Customer Relationship Marketing in KFC Restaurant Australia - Case Study Example

Running Header: Customer Relationship Marketing (CRM) in KFC Restaurant Australia Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Customer Relationship Marketing (CRM) in KFC Restaurant Australia Introduction Priority in marketing has shifted from just delivering the ‘right’ product to satisfying the customers who consume the services or products. Customer relationship marketing has turned up to be an effective way by which organizations today are able to attract, and retain their customers in their target market. The food industry has increasingly been more competitive with time and thus the nature of marketing strategy that is used to market the products means a lot with regard to the organizations capacity to retain its customers. KFC restaurants in Australia has existed for a long time and has done well previously however due to increased competition from strong competitors such as McDonald’s food chain industry, the company has had to invest in newer marketing strategies to retain and attract new customers. K.F.C. Australia refers to the Kentucky Fried Chicken food stores that are located in Australia which dates back to the 1968 when a young Canadian entrepreneur, Bob Lapointe began fast food revolution in Australia. The first restaurant was established at Guildford located in Sydney's western suburbs of Australia. This restaurant was built in that site and was opened in 1968 serving many customers and had employed a staff of 25 people. Today, KFC Restaurant in Australia boasts of over 600 stores in Australia and New Zealand. Most of the stores are franchised though others are owned. It is estimated that over 12, 000 employees have been employed to work on casual and permanent basis in Australia. Increased competition in the fast food industry in Australia due to the coming up of more fast food stores has led the company to invest more in customer relationship marketing as a strategy that will give it competitive advantage over its customers. This paper will address several concepts, concerns, and applications of consumer relationship marketing (CRM) in KFC Restaurant, Australia. The Concept of Consumer Relationship Marketing Customer relationship Marketing is one of the contemporary marketing strategies that has proved to be very effective in the new competitive markets of products and services today. CRM may be viewed to have come up from the operations in the industrial and service markets before finding its way to the mass market as the case is today. CRM came to the mass market in the nineties. The industries were making efforts to establish good relations with their customers, and this is evidenced by the exchange relationship theories. The theories were further developed and they led to what was referred to as ‘direct and database’ marketing. This formed the basis for Customer Relationship Marketing (C.R.M). Evidently, the customer relationship marketing has transformed how marketing is being carried out today. Priority in marketing has shifted from just delivering the ‘right’ product to satisfying the customers who are to consume the services or products (Meyer, Christopher, and Andre 2007, pp. 47). Customer relationship marketing may be viewed to be the practice where marketing activities are employed with the intention of establishing, developing and maintain a successful long term positive relationship between the customers of a service or product with its providers. This statement portrays that there are various implications that comes with CRM such as employee training, market planning, advertising, promotion, direct marketing, public relations, and package design among others. The key thing to note is that all these measures are taken with the customers’ demands on focus so as to retain them. It may also be clear that CRM incorporates unique and timely methodologies in building up of brands while at the same time performing the market research. This is because very rational consumer of a given service or product would want to be heard. This implies that they would reward service providers who appreciate the need to build strong customer relationship base with their customer. The reward often takes the form of increased consumption, invitation of new customers, and retaining their consumption standing in the service or products they consume. Therefore companies often collect consumer data so as to develop with the marketplace with regard to building of one’s brand and increasing of the Company’s market share. The need for CRM Relationship Marketing in KFC Restaurants Relationship marketing is very important for the success of any company. The service industries such as KFC Restaurant, Australia stands to gain a lot from CRM marketing for it being a fast food chain store, then the customer base of the chain is a reflection of its success in attracting and retaining its customers, and thus high profitability ratios. CRM isn’t just the establishment of a buddy buddy relationship, which in this case customers do not want. It involves organizations embracing tactics that are aimed at retaining customers; therefore this kind of marketing is a process that takes some time as opposed to a single marketing event. KFC Restaurant in Australia has the need to embrace more of CRM strategies through application of specific marketing tactics to the lifecycle of the fast food consumers in Australia. This is because for KFC Australia, this kind of approach has high likelihood in promoting high customer satisfaction to their customers, and this means increasing its profit margins (Sudhir 2004, pp. 36). Essentially, it is clear in today’s competitive age that fast food restaurant like KFC Restaurant in Australia has to embrace more of the Customer Relationship Marketing strategy so as to maintain and improve its profit margins. The previous marketing strategies as practiced from other marketing waves such as mass marketing, targeted marketing and global marketing have proved to have diminishing returns, and thus CRM has been projected to have the capacity to sustain profitable growth. This is why it is important for KFC Restaurant which has now expanded