Marketing relationships (Essay Sample)

Marketing Relationship
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(20, November, 2013)
Marketing Relationship: McDonalds
Part A (1): McDonalds and Customer Relations
The McDonalds Corporation is the world’s largest company in the field of hamburger fast food. The corporation started in the USA in 1940 has grown to a global presence of over 119 countries. Its customer base is 70 million daily. McDonalds started as a restaurant selling barbecues. In 1955, business mogul Ray Kroc joined the restaurant as a franchises agent. He acquired the restaurant and employed a production line marketing concept to grow it to its current global presence. McDonalds’ development has come from realising franchisees and affiliates to run it. The corporation runs only 15% of its operations. This ownership model allows for versatility in marketing. McDonalds employs different franchise models in different regions. The company made a profit of $5.7 billion in 2012 and revenue of $28 billion (Baines, Fill & Page 2008). The corporation’s global presence has led economists to coin the world "McDonaldinazation" in reference to its widespread global presence. In the USA alone, one in every eight employees has worked for McDonalds at one point in time (Thomas & Earl 1995).
The company under consideration sells different products to its global customers. The predominant products are hamburgers and chicken sandwiches in addition to soft drinks, salads, and French fries. Other products include breakfast foods and vegetarian food items. The company allows local franchise to incorporate local tastes and flavours. In Asia, for instance, McDonald’s franchisees are selling soup. In Germany, they trade in sell beer while those in New Zealand deal in meat pies. This diversity has allowed the company to expand to over 35,000 restaurants globally.
It should also be mentioned that McDonalds employs several marketing strategies. Through advertisements, the company creates awareness about its products. Its billboards are common in Europe and America together to its TV and radio advertisements to market the products. The company has devised many slogans for its brands. The McDonald Corporation has established and retained long-term relationships with its customers. This has been the main driver of its growth to the status of the world’s largest hamburger fast food restaurant.
A good relationship with customers is vital for growth of any corporation. McDonalds enjoys a cordial relationship with customers and franchisees (Jones and Sasser 1995). Establishing long-term relationships with clients builds loyalty and sustains growth. A corporation as old as McDonald has systems that guide its relationship with clientele. These systems guide the relationship towards achieving the corporation’s goals and objectives. In the recent times, McDonalds has launched a smart phone application through which it could interact with customers. However, such long-term relationship has disadvantages like building unrealistic expectations among customers, who may sometimes exploit this relationship to make demands that may hurt an organisation. This section will analyse in details how McDonalds has built long-term relationship with its clients and how these relationships have helped the corporation achieve its objectives. The section will also explore some of the challenges that long-term relationships with customers present to McDonalds.
Corporations relate with their customers through many platforms. The most popular one is customer relationship management programmes (Ballantyne, Christopher & Payne 2003). This platform aims at making sales and marketing easier by retaining customers’ loyalty. McDonalds has integrated customer relationship management programmes that bridge the gap between the changing customers’ needs and the corporations’ objectives. Since its inception, the company has kept in touch with its clientele needs and hence consolidated its leadership in local and global market. McDonalds has adopted an electronic customer relationship management programme that enables it to get feedback from customers, who can download the programme developed by Mowingo on their smart phones. The programme allows McDonalds to keep in touch with changing customers’ needs.
Long-term relationship with customers portends several benefits to corporations. For McDonalds, the relationship enhances effective management of resources. Companies invest a lot of resources in market research, thus McDonalds is able to reduce these costs by having platforms for sharing key information with customers (Harker & Egan 2006). The company has employed technology to interact with consumers, further reducing the strain on schedules and resources. The use of smart phone applications means that the corporation can communicate with customers in a convenient manner that the latter find easy and effective. This provides useful data that market research would not have obtained. In the USA, for instance, McDonalds restaurants are using data from the smart phone application to create personalised offers and loyalty rewards to customers.
Another benefit of long-term relationship with customers is the harmonisation of the process. Big corporations like McDonalds have complex systems that work together to achieve specific and overall objectives. These systems must work in synch to ensure that there is minimum confusion and less overlap of roles. A long-term relationship with the clientele guarantees that there is speed and quality in the delivery of services. Because of a long-term relationship, customers understand the corporation’s values and procedures, that appreciates customers’ uniqueness and develops systems that make all feel as if they are part of the family (Lagrosen & Lagrosen 2003). Customers will thus spend little time ordering because they know the norms and ethos.
The long-term relationship with consumers leads to excellent communication, which inspires confidence and brings about loyalty. If the relationship between the customers and the company is short-term and capricious, the chances of timely and honest communication are low (Harker & Egan 2006). Conversely, long-term relationships create systems for multi-level communication that gives customers the confidence to interact on different levels of management freely without fear. It inculcates a culture in which customers criticise constructively without creating unnecessary publicity stunts and legal suits.
It is worth noting that long-term relationships with clients have some disadvantages. First of all, customer relationship programmes are expensive. Creating a database of loyal returned customers and rewarding them accordingly requires substantial resources. Loyalty rewards do not always pay off as customers may still move on if prices elsewhere are cheaper (Lagrosen & Lagrosen 2003). Additionally, long-term relationships do not augur well with younger and adventurous customers. Fast foods appeal more to the younger generation rather than the old. Besides, the younger ones want to experiment and a long-term relationship between them and a company is difficult to maintain. McDonalds may therefore invest plenty of resources in long-term relationship that may not even pay back.
McDonalds employs a multi-dimensional approach in customers’ management. Similarly, different factors influence the choice of one customer management tool over the other. Narayandas (2005) argues that customer management programmes "provide employees with the information that they need to know their customers’ wants and needs, and build relationships between the company and its customers" (p.8). So, McDonalds is responsible for only 15% of its operations, leaving 85% to franchises and affiliates. However, the corporations, just like other franchisors, support its franchisees in marketing and customer management.
In the United States, most McDonalds’ franchises use smart phone applications to manage customer relationship management. As mentioned before, more than 6,000 McDonald restaurants use a downloadable application to establish customers’ frequency to the company’s premises. Customers can also give feedback about their levels of satisfaction using the application. The best way to reach and interact with customers is through platforms that are customer-driven. A phone application allows customers to rate services without the fear of judgment. It also lets companies have access to objectives and actionable data. Through the application, the firms can keep up with the changing needs of their customers. The digital interaction allows for establishment of cordial and mutually beneficial relationship between McDonalds and its clientele.
More than 30 million customers in the USA frequent McDonald restaurants daily. This large number necessitates a robust and reliable programme to manage customers’ relationships. McDonalds has therefore contracted Astute Solutions’ Power Center to manage communication channels with the consumers (Thomas & Earl 1995). The data solution vendor allows McDonald to increase data capture, which is vital to show levels of customer satisfaction. McDonalds’ franchisees all over the world can access this data and get a deeper understanding of how to manage customers. Astute Solutions’ Power Center integrates McDonald’s customer data and provides a reliable tool for managing customers’ relationship. Additionally, the robust data ensures measurable and actionable data to affiliates, franchises and franchisors to consolidate leadership in the market by having a better understanding of the custom...