Relationship Marketing By Mcdonalds Marketing Essay

Relationship Marketing: The concept of Traditional Marketing which was mainly based on customer satisfaction has now totally shifted to Relationship building with the customers, customer retention and managing the relationships (Gronroos C, 1989). The marketing mix of 5 P’s has changed into 30R’s (Gummeson, 1996) due to the globalisation, modern business trends and ever changing consumer’s demand. (Webster, 1992) Now the businesses are not only focused on developing a marketing mix in accordance with the consumer’s demand but they need to sell their products and services in such a way that consumer should satisfy and return for making the next purchase which means maintaining relations with your customers and managing it in such a way tending the customers to stay with the business for a longer period.

According to Gronroos, 1990, “Relationship Marketing is to establish, maintain, manage and enhance relationships with the customers and other parties, at the profit, so that the objectives of the parties involved are met. This is actually achieved by a manual exchange and fulfilment of the promises”. It is very important to build a relation with the customer in order to find out his needs, preferences and the attributes he values in the product, so that the marketer can easily formulate the strategies to fulfil those needs to satisfy the customers. Now both the parties are mutually helping each other in earning profit as customers are telling the marketers, what to sell and marketers are giving them what they need. Thus close relationship with the customer have become the vital part of today’s businesses. (Aijo T. S., 1996). Along with this the company should keep in mind that if they had made certain promises with the customers should be fulfilled (Egelhoff, 1998), as these promises made by the company for products and services given attract and persuade customers towards that company in return they will help in company’s progression by positive word of mouth and on the other hand if it is not so then it can result in disloyalty of the customers and even losing them (Colonius, 1988) and customer’s trust will help to maintain and enhance the relationship. (Moorman et al, 1993).

Mc Donald’s Company: Mc Donald’s is the global fast food restaurant chain most recognised and respectable world’s leading food service retailers (www.mcdonalds.com, 2011) with more than 32000 restaurants serving 60 million people across 100 countries. (Bramhall, 2009) The company is growing with the fast pace with the promise of quality service every time and in every meal, which differentiate it from the rest of the other restaurant chains. To achieve its motive of par excellence Mc Donald’s has always focused on the fact that the market and consumer’s demand are ever changing and has managed to adopt the marketing strategies to satisfy the customers and become the leader in the fast food industry. (www.essaysample.com, 2011) Mc Donald’s follows QSCV strategy (Quality, Service, Cleanliness and Value) at all its stores all over the world and the quality of products and services offered at all the stores is also the same. Out of the 32000 restaurants all over the world, 80% are franchised (www.aboutmcdonalds.com, 2011) with a belief of “working global but acting local”. To maintain and manage close relationships with the customers, Mc Donald’s has paid attention to the changing markets and customer’s wants and needs such as introduction of breakfast menus, adult food, kids zone, internet (wi-fi), Prêt a manger, training for the staff all over the world, adaptation of the choice of food demanded by the people in different parts of the world etc. (www.mcdonalds.com, 2011)

Relationship Marketing by Mc Donald’s:

The customers for Mc Donald’s are from the kids to the older persons, everyone can be heard saying I am lovin it. For all the customers visiting Mc Donald’s, the environment seems to be the same with the consistent services as in any other part of the world (Egelhoff, 1998). Company’s worldwide operations are held around a global strategy “Plan to win” and according to this the customers are offered with the exceptional and improved services to enhance their experiences with the Mc Donald’s. (www.aboutmcdonalds.com , 2011) This is the main strategy of the Mc Donald’s to retain and maintain its customers as every restaurant they are visiting they will find the best QSCV means the best quality, services, cleanliness and value for their money. For this mc Donald’s is having a series of suppliers providing the same quality of the raw material needed for the products and trained staff to serve the customers in the best and the same way everywhere. Along with this the adaptation of the menu with the new places such as Maharaja Mac instead of Big Mac in India due to preference for chicken and avoidance of beef, Samurai Pork Burger with teriyaki sauce in Thailand, Kiwi Burger in New Zealand etc (Sabana, 1996) and the adoption of new changes with the time and customer’s demand such as Golden Archs Hotel in Switzerland, Menu variations for people with diabetes, obesity and health consciousness, wi-fi, Mc kids, coupons, Mc Cafe etc (globaloneness.com, 2011, Butcher D., 1996). The acquisition of other brands such as Chiptole, Pret a Manger, Donato’s etc has also added new customers to the company. (Light & Kiddon, 2009)

Kids: For kids it has set up kid’s zone, toys with the meal, Ronald (it is said that when children sees Ronald, they think of French fries and Burger), chicken Nuggets etc and can say fun food for the kids. (www.customessaymeister.com, 2011)

Adults: For adults such as students and youngsters, it has set happy price menu as these people have limited pocket money and they value for the money they spend. They are served with burger, French fries, Mc puffs etc with coke.

