Voss z.F. G.co.com/article. vol 64 No.aspx?id=95558 11) http://www. Strategic Marketing for Nonprofit Organizations. . Saunders. S. 10) http://www. 2003. Journal of Marketing. 2) Jobber. 9) Narver. The Customer Centricity Program. Chichester: John Wiley.pdf 7) Doyle. NJ. 8) Financial Times (1987) Also reported in The Observer (3 May 1987) µSayings of the week¶. 4) Kotler. Journal of marketing. Prentice-Hall. J. and Slater.mcdonalds.uk 12) http://www.co.Armstrong .C. Customers need to communicate effectively with the organisation which enables the organisation to supply information efficiently within the organisation. V. 3) Customer Centricity is a trademarked term for a program at the University of Pennsylvania's Wharton School of Business. 54 (Oct): 20±55. P. (2000). Retrieved on 2007 June 25.Marketing Systems & Structures customer centric means additional revenues to the organisation. (2000) Value-Based Marketing.com/pdf/B2BCustRetention. (1991).ruthstevens. Maidenhead: McGraw-Hill. J. P. References: 1) Kotler.uk Abhishek Meshram 09048790 Page 8 . G. 5) Voss. 2003.
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