Customer Satisfaction - Essay Example

?Literature Review Satisfaction satisfaction is the term which is frequently used in marketing management. satisfaction derived from the performance of products of an organisation towards fulfilling the requirements of the customers. Customer’s positive response about a product signifies their satisfaction level (Grigoroudis & et. al., 2010). Every strategy prepared by an organisation has sole intention to satisfy the customers because it can enhance the profitability through higher sales (The McGraw-Hill Companies, 2012). Thus, rapidly increasing profitability of a company denotes that it has high level of customer satisfaction. Customer satisfaction depicts the ability of an organisation towards satisfying the needs of the customers. An organisation can effectively retain its customers by satisfying them (Kotler, 2009). Customer satisfaction depends on the product or service quality as well as the price provided by an organisation. It is referred as the key element in marketing from the perspective of theory as well as practice. In today’s business world, customer satisfaction has a huge impact on the competitiveness of an organisation. Hence, company managers provide more emphasis on customer satisfaction to increase the market share, the profitability as well as the sustainability of the business (Mohsan, F. & et. al., 2011). There are certain ways through which organisations can satisfy customers such as by creating customer loyalty towards the products as well as services, by improving the level of services and by enhancing the product value and product quality among others. In this context, it can be stated that customer satisfaction can be determined by effectiveness of employees in an organisation to provide good product and services (Taghizadeh & et. al., 2012). Customer Satisfaction in McDonald For McDonald, customer satisfaction has great importance to maintain profitability and to increase the market share. McDonalds, an international fast food chain serves world class foods to its customers since 1955. Apart from business activities, McDonalds performs several social activities such as sponsoring youth sports, providing donations to charities and organising social awareness events which has contributed to the enhancement of its brand value. According to McDonald’s commitment, doing the right thing is important for satisfying customers. McDonald’s policies, strategies as well as practices have made the company more competent in the market (McDonalds, 2012). According to the observation of the CEO of McDonalds, the company positively satisfies the needs of the customers in terms of providing quality products with affordable prices (McDonald’s, 2011). Marketing Strategies of McDonalds for Customer Satisfaction The target customers of McDonalds are children, young people as well as urban families. In order to satisfy the target customers, McDonalds have been providing special facilities to children such as ‘play place’ which help to attract huge number customers to its restaurants. Young urban customers are also attracted toward McDonalds because of certain facilities such as fun games (Food Advertising to Children and Teens Score, 2010). For any organisation, customer’s perception about the product is considered as a significant factor for success. Many organisations fail to satisfy customers because certain products are unable to fulfil the customers’ needs. Therefore, customer perception as well as expectation is considered as one of the most significant factors in the marketing strategies for an organisation (Ghosh & et. al., 2012). Consequently, McDonalds also understand the importance of perception of customers and thus, develops its marketing strategies in such as way so that it can fulfil their expectations. The 4p’s marketing mix strategies help McDonald to satisfy their requirements from a fast food restaurant. The aspects of 4p’s strategies are product, price, promotions and place. Product Due to increased number of fast food chains across the world, people in present days have numerous product choices to select from. Hence, McDonalds carefully develops the taste of the products by considering the number of choices of people. However, the preferences and the choices of the customers also change frequently. Products which are most favourable by majority of customers today may be rejected tomorrow. Hence, McDonalds continuously observes the changes in customers’ preferences so that it can effectively adjust the product strategies with the fluctuating demand. According to the report of McDonalds, in the UK, it can be observed that the company had launched several new products by discarding old products from their restaurants in order to fulfil the changing expectations of customers. New products are introduced in the market to stimulate the customers toward more sales. McDonalds adopts different strategies in different phases of product life cycle. For instance, in the introduction phase when new product is launched, McDonalds usually use advertisement strategy for achieving better customer response. McDonalds also ensures better packaging as well as product quality for satisfying vast customer segment. Understanding customer preference as well as customers’ expectations is essential factors while for satisfying customers. Thus, in order to understand the diverse preferences of customers, McDonalds carefully studies the customer behaviour in different regions. On the basis of the study of different reports, it can be observed that McDonalds has prepared different menu for satisfying the diverse customer groups in different regions. The positive response of the customers towards the products of McDonalds makes it a globally renowned company (The Times 100, 2012). Price The price of the product has significant effect on customer satisfaction. For many customers, product selection depends on product prices. From the perspective of