4.7customer management
ASSSESSMENT(Coursework 1)
Customer Management -MARK3014_2122_520
Analysis of KFC’s customer acquisition, retention and development strategies
Student ID: P2818668
Course: Customer Management Seminar(MARK3114)
Instructor: Dr.Mark Ojeme
Submission date: January 11, 2024
Words: 1594 words
Contents 1.0 Organisational Summary 3 Organisational Summary (max one page) 3 2.0 Customer Acquistion 5 2.1 Marketing 5 2.2 Product Innovation 6 3.0 Customer Retention 6 3.1 Customer-perceived value 6 3.2 Positive Customer Retention 6 4.0 Customer Development 7 4.1 Cross-selling 7 4.2 Up-Selling 8 5.0 Comparative Analysis 8 6.0 Customer Value Creation 10 6.1 IDIC Model 10 7.0 Conclusion 12 8.0 References 13
1.0 Organisational Summary
Organisational Summary (max one page)
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The chosen company
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KFC |
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· turnover · number of employees · products/services · market share
(remember to provide a date for these data)
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1.turnover : KFC's revenue in the first half of 2023 was 4.182 billion US dollars. 2.number of employees: In 2022 KFC is over 300000 employees. 3.products/services: KFC's positioning is to provide high-quality food and beverages. KFC mainly sells Western fast food products such as fried chicken, hamburgers, French fries, soda, coffee, etc. Among them, fried chicken is KFC's signature food. 4.market share: Global market share exceeds 10%. 5.Revenue (2022) : $6.787 billion(KFC company,2022) |
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What competitors exist in this marketplace, and their market share? (remember to provide a date for these data)
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McDonald McDonald's holds 12% market share in 2022.(McDonald company,2022)
KFC KFC's holds 6.7% market share in 2022.(KFC company,2022) BURGER KING BURGER KING holds 1.2% market share in 2022.(BURGER KING ,2022) |
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Digital marketing landscape
What social media platforms does your company engage with its customers, and the level of engagement (in the form of likes, tweets, comments and so on)?
(remember to provide a date for these data)
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1. Official website: Learn about brand history, culture, new product recommendations, and other information. 2. Social media platforms (Weibo, etc.): Feedback consumer opinions and suggestions through messages, comments, likes, and other means. Meanwhile, McDonald's also regularly releases promotional information to attract more users to participate. 3. Mobile app: Use the mobile app to order meals, which can save time waiting in line. In addition, you can also learn some promotional information and store updates through the app. 4. Customer service hotline: If you need to consult or report any issues, you can directly call the customer service hotline for communication. 5. Online community forum: Communication and exchange with customers on food related Tieba and takeout platforms. 6. Promotion and promotion of cooperative projects with third-party organizations: This method is mainly carried out in specific partner activities, such as advertising placement, public relations activities, etc. 9. Market survey questionnaires sent via email: This is also an important means of communication that can help businesses collect genuine thoughts and suggestions from customers about products and services. Overall, McDonald's will choose appropriate communication channels based on different needs to stay in touch with customers and improve service quality. 11/29(KFC company,2022)
Social platform: Data taken on 30.11.2023 Instagram UK: 18.1M followers Average around 1-6K likes on their posts, Their campaign has 150k-650k views. Facebook UK: 59.2M followers Average around 100-350 likes on regular posts .
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What value(s) does your company offer to its customers? |
McDonald's provides people with delicious food and ensures quality. Convenient, convenient location and time, affordable prices, providing customers with the speed, service experience, diversity, and personalization they need. |
2.0 Customer Acquistion
2.1 Marketing
Chavez (2022)said: "We have great food and great customers. We will show them more in future advertising." It is not difficult to see that KFC leadership attaches great importance to the impact of digital media. KFC will use coupons, gift cards, discounts or some co-branded activities. Coupons or group buying activities are often released through mobile advertising, media websites and other channels, and used in KFC stores to attract consumers, thereby converting potential users and encouraging new customers to come and spend, forming the activation of newly acquired users. KFC uses compelling content on Instagram to attract customers,
To enhance customers' impression of it or attract customers to want to taste it, thereby increasing customer loyalty. The effect is to convert local purchasing customers into high purchasing customers.