to have more than 600 stores in Australia. The rapid expansion of the stores of KFC Australian stores creates the necessity to watch out for not only growth but profitable growth, reason why CRM is not only a necessary marketing strategy but a significant one in this case. It is also very important for KFC to embrace Customer Relationship Marketing strategies because the CRM marketing model has a bigger capacity with regard to accommodating and soliciting for the feedback from customers something that is very important in the fast food business. Through the feedback that is received from the customers, KFC Restaurant can be able to adjust how they provide their services, the range and quality specifications that the fast food consumers would wish to have, and improve service delivery. This will significantly play a role in building up of their customer base as well as retaining their current customers. CRM is important to KFC Restaurant for it develops long term relationships with its existing and new customers. In addition, it also improves the corporate performance of the fast food store which adds value with regard to the promotion of customer loyalty, as well as retention. CRM is best for its simplicity in taking a deliberate approach to bring closer the right products and service to the right customer at the time its needed after taking into consideration of various market information. The market information may include the customers purchase history, preferences, personal information, among others (Brodie, Roderick, Nicole. Coviello, Brookes & Victoria 390). All in all, I would say that with Customer relationship marketing in KFC Restaurant in Australia, KFC stores in the country will be sure that they would save money through marketing to exclusive relevant customers (i.e. those who are likely to make a response). It would also make KFC Restaurant in Australia to increase their periodical and annual profits. This would be realized because CRM makes only relevant offers to those who not only want the specific fast food products but more so to those who can afford these products. KFC Australia will also be able to boost up the loyalty levels of their customer, alongside building up high retention capacity of the customers to KFC, and getting more referrals from the existing customers. To KFC restaurants in Australia, CRM will also promote cross-selling. This would be realized through tracking the services the customer’s uses at particular time, which would help KFC Restaurant marketers to schedule marketing activities in a way that it would match the needs and timing of its customers. The new software application in the modern customer relationship marketing additionally provides a chance for KFC Restaurants in Australia to embrace innovation as required by its customers (Johnson, Michael & Selnes 2006, pp. 40). Customer Relationship Marketing (CRM) in KFC Restaurant Australia: Development of CRM strategies for marketing in KFC Restaurant, Australia Developing and embracing various CRM strategies that will be relevant in marketing a fast food chain restaurant isn’t a mere task. It needs skillful research and analysis of the finding so as to sketch out the methodology by which the strategies are to be implemented. This is the rationale behind the research I did to come up with various CRM strategies that would play a significant role in improving KFC Restaurant in Australia. KFC Restaurant being a chain fast food restaurant, means that it’s the retention of its customers to the fast food products it offers entirely depends on how the needs of KFC interacts with the needs of its customers. This calls for the restaurants marketers to embrace a number of CRM strategies that are directed to attract new customers in the Australian market, as well as retain the existent customers in the market. KFC has already initiated various CRM strategies to increase their customers market base. The following CRM strategies should additionally be developed at KFC Restaurant with regard to their marketing plans and initiatives so as to retain their existent customers as well as attract new customers in the Australian market. CRM Strategy 1: The Restaurants marketers should make every customer interaction in the KFC Restaurant count. This is a very key strategy in CRM because it form the basis for the application of the other strategies. When the customers come into the Restaurant to take fast foods, the management of the restaurant should ensure that there is a strong customer relationship through ensuring that every customer interaction count. The restaurants management should ensure that not even a single customer is taken for granted. There should be great vale accorded to every interaction that a customer who has come to take fast food from the Restaurant. This strategy has a great potential in ensuring that customers particularly the existing ones are retained. When there is value in every customer interaction this increases the customers confidence as they take the fast foods or conduct other transactions such as payments and bookings (Greenberg 2010, pp. 46). This may make the customers refer other consumers to the KFC Restaurant, and thus this becomes a very beneficial customer relationship Marketing Strategy. The culture of the Australians especially the elites is that they are sensitive in the way they are handled. Most fast food consumers in Australia are attracted to the good services that accompany the fast food they are to be served e.g. courtesy while serving the customer, as compared to just the delivery of high quality fast food. Looking at the Australian market and the culture of the Australian people then this strategy should be further developed at KFC Restaurants in Australia. This interaction can be achieved through establishment of a focus group made of loyal customers. This group would help in the provision of timely information about the mind of many of the KFC’s customers with regards to their needs and the services they like. From the information, the KFC restaurant marketers will analyze the comments as well as the claims on their services and products, make specific promises to the valid claims and deliver the promises. This