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Tutorial: McDonald’s

Strategic Marketing – SUMMER SCHOOL 2013 1

The Art & Science of Service Marketing

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Today’s Session

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What we are going to cover…

• Three things from yesterday’s lecture on services?

• McDonald’s Case Study Analysis:

– Evolution of the McDonald’s service offering

– McDonald’s Franchising Model

– McDonald’s Glocalisation Strategy

• Love or Hate? How to design effective service solutions

• Group Exercise: Service Design

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Yesterday’s Lecture

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Key Marketing Concepts

• Three things from yesterday’s lecture on services?

– Services: Key Characteristics

– The ‘8 Ps’ of Services

– ?

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What is Franchising?

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Spot the odd one out…

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A Great Model for Services

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Top 500 Franchises

• Using another firm’s

successful

business model

and brand.

• Franchisor has an

alternative to

building chain

stores to distribute

goods and avoid

risk / investments.

• Franchisee or

operator pays a fee

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View from the operators

http://www.aboutmcdonalds.com/mcd/franchising/us_franc

hising/why_mcdonalds/success_stories/john_ebert.html

McDonald’s Franchise Model

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McDonald’s Franchise Model

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Rules & Regulations

• The Hamburger University (1961)

• McDonald’s is one of Britain’s

biggest trainers. It gets about 1m

applicants a year, accepting only

one in 15, and spends £40m

($61m) a year on training.

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McDonald’s Franchise Model

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Ad spend and brand recognition

• Restaurants spend $5.875

billion on advertising in the U.S.

• McDonald's spent $963 million

in advertising in 2012, up 8.6%

from the year before.

• That means $1 out of every $6

spent on restaurant

advertising in America is

done by McDonald's. Why?

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Glocalisation Strategy

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Adapting the McDonald’s service to local markets

Marketing Mix

Element Standardisation Localisation

Product Big Mac McAloo Tikka potato

burger (India)

Promotion Brand name / advertising

slogan ‘I’m lovin it’

Slang Macca’s (Australia)

MacDo (Philipines)

Place Free standing Home delivery (India);

Swiss rail dining cars

Price Big Mac is $3.10 in US and

Turkey

$5.21 (Switzerland)

$1.31 (China)

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The Service Revolution

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The booming service economy

• Services account for

nearly 70% of UK

economy (GDP).

• Product market is

satisfied

• Technology enables

services (online

banking, broadband)

• Individual needs

(customisation vs.

standardisation) Source: ONS 2008

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Designing Services

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Thinking from a Customer’s Perspective

Holistic experience

Department

A

Department

B

Department

C

Department

D

Department

E

Department

F

Provider Customer

Service Interface

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Love…

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Which services do you love?

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Hate…

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Which services do you hate?

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Designing Services

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Analysing Customer ‘Touchpoints’

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Designing Services

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Analysing Customer ‘Touchpoints’

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Service Design Process

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The Double Diamond Model

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Phase 1: Discover

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Using observation and empathic research

e.g. What is using a train like for

wheelchair passengers?

Services are

co-created

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Phase 1: Discover

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Mood-o-gram: One Person’s Emotional Journey

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Phase 2 : Define

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Creating Personas and Empathic Design

* Personas are visual

and anecdotal

profiles – empathic

tools which help

providers understand

the perspectives of

different users.

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Phase 3: Design & Develop

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Designing a Service Blueprint

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Group Exercise

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Design a new service blueprint

- Get into groups of three

- 30 minutes – plan your time!

- Use of flipchart, pens and sticky notes

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Group Exercise

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Defining the Customer Journey

1. Think of a service you either love (and wish to

demonstrate why you love it) or hate (and wish to present

your idea for an improved service proposition).

e.g. nightclub, BA degree, haircut, online retail, ski holiday

1. Identify a ‘persona’. List their needs and desires

2. Map out the customer journey

3. Underneath that, match up the customer touchpoints

(i.e. interaction between provider and customer) and

suggest ways of improving it.

See example of service blueprint.

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Group Exercise

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Defining the Customer Journey

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Group Exercise

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Defining the Customer Journey