McDonald’s is the world’s leading global foodservice retailer with more than 33,000 locations in 118 countries. McDonald’s has several company owned stores, but uses Franchising for both domestic and international expansion. McDonald’s India was set up as a 50:50 joint-venture between McDonald’s at a global level and regional Indian partners such as Hardcastle Restaurants Private Limited in western India, and Connaught Plaza Restaurants Private Limited in northern India. McDonald’s currently has over 220 restaurants in the country.
McDonalds doesn’t provide any financial assistance and absentee ownership of finance is not allowed. Also, the financial requirements are quite steep.
MFY- for implementing the MFY (Made for You) option for customers, the franchises are required to upgrade their equipment at their own expense. This caused some problem with maintaining standard service across all outlets. Pricing and menu may also be a point of difficulty for the franchiser and franchisee as prices vary between companies owned and franchised stores.
Inconsistent standards- There are several instances of poor service or disgruntled customers complaining about the quality of food served. This is because it is difficult to enforce the exact same standards in all franchised stores.
McDonald’s aims to provide 100 percent total customer satisfaction. In order to achieve this goal , McDonald’s relies on its operating philosophy based on QSC & V – Quality, Service, Cleanliness and Value.
McDonald’s believes that customer satisfaction is crucial to the success of the brand and all Restaurants must perform to the standards. These standards are used in both company owned and franchised restaurants.
This is achieved by its commitment to sourcing all its requirements from local farmers and suppliers. Before entering India, the company spent six years and Rs. 450 crore toset up its supply chain. In India McDonalds pioneered the cold chain management which helpskeep vegetables and processed products safe for a longer time.
Best quality standardized ingredients ensure standardized preparation standards can be followed. Every product has a fixed procedure of preparation. However, newer McDonald’s stores offer MFY (Made for You) where the product is made only after the order is placed.
* FIFO: (First in first out) for all inventories.
* Reverse osmosis water treatment plant: Best technology for water purification at every outlet to provide water. Strict standards for vegetarian products including eggless mayonnaise and eggless ice-cream.
* Soft standards:
* Welcome every customer with a smile and are genuinely friendly at all times * Deliver consistent standards of hospitality Seize opportunities to interact with customers in a personal and positive way * Be well informed about product contents and nutritional information * Always appear clean and well groomed.
* Hard standards:
* Serve fresh and hot
* Serve within one minute of receiving order or give a free coke. This is implemented in a few outlets and is not applicable during peak hours. *
Cleanliness and Hygiene
* The counters, tables, floor area are to be kept clean at all times. * All staff required to cover their heads and wear gloves when within preparation area. * All these standards are evaluated by mystery shoppers and rated. This is called a RVR Restaurant Visitation Report) which provides a snapshot of the stores performance over a period of a few hours. The stores are graded either A, B, C or F.
McDonalds design exhibits a sense of “Forever Young” look with bright red and yellow colours appealing to the children and establishing its family restaurant positioning. The building provides a practical, contemporary design that aligns with the McDonald’s brand essence while accommodating the latest operational and consumer experience standards. Their mascot Ronald Mcdonald is also present outside each of their restaurants.
McDonalds always have all glass restaurants. McDonalds has always clearly identified and managed the various clues that customers use to form the impressions and feeling about their company. In addition to this, McDonalds has separate take away counters in order to save time of their patrons.
All of McDonalds external signage reads as, “McDonalds-Family restaurant. Also keeping in mind with the local language, all McDonalds restaurant have their name boards in Hindi.
McDonalds strongly believes in adhering to the local sentiments and hence none of the outlets in India sell Beef products and every restaurant has this mentioned. Also McDonalds, strongly believes in glass branding for any new products or services they offer. Most of the communication is designed to cater to local tastes and preferences.
All McDonald outlets are located are accessible and present everywhere thus
capitalizing on brand recognition. Most of the McDonalds have their own restaurants and hence the seating space available is exclusive to McDonald’s patrons. Also McDonalds offers proper parking facilities for its highway restaurants.
All McDonalds outlet are standardized in terms of layout and have proper in-store branding. The “Young and Cheerful” design concept is a progressive, youthful, and energetic environment with open views for social interaction. All McDonald outlets are huge with proper aisles and passages with appropriate signage for seating arena, lavatories, wet floor and food counters. McDonalds has a Made for You food preparation platform.MFY is a unique concept (cooking method) where the food is prepared as the customer places its order.
This cooking method has helped McDonald’s further strengthen its food safety, hygiene and quality standards. McDonalds also has illuminated Menu boards that offer a mix of both vegetarian and non vegetarian burgers along with other savories and drinks. McDonalds also has proper queues for placing order and often there is a executive who assists you in order placing. Also McDonalds gives toys for children thus making them wanting to come back.
The other visible cues are color, lighting, in-store music, employee uniforms and trays with literary. McDonalds has ample in store lighting and directly inﬂuences an individual’s perception of the deﬁnition and quality of the space, inﬂuencing his or her awareness of physical, emotional, psychological, and spiritual aspects of the space. The bright McDonald stores ensure prompt handling and evaluation of products. In all McDonald stores the lighting is perceived as more pleasant than other fast food environments. The color scheme that McDonalds uses exhumes cheerfulness and warmth. Red depicts vibrance, cheerfulness while yellow depicts friendliness and brightness. At McDonalds, music is a positive auditory cue stimulating specific consumer behaviour and emotions. Music appears to influence buyer-seller interaction. There is audio played about the latest offers and products. Also a balance and constant sound creates a pleasant sound
environment. All employees at McDonald are provided with uniforms and name badges along with caps with McDonald signature “M” arch. Employees are also trained with appropriate soft skills to address customers. Every employee or front line executive greets the customer and exchanges pleasantries, which makes them happy.
