Describe the development of relationship marketing and how it can be applied to a selected business

P2: Describe the development of relationship marketing and how it can be applied to a selected business

The selected business I have chosen for this assignment is McDonalds. I will be concentrating on how McDonalds develop their relationship marketing with its customers and how the organisation influences people that are involved with such decisions.

A stakeholder is defined as any individual or group who have an interest in the business and actually influence the organisation itself and how it operates during its existence. A stakeholder can be anyone who is internal or external of the organisation and influence the business in different ways than others.

Stakeholders of McDonalds

Customers: The customers are an integral factor in the running McDonalds, or any other organisation, as they are the ones that are going to invest into the organisation itself. The customers are the ones that will be buying McDonald products so therefore they are the reason behind whether McDonalds make a profit or a loss. However, in order to make any sort of profit, McDonalds have to keep their customers happy. The more customers that McDonalds receive, the more money customers are likely to spend on this organisation therefore; this will lead to more profit. If McDonald’s customers are unhappy about the organisation, they are unlikely to come back and spend so they will look at other competitors such as Burger King or KFC.

Government: The government are labelled as a stakeholder as they influence the laws and regularities of any organisation that is UK based. Laws such as ‘no smoking’ in public areas have to be followed by McDonalds so that customers do not smoke inside the building. Also, as McDonalds recruit many people across the country, the government receive tax from their wages that contribute to their national insurance. Most working employees at McDonalds have to contribute tax to the government and are taxed according to the amount that they earn. Also, if the government was to increase the national minimum wage, McDonalds will have to offer their employees the minimum wage that the government set. Failing to do so may lead to the organisation receiving a heavy fine or in some extreme cases, may be forced to close the franchise store down. Also the government grant licenses to organisations that wish to develop their capacity to help McDonalds maximise their profits and will receive some of the profit gained through taxes.

Employers: McDonalds provide jobs to the public and create nearly 12,000 jobs across the UK. This helps the unemployment rate which has been rising over the past years to settle down and keep people of the roads. If an employee at McDonalds provides good customer service, this will lead to customers feeling good about the service they receive and how their products were processed. As the employees of McDonalds are the main face of the organisation itself, they are mainly responsible in ensuring that the organisation is seen as professional and that customers feel happy in coming back to McDonalds. Employees themselves have to look the part when working at McDonalds as employees are urged to look representable and make sure that they wear their company uniforms.

Local community: McDonalds have to ensure that their local community are not troubled by the way they operate and process themselves in the local area. McDonalds have to ensure that any rubbish is professionally put away in bins provided so that they do not attract rats around that area. As this is very unhygienic, this can trouble local people in the area as they will also be troubled due to McDonalds acting inappropriately and not doing their jobs properly. Also, McDonalds have to ensure that they do not cause too much noise so that local neighbours are not disturbed. ...

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Suppliers: McDonalds have to ensure that their suppliers produce their products and deliver on the given time that was agreed. The suppliers influence McDonalds as if their products are not delivered to the organisation they are unable to make profit as you cant sell anything if you haven’t got the product. Also, the goods being supplied have to be of a high standard so that customers are pleased with the products they have bought. As McDonalds themselves do not grow their own products, they have to make sure that any products they buy are clean and are of high standard. The process of the suppliers for McDonalds can be explained in the diagram below:

Manufacturer Wholesaler Retailer Consumer

DMU – Decision making unit

The decision making unit is usually a group of people that are responsible for making a final decision in purchasing a product.

The DMU product I have chosen from my organisation is the McDonalds ‘McFlurry’.

This is a product in which is an ice-cream that McDonalds have introduced so that they can attract as many customers to come and shop at their restaurants. The product itself is very affordable at only 99p and can be enjoyed by the whole family of all ages.

User who suggests purchasing a product or service.
Influencers who try to affect the outcome decision with their opinions.
Decider Makers who have the final decision.
Buyers who are responsible for the contract.
Gatekeepers who control the flow of information.

The 7ps

Price: the McFlurry is seen at a cheap price and is affordable by most people.

McDonalds sell this product at a price no higher than 99p, which is seen as cheap and your money worth. McDonalds have thought carefully about the price as if they were charging more, they would not have as many customers as not many would be able to afford it. If the price was really low, customers would have questioned the quality of the product and why would the organisation sell this product for at a low price.

Product: the product itself is an ice-cream that is toppled with different chocolate flavours that are sprinkled on top.

Place: As there are many McDonalds in the UK, there is at least 1 or more located on High Streets or town centres. This is because it is accessible to many people and that the chances of gaining more profit will be higher if the store is around a high number of people. It would be no good for business if there was a McDonalds in the middle of an area where there were less people. For example, you would not find a McDonalds that is located in the countryside as it would be ideal to run a business at that location.

