CRM Strategic Study of Chinese Catering Enterprises CHEN Zhuanqing, SHI Baojin Economics and Management College, Henan Science and Technology Institute, China, 453003 chenzhuanqing@126.com Abstract: With the further development of economical globalization, in Chinese catering market, western catering enterprises with McDonald's Corporation and KFC as representatives constantly grab customers from Chinese catering enterprises. Confronted with western catering enterprises with abundant capitals and advanced managerial skills, our catering enterprises must change our marketing recognition and begin to implement the concept of taking clients as the centre. They need to convert food management into information management, by the reasonable implementation of managerial strategy on customer relation, enhancing their competitive and capacity for development. Keywords: Catering enterprise, CRM, Managerial Strategy on Customer Relation With information technology rapidly spreading and the upgrading of economic globalization trend, the competition between catering enterprises become more and more heating. As customers are the core of the competition of Chinese and western, customer relationship management(crm) occurs naturally as a new type of managerial mechanism, which aims to improve the relationship between enterprises and customers and is applied in the fields related with customers, such as marketing, sales, service and technology support. [1] The objective for catering enterprise to apply CRM is to attract and retain more customers by providing rapid and all-round quality service and enhance customer loyalty so that customers will choose to consume in the same catering enterprise, finally bringing forth the growth in profit. The application of CRM is involved with relationship marketing and the application of CRM information technology as well as the excellent performance in enterprise management. 1 Introduction Because of limited region and radioactive scale, the attainment of enterprise profit mainly depends on repetitive consuming of customers. Only by attaining old customers and attracting new customers can the health development of catering enterprises be ensured. The aim of catering enterprise applying CRM is for keeping customers in highly-repetitive consuming. Only in this way can enterprises win advantage in heating competitive market. 1.1 Be useful for maintaining customer relation Customers are the outside base stone for the accumulation of profit. To a certain degree, marketing is a process of converting the need of customers into profits of enterprise. Based on this, increasing the number of customers has huge significance. Two aspects of works need to be done to increase the number of customers: one hand, actively explore new customers, on the other hand, keep old customers, the key of which is to improve the quality of customer service and constantly enhance satisfaction degree of customers. in the marketing practice. Despite the importance of finding new customers, enhancing previous customers satisfaction degree seems more important. This is not only for the cost of getting a new customer is far higher than retaining an old customer but also for the enhancing of customer satisfaction can bring good reputation for enterprises, which is also the reason why CRM is popular with modern enterprises. 1.2 Be good for increasing enterprise profit The focus of customer relation management is make enterprises keep long term relationship with customers, the aim of which is for its long term benefits. Without the application of CRM, in most occasions, enterprises are difficult to adopt other measures than product and enterprise image to maintain long term relation. If competitor depends on low price to attract customers and new technology 67
to solve the problems of customers, many customers may turn to your rivals. However customers and enterprises will keep in close relation after the application of CRM and price will not be the main method for competition any longer, which makes your rivals hardly destroy the long time relationship between the enterprises and its customers. These are good for enhancing customer loyalty and retain old customers. A foreign study indicates as well 5% growth in the repetitive purchase rate can result in 25% up in profit, which suggests the enhancing of customer satisfaction degree and customer loyalty degree can bring forth increase in profit. 1.3 Be good for enhancing enterprises ability to cope with changeable market The progress of society, the competition from rivals and the maturity of customers keep the management of catering enterprises more difficult than ever. Catering enterprises could lay base about by implementing CRM and further grasp precious customers information. In catering industry, customers usually attach more importance to the feature of food, how clean it is, how elegant the environment is, how good the service is and if the price is reasonable. However if the food caters to customers taste depends on the relevant information enterprises grasp about their customers. CRM can be applied smartly according to the specified need of customers and hence greatly improve the ability of enterprises to cope with changeable market. 2 The present situation and problems with Chinese catering enterprises CRM 2.1 The present situation of Chinese catering enterprises CRM Chinese catering enterprises can be generally divided into two categories: one is those providing both food and living, the others purely providing food. The former type is comparatively easy to carry out CRM, as basic information of customers can be obtained when customer registers for living, while the latter don t pay attention to the collection of customer information. We have to notice that many reputed wine shops are doing well in CRM. For example, some companies have set communicating platforms by opening hotlines, setting up website and member club or publishing journals. Some companies directly set up CRM department so that they can better serve customers, which undoubtedly indicate the importance of CRM gradually manifests in Chinese catering enterprises. 