In-N-Out Burger - Coursework Example

In-N-Out Burger al Affiliation In-N-Out Burger In-N-Out provides products that match the perception s in terms of value that they expect to receive from the amount that they pay for the products. According to Kotler & Armstrong (2014), customer-perceived value is defined as “the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers” (p. 675). As such, the products offered were identified to be in their simplest traditional menu: burgers, fries, and milkshakes – but made from the freshest ingredients, exuding high quality standards. For instance, their burgers were noted to be 100% pure beef without any preservatives, additives, or even fillers (Kotler & Armstrong, 2014). Likewise, case facts also revealed that In-N-Out makes sure that the patties being used for their burgers were never frozen. This was noted to be made possible since they reportedly own patty-making commisaries. In addition, all ingredients are natural: potatoes for their french fries, and real ice cream for the milkshakes. As a result, the customers who patronize In-N-Out stores are not only satisfied, but delighted to eat these products. In fact, many of the customers were revealed to queue for long hours just to avail of their products, especially when a new outlet was reported to be launched in an identified state. Aside from the products which evidently exhibit high quality in value perception to the customers, the manner by which their personnel provide customer service has been pegged as exemplary. As noted, the employees of In-N-Out are well trained “to deliver unexpectedly friendly service” (Kotler & Armstrong, 2014, p. 33). The acquisition, maintenance and development functions performed by In-N-Out management enable the employees to be satisfied and motivated to perform, as expected. It was revealed that the compensation for new part-time staff was $10 per hour and was accorded opportunities for regular pay increases (Kotler & Armstrong, 2014). Aside from paid vacations for part time employees and managers, the latter were stipulated to receive more that $100,000 per annum, in conjunction to bonuses and were promoted through the ranks. It was therefore noteworthy to mention that In-N-Out acknowledges that “happy, motivated employees help create loyal, satisfied customers” (Kotler & Armstrong, 2014, p. 34). Finally, the slow growth expansion strategy of In-N-Out through establishing stores in strategic locations only when there are “trained management and company owned distribution centers are in place” (Kotler & Armstrong, 2014, p. 34). The impact of this strategy is that customers apparently perceive the scarcity as more appealing and alluring, adding more to the value offered to customers. 2. In-N-Out’s performance could be evaluated relative to customer expectations through the ability of the organization to deliver more than what the customers perceive. Likewise, using the five step model of the marketing process, In-N-Out have apparently undertaken extensive and comprehensive market research to understand their marketplace, as well as the needs and demands of the clientele (step 1). They have acknowledged that although they shared similar roots with McDonalds, their thrust and orientation is to provide high quality products and not high volume menu. Thus, after discerning that there are customers who still appreciate eating burgers and fries that are made from the freshest ingredients, the focused strategy made them realize that there is a niche that In-N-Out could specialize and be a leader in. In addition, a customer driven marketing strategy was deduced to be effectively designed by the management of In-N-Out through understanding that by satisfying the needs and wants of their clientele, they would be able to deliver superior customer value (steps 2 and 3). From an evaluation of the strategy of In-N-Out, it could be interpreted that the organization has effectively designed in integrated marketing program through the supply chain (from sourcing the freshest ingredients, to cooking and producing delicious products, up to serving them through friendly and accommodating employees. It was even mentioned that due to the affirmation that the organization needs to exhibit commitment to addressing the needs of their clientele, it was revealed that “In-N-Out employees will be glad to make any of the menu items in a truly customized fashion” (Kotler & Armstrong, 2014, p. 33). Thus, tailoring the products to the needs and demands of their clientele exhibit commitment to build long lasting customer relationships and the ability to create customer delight (step 4). The outcome of all the process is the capturing of “value from customers to create profits and customer equity” (Kotler & Armstrong, 2014, p. 27). From the financial success, it could be evaluated that despite the smaller number of stores at 276, earning $550 million per year is equivalent to an average of almost $2.0 million per store. This is not far from what McDonald’s earn: with $85 billion per year from 33,500 stores, the average revenues per store is $2.5 million. This outcome indicates the greater customer satisfaction that each In-N-Out store provides. 3. One strongly believes that In-N-Out should not adopt a high-growth strategy, like those applied by McDonalds and other fast food stores. Through their experience and expertise, the slow-growth expansion strategy had already been proven to be effective and successful. Likewise, the slow-growth expansion strategy enabled In-N-Out to survive with only limited advertising and predominantly through word of mouth. It was commendable to note that most of their loyal customers appreciated that fact that, despite their limited stores in strategic locations, customers exert efforts of going out of their way to visit and patronize one of the In-N-Out stores which they do not frequently see. The testimonies of celebrities who were noted to look forward to purchasing and relishing their food products attest to the appeal and allure that In-N-Out continues to create. Employing a high-growth strategy would require more resources which could deplete their financial profits and would make them compete directly with large fast food chains like McDonalds and Wendy’s, among others. For one, it was specifically noted that creation of burger patties required the establishment of patty-making commissaries, which could not possibly be financially viable in a high-growth strategy. In addition, the level and intensity of management training, hiring the right kind of people with needed characteristics, personalities, and traits, as well as providing them with similar benefits (high compensation with bonuses and paid vacations) would not at all be feasible and economical, in the long run. In addition, their core competency is to serve a limited clientele only in selected and strategic locations. As such, veering away from the original slow-growth expansion strategy would not work well for In-N-Out. Reference Kotler, P., & Armstrong, G. (2014). Principles of Marketing. Pearson Education Limited. Read More