Final Project Report

UNIVERSITY OF CENTERAL PUNJAB, FAISALABAD

BACHELORS IN BUSINESS ADMINISTRATION

CUSTOMER RELATIONSHIP MANGEMENT

(Final project report on McDonald)

SUPERVISED BY: SIR FAROOQ QAISER

SUBMITTED BY: SEHRISH MAQBOOL (0089)

RABIA NAZ (0095)

ZAINAB MUSTAFA (0099)

MAHAM ASHRAF (0103)

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Table of contents
1. Vision about CRM--------------------------------------------------------------------------------03
2. Introduction of McDonalds’--------------------------------------------------------------------04
3. Vision and mission-------------------------------------------------------------------------------05
4. Business and operational strategy-------------------------------------------------------------06
5. Customer strategy--------------------------------------------------------------------------------07
6. Value customer receives------------------------------------------------------------------------08
7. Value organization receives--------------------------------------------------------------------09
8. Channel use to reach customers---------------------------------------------------------------09
9. Customer experience-----------------------------------------------------------------------------09
10. Collect information about customer----------------------------------------------------------10
11. Information system used in the organization-----------------------------------------------11
12. Utilization of CRM in the organization------------------------------------------------------12
13. Business model-----------------------------------------------------------------------------------14
14. Key performance indicators--------------------------------------------------------------------15
15. Metrics---------------------------------------------------------------------------------------------16
16. Give shareholder value--------------------------------------------------------------------------17
17. Employee value-----------------------------------------------------------------------------------17
18. Get feedback---------------------------------------------------------------------------------------18

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VISION ABOUT CRM

A CRM vision is more than a task for a few executives isolated from the rest of the organization.
It should be used as an inclusive process to collaborate on and socialize the CRM initiative.
Frontline staff and stakeholders provide a valuable perspective on how an organization functions,
and their often undocumented knowledge can provide many benefits. Effective solutions, long
hidden concerns, and common frustrations are often revealed when teams and departments are
encouraged to contribute to the roadmap process. Working through a collaborative process will
create not only a more effective solution, it will foster stronger relationships between
departments, and expand support for system adoption.

A truly successful CRM system is more than just the technology that drives it. It is a combination
of clearly defined strategies connected to specific goals that are delivered by the most effective
tools available. The initial process of defining the organizational strategies and goals that the
CRM will help deliver is essential. This is called developing a “CRM vision” and defines what
the system is expected to achieve and how success will be measured.

A CRM provides the powerful tools an organization can use to become more effective and
efficient, but for it to work properly, the organization needs to have a CRM vision—a clear plan
for what they want to achieve. A CRM vision serves as the high-level guide that provides a
focusing point for the organization’s goals, aspirations, and many of the strategies that it plans to
use. It doesn’t specify the details, but it does establish the priorities of the organization, and
outlines the most important aspects of their mission and the resulting constituent experience.

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INTRODUCTION OF McDonalds
McDonald is a very popular fast food business which is operating all over the world. It started its
operations in sixties and currently it is serving worldwide chain of 30,000 restaurants. McDonald
restaurant has a quality that it serves its product according to the culture of that region where
they are operating. Several artifacts of modern world has been very well organized as
Macdonald’s famous product, promotional plan with the famed toys and films, its participation
in the aid organization and its dispersion classified adds.

Overall McDonald planned plan is called plan to succeed. There focal point is not to be the
biggest fast food chain in the world but the finest fast food chain. McDonald planned philosophy
in the rear this plan is generates recovered experience through the finishing of multiple proposals
immediate the five factor of incomparable customer understanding. (McDonald, 2009)

A key element of the MacDonald strategy since the beginning has been to own all the property
on which the MacDonald was built doesn’t matter the property is franchised or company owned.
Rental money differs from property to property but it has been estimated that McDonald generate
more money from its rents of the property than the franchise fees it charges.

