Principle of marketing case study ck club app of circle k

lOMoARcPSD|12114775 NATIONAL ECONOMICS UNIVERSITY School of Advanced Education Program  PRINCIPLE OF MARKETING CASE STUDY: CK CLUB APP of CIRCLE K Teacher: Ph D Le Thi My Linh Class: Advanced Finance 61B Group: 03 Bach Quoc Trung - 11196312 Dinh Thanh Tu - 11195533 Nguyen Minh Phuong - 11194240 Hoang Phuong Hoa - 11196356 Ha Noi, 03/2022 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 Table of Contents PART I CURRENT MARKETING SITUATION ANALYSIS INTRODUCTION 1.1 Introduction of convenient store 1.2 Introduction of Circle K 1.3 Research purpose CIRCLEK AND ITS EXTERNAL ENVIRONMENT 2.1 PESTEL Analysis • Political factors • Economic factors • Social factors • Technological factors • Environmental factors • Legal factors 2.2 Porter’s forces analysis • Threats of new entrants • Power of customers • Power of suppliers 10 • Threats of substitutes 10 • Competitor rivals 10 2.3 Competitive positioning 11 2.4 SWOT Analysis 12 • Strengths of Circle K 12 • Weaknesses of Circle K 13 • Opportunities for Circle K 13 • Threats to Circle K 14 COMPETITIVE ADVANTAGES AND USP 15 3.1 Distribution in the marketing strategy of Circle K 15 a Create product diversity 15 b Diversify payment methods for users .15 c Operate 24/7 16 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 d Stores open in crowded residential areas .16 3.2 An added value for customers 16 3.3 New “smart” product innovations 17 PART .18 MARKETING INNOVATION PLAN 18 SEGMENTATION, TARGETING, DIFFERENTIATING AND POSITIONING (STP) 18 1.1 Segmentation .18 1.2 Target market .19 1.3 Differentiating and Positioning 20 MARKETING 4P .23 2.1 Product 23 • Features 23 • Benefits .24 2.2 Price 24 2.3 Place 24 2.4 Promotion 25 MARKETING PLAN FOR THE PRODUCT .33 MARKETING OBJECTIVE 33 OVERVIEW .35 3.1 Specific .35 3.2 Measurable 36 3.3 Achievable 37 3.4 Relevant 40 3.5 Time-bound 41 COMMUNICATION OBJECTIVES 42 MARKETING INNOVATION (KOLs) 42 CONCLUSION 47 REFERENCES 48 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 PART I CURRENT MARKETING SITUATION ANALYSIS INTRODUCTION 1.1 Introduction of convenient store A convenience store is a type of small-scale retail business whose products are a wide range of everyday items such as groceries, food, confectionery, soft drinks, ready-to-eat products, over-the-counter drugs, toiletries In some jurisdictions, convenience stores are licensed to sell alcohol, usually beer and wine These stores can also provide money transfer and bank transfer, phone card top-ups along with the use of fax machines and/or photocopiers at a cost per small copy (checkbook or bill) They differ from department stores and supermarkets in that they are not located in a rural location and are used as a convenient addition to larger stores Convenience stores often charge significantly higher prices than regular grocers or supermarkets, as these stores order smaller quantities of inventory at a higher price-perunit from the seller wholesale However, convenience stores make up for this loss by having longer opening hours, serving more locations, and having shorter checkout methods Beginning in the early 14th century, a grocer was a merchandise dealer that sold dried or prepared foods such as spices, pepper, sugar and cocoa, tea and coffee These items were purchased in bulk, so groceries became prevalent in the wholesale system As the number of ready-to-eat, canned and packaged foods increased, commercial activity expanded in the area In the United States and the United Kingdom, supermarkets and convenience stores are sometimes described as grocery stores, or simply grocery stores Now, convenience stores grow so rapidly It appears on a global scale Now, everyone goes to the convenience store, including people from all ages Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 1.2 Introduction of Circle K Starting in 1951 in the state of Texas, USA, Circle K has become one of the most prestigious convenience store brands worldwide, famous all over the world for its product quality and customer care service Great store with more than 16,000 stores, including: Over 14,800 company-run stores operating in the US, Canada, Denmark, Norway & Eastern Europe More than 2,380 Circle K franchised stores operate in many different countries around the world, including: Cambodia, China, Greece, Guam, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, United Arab Emirates, and Vietnam In Vietnam, Circle K focuses on rapid growth in the convenience store chain business under the US Circle K franchise license Circle K is proud to introduce that we are the first international convenience store chain in Vietnam, and the first store opened on December 20, 2008 They celebrated their 10th Anniversary of Circle K in Vietnam in 2018 Circle K Vietnam currently has more than 400 stores in major cities such as Hanoi, Ha Long, Ho Chi Minh, Vung Tau, Can Tho, Binh Duong, Hai Phong, Long Xuyen and will continue to grow to meet the needs of customers meet the needs of customers everywhere Their service commitment to customers is encapsulated in Fs (4Fs) (Fresh, Friendly, Fast, and Complete) Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 Their vision is to become the most popular convenience store chain in Vietnam Their mission is to bring an enjoyable, friendly and reliable shopping space to customers with rich and diverse items, services and dishes served quickly and enthusiastically 1.3 Research purpose The purpose of this research is to analyze the current situation of Circle K in Vietnam In particular, we want to understand how the company conducts marketing campaigns to maintain their position as one of the best convenience store chains in Vietnam Besides, with the new