organisation, product price not only determines the customer preference, but also the profitability. Hence, McDonalds considers different aspects while determining the price of the product such as pricing of the competitors’ products, available discount rates and business operational costs. Pricing strategies is the most significant part of the marketing mix which has direct impact on the customer behaviour. With respect to pricing, penetration pricing is one of the most common strategies used by organisations to attract customers. In penetration pricing, organisations usually provide products with low prices to gain more sales. However, it should also be noted that low price of product is always not preferable by customers. Low price can have negative effect on the customers mind as it might raise concern about quality. Thus, McDonalds determines the prices of the products on the basis of its brand value as well as integrity. An appropriate pricing strategy can maintain the demand of products in a market. Hence, it can be observed that the products of McDonalds are reasonably priced for satisfying majority of customers. McDonalds uses definite value pricing alo0ng with other pricing strategies which help to increase the satisfaction level of customers (The Times 100, 2012). Promotion Promotion is the other vital strategy used by organisations for satisfying customers. The promotion strategy of an organisation mainly depends on the type of target customers. McDonalds mainly consider children as its targeted customers. Hence, in order to satisfy them, McDonalds gives small toys with certain food products. Apart from gifts, there are also several other promotional techniques applied by McDonalds to meet the customers’ needs. For instance, McDonalds organises various contests for winning prizes such as lucky draws and scratch cards to satisfy young customer segment (Scribd Inc., 2012). Effective promotional tools are crucial for an organisation to attract customers toward a brand. In the context of promotion, marketing communication is considered as a significant aspect of promotional tool which is used for gaining better customer response. One of the most important communication tools for an organisation is television advertisement which makes customers aware about the any product. Furthermore, advertisement in press media also provides detailed information about a product as well as related services. Hence, it can be observed that McDonalds use marketing communication tools such as television and internet advertising for approaching to vast customer segment (McDonald's, 2012). Place Place is considered as one of the important aspects of the marketing mix. Physical location as well as distribution play vital role for satisfying customers. Place has a major role for an organisation through which, the end consumers get the products in their hand. In order to satisfy customers, products should be offered in right place, at right time and in right quantity. Organisations use series of processes in order to satisfy the customers through appropriate placing. With respect to McDonalds, it can be observed that the outlets of the organisation are placed near about everywhere in USA so that customer can easily get access to the products. With the help of prudent as well as strategic business expansion, McDonalds have successfully placed the outlets in major international markets in order to make the products available for large customers (Pickton & Masterson, 2010). After, implementing marketing strategies, proper assessment of performance of those strategies are crucial for satisfying the customers. Hence, it can be observed that relevant measures are taken by McDonalds to study the feedback of the customers regarding its product as well as services. Perfect measurement techniques can ensure appropriate customers satisfaction level. Influence of Marketing Strategies on Customer Satisfaction The marketing strategies taken by McDonalds have created positive impact in the mind of customers. The marketing mix strategies of McDonalds have helped the company to establish a strong brand value in the international market. As a result, McDonalds has been able to expand the business around the world. Although McDonalds has successfully established its brand image by using prudent marketing strategies, but recently, the company has recorded poor performance with respect to customer satisfaction. According to the American Customer Satisfaction Index (ACSI), in the year 2012, McDonald’s rating among the fast food companies is 73 which is low than its competitors named Burger King and KFC. With respect to customer satisfaction, Pizza of Papa John has ranked first among the fast food restaurants with 82 points in the year 2012. According to a survey conducted by ACSI, almost 68 millions of customers had daily visited McDonald’s restaurants except the year 2009. In 2009, McDonalds was ahead from the Burger King as well as KFC in term of customer satisfaction. However, in latter days due to inefficient marketing strategies, McDonalds has suffered badly by low customer satisfaction rate (Yahoo! Inc., 2012). Due to low customer satisfaction, McDonalds has started to take serious measures in order to satisfy its customers. The vice president of McDonalds (USA) Jim McCabe had stated that the company strives for considering the feedback of customers regarding products and services seriously through restaurant performance evaluations and employee feedback. Yet the company needs to do more in order to offer great value to the customers such as providing variety of menu and positive service experience every time they visit the restaurant. Thus, the management team of the McDonalds is continuously putting effort to improve the customer satisfaction level (CBS Local Media, 2012). In this regard, McDonalds have made a statement that customer satisfaction is its top priority of business. According to internal research, McDonalds