The success of the MacDonald since its beginning can be attributed to the customer’s service it
provides. Each restaurant wants to have a good brand image by giving quality food and good
customers services. In both field McDonald has made its name as it is providing quality and
cheap food together with quality service. It has come with a limited menu but with great
improvements. Another invention was the introduction of the play area. MacDonald is
continuing new inventions to facilitate the mass customization process. In 2001 McDonald’s
began standardizing its technology its existing point of sale system with the office system in
more than 11,000 stores in the United States. The company is investing in a common point of
sale which will be available to use all over the world in its branches. (typepad, 2009)

McDonalds make possible the replace of value by matching the money paid by customers with
quality and diversity of products and services resulting to the customer feeling of having
acknowledged their moneys significance and even more than what they compensated for.
McDonald objective the customer happiness by food preparation the penchant to formulate the
customers feels satisfied about the cost exchange. McDonald is advice for the family or friends
get-together as well.

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McDonald’s Corporate Mission Statement

McDonald’s corporate mission is “to be our customers’ favorite place and way to eat and drink.”
This mission statement highlights the significance of customers as the business focus, while
maintaining the company as a major influence on their food and beverage purchase decisions.
McDonald’s corporate mission statement has the following main components:

Customers’ favorite place to eat and drink

Customers’ favorite way to eat and drink

McDonald’s Corporate Vision Statement

McDonald’s corporate vision is “to move with velocity to drive profitable growth and become an
even better McDonald’s serving more customers delicious food each day around the world.” This
statement is included in the growth plan that the company introduced in 2017. The company’s
previous vision statement was “Our overall vision is for McDonald’s to become a modern,
progressive burger company delivering a contemporary customer experience.” The following are
the main components of the company’s new corporate vision statement:

Move with velocity to drive profitable growth

Become an even better McDonald’s

Serve more customers delicious food each day around the world

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OPERATIONS AND BUSINESS STRATEGY

Business strategy is defined as it is a long term planning of a business with specific goals and
target within a specific time with the available resources. It is a management plan constructed by
the top level of management in order to make the business runs in profit.

In McDonald the business strategy for the company is to make food fast available to its
customers at a very low competitive price but to get profit as well by reducing the cost of the
product and expanding the business world wide.

Operational strategies
Operations strategies play a very important role in achieving organizational goals. By using these
strategies an organization controls and maintains all of its operations. So these should make after
a comprehensive marketing analysis according to capabilities and resources of an organization.
Operation management strategies in McDonald are being made by made by top management.
These strategies are implemented in all the branches of the McDonald and these strategies are
distributed to all its franchise branches in the written form. So there are operational managers in
all the branches that control all operational activities.

McDonald has adopted a strategy which is based on the three sections. This strategy has
emphasizing on the customer importance and customers satisfaction. As the company has
increased using the information technology, it has developed new ideas to improve the
operational activities of the business. With the introduction of stock control data base system, it
avoids unnecessary ordering; keep the stock up to date in store. It has become very easy and time
saving now to order the stock. Stockrooms are directly attached to point of sale system and the
manager knows what product is moving fast and how much he should order more products.

REDUCING COST BUSINESS STRATEGY

The challenge facing the global equipment suppliers when they design the fryers for our
restaurants is to develop such kind of equipment that are more energy efficient and gives better
taste while improving the crew efficiency and using less cooking oil.

1-The low down oil quantity: Fryer is the next age band fryer. LOV improves cooking
efficiency, simplifies filtering and cleaning, and provide enhanced environmental benefits.The
LOV’s ground-breaking design allows restaurants to roast the same sum of produce with in the
region of 40% smaller amount oil. It in addition uses more or less 4 % a lesser amount of
liveliness than average fryers.

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2- Fluorescent low consumption: In McDonald lighting represent an important role in reducing

the cost of its operations. McDonald uses fluorescent low consumption lighting in the kitchen.
Tests revealed that each restaurant saves 11,000kWh of electricity each year.

3-Packaging plays an important role of McDonald brand not only for quality, integrity and
safety but also in its visibility to our customers. McDonald also use its cooking oil in its transport
operation which has significantly reduces the cost of operation as well.

