A Case Study on City'super vs China Resources Vanguard (CRV)
Effective Customer Experience At Retail Touch-point
This case study is contributed by the Master Degree Students of e-Commerce and Internet Computing, Master of Science of The University of Hong Kong. The report is one of the course requirements for the module of CRM: Business Strategies and Techniques, being taught by Mr. Sampson Lee, President of G-CEM. The case study is published with permission of the authors.
1. Who are their target customers?
"Target customers are those who are most likely to buy from you".
City'super is a high-end supermarket chain in Hong Kong. Younger than its rivals in the business, and with a new concept of making "grocery shopping" into an exciting and enjoyable experience, City'super's primary target customers are the middle class or the upper middle class with a household income of HK$40,000 upwards per month. They are probably business executives or professionals with higher education level working in or near the central business districts. This group of people tends to have stronger interest in foreign culture and have a greater demand for a higher standard of living.
The selection of the target group is expressly stated in the company literature and also clearly reflected by its choice of shop locations. Besides, the pricing strategy (relatively high price), merchandising strategy (trendy and quality items with style and taste sourced all over the world) and the promotion strategy (regular promotional events organized at its stores such as Okinawa Fair and Shizuoka Fair from Food Division, Travel Fair, Back to School and various design and cultural exhibitions from Life Division) all echo to the needs and wants of their primary target segments.
B) China Resources Vanguard Superstores
China Resources Vanguard (HK) Co., Ltd runs China Resources Vanguard Superstores (CRV), which is one of the largest supermarket chains in Hong Kong. The word "Vanguard" is chosen for a reason. "Vanguard" pronunciation in Chinese sounds like the meaning of "millions of families", which implies the intention of providing their service for the general mass, the ordinary people.
CRV has, however, tried to get a larger slice of the market by also targeting the middle class. Such intention is evidenced in its company literature as well as the location of its Superstores.
2. What are the critical needs of target customers?
The critical needs of target customers influence their decision to purchase goods. In customer relationship management, it is the long-term relationship rather than individual transactions that matter. Different customers have different critical needs.
City'super's target market is the middle class whose critical needs are as follows:
1) Product: These customers demand not only trendy and stylish merchandise of high quality, but they also care about the healthiness of food, and they would likely prefer green products;
2) People: They demand higher standard of customer services such as the sales' communication skills, staff appearance and tidiness;
3) Lifestyle: They are demanding and critical in terms of e taste of living - from product choices and quality to store decoration and display setting. They advocate a cosmopolitan lifestyle.
CRV's target market is the general mass whose critical needs are as follows:
1) Product: They care more on the product variety and product availability;
2) Price: These customers focus on the price of goods and are attracted by discounts and special offers;
3) Place: Their shopping choice is greatly affected by the convenience of store locations.
Regarding the middle class market, CRV's target customers also have the similar critical needs as those of City'super.
3. What are their brand values?
a) To be Hong Kong's leading specialty store (High-end supermarket chain)
- Differentiated from other supermarkets and food stores which offer mainly local brands and merchandise.
- Fresh and modern feeling and environment
b) Provide Hong Kong consumers with quality food and lifestyle products
- Its products are imported weekly in small quantities with more than 40,000 high-end specialty items from Europe, Australia, Japan and other countries.
c) Introduce new trends to Hong Kong through products and information
- Regularly host store activities
d) Aims to promote a food culture
- Food festivals in order to introduce and promote different cuisines from around the globe
e) Build relationships with the customers
- Cooking classes
- Collaborate with renowned Hong Kong restaurants to attract fine diners
China Resources Vanguard Values:
a) Good Value for Money
- Price, Promotions and Perceptions
b) Stock a wide selection of quality brands and products
- 'Cheapest of the cheapest' in some categories and the 'best of the best' in others
c) Providing one-stop shopping services
- Products ranging from fresh food, packaged foods from different countries, daily necessities, and wines.
Based on the above analysis, we have tried to walk through the in-store experience of the two stores, using the identity of a middle class customer to illustrate the result in the below Emotion Curves.
4. Emotional Curves
The below diagram and table illustrates the use of an Emotion Curve to measure the customer experience rating in a natural time sequence (from entry to exit to the stores) on a 100 point rating scale.
5. Are they delivering effective experiences? Why?
"An experience is not effective unless it is both remembered and branded". City'super has delivered its on-brand experiences. It successfully delivers its unique brand values of "high-end supermarket" image via providing quality products, cosmopolitan lifestyle and good services to their targeted customers - the middle class customers throughout their shopping experiences in the store.
Customers will remember the pleasure-peaks they have: the nice shopping environment, abundance of information provided by friendly staff and good quality imported products. All these fit in the metropolitan lifestyle - and that's what the target customers want. They may have pain-peaks during the process: the high price, some goods being out of stock, insufficient trolleys and long queue up time. The customers are, however, cheered up with various customer connections and benefits when they checkout. This also confirms the Peak-end Rule.
On the contrary, CRV appears to be providing NON-BRANDED and ineffective experiences: -
First, their positioning is somewhat blurred. It seems that they are focusing on the general mass as well as the middle class, but they fail to deliver what the middle class needs, for example, high class lifestyle.
Secondly, despite CRV positions its brand as "Lifestyle, High quality, Customer-oriented, Fresh, Low price and Convenience", middle class customers fail to experience a large Pleasure-pain-gap (PPG) from the emotion curve. There are very few high pleasure peaks which echo its brand values to the middle class customers. Thus, the whole curve becomes flatter without effective contrast to create branded experience to their customers. Unfortunately customers tend to remember those pain peaks, such as the unpleasant environment, inadequate information, insufficient choices, and even worse, lack of connection and customer care at the end point. In this regard, CVR is delivering a non-branded to the middle class segments.
CRV may be able to deliver a better experience to the general mass if they can really deliver what these customers care: low price, convenience and sufficient product variety and stock.
About the author
Mr Francis Chan
Mr Tong Kam Ming
Mr Cheung Kin Leung
Mr Philip Tam
Mr Chow Hiu Yeung
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