has started to make progress in satisfying the customers. McDonalds have also decided to spend $1.5 billion in the year 2012 in order to renovate the restaurants for enhancing the facilities such as WiFi connectivity, McTV along with comfortable seating facilities among others. McDonalds also included various items in its food products such as oatmeal, bakery items and smoothies which can add extra value in its menu. Thus, it can be observed that customer satisfaction is vital for any organisation and hence, McDonalds have taken serious measures towards customer satisfaction by improving its products as well as services (Yahoo! Inc., 2012). Acquiring a higher level of customer satisfaction is significant because satisfied customers are usually loyal to a brand and they also prefer to buy products from a particular company repeatedly instead of switching to other brands. In this context, it can be stated that when the customers get proper service as well as high quality products they become satisfied to a brand. The customer satisfaction level can be measured by conducting survey techniques. McDonalds have been providing quality products as well as superior services to its customer over a period of time. Although it has faced low customer satisfaction in recent time, but the company has taken several strategies to improve the performance. It has improved its menu and introduced innovative services for better customer satisfaction. Moreover, remarkable improvement in the growth of McDonald’s states that its customer satisfaction level has been increased rapidly (The Times 100, 2012). References CBS Local Media, 2012. McDonald’s Ranks Dead Last in Customer Satisfaction. News. [Online] Available at: http://chicago.cbslocal.com/2012/06/19/mcdonalds-ranks-dead-last-in-customer-satisfaction/ [Accessed December 07, 2012]. Food Advertising to Children and Teens Score, 2010. Fast Food Targeted Marketing. Media. [Online] Available at: http://www.fastfoodmarketing.org/media/FastFoodFACTS_TargetedMarketing.pdf [Accessed December 07, 2012]. Ghosh, R. & et. al., 2012. McDonald’s: Behind the Golden Arches. Marketing Strategies of McDonald’s. [Online] Available at: http://www.scribd.com/doc/11520753/Marketing-Strategies-of-McDonalds [Accessed December 07, 2012]. Grigoroudis, E. & et. al., 2010. Customer Satisfaction Evaluation: Methods for Measuring and Implementing Service Quality. Springer. Kotler, P., 2009. Marketing Management: South Asian Perspective. Pearson Education India. McDonald's, 2012. Values in Action. Our Story. [Online] Available at: http://www.mcdonalds.com/us/en/our_story/values_in_action.html [Accessed December 07, 2012]. McDonald’s, 2011. To Our Valued Shareholders. Annual Report. [Online] Available at: http://www.mcdpressoffice.eu/downloads/2011_Annual_Report.pdf [Accessed December 07, 2012]. McDonald's., 2012. Promotion. About us. [Online] Available at: http://www.mcdonalds.com/us/en/promotions.html [Accessed December 07, 2012]. Mohsan, F. & et. al., 2011. Impact of Customer Satisfaction on Customer Loyalty and Intentions to Switch. International Journal of Business and Social Science, Vol. 2, No. 16, pp. 263-270. Pickton, D. & Masterson, R., 2010. Marketing: An Introduction. SAGE. Scribd Inc., 2012. He 7 P's Of Mc Donald’s. Promotion strategy of McDonalds. [Online] Available at: http://www.scribd.com/doc/45941284/Promotion-Strategy-of-Mcdonalds [Accessed December 07, 2012]. Taghizadeh, H. & et. al., 2012. Prioritization of Customer Satisfaction Dimensions In The Banking Industry by Using Entropy. Interdisciplinary Journal of Contemporary Research In Busines, Vol. 4, No. 4, pp. 247-255. The Times 100, 2012. The marketing process. Case Study. [Online] Available at: http://businesscasestudies.co.uk/mcdonalds-restaurants/the-marketing-process/the-4ps.html#axzz2EGZdXpGw [Accessed December 07, 2012]. The Times 100, 2012. Operations theory. Revision Theory. [Online] Available at: http://businesscasestudies.co.uk/business-theory/operations/customer-satisfaction.html#axzz2EGZdXpGw [Accessed December 07, 2012]. The McGraw-Hill Companies, 2012. Developing Successful Marketing and Organizational Strategies. Sites. [Online] Available at: http://highered.mcgraw-hill.com/sites/dl/free/0073529931/782262/Chapter02.pdf [Accessed December 07, 2012]. Yahoo! Inc., 2012. McDonald's Ranks Last in Customer Satisfaction Index. News. [Online] Available at: http://shine.yahoo.com/shine-food/mcdonalds-ranks-last-customer-satisfaction-index-165900737.html [Accessed December 07, 2012]. Bibliography American City Business Journals, 2012. Abercrombie clinging to full-price strategy. Home. [Online] Available at: http://www.bizjournals.com/columbus/stories/2009/05/11/story4.html?page=all [Accessed December 07, 2012]. American Recruiters, 2012. Global Food Service News. Documents. [Online] Available at: http://www.americanrecruiters.com/documents/file/Craig's%20Newsletters/2012/Newsletter%20April%202,%202012.pdf [Accessed December 07, 2012]. Butchers – An Empirical Study, 2010. Contents. [Online] Available at: http://www.shannoncollege.com/wp-content/uploads/2009/12/THRIC-2010-Full-Paper-M.-Ruane-and-O.-Casey.pdf [Accessed December 07, 2012]. Habiyaremye, J. D., 2011. Market Segmentation and 4 Ps. GRIN Verlag, Lamb, C.W., 2011. Essentials of Marketing. Cengage Learning. Mahajan, V.C. & Rau, S.S., 2009. An Empirical Study on Service Quality Perceptions of Domestic Airline Consumers in India. International Journal on Information Sciences and Computing, Vol.3, No.2, pp. 69-74. McDonald, M., 2011. Marketing Plans for Services: A Complete Guide. John Wiley & Sons. McDonald, M. & Wilson, H., 2011. Marketing Plans: How to Prepare Them, How to Use Them. John Wiley & Sons. Ruane, M. & Casey, O., 2010. Marketing Promotional Strategies for Ireland’s South West Vander Schee, B. A., 2010. Teaching Integrated Pricing Strategy: Comcast as a Case In Point. Journal for Advancement of Marketing Education, Vol. 16, pp. 36-42. Read More