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Abstract

This study investigates the relationship between dining attributes, customer satisfaction and customer's retention in the fast food industry. In short this research paper is to describe & analyze why customers come back to the same restaurant when there are several options available to them. What influence their decisions? This research has brought out how to gain customer retention to the services and the factors that influence the customer retention. For this research qualitative approach is used. Data collection method is questionnaire and interviews to clarify what is their real mean of filling the options; sample size of 100 consumers from different fast food restaurant has been taken randomly on the basis of convenience sampling. Results obtained from the statistical analysis corroborate using the optimal regression as a statistical tool which shows that research can be used by marketers especially by the managers of the restaurants for better understanding, and assessing what influences customer how they behave and why they come back to the restaurant. Managers can also use our findings to increase the retention rates by adjusting relevant service elements of the restaurants.

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CONCLUSION & RECOMMENDATIONS 6.1 Conclusion

Testing customer demands indicated that management of the restaurant must make an effort to deliver not only quality food stuffs and services, but at the same time a high level of dining satisfaction that will lead to increased customer return results in re-patronage of customer and greater market share. The consequence of customer satisfaction and contentment in relation to possession rates, return rates and equally management researchers and experts in the generosity field have long urged ability. The behavior of the restaurant staff (the way they treat, talk, their face expressions, willingness and positive response) to the customers is another most important factor that helps in increasing the customer retention. The management of the restaurant should focus on the way their staff welcome and acknowledged their customers on the board. In the fast food industry, patronage and recommendations are dependent on the personalized service through empathy and assurance, the better the way they deal with their customers the higher will be the retention rate. As an outcome, the restaurant's whole environment of service, the atmospherics of feelings of the

surroundings is always very imperative in seminal both customers and front line staff attitude about the procedures and service delivery outcome. This entails that, it was very important that the awareness of the tangible pressure on service quality, such as the substantial and physical facilities, and the appearance of personnel The challenge for the management here is to train their staff to ensure better quality service, like appearance and cleanliness of the restaurant staff which are significant factors and play an important role in increasing the retention rate of the customers. In servicing industry the appearance and behavior of the employees is most important therefore, manager should focus these aspects with high priority. Tangible quality on its own may have a weaker influence and effect on behavior, but it helps in developing feelings and sense of attachment towards the restaurant, which results in a stronger influence on behavior. Restaurants supposed to strive for enlightening positive feelings to their brand name by maneuvering tangible attributes. Another most important issue for the fast food restaurants of Karachi is that though people do not accept that they are price conscious yet we find them, but price factor can be made less important for the customers if they are valued properly though all service elements.
6.2 Recommendations

Customer satisfaction is a key element for the planning of the marketing in view of the fact that satisfaction does sway customer's intention to repatronage the restaurant in fast food industry. Therefore, marketers are supposed to look into the issues that would have an effect on customer satisfaction intensity. Besides, as customer prospect are altering over time and it is advised to determine the customer satisfaction and expectation on regular basis and grip complaints timely and effectively. In order to provide the value addition to know the needs to the consumer and to satisfy them then managers and restaurants administration should understand what customer's value and must understand how consumers perceives their restaurant's products and services. So to have a study that divulges consumer perception of all brands is necessary. A study of this type should generate an accepting of how customers appraise main brands in order to get better both managerial and the academic understanding in the customers' assessment process. Restaurants should invest in the training and development of their employees as they are the one who in actual are dealing with the customers, their presence and approach will create an image in the customers mind. Customer retention is important in the current competitive environment; restaurant

manager should need to take care of the factors that have a direct impact on the customer retention rate.

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Customer centrality within the organization of mcdonalds Introduction

This report will assess the degree to which the organization of McDonald's is customer centred. Established in 1955 as a small Illinois neighbourhood restaurant, McDonalds has developed rapidly in becoming one of the world's best known brands of fast food with over "30,000 restaurants in over 120 countries and with 2001 sales in excess of $40 billion the company claims to be the world's largest food service organisation" (Jones et al,2002). The McDonald's brand continues to enhance its worldwide reputation to this day, the main reason behind this continual success is because the organization listens to its customer's needs and expectations. It is imperative that McDonalds remain customer focussed due to the vast amount of competition in the fast food sector, "customer orientation is critical to business profitability (Donaldson,1993; Narver and Slater,1990) and is "a necessary antecedent of competitive advantage" (Ganesan,1994; Williamson,1991). The typical McDonald's customer cannot be stereotyped or defined. In an attempt to categorize the typical McDonald's customer market research has been carried out which identifies different types of customers, for example (www.mcdonalds.com):

A parent with two children - Visits the restaurant to give children a treat. Children - View McDonalds as a fun place to eat. A Business Customer - Visits during the daytime as service is fast, the food is good quality and can be eaten whilst on the move. Teenagers - Attracted by the Saver Menu and the affordable food, Wi-Fi internet access is also an attraction.

