Principle of marketing case study ck club app of circle k

In Vietnam, Circle K focuses on rapid growth in the convenience store chain business under the US Circle K franchise license.. • Social factors As Vietnamese, especially the young, are

NATIONAL ECONOMICS UNIVERSITY

School of Advanced Education Program

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PRINCIPLE OF MARKETING CASE STUDY: CK CLUB APP of CIRCLE K

Table of Contents

PART I 3

CURRENT MARKETING SITUATION ANALYSIS 3

1 INTRODUCTION 3

1.1 Introduction of convenient store 3

1.2 Introduction of Circle K 4

1.3 Research purpose 5

2 CIRCLEK AND ITS EXTERNAL ENVIRONMENT 6

2.1 PESTEL Analysis 6

• Political factors 7

• Economic factors 7

• Social factors 7

• Technological factors 8

• Environmental factors 8

• Legal factors 8

2.2 Porter’s 5 forces analysis 9

• Threats of new entrants 9

• Power of customers 9

• 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

3 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

d Stores open in crowded residential areas 16

3.2 An added value for customers 16

3.3 New “smart” product innovations 17

PART 2 18

MARKETING INNOVATION PLAN 18

1 SEGMENTATION, TARGETING, DIFFERENTIATING AND POSITIONING (STP) 18

1.1 Segmentation 18

1.2 Target market 19

1.3 Differentiating and Positioning 20

2 MARKETING 4P 23

2.1 Product 23

• Features 23

• Benefits 24

2.2 Price 24

2.3 Place 24

2.4 Promotion 25

3 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

PART I

CURRENT MARKETING SITUATION ANALYSIS

1 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-per-unit 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

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 4 Fs (4Fs) (Fresh, Friendly, Fast, and Complete)

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

2 CIRCLEK AND ITS EXTERNAL ENVIRONMENT

2.1 PESTEL Analysis

- The need to ensure

- The increase in price of logistics, renting and labor costs

- Economic growth perspectives

- Young consumers are open to use convenient store’s product

- Consumers prefer low-cost product to

be served in a short time

Technological Environmental Legal

- Regulations for recycle

- The need to understand the VN law

- The risk of facing legal proceedings if made failures

• 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

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 do 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 do believe that the benefits outweigh the challenges Therefore, the potential of Circle K in this market is bright

2.2 Porter’s 5 forces analysis

Threat of new entrants

- Barrier in capital requirements

and management ability

- Very little due to the customers are young people

- Great diversity of rivals

- Low customers loyalty

- Competitor rivals such as WinMart, 7- eleven…

and traditional markets

- 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

• Power of suppliers

- Input products of Circle K is plentiful and supplied by well-known brands in Vietnam and in the world such as Coca Cola, Pepsi, Oishi, Nestle, Vinamilk, ect Since there are many competitive suppliers, while the product is quite similar and standardized, Circle K has the advantages in negotiating with suppliers on price and quality of the products

• Threats of substitutes

- Substitutions are supermarkets and traditional markets: The proportion of modern retail in Vietnam at 25%, is assessed as low and mainly for young people Consumption habits of middle-aged people still revolve around small grocery stores due to more convenience and affordable prices, especially on some occasions like Tet holiday

• Competitor rivals

- Nowadays, to find a convenience store or a minimart is very easy in big cities like Hanoi or Ho Chi Minh City VinMart+ is a minimart chain but still directly competes with Circle K It provides a similar range of goods, and also gives itself a very specific strength, which is the distribution of fresh vegetables and clean meat That expands its market segment and satisfies its customers a lot Other brands such as 7-Eleven, Family Mart, SatraFood, CoopFood, HaproFood are all experiments of domestic enterprises with convenience store model

2.3 Competitive positioning

A company can gain competitive advantage over its competitors by applying a good strategy To be successful, a company needs to combine a good strategy with a good tactic Both strategy and tactics should be designed after careful considerations

Source: https://www.feedough.com/competitive-advantage-definition-types-examples/