In order to achieve its business strategy goals, McDonald is emphasizing more and more on
reducing its cost of operational activities. In order to reduce the cost McDonalds purchases most
of the vegetables especially potatoes directly from farmers, this help the McDonald not even to
cut the cost of chips production but also get fresh vegetable for salad for its customers. This also
helps McDonald to not get effected by the fluctuations in the market prices.

These all operational activities are conducted in all the branches of McDonald worldwide in
order to successfully implement the business strategy of the McDonald.

Customer strategy
Growth Strategy

We know the most meaningful way to grow the business and create value for all of our
stakeholders is by serving more customers more often. That’s why we’re focused on giving
customers what they really want: hot, delicious food served quickly – with an overall experience
and value for their money that meets their rising expectations.

Velocity makes the most of our competitive advantages, from our unmatched global scale to our
iconic brand to our tremendous presence in local markets around the world.

The key pillars of our growth strategy are to:

Retain

Retaining the customers we have, fortifying and extending our areas of strength with focuses on
breakfast and family occasions.

Regain

Regaining the customers we had lost by improving the taste and quality of our food, enhancing
convenience and offering strong value.

Convert

Converting casual customers to more committed customers with coffee and snacks.We also
identified three accelerators, intended to drive growth on top of everything we’re doing:

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Digital

Re-shaping our interactions with the customer – whether they eat in, take out, drive thru or order
delivery.

Delivery

Bringing the McDonald’s experience to more customers – in their homes, their dorm rooms,
their workplaces and beyond.

McDonalds gives value to their customers

Responsible Leadership

We are committed to using our scale for good: good for people, for our industry, and for the
planet. From simplifying ingredients to being nutritionally mindful; from reducing our waste
impact to advancing the industry on sustainable and humane sourcing; from being a good
employer for millions to giving help to those most in need via RMHC(Ronald McDonald House
Charities)

Inclusiveness

McDonald’s is one of the world’s most universal, democratic brands. We welcome customers of
every culture, age and background, and we proudly invest in all the people our success rests on –
our crew, our suppliers and our community.

Progressiveness

We are a restless company: always innovating, always moving forward. From our original
business model to the invention of the drive thru and the Happy Meal, we're working to do things
better tomorrow than we do today.

Local Integration

McDonald’s has traveled far but we stay in sync with society in each of our countries,
responding to local needs and integrating with local culture. Our restaurants are typically locally-
owned, staffed by crew who live nearby, and who proudly give back to their community via
hundreds of thousands of local programs.

Freedom With in a Framework

We pay special attention to how our customers are alike – and how they are different too. For
that reason, markets and countries have latitude when it comes to menu, marketing, community
involvement and local business management.

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Customer gives value to McDonalds

Customer gave value back to them in the form of that try every new deal because trust on
McDonalds’ is on very high level and customer knows that what they served have all the
qualities of good food and one of the most important thing is that their services like customer one
time order to them and the next time customer orders it doesn’t matters where n which location
that customer spotted with in the country he just call the name and contact number the all data
shows about that customer even the last delivery he made. So it is time saving for the customer
and he just order and that’s it because every thing was noted and save the data of customer on
your first call

So that’s why customer valued to them because the first priority of McDonalds is gave value the
of their customers. Because customer also knows that his information is secured and privacy of
his data secured firstly prioritized

Channels choose to reach customers

Distribution Channel
The most prominent place McDonald’s products can be found are at its restaurants. Other places
where the company uses to sell its products are:

1-Kiosks

2-Post mates website and app

3-McDonald’s mobile app

Hence, the company is using the selective distribution channel maintaining a push-and-pull
marketing communication

What is customer experience at McDonalds?

A customer experience team member ensures that all customers have the best quality experience
when they come to McDonald's. They will answer any queries or questions customers have and
will always assist them in enjoying the experience of dining at McDonald's.