This report will attempt to assess specific parameters of focus for consideration with regard to customer centrality. The literature review will discuss several marketing concepts and models with the key concept being the 7 Ps Marketing Mix, by investigating how the 7 Ps model is integral to customer centrality various other concepts will arise as part of the marketing mix model.
Literature Review

"An organization which realizes that profits come from customers, not from products, will establish systems to measure and manage customer profitability" (Marketing Management,2003). In order to appreciate and understand how customer relationships are critical for profitable organisations we need to understand the key fundamental marketing principles. Once these key principles have been discussed the author will discuss how these fundamental principles are applied within the organization of McDonalds.

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Conclusion

It is evident through this report that McDonalds as an organization is extremely customer focussed. By carrying out research within the marketing mix concept it can be seen that all of the 7Ps and associated models are utilised by McDonalds. Through use of the servuction concept McDonalds has succeeded in establishing a highly trained internal and external workforce which has resulted in high levels of customer service ultimately resulting in consistently high sales and customer retention and acquisition. The literature review further emphasises the fact that McDonalds have carried out extensive research within its market area by implementing a successful market segmentation strategy to satisfy the different customer needs and expectations within the marketplace. McDonalds' service marketing strategy is testament to the additional three Ps of the marketing mix. Success of the overall service within the organization is due to the fact that the organization has critically identified all areas within the fundamental four Ps approach and emphatically succeeded in fulfilling all requirements with regards to segmenting, targeting, positioning and establishing an organizations which is customer central. The success of McDonalds customer centrality is not achieved by default, the organization has differentiated itself within a competitive market by excelling in customer relations. There are several fast food retailers within the sector who have a customer base achieved by default but it is not evident to the marketplace that they have focussed on customer centrality as a priority which is in vast contrast to the philosophy of McDonalds which structures its organization around the demands of the customer. The following statement typifies the way in which McDonalds views its organization;

"We strive to be a progressive market leader and we can only stay ahead of the rest by listening to the most important ambassadors of our brand - our customers!" (www.mcdonalds.com). The philosophy of customer centrality is imperative to service organisations as long as the relationship marketing concept is integrated within a successful marketing mix approach. Product orientated organisations could benefit from focussing on customer centrality by adopting relationship marketing. Transactional based marketing should not be viewed separately in its application as integration of relationship marketing within a transactional based model could result in increase in perceived quality, customer retention and overall satisfaction. Need an essay? You can buy essay help from us today!

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McDonalds Business Strategy


McDonald's has pursued 2 strategies since 2003. To be in the run with the fast changing customer preferences, demographics and spending patterns, McDonald's has introduced novel items in their menu including angus beef burger and premium chicken sandwiches and does campaigns to create more healthy foods including salads on the side. This strategy basically reflects the beliefs that innovation as opposed to reliability to traditional products is the key determinant towards success in the fast food industry. They have also focused more on increasing their sales at their current restaurants instead of opening new ones. To do so, McDonald's has redesigned many of their restaurants, kept their stores open till late and increased menu options. Nonetheless, new restaurants are still getting opened around the world at a rapid pace - the company plans to open nearly 1,000 units in 2010, and continues to produce its new restaurants at a 1%-2% rate each year. Size Matters Size of McDonald's has three main advantages: * McDonalds has a strategy of uniform menu offerings that can be accumulation produced, lowering production costs. * Bargaining power with their suppliers reduces input costs with improved margins.

* Large advertising costs mean lots of exposure towards domestic and international market.

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FINDINGS
From the above data collection and analysis my findings are listed below: 1. Irrespective of the gender and age of the customers many of them still keep visiting McDonalds as it is still perceived as the cheap and best food chain among its lovers. 2. Though McDonalds target audience is people in the age group between 15 and 35 yrs of age, however people from other age groups also visit the restaurant as McDonalds market themselves as family restaurant where the target audience is accompanied by kids and older people. 3. Though McDonalds is considered as the cheap and best food chain yet it's not cheap in its offerings. Many customers visit McDonalds keeping in mind the quality of its food and the taste that is unique. 4. The effect of credit crunch situation on McDonald's sales is very minimal as even McDonalds claim that many cash-strapped customers chose McDonalds to dine out under the credit crunch situation because of its comparative low cost of service. Along with it even some of the cash rich individuals chose McDonalds for a quick lunch as they trust the brand. 5. McDonalds has a very strong brand image and the effect of credit crunch has hardly put any impact on them in comparison to their competitors as people continue to visit McDonalds on a regular basis irrespective of any crisis. 6. From the above analysis it has been known that irrespective of their gender younger generation seems to be more brand savvy towards McDonalds and the older people would not actually mind going to other similar restaurants in case there is no option for McDonalds, hence I feel McDonalds should not waste any time in attracting them but target the younger generation instead. 7. As per the customer recommendations regarding improvement by McDonalds, majority of the respondents are towards increasing the seating capacity of many of its stores. Though most of the McDonalds in UK have a good seating capacity, however during busy timings customers find it difficult to find space inside the store and if there is no space some customers walk out of the store looking for something else as they want to sit and eat. Hence, McDonalds should focus on that apart from their brand image.