In the case of Circle K, we believe that they use a focused-low-cost strategy Their

products are cheap, and it is the main advantage of the store, compared to other supermarkets and convenience stores Moreover, the target customers are the young people It does not mean that the older people never go to Circle K, but the store depends hugely on the young segment This strategy is used well because there are more and more young people who go to this store brand

- Opening in residential area

- Home deliveries using e-commerce

- Acquisitions and mergers

- Expanded product line: Circle K is a banner with a wide range of products, it

offers convenience products, including food, hot and cold drinks, mobility services, including delivery fuel road traffic and charging solutions for electric vehicles

- Store location: Circle K stores are concentrated in multiple areas - fuel bunk beds,

convenience stores, coffee shops, car wash, food and beverage services in one place to provide customers with more products and also in a shorter period of time

- Brand: As stated in the acquisition, the parent company is connecting all other

smaller subsidiaries to Circle K and rebranding This has made it a globally renowned brand

- Number of Stores: There are 1,900 stores and more under the Circle K banner

around the world (14 countries) and the number is great value

- Dedicated Workforce: Workers in stores are trained online to maintain all the

workforce in one site of development and training A customer-friendly workforce and a powerful support for the brand amid the pandemic

• Weaknesses of Circle K

The weakness of a company is based on internal factors, and it gives your insight into the causes of business failure in the market They fall into categories where we can improve them

- Limited e-commerce presence: Circle K's limited e-commerce presence in its

country Recently it is working towards facilitating home delivery service through the registration of e-commerce establishments

• Opportunities for Circle K

A company's opportunities are based on factors external to the company It gives your insight into the reasons or areas that can lead the business into more light and can contribute to the business

- Marketing: This Circle K rebranding is very profitable with the right level of

marketing, and this will help in reaching customers more effectively

- Open in residential areas: C stores on highways and suburbs are hindering Circle

K's potential, so placing a Circle K convenience store in a residential area with the right location will help the market for Circle K's school grow faster

- Home Deliveries Using E-commerce: Before the pandemic, Circle K never

considered the importance of e-commerce in its business but during the pandemic when businesses are dying, it finally got the support of e-commerce and started home delivery in the country, at this point, with the help of e-commerce, back-office team, and members Their employees have delivered more than 5 million meals in Canada, 3 million cups of coffee, and 40 million meals in the US to residential areas and healthcare workers

- Acquisitions and Mergers: Adding companies under the Circle K brand will help

expand the store Mergers and acquisitions will also help capital markets develop

- Diversification: Entering new markets like lifestyle and clothing and adding them

to convenience stores will help brands explore new markets and respond more positively to buyers

- Innovation: Innovating food and beverages to add new products to the product

line will always be an opportunity to capitalize on

• Threats to Circle K

A company's threats are based on extreme external factors that you can't keep up with They can come anytime or anywhere The best thing you can do is build strength and be ready to face threats when it comes

- Competition: Increasing competition in the retail industry mainly in the

convenience store market will be the challenge and threat that brands will need to expand, update, and improve in every segment to keep an edge over competitors

- Customer Behavior: In this ever-evolving world, customer needs change with the

seasons and with trends Keeping up with different trends and being friendly with customer expectations and needs is quite difficult for the company

season Laws and Restrictions: Unannounced laws and restrictions on products or

requirements during the period always affect the day-to-day maintenance of the business

- Advanced technology: Since technology is an ever-evolving part of everything,

it can become a threat when new installations take up a large portion of the budget,

it can disrupt the business model Craft sales and customer-friendly offers or coupons incentivize customers to lean toward retail stores over other options

3 COMPETITIVE ADVANTAGES AND USP

Source: Alimentation Couche-Tard

3.1 Distribution in the marketing strategy of Circle K

a Create product diversity

Although entering the Vietnamese market early, with the rapid increase in the number of other convenience store brands, such as Family Mart, GS25, 7-Eleven, etc., Circle K has focused on making a difference for your brand Circle K's marketing strategy emphasizes product diversity

The products distributed at the store range from fast food, ready-to-eat foods to stationery, personal items or even cosmetics, etc Everything can be found at Circle K

b Diversify payment methods for users

Users when coming, buying goods at Circle K can pay in many forms From cash, card swipe to e-wallet payment, QR code scanning,