2.2 Problems with CRM of Chinese catering enterprises 2.2.1 Less attention to be paid on CRM For a long term, Chinese catering enterprises put emphasis on food special taste or the catering environment, but seldom consider the need of customers. When marketing is penetrated into our daily life, catering enterprises usually think the number of customers will increase along with the increase in advertisement input. They always neglect the categories of customers: new customers or old customers. In their opinion, old customers flowing away is quite natural and it s impossible to have a customer fixed in their own enterprise, as there are always some people going to other restaurants for a new flavor. So they are not concerned with so called customer relation, CRM and the relation of CRM between catering enterprise. 2.2.2 The lack of service awareness about customers Catering enterprises belong to service industry and the quality of service identifies with that of food. Although a large number of catering enterprises have realized the importance of taking customer as centre. But because there are many consumers and the need of customers are versified and complicated, many enterprises feel difficult to cater to consumer, which is the lack of service awareness, for example, the way of speaking and the way of laying dishes or the way of telling story about the dish name will influence the satisfaction degree when consumers are having dinners. 2.2.3 The way of promotion is dull Catering enterprises have many ways of promotion such as discount, shopping ticket, gift etc. which way to choose is generally decided by the sales season. In the season selling well, catering enterprise give presents. Oppositely they may offer discount or shopping ticket. We know the core of CRM is to know the need of consumers. Only when you do that can you offer product and service satisfying 68
product and service, but the influence only depending on discount, shopping ticket or presents is shorter and can t maintain long-term relations with customers. 3 CRM analyses on foreign-owned catering enterprises-take McDonald's and KFC as examples 3.1 CRM in McDonald's Since 1990 setting up the first branch in Shenzhen, McDonald's has set up about 670 restaurants in china throughout 25 provinces and municipalities directly under the jurisdiction of the Central Government. For many Chinese consumers, McDonald's has become the totem of western culture, becoming a food paradise for numerous children. CRM of McDonald's mainly embodies in the flowing aspects: 3.1.1 Maintain customers by product quality McDonald's has a very famous management concept QSCV fully embodying this point. The specific contents of.qscv are: Q-quality; S-service; C-cleaning, V-value. From this we can see product quality is the focus in Mc management system, product quality is also the most effective way satisfying customers need. In order to ensure quality, this company requires all the beef ingredients couldn t include internal organs and should be lean meat. Whether internally or externally, the ingredients is for all the branches have to be the same. As to various operation pattern and details, they also have detailed stipulation. [2] QSCV expresses the management concept of MC to offer high quality of more value to customers, which has turned into a bridge for maintaining old customers. 3.1.2 Attract customers by fast speed In view of the feature of fast-food, McDonald s tried to be the real fast food company by finding ways to save customers time.the company requests their workers to make a beef pie, a box of chips and a cup of drink within 50 seconds. The making of French chip needs seven minutes and the toasted beef must be thrown away after 10 minutes out of oven. Their branches all over the world try their best to speed up according to their actual situation, for example Japanese McDonald's usually sent Hamburg to customers, but they soon found customers became impatient immediately after selecting food with the hope to get food sooner. Hence, Japanese Mc cut down on time from 36 seconds to 32 seconds. People have a vivid comparison that McDonald's isn t selling Hamburg but selling time. 3.2 CRM in KFC KFC established the first Ken restaurant in Beijing in 1987 and the second branch in Shanghai. So far, Ken has set up 800 branches in Chinese over 170 cities. CRM in Ken is famous for its service and care to customers. 3.2.1 Standard service to attract customers The standard service in KFC is CHAMPS, whose specific content: C-Cleanliness means maintaining restaurant beautiful and clean. H-Hospitality means offering sincere and friendly equipment, P-Product Quality refers to sticking to the principal of making products of good quality. S-Speed pays attention to speed service. From the definition of standard service in Ken, we can cleanly see the emphasis degree of KFC on service quality. As long as customers enter KFC restaurant, there are always warm waiters greeting them with smile and providing considerate service. In order to provide convenience to children s parent, KFC is equipped with children chair and table and a small children park is also available. 3.2.2 Show care to target costumers The target consumers of KFC are families but the focus is youngster. Ken hope to inflect youngster by out coming culture, finally attracting the other members of their family to KFC and making KFC part of their family. Based on the strategic focus, the care they show to customers also embodies on children, such as children birthday party designed for children offering various type of food combination. Since 1995, Ken started to promote children birthday party in china responsible by specially arranged worker holding parties of different themes every year. [3] After the study of children s psychology, they prepare different types of cartoons to send on children s birthday as birthday gift, which is favored by many children. 69