would retain many of its customers and attract new ones altogether. CRM Strategy 2: The second CRM strategy that should be developed in KFC Restaurants in Australia includes the stores offering fast food products value and benefits that are congruent to the desires of its customers. KFC fast food store marketers should stretch out to its customers and affirm to them that they would always stick to their quality. This gives the customers of the restaurant the confidence in the quality of the fast foods that they do consume. Jeff Bezos, a renowned marketing consultant and author advanced that if a great experience is built in the minds of the customers about what they consume, they would always tell each other and others about it and thus it becomes a fervent marketing tool for the company. KFC Restaurant should take initiatives to reassure their devoted customers that their quality is high above the rest even as new fast food stores enter into the Australian market De Azevedo & Pomeranz 2008, pp. 54). CSM Strategy 3: Give attention to existing customers and listen to their demands. This strategy may appear to be easy but it is not as easy as thought, because lack of it is what has caused a number of fast food stores to go down the drain. The Australian fast food consumers are often keen to detail and this makes it important for management of the KFC Restaurant to attach great importance to this strategy. Many of the fast food customers would want to be treated with respect and accorded high value for their choice to have preference to KFC Restaurant. It has been agreed through research that it is difficult to find a new customer than to retain one. The energy and costs that are tagged to finding a new customer is far much more than those to retain a customer. KFC Restaurant in Australia already has had a big market share with regard to their existing clientele. The management and marketers of the Restaurant should design the restaurants operation in a way that no customer leaves on the grounds of complaints that cannot be timely resolved. This is important because through research a rational consumer has been found to be homogeneous in choice. Many of the Australians have specific places they would wish to take their fast foods, they would always be loyal customers to the restaurant they choose to eat from. Losing a customer by KFC means a great loss for it would be difficult to get the customer back. This is the reason why the customer should be given priority. KFC Restaurant’s management should listen to their customers with keen and handle complaints in a timely and proper way. This can be made stronger when the managers and marketers of the restaurant are available to respond to questions and complaints. CRM Strategy 4: Build a strong Brand Identity of KFC Restaurant on a continuous basis: Often many companies build up strong brand identity which fades off with time due to laxity in sustenance of value with regard to quality of service and products provided. KFC should endear to develop this strategy where their brand identity as the best fast food service provider in the Australian market is sustained. It is important for the restaurant to make it easier for its customers to identify with it. The winning slogan of KFC Restaurant has done a lot however there is need for more information to be extended to media and particularly the new social media and internet which have come (Aksoy, Keiningham & Bejou 2008, pp. 44). CRM Strategy 5: Embrace the Upcoming IT tools in marketing the fast foods as opposed to sticking to the ancient approaches of marketing. This is a very effective strategy in CRM because it is more diverse, where the marketers of the restaurant may use emails, social media, website contents among others to reach out to other potential customers in Australia. Let also the existing customers of KFC to be fed with information through these sites on the latest trend that the restaurant has embraced. This can be in terms of developments or price changes alongside making it easier for the restaurants managers to be reached by their customers. This may be done perhaps through increasing the branch networks so that the customers can be near the restaurants. The process of implementing the CRM strategies should be gradual since building a stronger customer relationship is not something that takes a fortnight. It is a long term and continuous process due to the changes that comes to the market that affects the fast food industry in Australia. Importance of CRM strategies to enhance customer relationship in KFC Restaurant CRM strategies carry a lot of importance with regard to building the customer relationship in KFC Restaurants in Australia. This is because realizing a stronger customer relationship between KFC Restaurants and its customers would be far from reach without employing the CRM strategies. Among other benefits that comes with embracing CRM strategies in building customer relationships between KFC and its customers includes the following aspects. CRM Strategies facilitates the managers and marketers of KFC Restaurant to understand the needs of their consumers. Understanding is slightly different from just knowing the needs or demands that the customers have. KFC Restaurant in Australia stands to gain a lot when they embrace CRM Strategies for they are able to go deeper into the minds of their consumers. This helps them to know the equality of fast foods that consumers expects, how their customers want to be served, and the new trends in the fast food industry that the restaurant customers will want embraced by the management of the restaurant. CRM Strategies are also very important with regards to its significant contribution in the development of consumer driven products. Many of the fast food consumers would be more satisfied with the fast food delicacies that they have participated in contributing to how it’s made. Development of consumer driven fast foods would be very important for KFC Restaurant because it would make the customers to be more satisfied with the service and food they have consumed. It would also increase the motivation of the customers for they will feel they have a voice by the virtue of being