The above marketing methods will also be used according to different customers. KFC will use market segmentation to identify and target specific consumer groups. For example, some people who have not purchased KFC products for a long time will not remember or want to eat them so much. If they put them Advertising will re-attract potential customers because KFC's main customers are children, teenagers and young adults, families and people with lower budgets. Teenagers like to eat out with friends, and they are proficient in using social networking sites, so they will see some advertisements and short videos placed by KFC.
Figure 1:KFC's page in Instagram. (2023)https:www.instagram.com
2.2 Product Innovation
Another marketing strategy of KFC is to continuously improve its product menu to meet the tastes of different consumers. "The one thing that's been missing so far is bringing the pure, unadulterated joy of eating Kentucky Fried Chicken to life," Newman(2019) said. Continuously changing KFC's products based on social needs to meet customer expectations and increase customer loyalty.
3.0 Customer Retention
3.1 Customer-perceived value
KFC's key relationship marketing structures are a marketing strategy based on the customer's actual relationship life cycle and a marketing strategy based on the customer relationship model. KFC's marketing structure includes trust, customer satisfaction, customer loyalty, etc.
Customer perceived value is based on the product's appearance, service, usability, emotion, pricing and reputation. KFC has launched a Colonel’s Club members-only event, where you can enjoy exclusive deals and some free products with a $5 purchase. This strategy greatly increases customer loyalty, because he needs to accumulate points to obtain more rewards, which encourages customers to increase their consumption and will be more inclined to choose their own store when there are multiple choices.
3.2 Positive Customer Retention
Customer retention has a direct impact on profitability. Keiningham (Keiningham, 2007) concluded that customers' repurchase intention and repurchase behavior are directly affected by customer satisfaction. Customer satisfaction is a direct driver of customer retention. KFC will make improvements based on the tastes and eating habits of people in different countries, will not set prices very high, and will provide food safety guarantees using whole muscle chicken. KFC's approach makes customers feel at ease and willing to repurchase, which improves customer retention.
4.0 Customer Development
Figure2:Victor Antonio,Selling Power's Top Sales Speaker 2023 | Author, "Sales Ex Machina: How Al is Changing the World of Selling",Release date November 2018 。https://www.linkedin.com/pulse/future-cross-selling-upselling-victor-antonio
4.1 Cross-selling
The tangible marketing strategy in the initial stage of the relationship life cycle of KFC is to cultivate the interest of potential customers, they use traditional product marketing strategies, such as using multiple channels such as television, print media, in-store promotions, social media, etc., and KFC understands Importance of Digital Marketing.
KFC uses cross-selling to drive per capita consumption. KFC will place its own new product advertisements or product introductions on social software and in-store.For example, KFC knows that the set meal is about to end, and additional combinations will appear when ordering, one or more products at less price. Why can customers re-order the same set meal with such subsequent recommendations? Sales will increase.
4.2 Up-Selling
KFC is using up-selling implementation. When customers choose products, they will provide food with higher price and quality, or advertise a lot of new products in the store, so that customers will have a desire to try and buy, thus allowing customers to perceive an increase in benefits. Volume is greater than the increase in price.