CONCLUSION
The above research has given me a very good insight on understanding the different stages involved in marketing strategy with respect to fast food industry and McDonalds in particular. I must say I was successful to a great extent in my attempt to understand the consumer psychology in the fast food industry and how does different company work on strategies to keep themselves ahead in the market. McDonalds is seen as a clear market leader in the fast food industry, despite different competitors giving tough competition over the years. With the recent credit crunch effect many companies are facing a bad time with loss of business, however McDonalds is said to have found this credit situation to their favor. According to the company's chief operating officer in the UK many people are coming back to McDonalds for refuge as they think it is cheaper having food at McDonalds than having at home. A family of four can have a meal for 15. McDonalds, which spends nearly $800 million on their marketing campaign every year has created a huge brand name for themselves and this popularity of theirs is also one of the reason for their continual improved performance even under the credit crunch situation. In this particular research I have done a primary research involving questionnaires that was distributed in one of the McDonalds outlet in central London. I had collected 100 responses, where the customers were divided with respect to their age and gender. The data collection was done in two days for my own convenience and the collected responses were analyzed individually. The collected data was recorded in the form of a pie chart with respect to the age and gender division. Based on these pie charts different statements were arrived at in the form of findings. These findings summarize the purpose of my research. Through this research I have learned that marketing is one of the most important areas for any business operating under any field and a tool that provides a division between the top companies and other mediocre companies.

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5.4 McDonalds Long Term Business Objectives

Organisations long term objectives mean the performance goals that can be gained within five years period or more. Long term objectives normally require improvements in certain sides of an organisation which areCompetitive position of the organisation Profitability Technology leadership Market share Employee relationship and productivity

Corporate image(Source: www.businessdictioonary.com) Setting successful long term objectives requires a strong basement of an organisation and skilful management can achieve the expected goals. McDonalds has already ensured a sustainable basement in global market. On the basis of previous business performance, its profitability is really in a secure position. As McDonalds believes in market dominance, it wants to utilize the modern technological advantages by using all technological access. To meet the requirements of ongoing market competition, it tries to dominate the share market and it also conscious about employee productivity. As a result, MacDonalds has already made a loyal corporate image.
Chapter Six Suggestions to improve Income generation and brand loyalty 6.1: Income generation of McDonalds

In every organisation, finance department plays the key roles to maintain its income generation. McDonalds is focusing on the functions of its accounting and finance department. By evaluating the previous performance and researching the future opportunities, its intents to maximise its profitability.
Profit calculation of restaurant sales-

Sales ........................ 100 % Food and Paper......... (30) % Labour...................... (30) % Advertising................ (5) % Maintenance............. (3) % Utility....................... (3) % Others...................... (2) %
Profit 30% (Source- macdonalds.co.uk/statics/pd) 6.2: Suggestion to improve income generation

McDonalds needs to do its cots benefit analysis effectively to ensure the proper cost management. It needs to practice the friendly relationship with its suppliers for having the maximum supports from them. Stuff pattern should be flexible that the employees can feel valued and it is important to eradicate the turnover. The level of new food innovation should be high to attract customers. Effective HR practice is required to staff motivation to ensure the maximum productivity. Utilization of technological benefit for example, making customer profile in database to know the customers preference. Analysis of customers feedback and taking actions regarding the complaints or suggestions.

