Evaluation and Control Methods at McDonalds

Evaluation and Control of Marketing Plans

I. Abstract

Every commercial organization looks to the bottom line to measure their degree of success over a given fiscal period, and as a barometer of performance as well as profitability. And regardless of the product(s), goods or services that company is engaged in the success of the organization depends on effective methods to generate sales, which is marketing and the evaluation and control of all factors within the enterprise. In addition, to the degree in which it can, the company also needs to evaluate and control factors or influence those aspects that are outside of the enterprise. The degree to which a company employs the correct methods within these spheres will determine to a great extent the degree(s) of success it will have in the marketplace.

Achieving success in the consumer arena, as well as staying and thriving there, is a function of an organization’s ability to implement what it has learned through market research and then implement those plans while evaluating and controlling their progress through the monitoring and measurement of results against forecasts. The preceding is important, because without goals and objectives the process itself is moot. And to attain the foregoing management must be able to pin point as well as understand the relative progress being made at every step in the selling and administrative (support) process to increase the quality, value and reputation of its offering, be it a product – goods or services as well as adjust, modify, control, and factors that act upon or are inherent in this synergy.

The preceding success is defined by the proper application of evaluative and control theories, of which there are a number of excellent examples. Toys ‘R’ Us, Nabisco, Honda, British Airways and countless other industry leaders have all managed to find the proper mix of evaluation and control methodologies in their industry sectors. And while there is no definitive system or methodology that is universal there are principles that form the foundation for the development of those methods that work within the confines of a particular industry classification and thus, marketplace. Given the subtle nature of the components comprising these processes, evaluation and control, it was determined that the selection of the McDonalds Corporation would provide an illustrative example whereby the synergies are readily apparent. The promotion and selling of hamburgers has vaulted this company into a global icon that was fostered by creating a marketing concept that the company utilizes throughout its organizational matrix. McDonalds is a stellar example of a marketing driven company that has forged new ground in its industry classification as a result of successful evaluative and control techniques.

II. Introduction

In business, the scorecard is revenue. It measures the success of management in developing and organizing the enterprise into a coherent operation that effectively and efficiently produces and sells its products. McDonalds is one of the world’s most successful marketing driven companies regardless of whether you personally partake of its menu offerings, the company has managed to build an extremely successful brand franchise with young adults, as well as segments of the population above thirty. The company recognized that adults have a wide breathe of selections from which to choose, and are subject to the influences of associates, co-workers and circumstances in making such. Whereas children do not have this luxury, they are a product of the small environment they operate in, which is by and large home, school and their play interludes with friends. And one of the most influential components within that environment is television.

McDonald’s built and maintains its franchise by consistently cultivating and dominating afternoon as well as Saturday cartoon and children’s shows to create a built in recognition and sales base in the young generation. This influence thus extends to their parents, who become marketing targets as well, and continues as McDonalds follows as well as leads them through elementary and high school, into college and the working world. The image built through these advertising messages is reinforced in locations, the huge McDonalds tractor-trailers with giant hamburgers on the side and the delivery of the product in outlets. Even the use of the color red has been selected to achieve consumer recognition (Goodell, 2003) as it relies upon its location in the color spectrum to draw our eyes to it. Red, along with yellow tends to raise one’s blood pressure ever so slightly as well as very moderately dilate the pupils. These attention and recall factors have been incorporated into the recognizable McDonalds signage, locations and interiors.

The preceding examples are long term components of the company’s marketing strategy that have helped to drive sales making it the world’s largest fast food operator.

III. An Appraisal of Evaluation and Control Methods

Kotler’s (2003) book Marketing Management essentially states that the understanding of what to do and adjusting the processes while in motion, are the key principles of forging a marketing plan into revenue success. Least we forget, no matter how expertly crafted a marketing plan may be, results are not guaranteed. The foregoing is because market conditions change on a consistent basis, as must varied components of the marketing plan to adjust to market realities. This does not say that the core or foundation of the plan needs adjustment, just its branches and tentacles (Britannica, 2005).