5.0 Comparative Analysis
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Customer Acquisition, Retention and Development Strategies of McDonald's |
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Customer Acquisition |
The strategies McDonald's uses to acquire customers include targeted advertising products, innovation and strategic partnerships. According to data given by research company Statista, $490 million was invested in advertising in 2020. McDonald's has created a brand image for itself as reliable and trustworthy to its customers. McDonald's focuses on diversified choices. They have launched an all-day breakfast plan to provide breakfast service all day long. McDonald's will conduct extensive market research to understand consumer needs and competitors' strategies before improving its own brand. At the same time, these strategies also result in more capital expenditures. |
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Customer Retention |
McDonald's attaches great importance to cultivating customer loyalty. McDonald's has also developed a loyalty program and developed an application in which exclusive offers and discount coupons are often placed and are very convenient to use. McDonald's provides a variety of products to meet the needs of a variety of people. In addition, McDonald's continues to improve its employees in order to build customer loyalty. According to a survey by ACSI in the United States, McDonald's received 70% satisfaction in 2021, which proves that McDonald's strategy is very effective. |
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Customer Development |
McDonald's adopts a multinational strategy, allowing other overseas companies to conduct research, development, production and sales. |
Through the customer acquisition and development strategies of McDonald's and KFC, it can be concluded that McDonald's has enough advertising and word-of-mouth, but it also spends a huge amount of money on packaging and branding, and because of McDonald's diversification strategy, product updates and iterations are fast. It is not sophisticated enough, and some products do not meet popular tastes, and customers have difficulty remembering the names of the products, or it is easy for them to not choose the flavor that suits them, leading to disappointment in the brand. On the other hand, McDonald's adopts a multi-country strategy, which will increase cost pressure and sometimes cannot transfer its products and services to these companies. KFC pays more attention to local tastes through in-depth research and development and investigation, which will make customers prefer its own brand products without consuming too much money.
6.0 Customer Value Creation
Figure 3:IDIC Model
6.1 IDIC Model
The IDIC model was proposed by Don Peppers and Marta Rogers in 2004. It is suitable for discovering customer needs and values and is used as an important factor in communicating with each customer.
Figure 4: IDIC model application of two attributes, spedfic to KFC.
6.1.1 Identify
Identification helps companies understand their customers and master their basic information. Most KFCs will identify customers based on consumption record order information and local staff statistics, or issue some questionnaires to obtain basic information. The users identified by KFC are parents of children, young people, working people and fast-paced young people. KFC uses demographic segmentation to cater to all customers. KFC will mainly identify local consumption levels, customer age groups and population size to make changes. Customer identification allows KFC to have a more comprehensive grasp of customer information. This theoretical framework of customer identification is very suitable for KFC's strategy of changing according to different regions.
6.1.2 Differentiate
Customer differentiation is to differentiate customers based on value and needs. After identifying customers, customers are distinguished. For example, KFC members provide membership cards. Consumers with membership cards will receive more preferential policies and need to accumulate points to redeem cash or food, which makes customers more loyal to the brand.
6.1.3 Interact
Interaction is communication, dialogue, and information exchange with customers to understand their needs. There are forums on KFC’s official website and social software, allowing customers to freely comment and make suggestions. At the same time, there is also a very good after-sales service company that will reply to some hot comments, so that customers who ask questions can feel satisfied and respond promptly. Make adjustments to further promote the communication and interaction between customers and the company. This theoretical framework is very important to KFC, because KFC itself is a brand image that needs to be adjusted based on the tastes and needs of local people, so that improvements can be made in a timely manner. sales, and increase customer satisfaction.
6.1.4 Customise
Customization means that a brand will provide personalized services and products based on established customer relationships. KFC uses a customized method when purchasing a set meal. You can buy a set meal and choose the matching items or add some other snacks and drinks. This can make customers more satisfied with the set meal and better meet the customer's personal needs. Improve customer satisfaction and loyalty and increase product value.
7.0 Conclusion
KFC's marketing strategy attaches great importance to digital, media, innovation and customer loyalty. According to the local taste research to improve and improve. As for KFC, McDonald's, a competitor that focuses on advertising and diversification, also lacks the ability to focus on improving its main products. For KFC, IDIC model can help KFC to discover customers' needs and values in detail, and make good communication, so as to enhance its brand. KFC can provide its customers with the value of delicious, healthy, high quality, convenient and low price food, and can constantly provide customers with new products.
8.0 References
https://www.projectguru.in/customer-relationship-management/#SnippetTab (Accessed: Priya Chetty & Shruti Thakur March 2019)
https://us.mullenlowe.com/agency/news/inside-kfcs-marketing-strategy (Accessed:
Adweek February 2022 )
https://www.simplilearn.com/tutorials/marketing-case-studies-tutorial/kfc-marketing-strategy-case-study (Accessed: Rahul Arun November 2023 )
https://baymard.com/checkout-usability/benchmark/step-type/cross-sell/11364-kentucky-fried-chicken (Accessed: Doo