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Information Collect From Customer

We may collect personal information about you when you visit our restaurants, use our websites
or mobile apps (“online services”), and otherwise interact with us (collectively, “services”). The
information we collect falls into three categories:

(a) information customer provide us;

(b) information we collect through automated methods, and

(c) information we collect from other sources.

Generally, your providing of your personal information is voluntary. However, there may be
situations where your providing of personal information is necessary to provide a service or is
required by law. Please note that in certain cases, we may be unable to provide you with our
services unless you provide the information. We will let you know when the providing of your
personal information is necessary.

Customer Provide the following information to us, depending on how you interact with us:

personal details, such as your name, postal and email addresses, phone number, birthday
information and other contact information, when you register with our online services, log-in to
Wi-Fi, enter one of our competitions, or contact us by phone or through our online services;

transaction information, including information about the products you buy, prices, method of
payment and payment details;

account information, such as your username or password (or anything else that identifies you)
used to access our online services or to buy or use our products and services;

profile information, including products and services you like, or times you prefer to visit us; and

other personal information you choose to provide us when you interact with us.

We collect information through automated methods.

We may use automated technology to collect information from your computer system or mobile
device when you visit our restaurants, use our online services, or in-restaurant technology.
Automated technology may include cookies,

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We collect information about customer from :

internet protocol (IP) address;

date and time of access of our online services or in-restaurant technology;

name and URL of the file retrieved when you use our online services;

computer or mobile-device operating system and browser type;

type of mobile device and its settings;

device and component serial numbers; advertising identifiers (for example, IDFAs and IFAs) or
similar identifiers;

referring website (a site that has led you to ours) or application; and

activity related to how you use our online services, such as the pages you visit on our sites or in
our mobile apps.

There are many types of information systems used in McDonalds

such as :
Transaction Processing System (TPS)
First transaction happens when two people make an exchange, and collecting data about it called
transaction processing, so transaction processing is collecting, storing, modifying, and retrieving
the transactions of an organization. Transaction system is important to answer routine questions,
and it helps to conduct business such as payroll, employee record keeping or paying an
employee. It's important to store the data of the transaction save and protected because
transaction generally involves an exchange of money which is critical to any organization.

McDonalds everyday sells a huge amount of hamburgers ,so McDonalds should order raw
material from its supplier , each time McDonalds place an order with its supplier , a transaction
happens , and the transaction processing system records the relevant information such as supplier
‘name , address , the quality of the items purchased and finally the invoice amount.

Decision support system (DSS)

At first McDonalds began as a small restaurant, selling foods to customers , the business
expanded slowly ,then McDonalds analyze the market well to come with opportunity, as we

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know we live in the time of technology , so McDonalds thought of providing wireless services ,
so the company gather information about the customer usage of wireless services , length of stay
and sales level , then the decision support system analyze the data to come up with the decision
of providing wireless service in their restaurant.

POS system "Scale of Point system "

McDonalds is very busy restaurant because many customers goes there , the first priority for
McDonalds is to deliver best restaurant experience for the customers , for that McDonalds used
POS system " Point of scale system " to ensure fast and accurate order , because this system is
used to speed the business process, it can track massive amounts of data in seconds., With these
systems, each order is instantly transmitted to several workstations throughout the facility, The
cashier instantly knows what payment is due. The kitchen knows what orders are coming up, and
how long a customer has been waiting.

McDonald's utilized CRM objectives and strategy

a.General strategy

First of all, we shall study about the general strategy of McDonald's. This will allow us to
precisely understand as to how they work and react to the market.
McDonald's have developed a price-slashing and low volumes policy; and comprise the main
components of its competitive advantage. Prices have to be affordable in order to deliver a
variety of meals everyday. McDonald's is not a regular restaurant. They want to attract the
customer as regularly as possible, and thus, the prices of the meals cannot be too expensive. The
prices are not the same in every country and they can vary in a country depending on the city.

b. Interaction with the customer strategy

Moreover, about 70 % of the sales at McDonald's are conducted within four hours. Hence, they
decided to try and change the dietary behavior in order to attract more customers during the off-
hours. For example, if you buy a meal at lunch, you have a discount on a second meal which is
bought before six in the evening.

c. Offer customer rewards.