launch of the application called CK Club, we want to propose some goals for the campaign and to measure the success of this application Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 CIRCLEK AND ITS EXTERNAL ENVIRONMENT 2.1 PESTEL Analysis Political - - Economic The need to ensure The relationship huge in VN convenient store’s The increase in product - US price of logistics, The VN government renting and labor low-cost product to want to strengthen costs be served in a short Economic growth time - - Consumers prefer perspectives Technological Environmental AI and robotics to - Restriction of Legal - The need to digitize retails plastics product understand the VN supply chain which create more law Ensure technology pollutants application is safe and easy-to-use - Young consumers are open to use convenient store - - convenient store is and broaden - The demand for safety of customers between VN and the - - Social - - The risk of facing Regulations for legal proceedings if recycle made failures Quick, accurate payment system Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 • Political factors In most countries, especially the developed ones, governments always pay strong attention and have strict laws for the safety of the citizens Therefore, it is essential for the company to make sure everything is safe, as this is the matter of life and death The company also needs to have appropriate certificates for qualified products before issuing the product publicly Moreover, the relationship between Vietnam and the US should also be taken into consideration As a US company, Circle K can receive support from the US government, as well as beneficial policies from the Vietnamese However, the company should follow the relationship between two countries because it is not always good Lastly, one of the biggest advantages of Circle K is the support from the VN government It is the trend that the economy will head toward convenience stores for quick, high-quality products, instead of spending much more time in the supermarket • Economic factors According to Dantri, the demand for convenience stores has increased significantly in VN When people are demanding good products within a short period of time, they go to convenience stores Moreover, because the products are suitable for the financial background of most Vietnamese citizens, the potential of this chain is very huge Heading toward the risks, there is the increase in price of logistics, renting and labor costs which should be noticed With the trait of trading the products from different suppliers, it is important to pay attention to the supply source, as well as transportation fee and other logistics fees Moreover, renting costs and minimum wages for employees are also a thing to consider • Social factors As Vietnamese, especially the young, are now focusing on buying products from convenience stores, Circle K has a huge potential to satisfy this demand They love to Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 have a quick, good product to be served Moreover, the store opens 24/7, making it comfortable for all types of workers For example, a worker who has a night shift can easily go to a Circle K chain for food, which is the only store open at that time • Technological factors To economize the supply chain, it is important for the company to involve technology in the near future It will help to speed up the process, as well as making it more accurate Besides, the company also has applications for IOS and Android So it is essential for them to make the app easy and convenient to use Lastly, they should make sure the payment system is good and easy for cashiers to use • Environmental factors It is important to note that there are strict rules for the restriction of plastic products which create more pollutants for the environment Moreover, the Vietnamese government also has strict regulations for recycling the wastes Therefore, the company should deal with this carefully • Legal factors Many countries have strict laws in producing, selling and distributing products, especially the consumed packaged ones As Circle K wants to penetrate the VN market, it is important to understand the law For example, when a company operates in an international market, it must take care of the tax laws, as well as the environmental laws If they fail to so, the company may receive penalties or be banned in the country In conclusion, we can see that from the analysis above, the company will face both advantages and challenges in the VN market However, we believe that the benefits outweigh the challenges Therefore, the potential of Circle K in this market is bright Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 2.2 Porter’s forces analysis - Threat of new entrants Bargaining power of buyers Rivalry among competitors (low) (low) (high) Barrier in capital requirements - and management ability - Very little due to the - Great diversity of rivals customers are young people - Low customers loyalty - Competitor rivals such as Threat of substitutes Bargaining power of suppliers (high) (medium) Substitutions: supermarkets - and traditional markets WinMart, 7-eleven… Strong, famous brand: Coca Cola, Unilever, P&G Conclusions from the Porter’s five forces: Based on our analysis above, we believe the threats and competition in the US’s electric vehicles market is medium However, as a new entrant with less experience, it is indispensable for the company to carefully calculate and build the plan for penetration • Threats of new entrants - Barrier in capital requirements: In fact, to run a convenience store chain, the initial investment costs are quite large for investment in fixed assets, construction of stores and warehouses, and a part of