McDonald's Functional Areas of Customer Satisfaction - Case Study Example

McDonald's Functional Areas of Customer Satisfaction Executive Summary Customer satisfaction is the key to the success of a business. This paper focuses on McDonalds, a leading fast food chain in the world. Despite its huge revenues, the company has had issues with customer satisfaction. This paper has identified service quality as a functional area of achieving customer satisfaction. The modes of achieving service quality have been discussed in sufficient detail as well as the information system necessary for achieving service quality.

Five components of the information system have been identified and described, including measurement of service expectations, capturing of customers’ words, reaching out to all employees, emphasis on information quality, and linking service performance to business outcomes. These McDonald’s approaches have been weighed against these criteria to justify the failure of its customer satisfaction. Introduction Founded in 1940 by Dick and McDonald, McDonald’s is one of the largest food chains worldwide today.

McDonalds has over 35,000 stores spread out over 119 countries. Together, these stores serve approximately 70,000 customers daily (McDonald’s, 2014). The stores are run either by the McDonald’s Corporation itself or as a franchise. For instance, 60% of McDonald’s stores in the United Kingdom are franchises while the corporation itself runs the rest. A franchisee has to undergo a stringent process of the application due to the requirements established by McDonald’s. For instance, the applicant has to have a higher level of integrity, experience in the food industry, business experience, completion of a franchisee training, maximum commitment as a franchisee, and a significant capital base (McDonald’s, 2014).

These requirements have contributed to McDonald’s strength as a brand. McDonalds aims at achieving a sustainable and profitable growth. Moreover, it is customer-driven thereby putting customer satisfaction at the core of its activities. This company is the best for purposes of this research as it is well-regarded and best-recognized in the market of fast foods (Maskowitz, 2014). McDonalds has been doing all it can to satisfy its customers. However, the American Customer Satisfaction Index (ACSI) has in recent occasions ranked McDonald’s last in terms of customer satisfaction despite the company’s increased revenue.

Nevertheless, McDonalds has put greater effort in streamlining its customer satisfaction owing to the recent dismal performances. For instance, the company has resorted to price reduction, menu expansion, extra facilities for customers at the stores, and cleanliness at the stores among other steps. The customer satisfaction indices have shocked the company executives, and they are indeed committed to reviving customer satisfaction. Functional Area #1 – Service Quality Over the years, organizations have considered service quality a strategic tool through which positioning, business efficiency, and operational efficiency are achieved (Mehta at al., 2000). The success of organizations has been pegged on service quality because it is closely linked to customer satisfaction (Gilbert and Veloutsou, 2006).

The position is effective particularly in the service industry. For this reason, organizations regard service quality as a factor for achieving competitive advantage in the market. In addition, excellent services boost customer retention and strengthen the customer purchase behavior. In turn, the organization enjoys a larger market share thereby generating more revenue. Restaurant marketers, including McDonald’s, have increasingly researched on customers’ needs to ascertain the kind of service quality and satisfaction level to maintain.

Service quality improvement has no silver bullets. Hard work and greater attention to minor details are at the heart of service quality improvement. This requires passion and consistency at all organization levels as far as quality is concerned. The first main ingredient is to capture the customer’s voice and measure emerging customer expectations regarding loopholes and possible improvements in customer satisfaction. The company should use a range of listening methods in the correct measures such as customer satisfaction measurement.

Essentially, this entails managing customer risk assessment, which should focus on weaknesses, problems, and customer losses thereby paving the way for positive, profitable actions. The company should include a detailed customer experience analysis both internally and externally. Through this analysis, the company should define all decisive moments, know how its services are delivered, and determine the opportunities for improvement as well as the factors hindering improvements. In addition, the company should the bad processes that drive away good customers.

The company should bring the customer’s voice into the business processes at the horizontal level and identify the process deliverables based on customers’ terms. Next, the company should animate these processes so that all business functions and processes are so clear that everybody including all customers understand their roles and interdependencies. Through this, the traditional process redesign should be more effective. Lastly, the organization should strive to lead people from the heart and do this passionately.

Senior managers should lead this process. When people are well-treated, turned on, and motivated, the company is assured of great services. The concept of people-profit-service chain has strongly been proven. To make customer service successful and lasting requires a greater passion for people, including employees and customers. Managers today treat employees and customers as assets and guard them to the best of their ability. Service quality is tested primarily in the manner in which it informs and guides the decisions on service improvement.

The system should also motivate managers and other employees in improving service delivery. Therefore, the information system on service quality takes into account the following five elements. Firstly, it should measure service expectations. Customer service expectations offer a frame of reference to assess the service. For instance, a company could simply measure the perceptions of customers on service performance using the 9-point scale. On this scale, the company could score a 7.3 for performing the service correctly at the first time.

Secondly, the information system should emphasize the quality of information. A service-quality information system is effective when the quality of information is put center stage, not quantity. A number of questions should be asked in this regard, including whether the information is relevant, useful, precise, credible, timely, understandable or in context. The information system should also capture the customers’ words. Qualitative and quantitative databases help build excellent service-quality information systems.

The averages of customers’ perceptions pertaining to the service should be calculated. Quantitative data generates reliable service information, which aids analysis and comparability across periods. The information system should also connect service performance to the results of the business. The delivery of quality service is helpful to the company from the bottom line. Excellent services enable the company to strengthen customer loyalty as well as expand its market share. Lastly, the information system should reach every employee in the organization.

The information system is useful when decision makers make the best use of it. The system should be more than simple data collection system. The system should be a communications system as well. The system should determine the recipients of the information, the format of receiving the information, and the time of receiving the information. Summary Customers seemingly overwhelm McDonald’s to the extent that it cannot balance service quality with customer satisfaction. The information systems at McDonald’s have not changed much in light of the change in customers’ needs and preferences.

These explain why customer satisfaction at McDonald’s is dwindling. For instance, the decision-making process at McDonald’s is based on the quality of data gathered and the effectiveness of data analysis, which parameters are not given more weight. Wrong decisions are made, and customers are the ultimate victims. In addition, McDonald’s has failed to acknowledge its employees as assets of the company. This reduces the passion of service delivery hence the dwindling customer satisfaction.

References Gilbert, G. R., & Veloutsou C. (2006). A cross-industry comparison of customer satisfaction. Journal of Services Marketing, 20(5), 298-308. McDonald’s (2014a). Corporate Info. Retrieved 29 April 2015 from http://www.McDonalds.com/us/en/our_story/Corporate_Info.html McDonald’s (2014b). McDonald's International Franchising. Retrieved 29 April 2015 from http://www.McDonalds.co.uk/ukhome/Aboutus/Franchising.html Mehta, S. C., Lalwani, A. K., & Han, S. L. (2000). Service quality in retailing: relative efficiency of alternative measurement scales for different product-service environments.

International Journal of Retail & Distribution Management, 28(2), 62-72. Moskowitz, D. (2014). McDonald's Brand Strength Still Dominates Its Peers' Retrieved 29 April 2015 from http://www.fool.com/investing/general/2014/04/03/McDonalds-brand-strength-still-dominates-its-peers.aspx