Central supervision on franchises to encourage them for maintaining the companys standard. Evaluation of stakeholders (franchise, supplier) and employees contribution for the interest of better outcomes.
6.3: Brand loyalty

Brand loyalty indicates the position the brand image in the market. If the product carries the brand value, customers can re-purchase it and trust it. Customers recognise it, prefer if and return to it. McDonalds has made a high profile brand image in the current global market.
6.4: Suggestions to develop brand loyalty

Suitable price setting- by evaluating the competitor price, suitable price setting is required. Sometimes, higher price can be considered as standard quality and lower price can be treated as low quality. Promotional campaign- worldwide promotional campaign should be continued with company standard. Loyalty price- it is saying that McDonalds loyalty price is high amounting 12.5% where other companys price not more than 7%. McDonalds think about its loyalty price. Customer commitment- customers should be valued to McDonalds that they can return again and again. Company image- it takes time to make a good image but it can be affected within a moment. So, needs to care about its image at all times. Out looking- infrastructure, packaging, uniform, premises all should be organised. Market share- if shareholders get their desirable returns from share market, company will be treated as loyal. In addition, huge market share shows the loyal position of company. The main intention of an organisation is to increase its sales for making more profit which is closely related the price of its products. On the other hand, customers always look for loyal branded product with affordable price. That means it is a matter of big challenge for company how it generates its income and how it improves its brand loyalty. In the question of loyal brand and value price, the achievement of McDonalds is really remarkable.

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Chapter seven Customer service analysis and suggestions 7.1: Current customer service

Good customer service makes an invisible relationship between customers and service provider. For making the companys image better, providing excellent service to customers is essential. It meets the customers needs and expectation and it intends to customers return to the company. McDonalds saysMcDonalds exists in the market because of its customers. This relationship has made it responsible more responsible to its customers. McDonalds is really committed to its customers for providing superior service in a welcoming environment (ourvalue.macdonalds.com). It is a key part of McDonalds policy to serve quality food with friendly manner, in a modern environment with great-value and quick service. (aboutmcdonalds.com). Special servicesFree Wi-Fi service for customers in about 98% of total stores of McDonalds with unlimited access that customers can experience the different service. It has ensured about 99% accessibility including paper Braille and photo menu for the disable customers in its restaurants and more facilities are being included day by day. Membership card and discount facilities for regular customers for example; if actual price is 3.99, regular customers can have it for 2.99. McDonalds gives 30% discount for student as well. One cup of coffee is free for every six cup of coffee. Almost in every store has playing facilities for children. It provides toys and some other entertaining equipment.
7.2: Suggestions for improvement

Stuff training is required to make them aware about their roles. They need to pay maximum attention on customer satisfaction. Whatever the reaction comes from customers, it should take seriously that customers can think themselves valued. 100% orders should be reached to the customers on time. If customers can get their food on time, they will feel something positive. Product with zero defects can make the customers satisfied. So order should be served without any defect. Price is very important issue. It can be reduced as much as company can to attract more customers. Return and replacement service should be friendly and flexible. If customers find anything wrong with the foods and give it back and ask for another food or money back, management should care about that.

Top management of the company should take care of the customer service activities to ensure the effectiveness. Proper supervision, monitoring and auditing should be utilized in regular basis. As McDonalds is facing high competition in local and international market, it needs to perform with exceptional and impressing customer care. All food providers aim to attract more customers and every organisation take their customers as first priority. So, their success is depends on how they perform.

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McDonalds - A Brief History

McDonald's has conquered the world for the last years. You can see their well known logo almost in every country around the globe, and try their delicious and highly successful meals. But what has made this business so prosperous? How a man over his fifties managed to create one of the biggest companies of our time? Well, here are some answers in the short story of McDonald's... In the 1950 milkshakes were an expanding business in the United States. A guy named Ray Kroc was there too, selling multi-mixers which allowed its users to make multiple milkshakes at once. At that time, Kroc's business was running well and he planned to continue it for the rest of his life. One day in 1954 (when Kroc was 52 then), Kroc visited a fast food joint, where he was just amazed, when he saw zounds of customers, waiting patiently for their turn and buying big amount of hamburgers, chips and drinks. That business was run by two brothers - the McDonalds. Kroc just thought that if he could convince the brothers to expand their obviously profitable business, he could sell multi-mixers to each new branch that opened up and he could make a fortune. Thats correct, Kroc's initial ideas was to sell more multi-mixers. As the next couple of years went on, Kroc was growing more and more frustrated with the McDonald brothers because they didn't want to expand and wanted to run only 5 or 6 restaurants. They were doing their business just for pleasure and to have enough money to support their families. If no new places opened then Kroc couldnt sell any multi -mixers. Then one day he woke up with an idea, that would change the world. Krocs vision was that more and more people would want their food faster and h e looked at McDonalds as the perfect restaurant to satisfy the public appetite. He had a vision for McDonalds that even the McDonald brothers didnt see. In 1961, with the backing of some investors Kroc bought out the brothers for $2.7 million and the McDonalds restaurant concept was now his.