Reference no: EM131435767

Shazia is manager of a McDonald’s restaurant in acity with many “senior citizens”. She has noticed that some senior citizens have become not just regular patrons—but patrons who come for breakfast and stay on until about 3 PM. Manyof these older customers were attracted initially by a monthly break fast special for people aged 55 and older. The meal costs Rs.99, and refills of coffee are free. Every fourth Monday, between 100 and 150 seniors jam Shazia’s McDonald’s for the special offer. But now almost - as many of them are coming everyday - turning the fast food restaurant into a meeting place. They sit for hours with a cup of coffee, chatting with friends. On mostdays, as many as 100 will stay from one to four hours Shazia’s employees have been very friendly to the seniors, calling them by their first names and visiting with themeach day. In fact, Shazia’s McDonald’s is a happy place, with her employees developing close relation ships with the seniors. Some employees have even visited customers who have been hospitalized. “You know,” Shazia says, “I reallyget attached to the customers. They’re like my family. Ireally care about these people.” They are all “friends’’ and being friendly with the customersis a part of McDonald’s corporate philosophy. These older customers are an orderly group and very friendly to anyone who comes in. Further, they are neater than most customers, and carefully clean up their tables before they leave. Nevertheless, Shazia is beginning to wonder if anything should bedone about her growing “non-fast-food” clientele. Thereis no crowding problem yet, during the time when the seniors liketo come. But if the size of the senior citizen group continues togrow, crowding could become a problem. Further, Shazia is concerned that her restaurant might come to be known as an ‘‘old people’s” restaurant—which might discourage some younger customers. And if customers felt the restaurant was crowded, some might feel that they would not get fast service. Onthe other hand, a place that seems busy might be seen as “agood place to go” and a “friendlyplace.” Shazia also worries about the image she is projecting. McDonald’s is a fast-food restaurant, and normally customers are expected to eat and run. Will allowing people to stay and visit change the whole concept? In the extreme, Shazia’sMcDonald’s might become more like a European-style restaurant where the customers are never rushed—and feel very comfortable about lingering over coffee for an hour or two! Shaziaknows that the amount her senior customers spend is similar to theaverage customer’s purchase but the seniors do use thefacilities for a much longer time. However, most of the older customers leave McDonald’s by 11:30 - before the noon crowd comes in. Shazia is also concerned about another possibility. If catering to seniors is OK, then should she do even more with thisage group? In particular, she is considering offering bingo gatesduring the slow morning hours—9 AM to 11 AM. Bingo is popular with some seniors, and this could be a new revenue source—beyond the extra food and drink purchases which probably would result. She figures she could charge Rs. 300 perperson for the two-hour period and run itwith two underutilized employees. The prizes would be coupons for purchases at her store (to keep itlegal) and would amount toabout two thirds of the bingo receipts (at retail prices). The party room area of her McDonald’s would be perfect for thisuse and could hold up to 150 persons. Questions:

1. Evaluate Shazia’s current strategy regarding senior citizens.

2. Does this strategy improve the McDonald’s image? Justify your answer.

3. What should she do about the senior citizen market - i.e. should she encourage,ignore, or discourage these seniors? Why?

4. What should she do about the bingo idea? Explain.