These forms are widely applied across chain stores This creates great convenience for consumers in the shopping process

c Operate 24/7

The store is open 24 hours a day, operating all days of the week including New Year holidays This point is considered a big differentiating factor, helping customers to visit Circle K anytime without fear of time Shopping needs can therefore be met immediately,

at any time

d Stores open in crowded residential areas

Circle K stores are all open in densely populated areas and major roads This is one of the points in the marketing strategy of Circle K In particular, this is also a factor to help attract more customers for the unit The shopping of users around the area has also become much more convenient

3.2 An added value for customers

Circle K provides value to its customers in the following ways:

- Brand strength and reputation: Circle K is one of the most recognizable

convenience store brands in the world; has been a reliable and efficient retailer since the 1950s

- Convenience and coverage: Circle K has its retail locations everywhere; around

densely populated areas to ensure that their stores are easily accessible to consumers

- Customer Service: They provide excellent customer service that is geared

towards friendliness Give customers an enjoyable shopping experience

- Product Range: Here offers a wide variety of products Including drinks, snacks,

fresh food, coffee; Basic household items and other items Ensure that the needs

of the guest base can be met

3.3 New “smart” product innovations

Most convenience stores sell relatively similar products, so to make a difference, investment, and development of unique products only circle K have, especially food and beverages drinking water When launching new food and drinks, Circle K can make a 63-point card to check the frequency of customers repurchase of that product, as well as based on sales to decide whether to develop or remove the product eat, drink that Circle K's new foods and drinks, when newly launched, are often unknown to customers until they are introduced by the staff afraid to try and will say no as soon as the staff wants

to introduce Therefore, in addition to the eye-catching posters in the store, circle K must

be active in social media, posting reviews in large food groups that influence young people Especially, the more attractive the promotion program, the more it stimulates customers to want to try, if the food is delicious and of really good quality, even after the promotion expires, the product will still sell well

Circle K can take advantage of consumers' green living trend to sell more environmentally friendly products: paper straws, bamboo straws change the packaging to paper bags or

biodegradable ones to protect the environment

PART 2

MARKETING INNOVATION PLAN

1 SEGMENTATION, TARGETING, DIFFERENTIATING AND POSITIONING (STP) 1.1 Segmentation

● By geographical locations

Circle K focuses on our country's two main markets, Ho Chi Minh City and Hanoi, with the largest populations and the highest demands for a high standard of living in Vietnam The shops have cleverly gathered and opened in crowded residential areas, near schools, and crowded places in these two locations

● By age and income

Circle K in general and CK Club in particular hits all ages From adults and children, housewives and especially the most concentrated customers are students Besides, the youth who are interested in technology and convenience are also attracted by CK Club because it is easy to use, provides many incentives as well as saves time The products here are diverse and reasonably priced, from everyday items to imported ones, so people with low incomes can also buy them here

● By career

- Urban consumers: Customers in urban areas and large cities that enjoy the ease

and speed of shopping at Circle K stores

- Individuals working: A group of people who do not have enough time to go to

supermarkets or traditional markets Or they don't have time to cook and instead rely on convenience stores like Circle K for snacks, coffee, and food

- Students: They use the Circle K space to study, connect, and socialize with each

other

● By psychological characteristics

Circle K targets young individuals who have the attitude of convenient shopping, meeting

or reaching everyone's modern and modern lifestyle Everyone, especially during the Covid-19 pandemic season, is maximizing ease, convenience, and comfortable shopping time without having to worry about the store closing, as was the case previously People may buy online without leaving their homes and still take advantage of a variety of deals, and discount vouchers

In addition, after 10 p.m., most food stores close However, Circle K will be open 24 hours

a day, seven days a week, to serve customers who arrive late from work or who have important tasks to complete in the middle of the night

● By consumer behavior

Circle K provides all its customers' demands, from individual to communal goals, as well

as purchases for the family or as gifts Circle K not only sells a wide range of products, but it also offers high-quality support services to help customers get the most out of their purchases Circle K is open 24/7, from early morning to late at night

