Circle K is an international convenience store that is currently operated by the Canadian firm Alimentation Couch-Tard with its headquarters in Tempe, Arizona in the US. The brand is available in over 8000 locations all over the world (Sternquist 250). In Hong Kong, the store is called 'OK' referring to the circle that surrounds the 'K.' Fung Retailing founded the brand in Hong Kong in 1985 who was the licensee of the name and has 349 locations that are operational in Hong Kong (Vastine 11).
Circle K Hong Kong sells products ranging from beverages meant to warm up, cool down, satisfy or simply energize (Asia 24). They also have various types of foods, motor vehicle fuel, toolboxes, and first aid kits. Motor vehicle servicing is the main service offered by Circle K Hong Kong. Just like any other convenience store, Circle K target segment is the quick shopper and the late night shoppers. Quick shoppers edge out other segments because of higher human traffic during the day. Over the years Circle K Hong Kong has gained a good footing in Hong in spite of the unfavorable business conditions.
For a company to be successful, they need to have a customer journey that is consistent and efficient. The customer journey is the process through which a brand convinces potential customers into making purchases from the company(Campbell n.p 1770) It involves every process that leads up to that transaction between the customer and the brand. To have a good customer journey, a brand needs to take a customer-oriented approach. This is where the marketing team takes the approach of putting themselves in the customer's shoe to understand the customers' needs. To identify the customer journey of Circle K Hong Kong, one needs to identify the customers' touch points. The touchpoints will enable identification any obstacles in a customer's path to purchasing from the stores.
The main touchpoints include; Pre-transaction. They mostly have to do with the marketing of the brand. They include social media activity or online presence of the brand, television and billboards adverts, word of mouth. The second touchpoint is the transaction process. This is convenience store itself or its website. At this touchpoint, the customer directly interacts with the product and the brand's employees. Post-transaction; which includes the customer feedback, questions and answers that the customer might have, and product newsletters.
Innovative marketing is their first step in the customer journey where they have managed to get not only the attention of Hong Kong locals but also Chinese tourists from the mainland. Among this is increasing in their online presence especially through their fingershopping.com. They have also gone into partnership with Sinopec Marketing to operate their gas stations. Circle K Hong Kong customer journey got a boost with their strict cost controls that ensure they remain competitive against other stores. Circle K Hong Kong has also ensured to have a good employee satisfaction and retaining programme that looks into the welfare of their employees (Yee et al. 658). They are trying to avoid the incident that occurred in 1988 where the US side of the company wrote to its 8000 employees for some conditions such as AIDs.
The brand faces the challenge of moderate spending from Chinese from the mainland and flat customer sentiment. The lack of positive sentiment is mainly attributed to the events occurring in mainland China. With the Chinese economy slowing down the countries in the region are feeling the pinch. The slowing of the Chinese economy reduces consumer spending which affects the stores. This has therefore reduced the number of first-time customers that do their shopping at the stores. It has also led the brand to lose their lapsed customers. Hard economic times makes consumers less likely to explore new options, and that has affected the new customers. The brand has lost their lapsed customers because the customers are trying to cut their spending. It is this that has resulted into the brand enforcing strict cost controls and are planning to implement it even further to reduce the exodus of lapsed customers. The brand is also facing another challenge from the Hong Kong government. The government has put forward a review of the working hours. This may force the stores to operate shorter hours or employ more shifts of employees. This bill will indirectly affect the customer experience by increasing the operating costs of the stores which may force the store to review their product and service prices.
Having looked at the challenges faced by Circle K Hong Kong, it is important to set Key Performance Indicators that could help steer the business to profitability as per the challenges discussed above. The first one is the status of existing customers. Existing customers, in this case, refers to loyal customers or returning customers. This group offer stability to the brand and provide the brand with the ground for expansion. The next KPI is the customer attrition. Circle K Hong Kong main objective should be keeping its current customer base and prevent an exodus from lapsed customers (Trasorras 21). This KPI should, therefore, help them keep track of the number of customers that are not returning and try and point out the key reasons for this. This will enable them to streamline their operations to suit the needs of this group. New customers, they have acquired; another KPI that could come in handy in promoting the brand's profitability. New customers are crucial for a brands expansion. Because Circle K Hong Kong operates many stores attracting new customers is the best way to keep these stores open (McKenna 16). This is also an indication of whether their marketing strategy is working. Segmenting customers depending on profitability. The Circle K business in Hong Kong heavily depends on mainland citizens. Segmenting their customers according to their demographics should help them differentiate the profitability of mainland citizens from Hong Kong citizens. Waiting time for customers' orders is a performance indicator that could help improve customer experience (Weber & Thomas 11-26). Because of the rise in the cost of operation which is likely to push into the cost of products and services, Circle K Hong Kong could opt to make up for this by offering very good service to their customers by reducing their waiting time(Sharma 160).
The KPIs discussed above can be used to come up a loyalty campaign that could help tackle the problems faced by Circle K Hong Kong. This loyalty campaign will use the full funnel model to indicate how the brand can achieve its objectives (Singh 31). Beginning at the top of the funnel the brand should use the hero moment to get the attention of as many people as they can. This involves making use of their partnerships such as those with Sinopec Marketing to get the first touch with potential customers. At this stage, the brand should be pushing to have as many people as possible to get to know about the brand. Then they could proceed to the hub stage. At this stage, the brand's main goal should be trying to get the potential customers to get into the store. For example, they can ensure they make their stores as visible as possible to get the attention of those who have heard about the stores (Prendergast & Ho 56). They then proceed to the hygiene stage. This takes place inside the store. Once inside the store, the brand should be trying to get some of those customers to make his/her first purchase and use a member activation rate method to determine their performance. This stage has the highest conversion rates because most customers who enter a store have already made up their mind to make a purchase and those who have not mostly end up deciding to purchase while in the store. Once you have acquired a new customer, the brand can now push for some of those new customers to return to achieve the loyalty stage. They can achieve this by sending the regular customer notifications on new products in the store and some new stores. They reach their customers by giving first-time buyers subscription option through either email or phone number. This can be done by introducing Circle K Hong Kong shopping cards to their customers.
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