Making Business Decisions I

In an effort to better connect with younger consumers, McDonald's restaurants in southern California are enticing customers through their cell phones, offering mobile coupons for a free McFlurry. Under the month-long promotion, customerís text the message "McFlurry" to a five-digit short code promotional phone line. An electronic coupon for the free dessert is then downloaded to their cell phones; when consumers bring those cell phones to participating restaurants, they can redeem the coupon electronically.

Mobile coupons (m-coupons) that are stored and carried in a cell phone have higher redemption rates than paper or e-coupons because they are not forgotten, or left at home. M-coupons can drastically reduce delivery and redemption cost, trigger impulse buys, and offer the following benefits:

  • Send offers to customers in real-time that are location based†
  • Track results by customer, the exact time and purchase location
  • Offer rewards based on redemption and referrals. For example, customers who have opted-in to a mobile alert list can be sent a text coupon that expires that night.


Your customers are mobile, and you want the cafe to be mobile too. You have decided to create an innovative system for mobile coupons, allowing cafe customers to capitalize on instant redemption coupons. As customers walk past the cafe (or within a 25 foot radius of the cafe) a coupon for a dollar off a latte or a 15 percent discount on an order will be pushed to their mobile device. As you prepare to deploy this new mobile marketing campaign you want to understand all of the benefits and risks for the following:

  • Why are m-coupons better than traditional paper coupons?
  • What are the risks involved with mobile marketing and m-coupons?
  • What are the privacy issues involved with mobile marketing and m-coupons?
  • How can the cafe benefit from collecting and tracking response rates† of m-coupons by customers?
  • How can the cafe benefit from tracking if an m-coupon is forwarded to another cell phone?

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