loyal customers to the KFC Restaurant. CRM Strategies are also instrumental in the maintenance of relationships as well as in the development of loyal consumers. When the restaurants customers have good relationships with the managers and stakeholders of the restaurant, then this plays a crucial role with regard to making these customers move from being normal customers to loyal customers. Increased loyalty among KFC Restaurants customers would mean that there will be increased reliability of sales and thus the profits would b secure. Tailor consumer specific campaigns often is made to be a success when management of KFC Restaurant appreciates the need to embrace CRM Strategies as part of their key marketing strategy. This is because consumers often posses a lot of ideas and creativity, that if tapped it can take the restaurant to another stage. KFC Restaurant stands to benefit a lot when its relationship with its customers is developed, for the consumers will b willing to establish and support specific campaigns that will make the restaurant sell more of its fast food products. Analysis of the market opportunities/threats (changes/trends) faced by KFC Restaurant, Australia KFC Restaurant has been in Australia from the 1968 and this shows that already by the virtue of its establishment it has a competitive advantage of being established earlier as compared to the new fast food stores in Australia. This may translate to it having more popularity in the market, having experience in the market with regard to having hands on experience of the changing trends in the Australian market. This poses an opportunity for them to take informed risk with regards to expansion of its branch networks in the country. The increased population in Australia when coupled by its long time existence in the market provides the Restaurant the opportunity to expand its networks and serve more of the potential consumers of fast foods through making the restaurants come much closer to them (Subhash 2005, pp. 32). Secondly, the Australian market has been growing with time and by the fact that KFC is an international fast food company. The company should take the opportunity of the expanded economic capacity of many of the Australian cities to invest on more avenues to sell the fast food such as home or office delivery as opposed to the normal case where it’s the consumers only who have to visit the stores. Already, the KFC Restaurants in Australia are said to be the ones that produce high profits as compared to the other sister stores in other countries, therefore tapping the opportunity of delivering fast foods to offices and homes would not only improve customer relations but would also increase its profit margins. Establishment of new branches in non-traditional location is also another key opportunity that KFC has in the Australian market. This is because there have been rise in demand for fast foods in these locations (i.e. high traffic areas, shopping malls, universities, and hospitals. This is because most of the Australian consumers are demanding greater convenience with regard to the purchase of the fast food. Availability of fast foods in these locations will increase the customer’s satisfaction thus building stronger customer relations of the customers (Grönroos 1994, pp. 43). Threat 1: There are a few threats that KFC Restaurant is faced with. They include the company’s saturation in the US market. This shows that the projected returns for the industry from the US stores will be low, and this may end up affecting the sister stores in Australia where huge amounts of money may have to be borrowed from Australia’s stores so as to maintain the stores in America to be in existence. Threat 2: The second threat that KFC faces is the increase in competition from competitor stores that have flocked to the Australian market. In addition to this, we have a rise in sales of substitute products that have entered into the Australian market, and this pauses a threat. Slowed sales growth n the Australian fast food industry led to other competitors such as McDonald’s to introduce its ‘McChicken’ sandwich. Which have taken the market by storm. Other products introduced includes chicken and teriyaki rice introduced by Jack in the Box Restaurants, with Domino’s introducing chicken wings to its menu. These have been great threats to the sale projections of the company. Threat 3: Change in preference of consumers in Australia has acted to be among the greatest threats to KFC Restaurant. This is because from the late eighties the demand for healthier foods shot up, and KPC was faced with the challenge of preparing these foods since most of its foods were fried.KFC made efforts and introduced Oriental Popcorn Chicken, Oriental wings, and Honey BBQ Chicken to act as alternatives to its fried chicken. However, other food chains which began with the focus to produce those foods perceived to be healthier still act as a threat to the sales of KFC Restaurants in Australia. Conclusion All in all, the Australian market is expanding; however the target segment(s) of KFC Restaurant, in Australia are in terms of the Demographical, Behavior and Geographical basis. In demography, consideration shave been given to the income factor i.e. if the people income is high, average or low in that target market. The basis of Behavior holds the considerations of the taste, price and quality of the fast food. This is further looked unto in terms of taste conscious, quality conscious, class conscious, combination of price and quality. On geographical basis, the considerations here were the fast food consumers who live either in urban areas or sub urban areas. This has helped KFC to have sales projections of their different markets in Australia. It is important for CRM strategies to be embraced so as it can build a stronger customer relations with its customers. References Aksoy, L., T.L. Keiningham and D. Bejou 2008, Profit Maximization Through Customer Relationship Marketing. Routledge, London. Greenberg, P. 2010, CRM at the Speed of Light, Fourth Edition: Social CRM Strategies, Tools, and Techniques for Engaging your Customers, McGraw Hill, New York. 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