prepaid deposit for suppliers - Barrier in management ability: Retailing business is a field that does not require advanced and modern technology but high level of management skills Practical evidence shows that enterprises with high management experience such as Vingroup, AEON, Metro, and BigC, when entering the Vietnamese market, all achieve great success despite being new • Power of customers - The target customer of convenience store chains is young people, so the bargaining power on the price or quality of groceries is very little and insignificant Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 - Raising brand awareness: ▪ 472.294 Facebook users follow the Fanpage of Circle K Source: Circle K Vietnam ▪ Circle K has about million to 1.4 million loyal customers, of which young people and people interested in digital technology are targeted for the products ▪ 10,000 people install the CK Club App in the first month of launching Source: Kênh14 34 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 OVERVIEW ● Objectives: reach 800,000 downloads on app stores platforms within months ● Specific: focus on the young people and the people interested in technology within Vietnam to reach 800,000 downloads on app stores platforms over months ● Measurable: the installs is approximately 100,000+ per month ● Achievable: the estimated app relative rank by downloads is right after VinID app and achieved nearly 10,000 downloads just after the first day of launching ● Relevant: focus on about million to 1.4 million loyal customers of Circle K to increase the installs ● Time-bound: within months 3.1 Specific The specific and clear goals have a significantly greater chance of being accomplished When making a goal specific, these “W” questions would be considered: Who involved in the goal? What to accomplish the goal? Where to achieve the goal? When to reach the goal? Why to attain the goal? Which resources or limits are involved? Circle K is a convenience store chain opened in Vietnam, so the main customers are Vietnamese, especially residents in the cities which have many stores located Therefore, the two big cities: Hanoi and HCM are expected to have more customers The main customers of CK Club app are the younger people under 35 who focus on convenience and have the ability to use technology The aim of this brand is to achieve 800,000 downloads on App Stores as well as Google Play within months => A specific goal: CK Club app will focus on the young people and the people interested in technology within Vietnam to reach 800,000 downloads on app stores platforms over months 35 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 3.2 Measurable A SMART goal must have several criteria for measuring the progress and keep on track to reach the specific goal When making a goal measurable, these questions would be considered: ● How many/much? ● What is identity when the goal has been reached and the indicator of progress? After months from now, the number of people interested in the CK Club App, which is reflected through the “Installs by user” or “Installs by device” on every app store's platform, is expected to reach 800,000 installations Therefore, the strategy would be setting up to boost the installations from users as high as possible Positive impact from consumers in this first stage will significantly increase the friendly and high-quality perception of the brand At this time, the CK Club App has more than 100,000 installs as reported on Google Stores Source: Google Play App Store => Measurable: On average, the installs should be approximately 100,000+ per month to reach the setting goal and should regularly receive positive responses from the users; or else the advertising campaign will be modified to be suitable with the setting goal 36 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 3.3 Achievable To achieve the setting goal, it first has to be a realistic and attainable goal An achievable goal would answer for these questions: ● How to accomplish the goal? ● How realistic is the goal based on other constraints? Launched on October 27, 2021, however, the CK Club first appeared a day before on a Facebook post of Circle K, the biggest media platform with nearly 460,000 followers of this supermarket chain The announcement of this new app has attracted thousands of interactions and attention from the Facebook followers, with 1.1K reactions and 54 users who are interested and comments below the post Source: https://www.facebook.com/CircleKVietnam/posts/10158215499121455 According to Kênh14 - an online news platform that provides daily information on fashion, gender, social life, and more especially for the teenagers, the CK Club member app has achieved nearly 10,000 downloads just after the first day launching Source: “Phát ghiền với đặc quyền “Very tiện, very lợi” từ CK Club!” – Kênh 14 37 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 Even after the first month, the post celebrating a month of launching CK Club app still also obtains a great attention from followers with 3,4k reactions: Source: https://www.facebook.com/CircleKVietnam/posts/10158210525001455 And all the posts uploaded on the Facebook of Circle K whose content is about this new app also maintain to receive lots of interest and positive responses in social after a period of launching: Source: https://www.facebook.com/CircleKVietnam 38 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 In addition, according to the analysis on Data.ai - The 1st Unified Data AI Company, the usage stickiness rate which is the relative rank of percentage of the install base that opened the app during the period from January to March 2022 of CK Club App is outstanding from others similar app: Source: data.ai