The most effective programs offer graduated rewards, so the more customers spend, the more
they earn. This rewards your best, most profitable clients or customers and cuts down on low-
value price switchers-customers who switch from program to program to get entry-level rewards.

d. Hold special events.

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With the renewed interest in retaining and up-selling current customers, company-sponsored
special events are returning to the forefront. Any event that allows us and our staff to interact
with our best customers is a good bet, whether it's a spring time golf outing, a summertime pool
party or an early fall barbecue. Just choose the venue most appropriate for our unique customers.

e. Build two-way communication.

When it comes to customer relations, "listening" can be every bit as important as "telling." We
Use every tool and opportunity to create interaction, including asking for feedback through your
Web site and e-newsletters, sending customer surveys (online or offline) and providing online
message boards or blogs. Customers who know they're "heard" instantly feel a rapport and a
relationship with our organization

Objectives
a-Having a large proportion of loyal advocates: A customer goes through stages in his
relationship with our brand. He may finally reach the advocate stage where he actively canvasses
for a brand. The service firm should try to convert its good customers into advocates, who in
turn, would become the ambassadors of the brand. This follows from the first objective and
should result in a large number of loyal customers. Loyal customers have an increased level of
commitment to a brand. The marketing cost for loyal customers is minimum. The referrals
(advocates) give positive word of mouth recommendations to other potential customers. Such
recommendations reduce the cost of serving them when they repurchase from the service
provider.

b-Having profitable relationship: Customers vary in attitude and behavior. In a competitive

market place, customers are exposed to hundreds of selling messages. Customers have limited
ability to process information. A number of constraints influences their decision making. Every
sale is the result of complex interaction with customers. So, building strong casual relationship
with customers is very important. The CRM strategy maintains an ideal relationship without
giving an impression to customers that their privacy is being invaded.

c-Using cross selling opportunities without annoying customers: Customers can be groomed
for purchasing not one product of our organization but for a series of products from the same
organization. Credit facility also provided to customers to buy other service products of the same
service provider.

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Business Model
Together with its suppliers the company's model is based on a three-legged stool: suppliers,
franchisees and McDonald's. Each leg must thrive for the business to be profitable. The key
activities McDonald's engages in is the marketing and selling food and beverages.

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McDonald’s Key Performance Indicator

Summary For our 2006 Worldwide Corporate Responsibility Report, we took a major step
forward by establishing initial key performance indicators (KPIs) for each of our most material
issues. In the course of reviewing the 2006 KPI data, we have updated them to reflect improved
processes for data collection, analysis and reporting. Working with subject-matter experts and
our internal audit team, we have clarified terms and instructions, developed additional reporting
forms, and worked with field staff to strengthen their understanding of the process. With this
report, we are able to report metrics representing a greater number of markets with improved
accuracy. We will continue our work to embed the process in our ongoing operations and expand
it, for all KPIs, to all of our largest markets.

1-Sustainable Supply Chain

SUPPLIER SOCIAL ACCOUNTABILITY (WORLDWIDE)

Food, packaging and tier-1 equipment suppliers that have affirmed our Code of Conduct2

Year 2004 2005 2006 2007

%of Supplier facilities 57.0% 89.0% 93.5% 92%

ANIMAL WELFARE (WORLDWIDE)

Supplier meat (including beef, pork and poultry) processing plants audited

Year 2004 2005 2006 2007

% of Suppliers 534 521 562 513

2-Nutrition & Well-being

OFFERING MENU CHOICE

Items, per market menu, that contain at least 1 serving of fruit or vegetables

Year 2004 2005 2006 2007

Average # NA NA 6.1 6.1

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3-Environmental Responsibility
RESTAURANT-LEVEL ELECTRICAL ENERGY USE3

Kilowatt hours used per transaction count (TC), resulting from electrical energy use in the
restaurant

Year 2004 2005 2006 2007

KwH/TC NA4 NA4 1.15 1.15

Matrices’
1. Growth in system wide sales: 8%

Putting the spotlight on McDonald's strong momentum, year-over-year system wide sales growth
accelerated to 8%, up from 7% growth.