RM model for Mc Donald’s:

It’s clear from the above description that Mc Donald’s is using QSCV strategy and glocalisation strategy i.e. global product with the local flair to attract the new customers and retain them for a long by coping up their ever changing demands. We can say that the company is earning great success with its policy but the Loyalty Ladder model is used to assess the customer’s loyalty towards the company.

Loyalty Ladder Model:

The loyalty model is the heart of the CRM, the marketers want their customers to climb this ladder and become their loyal customers (Sanchez, 1997).The model shows that when a customer is known about a product or services he becomes the prospect and would like to try the product or services, then his next move is to buy the product and becomes the customer of the company. In such case if he likes the product would repeat the purchase and if not then he can turn to be a disloyal customer who will speak against the poor experience of the product or service delivered at every opportunity. But if they liked the product would like to repeat the purchase and become the regular client of the company, in such a case company should see to it that these clients are thoroughly satisfied as they will turn as a loyal customers in the near future. Mc Donald’s is keenly acting locally with the global products so that the customers would tend to buy the product every time the new variations in the menu or the combinations of the meals such as Happy Price Menu, Extra Value meals etc are introduced in the stores. The quality of the services and the product offered are of the superior quality with the local tastes and modifications which makes the customers of Mc Donald’s, a loyal customer or a advocate who will always speak about the best experiences and the fun related to the new introductions with the time.

Critical Evaluation of the Mc Donald’s RM strategy:

The QSCV strategy followed by the company and the global product with the local flair are the main strategies attracting the customer and the superior quality and consistency of the services are retaining them for long. Mc Donald’s has gained success with its great asset customer’s who shared their fond experiences as a child or parents taking their family to the stores. The company is marketing, innovating and renovating the brand by huge publicity through television and other mass media sources. (Light & Kiddon, 2009) But with the time the company has faced criticism such as decline of quality of food, health problems such as obesity, unavailability of same quality of raw material all over the world, toy with the meal was attracting the kids for the toy not food, health conscious customers were demanding organic food instead of the fatty stuffs. The company has successfully overcome such criticism through continuous innovations but there is need to do more for the customers as Mc Donald’s has close competitions with Burger King, KFC, Yumm etc and they are also offering the best services and global products like hamburger, chicken sandwiches and French fries etc so there is a possibility that the customers if not served well can switch to other brand very easily. The unsatisfied customers can turn to be the disloyal customers harassing the brand image of the company.

Conclusion and recommendations: We can conclude from the above description that Mc Donald’s is the leading brand in the fast food industry and has managed to win the hearts of the customers all over the world with its exceptional services and quality of the food offered. It has been successful in managing and maintaining good relations with the customers in spite of the criticism faced by the company over the time. But here are some recommendations for the company so that it can move on with the same pace and win the heart of the customers. Now as we know that the world has become a global market and the strategy once followed can’t be successful at all the time, there is a need to introduce some changes over the time. Along with the QSCV strategy, timeliness criteria should also be introduced that the customers would be served in the particular period of time. The variations introduced according to the regions can be carried forward to the other regions also to provide an international taste to customers all over the world e.g. Coconut milk served in Brazil by the Mc Donald’s can also be introduced in India or Srilanka, countries where coconuts grow to give a Brazilian flavour to the meals etc. Regular innovations and communication with the public is very necessary for the company to be the top leader as it is facing tough competition in the fast food industry market with the Burger King, Yumm and KFC etc as they are also having their food specialised in a way or another so regular innovations with the meals are very necessary to keep the customers in touch regularly.