Service quality gap:
The five gaps that organizations should measure manage and minimize: Gap 1
(Listening gap) is the distance between what customers expect and what managers think they expect – Clearly survey research is a key way to narrow this gap.
Gap 2 (standard and specification gap) is between management perception and the actual specification of the customer experience – Managers need to make sure the organization is defining the level of service they believe is needed.
Gap 3 (performance gap)is from the experience specification to the delivery of the experience -Managers need to audit the customer experience that their organization currently delivers in order to make sure it lives up to the specification
Gap 4 (communication gap) is the gap between the delivery of the customer experience and what is communicated to customers – All too often organizations exaggerate what will be provided to customers, or discuss the best case rather than the likely case, raising customer expectations and harming customer perceptions
Gap 5 is the gap between a customer’s perception of the experience and the customer’s expectation of the service – Customers’ expectations have been
shaped by word of mouth, their personal needs and their own past experiences. Routine transactional surveys after delivering the customer experience are important for an organization to measure customer perceptions of service
Service Quality dimensions
: Physical evidence of service
: Consistency of performance and dependability
: Willingness/readiness of employees to provide service in timely manner
: Trustworthiness, believability, honesty
: Freedom from danger, risk, doubt, assurance guarantee, Certification
: Possession of required skills to perform service
: Approachability and ease of contact Empathy
: Politeness, respect, consideration, friendliness
They place customer experience at the core of all they do: They believe customers are the reason for their existence. They demonstrate their appreciation by providing them with high quality food and superior service in a clean, welcoming environment, at a great value. Their goal is quality,
service, cleanliness and value (QSC&V) for each and every customer, each and every time. They are committed to their people. They provide opportunity, nurture talent, develop leaders and reward achievement. They believe that a team of well-trained individuals with diverse backgrounds and experiences, working together in an environment that fosters respect and drives high levels of engagement, is essential to their continued success. They believe in the McDonald’s System. McDonald’s business model, depicted by their “three-legged stool” of owner/operators, suppliers, and company employees, is their foundation, and balancing the interests of all three groups is the key. They operate their business ethically. Sound ethics is good business. At McDonald’s, they hold themselves and conduct their business to high standards of fairness, honesty, and integrity. They are individually accountable and collectively responsible. They give back to their communities. They take seriously the responsibilities that come with being a leader. They help their customers in building better communities, support Ronald McDonald House Charities, and leverage their size, scope and resources to help make the world a better place. They grow their business profitably. McDonald’s is a publicly traded company. As such, they work to provide sustained profitable growth for their shareholders. This requires continuous focus on their customers and the health of their system. They strive continually to improve. They are a learning organization that aims to anticipate and respond to changing customer, employee and system needs through constant evolution and innovation. McDonald’s is committed to providing the highest quality food and superior service, at a great value, in a clean and welcoming environment. That’s why we work with their employees, franchisees, and suppliers to serve a balanced array of food choices and provide the nutrition information needed for customers to make sound decisions. At the restaurant level, McDonald’s is focused on energy conservation, sustainable packaging, and waste management. They are dedicated to innovate and improve their operations in order to build an even more sustainable, environment friendly and profitable business. And will continue to re optimize their menu, modernize the customer experience, and broaden accessibility to their brand, so that consumers will always enjoy the maximum McDonald’s experience.
Loopholes in service operations:
A research report released Thursday by Dunnhumby, highlighted by The Wall Street Journal, elucidates that in reality the customer eating experience is becoming more and more important to consumers. With so many fast-food options available, they make their decisions based on loyalty — and a significant portion of this support is garnered through a chain’s friendly customer service and good eating experience. It is without doubt that McDonald’s is still winning over Americans with its cheap Dollar Menu offerings and convenient drive thru service. But its poor customer-service scores are ultimately hurting its sales– a certainty supported by the Dunnhumby report that demonstrates that restaurants with higher customer-service scores tend to show higher comparable sales growth over a two-year period. Thus, if the world’s largest restaurant chain wants to maintain its edge over competitors, it must not only focus on price and promotions, but also the experience it offers to customers every day. And McDonald’s executives agree. The Wall Street Journal explains that in a webcast these executives held with franchise owners in March, they called its service “broken.” The number of customer complaints related to friendliness issues have only increased, and complaints about speed of service also “have increased significantly over the past six months.” Is it then perhaps possible that customers are becoming more accustomed to the friendly service and loyalty rewards they receive at other growing chains like and then less tolerating of the subpar services they encounter at other fast food chains? With respect to the services provided by McDonalds, the following management issues were observed
McDonalds wishes to rework on its restaurant interiors and match up to those of its self owned restaurants, However the problem that they have encountered is that franchisee owners are unwilling to invest in interior design.
McDonald’s has introduced MFY (Made for You) whereby the burgers are made after the order is placed. However, the franchises are required to upgrade
their equipment in order to follow this. The franchisees are not willing to incur such expenditure which poses a problem to McDonald’s.
We normally observe the customary trend of people queuing outside McDonalds especially during the weekends. This is due to the limited capacity space in the restaurants. This has been a persistent management problem for McDonalds. Even though the management at McDonalds has been trying to search for a solution for the same, it fears doing so pertaining to cost issues.
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