Cook, et al (1993) indicated that overlooking the importance of theory in program evaluation is a mistake. Senge (1994) elaborates on the foregoing in explaining that theory is a set of assumptions that are utilized in building a practical model on varied topics or business areas. Scriven (1991) states evaluation is the process of determining the merit, worth and value of things and goes on to add, evaluations are the products of that process Control theories are outgrowth of the requirement for businesses to gather information into meaningful statistical data for evaluation. Control also entails administrative, supervisory, production and logistics management (Schoensleben, 2000), and represents the data, processes and systems that evaluation theories as well as processes look at. Together, these two areas form the analytical process which is the key to all intellectual endeavors and the most powerful as well as versatile of tool disciplines such as design, statistics and logic.

Brassington et al (2002) discusses the importance of controls and the establishment of them to effectively monitor and manage information as well as oversee results by gathering data for management review and evaluation. Without controls evaluation would be reduced to a study of planning measures to develop a means by which to gauge the effectiveness of varied business functions such as manufacturing, sales, marketing campaigns, etc. These are subject areas broached by Mills (1988) in describing the importance of verifying information gathered for analysis to ensure the proper foundational data is utilized in the process. The evaluation process is not just about raw numbers and data, Scriven (1980) states that Evaluation is what it is and adds that it is the determination of merit or worth, and what it is used for is another matter. Weiss (1972) sees the process in a broader context that encompasses policies, processes, people and any aspect that forms a functioning part of operations. The core of the preceding references establishes that purpose of evaluations is to measure the results against the goals set at the onset, and to utilize this data in decision processes concerning modification and or improvement, if required.

IV. The Importance of Evaluation and Control Methods at McDonalds

Founded by Dick and Mac McDonald in 1948 as a restaurant. The McDonalds we know today did not begin its fast food origins until the brothers introduced their ‘Speedee Service System’ that Ray Kroc utilized to establish the franchise system. This system, represents the ‘control’ mechanism that McDonald’s utilizes to control quality, sales and all aspects of operations that are tied into headquarter operations through regional branches that review and correlate the daily data. While the implications of the preceding are obvious in today’s terms, such was not the case when the company established its first franchised outlet in 1953 (McDonalds Corporation, 2005). It is this franchise system that provides McDonalds with the perfect control mechanism for its 20,000 global locations and the information tools via which the company can evaluate each operation (McDonalds Corporation, 2005).

The McDonalds franchise system works so well because they say that headquarters actually listens to them. This two-way communication path is a critical tool in retaining management control as well as a means to evaluate performance. The relationship between the individual McDonalds outlets and the corporation are so good that the idea for the ‘Big Mac’, ‘Egg McMuffin’ and ‘Ronald McDonald’ did not come from the headquarters operation, or even the company’s advertising agency, but from a franchised store owner (McDonalds Corporation, 2005). As a result of management listening so closely to its franchisees the company’s same store sales actually continue to increase with the opening of more McDonalds, belying the problem of potential saturation and the resultant reduction of revenues.

The company has managed to develop such an excellent system of control because each of its outlets are owned by individuals with ties to their community and they are granted the freedom to run their business on a day to day basis within the broad context of McDonald’s quality guidelines (McDonalds Corporation, 2005). The company’s support and availability to its franchisees represents one of its most successful controls in that the assistance is welcomed, rather than being seen as supervision or meddling. The data collected through web based computer systems aids the company in understanding individual territories as well as individual store performance and assists in the planning of marketing and promotional campaigns as well as understanding competitive tactics and developments as part of the excellent two-way feed-back process that exists between the franchise owners and the company.

V. Assessment of the Methods of Evaluation and Control at McDonalds

The open two-way communication system that exists on the franchisor to franchisee basis within the McDonalds corporate culture and organizational matrix represents the interpersonal side of the relationship that fosters the flow of ideas as well as suggestions and innovations. On the data side, the restaurants are all equipped with a two-way data link system that permits them to send updates on the daily tally of sales. This information provides McDonalds with information on the consumption percentage of products as well as the success rate of promotions and advertising/marketing programs. The sophistication of this information provides the company with data on adjustments, modifications and other changes that might need to be made to either increase the effectiveness of these programs, as well as the planning, timing and spacing of future programs, advertising and campaigns. The preceding represents the heart of the McDonalds franchise driven success in that the effectiveness of its marketing program has created an atmosphere where the company is ingrained as an iconic part of lifestyles. An audience the company keeps close tabs on through its daily product sales updates.

