Reference no: EM131951622
Shazia is manager of a McDonald's restaurant in acity with many "senior citizens". She has noticed thatsome senior citizens have become not just regular patrons-butpatrons who come for breakfast and stay on until about 3 PM.
Manyof these older customers were attracted initially by a monthlybreakfast special for people aged 55 and older. The meal costs Rs.99, and refills of coffee are free. Every fourth Monday, between100 and 150 seniors jam Shazia's McDonald's for thespecial offer. But now almost - as many of them are coming everyday - turning the fast food restaurant into a meeting place.
Theysit 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 theseniors, calling them by their first names and visiting with themeach day. In fact, Shazia's McDonald's is a happyplace, with her employees developing close relationships with theseniors. Some employees have even visited customers who have beenhospitalized.
"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 veryfriendly to anyone who comes in. Further, they are neater than mostcustomers, 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 concernedthat her restaurant might come to be known as an ‘‘oldpeople's" restaurant-which might discourage someyounger customers. And if customers felt the restaurant wascrowded, 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 customersare expected to eat and run. Will allowing people to stay and visitchange the whole concept?
In the extreme, Shazia'sMcDonald's might become more like a European-style restaurantwhere the customers are never rushed-and feel verycomfortable 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 oldercustomers leave McDonald's by 11:30 - before the noon crowdcomes in.
Shazia is also concerned about another possibility. Ifcatering 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 popularwith some seniors, and this could be a new revenuesource-beyond the extra food and drink purchases whichprobably would result.
She figures she could charge Rs. 300 perperson for the two-hour period and run itwith twounderutilized employees. The prizes would be coupons for purchasesat her store (to keep itlegal) and would amount toabout two thirds of the bingo receipts (at retail prices). Theparty room area of her McDonald's would be perfect for thisuse and could hold up to 150 persons.
Questions:
1. Evaluate Shazia's current strategyregarding senior citizens.
2. Does this strategy improve the McDonald'simage? Justify your answer.
3. What should she do about the seniorcitizen market - i.e. should she encourage,ignore, or discourage these seniors? Why?
4. What should she do about the bingo idea? Explain.