Services Marketing and Relationship Marketing

This essay discusses different characteristics and aspects of a hospitality organization, McDonalds, and categorizes its operations in different departments, i.e. front stage and back stage departments. It also includes flow charts for both front and back office operations of McDonalds, the significance of service encounter, and managerial implications.

Running Head: SERVICE MARKETING 1
Services Marketing and Relationship
Marketing

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Introduction
In today’s competitive business environment, it is very tough for service organizations to impress
the customers and satisfy their needs and demands at the fullest. The organizations need to meet
the service encounter by effective management of its operations (Grönroos, 2007). Basically, a
service organization executes the functions by managing two departments, i.e. front stage and
back stage departments which help the organizations to provide services by understanding the
demands and needs of potential customers. The purpose of this essay is to make a discussion
about different characteristics and aspects of a hospitality organization. For this paper,
McDonalds is selected as service organization. McDonalds is an American fast food organization
that was established in the year 1940 as food restaurant and it is operated by Maurice and
Richard McDonalds in California, United States (McDonalds, 2018). This essay categorizes its
operations in different departments, i.e. front stage operations and back stage operations.
Considering their functions and operations, two flow charts are created for both front and back
desk operations. Furthermore, there is discussion about the importance of service encounter. At
the end, it includes managerial implications at flow charts’ different stages.
Flow Charts
Flow chart is a visual presentation that displays how a company begins with its functions and
operations to reach its objectives. Service companies develop flow charts by taking the guests’
demands into account. McDonalds is one of the largest fast food chains that offers a variety of
products such as Hamburger, French fries, milkshakes, soft drinks, wraps, breakfast items,
desserts and chicken products. It is largest food outlet in the world in terms of revenues that is
serving more than 69 million customers in over 100 nations across around 36,900 outlets as of
the year 2016. As per a report of 2012, this organization is second largest private employer all
over the world as it has 1.9 million employees, 1.5 million of whom are working for the
franchises (McDonalds, 2018). This essay consists of flow charts front and back office
operations of McDonalds. The organization will help the restaurant to achieve its business and
corporate goals.
For McDonalds, both of the charts are created below:

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Front Stage Flow Chart
A hospitality firm utilizes front desk flow chart to organize all the operations and services and
data on the basis of global level and to meet the needs and expectations of guests at its diverse
locations across the world. The primary aspects of front office responsibilities of a service firm
focus on the contact with the potential customers and gathering of firm’s data from them.
Furthermore, it can be said that front desk operations and roles focus on interaction procedure
with the back desk department of organization to give required information. It assists the
organization to practice its back stage operations and services smoother (Wu, Hsieh and Fang,
2015).
The front office operations of McDonalds include the actions of customers, onstage employee
contact and onstage technology actions. In this restaurant, the customer actions include choosing
the food product from a menu display on the counter and stand in the line for placing the order.
Then the customer pays the money, take the receipt of order and wait for the order to be
prepared. After that, customers receive their food, pick up the straws and napkins and select the
most suitable place to sit (McDonalds, 2018). After finishing their food, they dispose the dishes
in dustbin and leave the restaurant. In the operations of front stage, the major role of customer
service staff is to welcome and interact with the visitors and helps them via a delivery of
information about new offers and combo meals (Rodrigues, Nikhil and Jacob, 2016). They help
the customers in making the choice of food and billing process. The staff need to give the
transaction invoice and consists of the payments via vouchers and coupons. Moreover, onstage
staff is involved in serving the food to customers and in the process of safekeeping and cleaning.
These employees are also trained to take the feedback of customers so that they can meet their
demands and expectations. By looking its front stage flow chart, it can be stated that its back
stage and front stage functions generally occur simultaneously.
The front stage flow chart of McDonalds’ operations is drawn below:

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Is it busy?
If No If Yes
Front stage Flow chart
(Source: By Author)
Customer reaches
to restaurant
In
queue
Provision of data like
menu cards, prices
Place the order
Generation of bills
Payment of bills (cash or
cards)
Preparation of Order Customer receives
the order
Customer eats
food and leaves

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Back Stage Flow Chart
In any food serving organization, back desk flow chart covers different functions that include the
operations which are practiced by supporting staff. These are the activities which cannot be seen
by visitors or customers. Usually, the employees in this division do not have direct
communication with the visitors. They have a vital role in producing the profits and growth for
this restaurant. The back stage processes of a restaurant can make its front office functions more
efficient and effective. It is very important for a service organization to manage its back office
operations so it can enhance its front stage operations. At McDonalds, it covers various divisions
like sales, kitchen, finance, marketing, HR and housekeeping (Xu and Gursoy, 2015).
The backstage operations of McDonalds include maintenance of raw material that is used to
prepare the food at restaurant. It includes importing of fresh stock and routine purchase of
vegetables like lettuce and tomato. Moreover, its operations include supervision of the storage
(frosting /frozen) conditions, refrigeration of soft drinks and perishable goods, updating online
information and menu cards, safekeeping and cleaning of kitchen and dining space (McDonalds,
2018). Under the back stage operations of McDonalds, the primary members are preparation
staff, cleaning crew and chefs. The efficiency and management of back office functions can be
assessed by observing its visitors serving employees. These activities begin by back stage staff
play a vital role in maintaining good standards of services (Rhou, Singal and Koh, 2016). The
below-drawn flow chart includes the entire functions and activities of back stage division of
McDonalds:

