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A Study on Operational & CRM activity at McDonalds Retail Food Chain - Dehradun

In Guidance of Dr. Neeraj Anand


Assistant Professor College of Management & Economic Studies University of Petroleum & Energy Studies Dehradun

Submitted by: Poornima Gupta- R600210034 Rupal Kadian- R600210041 Nitin Tripathi- R600210055 Tushar Shukla- R600210056 MBA (Logistics and Supply Chain Management)

College of Management and Economic Studies University of Petroleum and Energy Studies, Dehradun, Uttarakhand, India March, 2011

1. Background: Customer Relationship Management (CRM) plays a very important functionary role at McDonalds & it is directly interlaced with Operations Management at this retail food chain. In this era of informed consumerism, it is very important for an organization to have an impressive presence in mindset of its consumers, when it comes to service. This can be greatly achieved by managing customers & its operations in a closely knitted fashion. Nowadays a new concept of customer delight is playing a very important role with respect to customer satisfaction because it takes the customer to a level above. Thus various organizations are using CRM as a prominent tool to make its customer delightful & hence sustain the increased competition. The market portfolio here in Dehradun is a bit different when compared to metro cities, but with opening of new retail food chain stores i.e. Subway, KFC etc., McDonalds is also facing the similar trend. Now, the bigger role will be played by CRM & how effectively McDonalds uses this strategy to maintain & foster long-term relations with its customers & what strategy it uses to find, attract & win new customers and clients. It can also involve reduction in marketing cost & client service which can be interlaced with operations management. It will also involve the comparative study of CRM practices followed by different chains. 1.1 CRM-the Concept: Evans & Collier (2001) explained CRM, as a concept which can be defined as a business strategy designed to learn more about customers wants, needs, and behaviors in order to build customer relationships & loyalty & ultimately enhance revenues & profits. It helps in gaining & maintaining competitive advantage by-

1. Segmenting markets based on demographic & behavioral characteristics. 2. Tracking sales trends & advertising effectiveness by customer & market segments 3. Identifying which customers should be focus of targeted marketing initiative with predicted high customer response rates. Etc. Anderson & Kerr (2002) defined Customer Relationship Management is a comprehensive approach for creating, maintaining, & expanding customer relationships. 2. Review of Literature:

McDonald's restaurants are found in 119 countries and territories around the world and serve 58 million customers each day. McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The company also operates other restaurant brands, such as Piles Caf. In most McDonalds outlets both counter service and drive through service is being provided. Near highways McDrive locations do not offer counter service or seating. Drive-through is followed there. Counter service is mainly near the densely located cities. In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their restaurants, the first major redesign since the 1970s. McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments. As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators. McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country (Fast Food Nation by Eric Schlosser (2001),). For advertisements, in addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events.

2.1 McDonalds competitors in India McDonalds competes with fast food chains like Pizza Hut, Dominos Pizza, Papa Johns, Nirulas and KFC in India. (McDonald's publication. "Corporate FAQ". McDonald's Corporation. (http://www.mcdonalds.ca/en/aboutus/faq.aspx.)

McDonalds Supply Chain- McDonalds has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level. In India, food industry and particularly informal eating out market is very small. In India, over quarter of a million customers visit McDonalds family restaurants every day. The Indian fast food market is valued at $1billion (Rs 4,547 crore) approx. Fast-food chains face a tough time balancing between margin pressures and hiking prices which can hurt volumes. Consequently, the chains have to increase rates or rework their strategies. Affordability has been the cornerstone of McDonalds global strategy. Some of its measures to achieve this include Bulk buying, long-term vendor contracts, and manufacturing efficiencies.

McDonalds India in 2010 In 2010, McDonalds India plans to open 40 more outlets. The company has also earmarked a budget of Rs 50-60 crore to market its new products and initiatives for consumers. Its new marketing campaign is titled Har Chotti Khushi Ka Celebration in other words celebrate little joys of life where it positions McDonalds as a venue for enriching life of consumers. In South India, McDonalds has 29 outlets and plans to add 10 more by end of 2010.

Employees and Customers: In India, McDonalds employs 5,000 people and serves half a million customers a day via its 169 family restaurants. McDonalds has 85,000 employees and serves 2.5 million customers a day in the UK.

3. Research Methodology 3.1 Research design- descriptive study (statistical research)- used to collect, describe and analyze data to make inferences and conclusion.

Our aim is to collect the information regarding the operational activities of dehraduns McDonalds outlet with the help of the research papers and surveys conducted in dehradun region. 3.2 Data collection methodData is the specific information collected to analyze. Primary Data Collection: Interviews will be conducted and questions will be asked in oral form. Observations will also be made. Secondary Data Collection: Research papers, journals, internet sites and magazines. 3.3 Sampling 3.3.1 Sample Size internal staff- 25 Line manager, operation manager, employees and other working staff along with the customers will be questioned. 3.3.2 Sampling technique- Non Probability Sampling Convenience sampling as any staff member could be questioned. 3.4 Presentation of facts and findings: Bar graph, pie chart, and histogram 3.5 Analysis and interpretation of data: Analysis will be made on basis of measurements taken to improve operations in last 2 years. Statistical tools will be used. 3.6 Possible Limitations for the Research: 1. Sample Size- all the staff may not be interviewed. 2. Lack of availability of data 3. Lack of reliability of data- customers may not provide correct information. 4. Access- management may not provide with all information

TENTATIVE STRUCTURE Abstract 1. Introduction Introduction Problems Scope of Work Context of Study

2. Literature Review 3. Research Methodology Research Application and Methodology Data Collection

4. Application of Research Methodology Interpretation Analysis

5. Results/ Findings 6. Discussions and Recommendations Discussions and Critique of findings Implications of findings Recommendations

7. Conclusions and Lessons Learned Learnings from the project Conclusion Limitations

8. References 9. Bibliography
10. Annexures/Exhibits/Appendices/Tables/Figures

REFERENCES

Thomas Derdak and Jay P. Pederson, ed (2004). "McDonald's". International directory of company histories. 67 (3rd ed.). St. James Press. pp. 108109.

http://www.casestudyinc.com/Case-Study-McDonalds-India-Business-Strategy Love, John F. (April 1987). "Big Macs, Fries, and Real Estate". Financial Executive (4): pgs 2026.

http://www.casestudyinc.com/Case-Study-McDonalds-India-Business-Strategy http://www.mcdonalds.com/us/en/home.html http://www.aboutmcdonalds.com/mcd Caterersearch McDonald's Restaurants McDonald's history 19541955". www.mcdonalds.com. http://www.mcdonalds.com/corp/about/mcd_history_pg1.html.

McDonald's posts sizzling 80% profit rise in 2008". Breitbart.com.