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IN–N-OUT BURGER

 Concept of customer value creation


 Central role in marketing.
 What makes Customers loyal?
 Customer relationship management.
Case Study
General Guidelines
1. Identify and analyze the issues
2. Factors/environments
a. Affect the company’s situation
b. Ability to respond to the situation
3. Develop strategies/options to address those issues
4. Your recommended option(s) and why?- prioritize

Interested in your approach and analysis


Discuss the company's situation at the time of the case and
use only the information in the case:
• No Internet research
• No updates on what has happened since then
• No discussions of your personal experience with the product
category
• Minimize fluff, use facts and figures
Fast Food Industry
 McDonalds
 Burger King
 Wendy’s
 Pizza Hut
 Subway
 Describe In-N-Out in terms of the value it provides
for customers.
 Do SWOT analysis for In-N-Out and McDonald.
 Evaluate In-N-Out’s performance relative to customer
expectations. What is the outcome of this process?
 Should In-N-Out adopt a high-growth strategy? Why
or why not?
 With so many customers thrilled by In-N-Out’s “no-
change” philosophy, why don’t more burger chains
follow suit
Customer Perceived value
Value = Benefits - Cost Value = Benefits/ Cost
Perceived Value
Benefits Costs
 Fresh ingredients • Price - higher(?)
 Food that is made-to-order
• Waiting time
 Customization through the secret
• Single menu
menu
• Location o-out of the
 Offering that never changes
way
 Friendly and competent service

 Cool factor that others simply

don’t have
SWOT
STRENGTH WEAKNESS
Internal Internal

Brand Name, Inexpensive, Quick, Unhealthy image, labor


Clean demands
OPPORTUNITIES THREATS
External External
Health trend, losing favor with
Economy, global markets millennials, minimum wage
regulation, other fast food
In-N-Out
STRENGTH WEAKNESS
Internal Internal
Name, Quirky, food, Ambience
Employees, Customers (WOM) Service , Ambience
Ambience Location

OPPORTUNITIES
External THREATS
External
New Markets Health Trend, Copy Cats
Customer Segments Changing Customer Tastes
Dissatisfaction, Satisfaction, Delight

PERCIEVED
DELIGHTED

SATISFIED
EXPECTED
PERCIEVED
DISSATISFACTION

PERCIEVED
Customer Satisfaction and Loyalty

Delight 
delight 
delight 
delight 
delight 
Delight 
delight 
delight 
delight 
delight
Delight 
delight 
delight 
delight 
delight

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
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performance relative to
customer expectations
 Meet Expectations
 Not changed anything in 60 years
 They know what to expect
 Meeting expectations – are they
exceeding?
 Emotional Outcomes – consistency
produces positive emotions
 Trust ?

https://
www.youtube.com/watch?v=o7U3lo80YrQ
High Growth or Slow
Growth
 Stuck to a slow and steady growth strategy.

 Pressure to Grow - none

 Grow faster – keep everything the same


 Uniqueness lost?

 ensure product and service quality.

 Can rapid growth – change customer perceived value

 Issues – ingredients
 Employee training
How about others?
 Wendy’s, Taco Bell, or McDonald’s
 Always have new products/modified products
 Smaller Firms can do it – niche
Hops Burger Bar – Greensboro, North
Carolina
Nic’s Grill – Oklahoma City, Oklahoma

Billy Bob Dairyland – Branson, Missouri