1.2 Target market

The purpose of creating CK Club is to provide customers with the greatest convenience The target market for Circle K is everyone because it sells daily basics Customers who don't have a lot of time are particularly attracted to it; they may complete their work late and purchase some necessities as a result

Circle K serves a variety of foods with many attractive fast food and beverage combos, recently gaining success in the Vietnamese market, where students are the key customers In addition, there are many vouchers and discount programs for memberships

of CK Club which will attract low-income people

In detail, the target customers of CK Club can be described as follow:

- Age: 15-35

- Gender: All gender

- Income: Low to Medium income

- Career: Students, office employees

- Demand: People who want to be able to buy things quickly while also knowing that

they will be of good quality In addition, CK Club is also for regular customers that they can apply many incentives to buy goods at low prices

- Lifestyle: Modern, Busy, Fast, Ordinary

1.3 Differentiating and Positioning

● Positioning

Competitive position is considered for the market in which enterprises do business in the direction of a chain store combined with a coffee shop model that sells necessities (not selling fresh food) both serves food, drinks, and has seats

According to a report in the journal Asia Plus, Circle K has entered the top three large convenience stores in Vietnam, alongside VinMart+ and Family VinMart+ has proven to

be very popular among consumers aged 30 and up, particularly housewives More young individuals between the ages of 16 and 23 shop at Family Mart and Circle K Circle K was chosen as the best store in terms of service, including fast and fresh food, tables and chairs, cold air conditioning, a nicely furnished room, and powerful internet

● Differentiating

- Brand strength and reputation

Since the 1950s, Circle K has been a reliable and efficient retailer, becoming one of the most recognizable convenience store brands in the world with more than 16,000 stores around the world and in general and nearly 400 stores in Vietnam in particular Circle K's goal is to open stores in all of Vietnam's big and small cities, on every corner of every street, and in every residential area, in order to reach all customers As a result, the number of Circle K stores is extremely high, with the goal of becoming the store chain with the largest market share and wide coverage Circle k has improved brand value, brand image, brand awareness, and reputation as a result of its wide networks

- Integrating delivery feature

CK Club has a service called CK GO - an online shopping platform, that sells everything from fast food to fully prepared foods to stationery, personal stuff, and even cosmetics Therefore, customers can shop quickly at home Besides, there are many special

Circle K’s competitive position map

promotions for customers and other membership benefits that are only available on CK Club They offer outstanding customer service with a focus on kindness

- 24 hours a day, 7 days a week

The shop is open 24/7 a day, including the New Year's holiday This point is a significant differentiator, allowing customers to visit Circle K at any moment without fear of running out of time As a result, shopping requirements can be met instantly and at any time

- "Very ti ện, very lợi!"

“Very tiện, very lợi” is the catchphrase that anyone must say when experiencing the incredible advantage from the newly launched member app, exclusively for "big fans" of Circle K!

- 3P - Patience

Mr Yan revealed the key to his staff: "Patience, patience, patience" is the only way to

develop in Vietnam "24 hours a day" is the core of the convenience store business, so you must always be in a working mood This is the third installment of Tony Yan's business strategy, which he has used for more than seven years as the owner of Circle

K in Vietnam

- 4Fs - Fresh, Friendly, Fast, Full

Circle K responds effectively to the criteria represented in (4Fs) In detail, Products must

be fresh; staff must be friendly to clients; service must be quick; and full service – a wide choice of goods must be available Circle K has a high level of consumer trust, which is like a golden card in the convenience store company

advantages, with features like:

+ Accumulate stamps, exchange gifts: The customers can easily bring home the

"hot hit" presents and gifts from Circle K by accumulating stamps and exchanging them at any Circle K store

+ Playing games, winning prize: When successfully register as a member of the

app, the users will immediately have 1 turn to play the game "Try your luck, win money now" or "Thử vận may, trúng tiền ngay" with a chance to win 100% gifts, prize value up to 5,000,000 VND

Source: Circle K

+ Offers & promotions: The super sales and great deals are only available on the

CK Club app and are always updated regularly which applied to a wide variety of items and products

+ Inviting a new friend: With the slogan “More friends, more fun Together convenient, together benefits”! whenever you invite your friend to download the CK