Mcdonald’s senior restaurant case study
Lisa Aham’s restaurant case is another example of how managers should analyze their businesses, their competitors and their customer environment to effectively adapt business strategy in carving out a niche that addresses customer perceived value while allowing the business to remain relevant, especially in a highly competitive industry such as the fast food industry. Even without knowing all of the statistical facts involved with this case, once can safely assume that the marketing strategy employed here is an effective one, perhaps one not being offered by rival restaurants.
Aham’s ability to identify a target market with seniors, from what one could perceive as a careful assessment of the market that her McDonald’s operates in, and her ability to create a marketing mix such as the $1. 99 menu offering and the free coffee perks is certainly an effective differentiation strategy; one which customers have responded to positively as evidenced by the influx of the large crowd that consistently visited the restaurant.
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Now whether this is good image issue for McDonald’s, it depends largely on the company’s.
According to the article, a key part of McDonald’s philosophy is what we see playing out at Aham’s restaurant; Aham’s actions seem to align with key parts of the company philosophies. It could be argued that she certainly has achieved some success in adapting those philosophies and combining them with elements of the marketing mix to help fulfill the overall business objectives and perhaps impacting the business’s bottom line. In practice, the marketing mix in this example is conveyed by the restaurant’s menu offering, the $1.99 meal, being offered at a price that is reasonably affordable, the free coffee refills take the form of the restaurant promotion and the meal products seem readily available to seniors at a convenience, both in place and time. The senior citizen market segment signifies the repeat customers that a restaurant typically target. According to the article, these seniors spend similarly to the average customer; they are neater than most customers and carefully clean up their tables before they leave. From a corporate perspective, they represent a dream niche that most restaurants could counton for guaranteed revenue. With them cleaning up after themselves, one can assume that they probably help keep variable labor costs down while consistently creating additional revenue by bringing in additional customers to the restaurant. All things equal, a cost benefit analysis would probably yield positive revenue to cost ratio. These are all positives that would seem to outweigh potential negatives at least in the short term, so from that point of view, no immediate actions would seem necessary. The Bingo idea on the other hand, is one that would need to be carefully examined.
A restaurant has an obligation to be socially responsible by aiming to improve its positive effects in the environment in which it operates. Bingo, even with no monetary exchange, could still be perceived as organized gambling by some members of the society. Though the intention sounds good, the restaurant’s effort to create extra satisfaction, even while increasing revenue, could actually create a micro-macro dilemma effect that could be damaging to McDonald’s overall image. What is “good” for some other businesses and consumers may not always be good for society as a whole.