Promotion: McDonalds promote their McFlurry products on a very day to day basis. As McDonalds are a multi national organisation, they can easily afford to advertise through television media such as T.V adverts on an all-day basis, through many well known website such as Google and MSN and on buses. McDonalds use promotion as a way to get the product across to many consumers, mainly being the younger generation so therefore, their products are on bus tickets and on billboards.

Physical evidence: the product itself is given in a plastic cup which is very stylish and unique in its own way. The product has its name on the packaging, along with the flavour they had along with the organisation name as well, the purpose being that the product can be recognised by other people. Also the colours they have sued are very eye-catching and it attracts customers to purchase their product, even if it has a strong brand name alone. Also the product comes with a little toy which also attracts the target audience at a high number.

People: McFlurry is mainly targeting the younger generation rather than the older generation as it has a children’s theme that is specifically for them. However, as it is a well know product, the older generation have also purchased the product for themselves.

Buyer

The Buyer is the person that is actually purchasing the product. The buyer is going to be influenced by the price as if the buyer belives that tyhey are charging to much for McFlurry, they would either not buy the product or maybe buy an alternative product. The buyer themselves would be adults as the McFlurry is a younger generation product but is more likely to be bought by an older person. The buyer will also be influenced by the product as if they belive that the products is going to be bad for their child, they will not buy it or if the product is not to the standard that they expected. Buyer will be influenced by place as if the store is close by, they wil be more willing to make the trip down to the store and buy products there. Howver if the location is abit further out and McDonalds not doing delivery services, the buyer will unlikely be going out their way to go McDonalds.

Gatekeeper

The Gatekeeper is the person that is not involved in the final decision but can influence the buyer to purchase. They can control the access and the flow of information to others but do not purchase themselves. The gatekeeper for the McFlurry will have to be children. As they do not purchase the product directly themselves, they influence other people such as their mom and dad to purchase the product for them. They are also influenced by the product as children will see a product and if they like it, they would persuade their parents to purchase it.

User

The user is the end user of the product who generally initiates the request. However, for this particular product, the product that is requested is not usually for the person that initiates the request. The user for the McFlurry will be young children but they do not actually purchase the products for themselves. An older person like a parent or a guardian buys the product and passes it on to the child. The user is also influenced by promotion as they are more aware of the product. McDonalds do this by advertising on TV adverts in the evening time when kids are more likely to catch the advertisement. They know that if they are able to persuade children by using TV adverts, they are more likely to inform their elders about the product and make them purchase it for them.

Influencer

The influencer is the person that influences the decisions of the buyer or the decision maker. They are influenced by promotion for this product via promotion. This is because the person that sees the promotion adverts which McDonalds use to help promote this particular product would want to buy the product or try it out because of how it is promoted. The McFlurry use many methods of promotion through TV adverts, internet and on bus tickets to help maximise their customer awareness about the product. The influencer for this product will have to be young children, as they do not buy the product themselves directly.

Decision maker

The decision maker is the person that has complete control of the purchase and has formal and informal power to select suppliers and approve purchase. The decision maker for my chosen product is the person that buys the product, which will be someone that is either buying for someone that is younger (most of the time) or someone who purchases the product themselves. The decision maker for this product is an older generation person that is buying the product on behalf of someone else on common occasions.

Augmented product

The augmented product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. For example, when you purchase a brand new T.V, you are not just offered the TV on its own but along with warranty and guarantee of the product if something was faulty or if something was to go wrong. This is the augmented product. Although McDonalds is a fast food restaurant, it is very unlikely that they have augmented products apart from customer services. As McDonalds take a great pride in their customer service department as they would want to be kept informed what their customers feel about their products and services that they offer.

Source:

Total Product Concept

The core product addresses the basic form of the product on a whole. So if you were purchasing a car, the car it self fill be the core product. However, there are many ways in which the user wants to buy the car, mainly being to travel from A to B. However, a bicycle and a train could also do this, this it is stated as the core product

But the total product is everything that the customer receives - including the service and intangible links such as servicing and regular checks when associated to the brand.

In relation to McDonalds, they offer their customers with high quality food products in which they believe that other competitors cannot match. Competitors such as Burger King and KFC are very competitive organisation so McDonalds have to ensure that their customers stay loyal to them rather than other organisations. They do this by keeping their customers happy by giving them their products on a quick time basis, usually under 5 minutes so that customers can enjoy their meals while it is relatively hot.

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