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Back Stage Flow Chart
(Source: By Author)
Both front and back office staff of McDonalds are properly trained so that they can provide
excellent hospitality services and prepares the food quickly. The product managers engaged in
the back office operations create and maintain the website with attractive colors and images. The
restaurant chain also implements exclusive pricing strategy like happy meal to increase its sales
volume. Some of its employees are involved in lighting and décor to enhance the footfalls
(Saarijärvi, Grönroos and Kuusela, 2014).
Significance of Service Encounter
For any service organization like McDonalds, the communication between customers and front
line staff is very important because they purpose to generate higher quality service encounters.
Service encounter plays a significant role in offering satisfaction to the customers. The above
flow charts of organization indicate that there are various points of interaction. The customer
support staff of this restaurant needs to make sure that they give excusive customer experience to
every point of service. The customer satisfaction can be enhanced only when the encountered
service will be effective. There are many methods which this restaurant can utilize to enhance its
Kitchen management (Food
storage and preparation )
Management of Inventory
New product system and pricing
Restaurant management and
safekeeping

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service encounter (Haksever and Render, 2018). It is significant that McDonalds should use a
standardization approach to provide a standard experience to the people. From the perspective of
customers, it is very important that they should receive same experience across all the restaurants
of McDonalds. It can occur when this fast food chain makes investment in training programs for
its staff (Zeithaml, 2013). It is very important for the wait staff, managers and other workers to
understand the standardization which could be a stage for efficient services to customers. It
would not be a hyperbole to state that satisfaction levels of customers is very much dependent on
the communication between customers and employees. So, it is recommended that the
management team of this food chain should take its staff as its primary line of customers. It will
assist the organization to enhance the service encounter of people with restaurant’s staff. The
service encounter of staff with the visitors will also allow its team to know about their pain
points. It is believed that customer response also allow the restaurant to enhance its service
encounters. This customer feedback will enable McDonalds to enhance the quality of its services
(Helgesen, 2018).
Thus, it can be stated that it is significant that service encounter should be in line with
organizational structure of the restaurant. The most important feature of a company is its
organizational structure so McDonalds needs to focus on its back stage and front stage
employees. McDonalds Restaurant utilizes different types of remote, direct and indirect service
encounters for effective service delivery. By evaluating staff and operations of chosen restaurant,
it can be said that remote service encounter is better for the food lovers (New, 2015). In this, it
can adopt modern technologies and internet to offer fully satisfaction to the visitors. Service
analysis of McDonalds indicates that it provides service encounter which is more effective in
comparison to its competitors like Subway, KFC etc. Looking at the significance of service
encounter, McDonalds is using different practices like marketing research and market
intelligence to understand the needs of customers and take their feedback about the service
offered. In the process of service encounter, the company and its human resources match their
actions to attain goals by managing their behavior (Thakkar and Thatte, 2014).
Managerial Implications
Understanding the importance of service encounter has significant implications for managers. It
is vital that McDonalds’ managers should know about the significance of service encounter and

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its effect on customer satisfaction and loyalty. The most important feature of McDonalds is
innovation and creativity. The value and effectiveness of its functions can be monitored by
evaluating the service encounter between employees and customers. In this process,
communication plays crucial role as it helps in assessing the needs of foodies for increasing
effectiveness of quality. By using the services of McDonalds, it can be said that service
encounter can have a significant impact on its brand image and efficiency. At McDonalds, one of
the most significant implications is in context of understanding the aspect of service marketing.
The understanding and experience of handling the customers during service encounter will allow
McDonalds’ managers to know about customer relationship marketing (Grönroos, 2017).
Additionally, it is essential that restaurant’s managers should have 360 degree of concepts of
service management. Managers should consider its customers as its working partners which will
allow the restaurant to enhance the business performance.
Thus, the above analysis shows that managers of McDonalds should believe that the managers
need to work on front stage operations and back office operations (Pollitt, Birchall and Putman,
2016). The front stage operations are related to the communication with customers and back
stage operations are linked with the internal stakeholders and employees of McDonalds. The
managers should emphasize on the optimization of activities which are part of back end and front
end system. At this restaurant, the managers can adopt the benchmarking technique to
benchmark the operations over the service operations of other competitors in restaurant industry.
The knowledge of service encounter and customer service will assist McDonalds’ management
team to understand the augmented and core customer values. This restaurant runs its operations
in service environment. It is vital that augmented service is more important than actual product
(Gronroos and Voima, 2013). There is a room for improvement for these service-based
organizations so that they can enhance their operations and services. This restaurant can learn so
many things from the experiences of service encounter for its staff with the visitors. As per this
service analysis, it can be noted that its management approach will assist it to attain different
objectives and service delivery in an effective manner.
Conclusion
In the limelight of above analysis, it can be stated that McDonalds is a service organization that
has managed its staff in two different categories i.e. back office and front office. The operations

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of the restaurant are also categorized as per their roles and importance. In the above report, the
flow chart for both front office and back office operations of McDonalds. McDonalds is one of
the largest fast food chains that have its operations in various countries. The reason behind this
growth and success is the effective management of its human resources and operations. For a
service organization, it is necessary to divide different responsibilities and tasks in categories.
Moreover, this is evaluated that service encounter plays a significant role in its development. It
can have different implications for the managers which can enhance its service delivery.

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