The growth stage of the CK Club App, which reflect through the estimated app relative rank by downloads, is right after VinID app - the leader of the convenience stores market in Vietnam: Source: data.ai 39 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 Moreover, according to “Q&Me” - the online market research services available in Vietnam, the popular rate of Circle K's loyalty programs is 35% This is a high percentage in comparison to other conventional stores chains in the market Source: https://marketingai.vn/bao-cao-muc-do-pho-bien-cua-cac-chuong-trinh-the-thanh-vien/ => Thus, these given evidence are undeniable that the expectation of setting goals would be achievable 3.4 Relevant The relevant factor will ensure the goal matters as well as aligns with other relevant goals A relevant goal would give the answer “YES” for these questions: ● Is this worthwhile? Is this the right time? ● Does this match other efforts/needs? ● Is it applicable in the current socio-economic environment? With the high internet penetration rates globally, Vietnamese people are among the most connected population in the world Besides the great number of smartphone users, Vietnam also witnessed rapid growth in mobile app usage The appearance of these 40 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 applications has turned smartphones into multifunctional devices and gradually become an essential part of daily life for many people Source: https://www.statista.com/topics/8264/mobile-apps-in-vietnam/#dossierKeyfigures Statistics shows that mobile applications of loyalty programs are gradually decreasing, attractive to users in Asia - Pacific region (69% compared to 60% globally – Nielsen statistics in 2016) Therefore, application platforms will create more opportunities for consumers to participate in these programs, creating convenient and personalized conditions for members => Circle K now has about million to 1.4 million loyal customers, of which young people are the main customers Therefore, the approach of the new CK Club app will reach more people than the traditional way and would be easier for the retailers in terms of interacting with customers Moreover, young people are interested in digital technology, so enhancing the CK Club App will play an essential role 3.5 Time-bound The setting goal must have a target date to focus on and to work toward A time-bound goal would give the answer for the question: - When and What to to reach *a target deadline* from now? Circle K is organizing a small game with interesting gifts only for CK Club members on March 17, 2022, named "Very tiện, Very lợi" The event offers a plethora of attractive rewards which is up to millions of Viet Nam Dong This strategy is aiming to attract more and more loyal customers to use CK Club app and increases the installs on the app stores’ platform => CK Club App is seeking to achieve 800,000 installs from customers by August 2022 41 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 COMMUNICATION OBJECTIVES ● Awareness building: increases to 800,000 people know about CK Club App ● Change perception: technology is becoming a significant part in daily life, therefore, every transaction and activity is transforming to in technology apps ● Persuasive: stimulates buying demand of customers by social media’s posts of KOLs and especially through a short video of product’s promotion with thoughtful messages and viral tagline ● Comparing competition: This innovation plan will make CK Club App stand out from its competitors in regard to the app from other convenience stores and supermarkets Therefore, it can help to expand the business size MARKETING INNOVATION (KOLs) Based on the analysis of Circle K’s current business situation, it can be deduced that the corporation has been performing quite stably and promisingly Circle K Club App does prove to have some distinctiveness but is yet to approach a large number of users In fact, most of the existing marketing activities of the company are push marketing and only on social media platforms Specifically, the marketing activities to attract customers to install CK Club are mostly supported by the promotions from this convenience stores chain and then the customers just subconsciously install the app to receive these promotions as well as the promotional goods even though they are never used In order to create a marketing innovation and capture a larger market share of CK Club App, a SMART marketing innovation plan on digital platforms plays an imperative role Not only does it apply the pull marketing, but new marketing also offers the company a modern way of advertising products and reaches more customers 42 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 This marketing innovation aims to use the market penetration strategy, which helps promote CK Club App to gain higher market share Therefore, a totally new marketing strategy by using non-personal marketing is implemented • Marketing channel: KOL marketing to promote product • Time - bound: months In this first stage, which is to increase the image of CK Club App, Circle K uses KOL marketing to bring the CK Club App closer to the targeted customers The first stage objective is done by sending a brief of required contents: The common behavior of GenZ: every activity will be done at the smartphone, and the younger is not bringing along the membership card often by the side The CK Club App is “Very tiện, Very lợi”, which: • Accumulate stamps, exchange gifts • Playing games, winning prize • Offers & promotions • Inviting a new friend to receive gifts and enjoy more attractive privileges • Save time while getting the discount offers only available on the app, get excellent pricing, and get it delivered to