References:

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B2B Dual branding Strategy by Cemex:

Abstract: This essay evaluates the B2B operations of Cemex plc that how the company has built its brand image and used dual brand strategy to become a global leader in the field of the construction materials suppliers. It will show that how the strategy has been formulated and used in different countries with a view to acquire the knowledge of the local markets and deploy this knowledge for the integration and acquisition in the global markets.

B2B Marketing: Unlike B2C where businesses are directly exposed to the end users, B2B marketing is held between the businesses and it is very necessary for the businesses to maintain and manage the relationships with their suppliers, distributors and the retailers who are helping the company to not only produce a product but also transfer them to the end users.

Cemex Company Overview:

The Company has been established in 1906 in Mexico and from a local company it has grown to a top leader in the field of producing, distributing and marketing cement, ready mix concrete, aggregates and building related materials nearly all over the world. The company has annually 97 million metric tonnes cement production capacity, 54 million cubic metres of ready mix concrete and 168 million metric tonnes of aggregates production capacity (Kotler, 2001; Cemex.com, 2011). To provide the best products to its customers it is using local market’s knowledge, combining it with the international networks and thoroughly satisfying the customers by providing integrated offering which are more reliable, of higher quality and consistent. The company has applied IT and e business ideology to gain and integrate worldwide knowledge on products, operations and customers and this has helped it a lot to provide the customers what they needed and use this knowledge for the global operations. The company’s business model is based on the following principles:

Focus on its core business of cement, ready mix concrete and aggregates

Effective allocation of the capital

Improving the operating efficiency and productivity continuously.

Providing the customers with the best value propositions and satisfies their needs to the optimum. (Kotler, 2001)

Along with these principles the dual branding strategy and acquisitions and mergers with the different local brands are helping the company to grow its empire all over the world.

B2B relationship of the company:

For maintaining the strong relationships with the business customers, the company is following dual branding strategy which means different local brands are operating under parent or umbrella brand. This is done to expand the business operations to the other nations and improving the brand image. The dual branding of the Cemex includes:

1. Transnational brand: this brand operates in different countries uniquely in accordance with the local market; the offerings and the operations are customized to fulfil the local conditions. Along with the local brand the main corporate brand is also advertised to make it familiar to the business consumers or the end users. (Kotler, 2001)But as it is said that it is very critical for the individual brand to cope up with the corporate brand as it is the strong brand having positive perception in the consumer’s mind if the individual brand fails to serve the consumers as its corporate brand then can harm the image of the main brand also. For this reason, Cemex first all work to make the individual brand or the subsidiary company successful and in accordance with the vision and mission of the corporate brand and if it is so then renamed it with the Cemex brand. For example: Cemex Thailand was bought in 2001 but renamed in 2002 after proper reconstruction and reorganisation and Cemex Spain in 2002 after refurbishing and making it quite successful. (Kotler, 2001)

2. Corporate brand: The corporate brand covers all the products and services offered by the company representing the corporate vision, personality and value in all its offering. Under this umbrella brand, other sub brands and individual brands are established and operated.(Esch, Tomczak, Kernstock & Lengner, 2004) The prestigious brand name has an equity associated with it serving as a intangible asset for the company to leverage it.(Roll M., 2005) The main corporate brand is Cemex under whose name the main products of the company are sold. The company Cemex is rapidly growing in the cement industry across the world. It is operating in the countries like Mexico, Spain, Dominican Republic, Egypt, Venezuela and many Asian nations. (www.cemex.com, 2010) Cement market has growth potential in these countries as they need regular infrastructure and reconstruction carried out by the governments or the local contractors. Here the brand Cemex is sold in the bags not the cement, as the brand name is associated with the strength, durability, prestige and stability distinguishing Cemex from the other cement. Along with the brand the promise to provide the customers the best value has enhanced the customer loyalty towards the brand serving as an intangible asset in such volatile economies and providing competitive edge to the company.

3. The core values of the company serving the business customers as under:

Collaborations: Cemex operates its B2B relations through strong collaborations with the distributors, suppliers and the stakeholders. It licenses the brand to its distributors such as Consturama in Latin America, other than this it also offers competitive prices, training, best industry practise and marketing support with a view to build a smart world with all its collaborators and become a successful and competitive company with a positive impact on the world. (www.cemex.com,2010; Kotler, 2001)

http://www.cemex.com/su/Su_lp.aspx

For the successful collaborations with the distributors the company has made 3 commitments:

3.1.1 Competitiveness: Cemex believes in running business by increasing its competitiveness through improved operational efficiency, innovative products with high standards as demanded and liked by the customers.