Since McDonald's reported revenue has been materially impacted by its ongoing strategic
refranchising initiative, system wide sales growth is a good barometer of the company's business
growth; it's good to see the metric accelerating.

2. Growth in global comparable-restaurant sales: 5.5%

Unlike growth in system wide sales, McDonald's comparable-restaurant sales growth decelerated
to 5.5% year over year, down from a rate of 6% in Q3 and 6.6% in Q2.

But this isn't necessarily a red flag. This is still strong growth compared to growth in the year-
ago quarter of 2.7%, and compared to peers like Starbucks and Wendy's. The two restaurant
peers saw comparable-store sales growth of 2% and 3.4%, respectively, in their most recently
reported quarters.

Still, with comparable-sales growth declining for a second quarter in a row, investors should
keep an eye on this important metric in the coming quarters to see if the notable performance
here proves short-lived.

3. Growth in adjusted earnings per share: 19%

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On the surface, McDonald's earnings-per-share performance in its fourth quarter was atrocious.
At $0.87, EPS was down 40% year over year. But after adjusting for the implications of the Tax
Act, earnings per share actually climbed 19% year over year, or 16% in constant currencies.

4. Planned investments: $2.4 billion

Capitalizing on the strong trends it saw in 2017 as the company posted its best comparable-sales
performance in six years, McDonald's said in its fourth-quarter earnings release that it plans to
invest $2.4 billion in 2018,

Efforts to Enhance Shareholders’ Value

The company’s capital allocation flexibility has increased owing to change in its business model
and tax laws as well as Jobs Act of 2017. People looking for regular income from stocks are
most likely to choose companies with a track record of consistent and incremental dividend
payments.

In the second quarter, the company paid dividends of $786.1 million, reaching the total dividend
amount to $1,600 million as of Jun 30, 2018. Additionally, the company repurchased 10.4
million shares for $1,700 million, reaching total purchases for the first six months of 2018 to
20.8 million shares valued $3,300 million. Meanwhile, the company expects to return around
$24 billion to shareholders for the three-year period ending 2019.

We appreciate McDonald's’ efforts to consistently enhance shareholder returns despite the

sluggish economic condition of some of its major international markets. This reflects the
company’s business strength and sustainability of significant cash flows.

McDonald’s shares have gained 1.2% against the industry’s rise of 6.1% in a year’s time.
However, we believe that the recent hike in dividend will help the company attract investors
which in turn is expected to facilitate earnings growth.

Give Value To Employees

Since launching in 2009, we continue to activate the three basic elements of our EV. Our market-
level business units continue to:

 Align their People Plans with the EV framework.

 Ensure that their plans deliver on the three core elements that our crew and managers told
us were important: Family & Friends, Flexibility and Future.

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 Share best practices with other markets within the McDonald’s System on how they are
bringing the EVP to life in their markets.

 Know and understand how strong people practices support our EVP and have a positive
impact on business results.

 Use the People Practice Playbook and local operations and training manuals as resource
guides.

 Seek the engagement of employees when developing a commitment survey action plan
that builds on the strengths and addresses key areas of opportunities within their
restaurants.

Get customer feedback

 In the light of strengthening its engagement with customers, McDonald’s has launched a
new mobile app “My Voice”, which offers a platform for the tech-savvy to share their
feedback.

 customers can use “My Voice” to rate their dining experience at a designated
McDonald’s restaurant. Real-time feedback from customers will be delivered to
McDonald’s restaurant management team via emails swiftly, so restaurants can take
follow-up actions as appropriate.

 The app collects ratings and feedback on the customers’ dining experience in various
aspects such as dining environment, food quality, customer service and cleanliness.

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