One of the methods that the company employs to evaluate quality throughout its franchise chain is the utilization of ‘mystery shoppers’ to provide feed-back (Leung, 2001). This program was implemented to keep franchise owners on their toes concerning quality control and policy with respect to customer greetings, the offering of special promotions and order fulfillment along with a host of other things. This particular program has seen the quality scores come in at 81.9%, which is just marginally better than Burger King at 80.1%, Wendy’s at 80.7% and the 77% recorded for Taco Bell. The McDonald’s score was only slightly higher than the 80% that is the mean average for all restaurant establishments nationwide (Leung, 2001). And while the company has not seen any dramatic increase from this particular program, the cumulative effect of all of the in-place as well as yet to be implemented measures represents a commitment to evaluative and control methodologies. Even in the face of mixed results in this instance, the continued emphasis within this area is beneficial as a policy.

VI. Recommendations

The evaluation and control theories and practices of McDonalds as part of their franchisee relationship, represents a company wide commitment to a two-way communication methodology for that doubles as a feed-back as well as data collection system. As is usually the case with any program(s) there will be periods and or instances that suffer from quality or information slippage as well as a net performance that is less than optimal however, the commitment to such a policy has helped to make the company the leader within its field.

The commitment of McDonalds to its open communication system and data collection methods provides the company with the means to monitor, evaluate and review marketing, administrative, policy and other areas which are all dependent upon public opinion. The seamless nature of the company’s marketing, data and communication systems is a plus in providing management with information to make adjustments in control mechanisms through the evaluation of various programs and data sets. The culture as well as methodology is in place, and even though there will be instances whereby the individual applications might not yield the anticipated results the commitment to such close ties and pulse beat on its customers represents a company that understands the nature of the business it is engaged in – customer satisfaction on all levels of contact. It is possible that the addition of short surveys and interviews might provide further benefits, but all in all McDonalds is actively engaged in maintaining a close relationship with its outlets and customers through active control and assessment methodologies.

VII. Bibliography

• Brassington, Frances, Pettitt, Stephen. 2002. Principles of Marketing. Pp 623 – 675. Prentice Hall. ISBN: 0273657917
• Britannica Online. 2005. The Marketing Process: Marketing Evaluation and Control. http://www.britannica.com/eb/article-27222?tocId=27222
• Cook, T.D., Shadish, W.R., Leviton, L.C. 1993. Foundations of Program Evaluation. P. 20. Sage Publications. ISBN: 0803953011
• Goodell, JJ. 2003. Some Thoughts on Color. http://www.goodellgroup.com/color.html
• Kolter, Philip. 2003. Marketing Management. Pp 256-345. Prentice Hall. ISBN: 0130336297
• Leung, Shirley. 2001. McDonald’s Asks Mystery Shoppers What Ails Sales. 17/12/2001. P. B1,3. The Wall Street Journal
• McDonalds. 2005. The McDonald’s History. http://www.mcdonalds.com/corp/about/mcd_history_pg1.html
• Mills, Charles. 1988. The Quality Audit: A Management Evaluation Tool. McGraw-Hill. ISBN: 007042484
• Schoensleben, Paul. 2000. Integral Logistics Management: Planning & Control of Comprehensive Business Processes. Pp 162 – 221. Saint Lucie Press. ISBN: 1574442724
• Scriven, M. 1991. Evaluation Thesaurus. P 1 Sage Publications. ISBN: 0803943644
• Scriven, M. 1980. The Logic of Evaluation. P. 7. Edgepress
• Senge, Peter. 1994. The Fifth Discipline. Currency Publications. ISBN: 0385260954
• Weiss, Carol. 1972. Evaluation Research: Methods for Assessing Program Effectiveness. Prentice Hall. ISBN: 0132921936