Impact reduction: Cemex is basically a cement company dealing in concrete, aggregates and other building stuffs which are more likely to be dangerous if not handled safely. Company strives to minimize the risks of fatalities at work place, noise pollution, air pollution etc to put a positive impact on the world.

Stakeholders outreach: company deals with number of stakeholders such as employees, suppliers, customers and neighbours and always tries to manage good relations with them through training programs, dialog sessions, meetings and online services etc. This helps in overcoming the challenges faced for building strong relationship with the stakeholders. (www.cemex.com, 2011)

Integrity: for leveraging the brand equity and making it a prestigious brand, the company is also engaged in social activities such as Patrimonio Hoy (www.cemex.com,2010, Letelier, Flores, Spinosa, 2003) which provides housing solutions to the low income families, using alternative sources of fuels to reduce carbon emission and making the world green such as Eurus, a wind farm project, supplying 25% of the energy needed by the plant in Mexico etc. Such activities makes the brand more familiar to the general public and their desire for the brand tend the suppliers and contractors to associate with the company increasing firm’s efficiency and profitability.

Leadership: By integrating IT knowledge with its global operations, Cemex has strengthened its position for the global leader in the cement industry and acquisition of RMC has smoothed its path for success. The continuous feedback from the customers helps in regular improvement of the services, simplified business transactions and access to real time account has helped the company to improve its relationship. ( Kotler,2001)

Cemex Capital: To enhance and improve customer relationships the company has launched a financial assistance body known as Cemex Capital, it is a credit branch of the company providing financial support to the business customers and partners. The assistance can be in form of credit for buying the products, to finance the working capital and allotting loans for construction projects. Besides this the loans are offered at the rates lower than the markets.

Critical evaluation of the B2B relationships strategy of Cemex:

The world leader Cemex in the cement industry has adopted dual branding strategy for managing business relationship. The corporate brand is associated with the reliability, stability and strength and the national brands are according to the local market’s need fulfilling their unique needs and emotionally attached with the customers. The corporate brand has its brand equity providing value addition to the product and enhances consumer’s perception for the brand. ( Aaker, 1991; Keller, 1993; Bendixen et al, 2004). But at the same time, all the products under the umbrella brand are expected to be as good as the main product and deliver the promise made by the company, to provide the best quality to the consumers. The mergers & acquisitions and collaborations with the stakeholders & subsidiaries need deliberate efforts to amalgamate with the international brand, having its own corporate abilities, styles and reputation. (Lambkin, 2009)Before rebranding any local subsidiary, proper reconstruction and reorganisation is done, the managers run a focus group activity and commercial team effort to establish the local brand with the corporate brand. If the company fails to properly communicate with the new stakeholders, employees and integrate the corporate culture (Balmer & Dinnie, 1999; Krishnan et al., 2007) than can cause decline in service quality (Urban & Pratt, 2000) and also lacks the competition in the outer world. (Reichheld & Henske, 1991). So, it is necessary for the company to leverage its brand equity with proper amalgamation and rebranding policy to avoid any negative consequences in the business.

Conclusion and recommendations:

We can conclude that through strong corporate brand image Cemex has successfully become the world’s leader in the infrastructure industry, it is not only engaged in the supplies of the basic materials but also provide the other utilities under its brand name through a channel of the subsidiaries and individual brands operating under the umbrella brand Cemex all over the world. The strong corporate brand creation has resulted in cost efficiency and brand building advantage for the company. The individual brands allow the company to fulfil the local markets need and the corporate brand is providing an international platform to the operations of the company and maintains strong B2B links with the clients, distributors and the end users. The company is earning great success but still it is recommended that B2B branding strategy serves a better platform for managing and enhancing relationships but if done with care such as employee involvement, stakeholder’s knowledge and market study then it will be more successful. The company can also diversify its operation such as media, entertainment or technology for the purpose of risk reduction and using its corporate brand in these fields to get cost efficiency and more B2B relations.