their door 43 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 Creative, humorous, and free-style contents are encouraged, but discussions are required Name Followers Sơn Tùng MTP 6.5M Giang Ơi 461K mass seeders on Expected Photoshoot Livestream 500.000 100.000.000 100.000.000 50.000 10.000.000 15.000.000 interaction 1.000 - 5.000/ 10K - 50K mass seeder Instagram account 1.000.000/mass x seeder account VND 115m VND 115m Total VND 230.000.000 Reason for choosing these KOLs: We expand our reach to potential customers by diversifying our selection of KOLS in groups: celebrity, influencer and mass seeder Specifically, in each KOLS group, we choose the suitable and influential representatives for Circle K Club App's potential users All of them have got favorable interactions from huge fan clubs, thus these KOLs are likely to hugely impact the decision making of other young people Many big brands like Shopee have also collaborated with these KOLS and have seen positive results To be more specific: 44 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 • Sơn Tùng MTP: Sơn Tùng MTP is a musical phenomenon that many young people admire and pay attention to Therefore, choosing Son Tung MTP as the brand representative face for this campaign is expected to be the big step to boost the download and use of the CK Club App • Giang Ơi: Giang Ơi is very famous for many younger as well as young parents She often shares about daily life on social media and makes vlogs about daily shopping, activity and recommends products that are useful and especially, friendly to the environment as well as provide the reason to buy certain kinds of household appliances, use certain applications, etc Therefore, Giang Ơi has long been in the center of attention and trusted by many people and viewers • Mass seeder: Mass seeder has influence within a smaller community Therefore, Mass Seeder's job is expected to share the information about the Circle K Club App from Celebrity and Influencer groups for the purpose of promoting products and brands of Circle K to their small group of target customers => Since these KOLs all have a great impact on social media, especially for the younger generation, this can have an effective and direct influence on the target customers The product image can be also created as friendly and suitable for all users KOLs advertise CK Club App The KOLs advertise the CK Club App by posting a photo with the app, and then review the effectiveness, the convenience as well as the offers that CK Club App provides to the users to encourage more people to install The marketing campaign at first will reach a large number of the youngsters and raise their awareness of the useful CK Club App This stage will occur in a month when these KOLS show their interest in the product through social media During the second stage, which is after a week, CK Club App will evaluate the marketing effectiveness and prepare a report for the KOLs marketing at the first stage If necessary, adjustments to tactics are made to bring about the most satisfying result possible 45 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 For the third stage, which is advocacy in months, a short video of one minute from Sơn Tùng MTP for advertise through Out of home Advertising on Billboards, Posters, Tube system, metro, and other travel locations, Airport Taxis, Street furniture, etc and stories with other KOLs promoting the product together with sale discounts would be the choice These would be advertised through different platforms such as YouTube, Facebook, Instagram to foster attention and sales revenue At the last stage, CK Club App will make the final report with statistics from social networks in terms of reach, engagement, likes, comments and shares, then analyses and assess marketing performance 46 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 CONCLUSION Innovation is a process to shift a company to a different mindset of exchanging It is not a tool that can just be implemented over the same communication bedrock, on which a company normally works Rather, it is a different way of communication, including people and valuing their ideas It means changing hierarchical communication structures into horizontal ones and for the management to above all start listening and setting the right environment and incentives to let people exchange as much as possible and brainstorm in all directions Additionally, the 4.0 revolution has transformed numerous aspects of human life, including the way economy operated So, the world is becoming digital, and the Internet has become virtually indispensable Marketing is day by day stepping deeper into the digital transformation, hence making good use of this transformation is the key to the door of success This is a great opportunity to expand the business network and communicate with customers on this platform Therefore, only if Circle K profoundly understands this advantage, grab the chance, and put it into practice can they meet the remarkable profit in the future and expand the business in the markets Enhancing social platforms will be a useful tool for the Circle K convenience store chain to connect and interact with customers with a great growth 47 Downloaded by Vu Vu (quangchinhlas199@gmail.com) lOMoARcPSD|12114775 REFERENCES - The convenience store industry in the 1990s and beyond Giới thiệu - Circle K Việt NamCircle K Việt Nam - Take it easy https://123docz.net//document/10026989-dac-diem-cac-phan-doan-thi-truong-muc-tieucua-circle-k.htm https://www.feedough.com/competitive-advantage-definition-types-examples/ https://kenh14.vn/phat-ghien-voi-nhung-dac-quyen-very-tien-very-loi-tu-ck-club20211101234126503.chn 48 Downloaded by Vu Vu (quangchinhlas199@gmail.com)