3.3 CRM experience of catering enterprises in china Through the analysis on KFC s and McDonald's catering branches in china, besides good quality and service, one very important reason is they all emphasize CRM. Their successful experience can be illustrated from the flowing points: Firstly, set up customer calling centre. The setting up of calling centre is the embodying of information technology in catering market, which facilitates contacting with customers. Secondly, set up professional customer service department. Customer service department is the place for solving customers problems and help customers, the aim of which is to ensure the loyalty and satisfaction of customers. Thirdly, send festival card, which is a way of promotion facilitating the emotional communication with customers. A small card is low price but can fully satisfy Chinese cultural and traditional psychology. Fourthly, show care to customers. The need of customers is not only physical but also spiritual. Sometimes people s need in spirit is even more important than physical need, which is applicable for food consuming. McDonald s and KFC understand it very much so they can tightly grasp the psychology nerve of Chinese customers by various way of showing care to customers. 4 Strategies for Chinese catering enterprises applying CRM We analyze the successful experience of McDonald s and KFC in order to give some enlightenment to Chinese catering enterprises. Of course we deeply know that business mode can t be copied entirely, but we can combine the specific status Chinese catering enterprises and the successful experience of Mc and Ken to apply CRM of our own feature. 4.1 Set up the idea of taking customers as centre In Chinese enterprises, some sayings like customer is God and customers are our parents are the specific embodying of taking customers as centre. To speak is easy; the fact is there are just a few enterprises to insist on acting on this principle. The special feature of catering restaurants make many catering enterprises consider good cook, dishes and decoration as the three important factors, which in their opinions are the decisive factors for the success or failure of catering enterprises. From the angle of Marketing, this idea is typical product idea. Those with this idea think consumers most like innovative product of good quality and function. In the organization with product idea, managers always devote themselves to the production and improvement of good quality products, however, many managers deeply affect for their own products so that they have no the awareness of catering to market. [4] 4.2 Make use of CRM to retain the customers most suitable for the enterprises It is the first step for CRM to set up the marketing concept of taking customers as centre. If they want to retain the most suitable customers, they should apply CRM management system. the utilizing of this system enable catering enterprises to get known about some information such as their customers name, age, family status, work, income level, correspondence address, hobby and consuming habit and so on, which are the bases for service of individuality. [5] The purpose of using CRM management system is to win customers loyalty and retain them by proving different service to different customers and maximally satisfy consuming psychology of customers 4.3 Establish good customer relationship by information management Good customer relationship relies on the communication between catering enterprises and their customers. They can set up good relation with customers from the following aspects. Firstly, set up customer materials stock, including character, catering hobby and so on, based on which they could adopt marketing strategy to maintain the relation with customers. Secondly, set up customer club. The club can provide feature marketing activities, such as promotion for new dishes, gathering and low price etc. Catering enterprises can strengthen the relation between customers and enterprises and further cultivate the loyalty of customers by the mood communication and interaction between enterprises and customers. 4.4 Constantly innovate catering product to enhance customer satisfaction degree 70
The extension of new product in marketing has extensive comprehension. As long as any one facet among all the facets takes change, we can say a new product is born; there is no exception for catering product. It is a systematic project with market as orientation to enhance product value, established on the concept of catering product of extensive definition, and is a potential chance for managers to grasp market. It takes business benefit as objectives and emphasize production condition and product elements as well as practice and operation and market value to shape a more suitable catering habit For consumers and the production and management system with lower price,further promoting new catering products such as new ingredients, new technology, new art, new utensil, new service and new environment as so on is a combination with a series of elements including marketing orientation of enterprises, enterprises culture, enterprise feature and physiologic needs of consumers. [6] 5 Conclusion China has broad catering market. With foreign catering enterprises entering china, future catering market will have more fierce competition. Only by setting up CRM with customers as centre can Chinese catering enterprises enhance their core competition and reach the aim of fast growth. What we need to emphasize is CRM is not software which is involved with the synthetic application of mythologies, theories of information and relation and is a full set of application of business facilities. If we say CRM is a precious sword for the success of enterprises, the specified strategies of CRM are the most shining rays on the sword. References [1]. Jian Dian Wu. Managerial analysis on CRM of steel enterprises. Heilongjiang science and technology information, 2008(10):238. (in Chinese) [2]. Liu Zhuan. Management Format of McDonlds. Today s Article Abstract, 2009(5):53. (in Chinese) [3]. Yang Ming de. The marketing strategy of KFC in China. Chinese Advertisement, 2001(8): 62. (in Chinese) [4]. Philip Kotler, Kevin Lane Keller. Marketing management. Shanghai: Shanghai people publishing house, 2006: 15 [5]. Zheng Yongxian, Hua Qing. Forge new mode of CRM in catering enterprises, 2003: 59. (in Chinese) [6]. Yang Mingduo. The construction of catering products innovative system. Yangzhou University Cooking Newspaper, 2007(4): 39. (in Chinese) 71