MARS501 Final assignment
Hallo and welcome to my presentation. My name is _____ and I will take you through my thoughts and analysis of Case 2 (KFC) and Case 5 (Toyota AYGO).
Case Study 2
KFC was battling the classic resistance to change from it loyal consumer base who were insistently complaining over the chips/fries being not to the satisfaction of customers. There was a pressing need to change the recipe for the product in the UK and Ireland markets. Pereira et al. (2019) express that customer satisfaction is among the key performance indicators in the food industry, requiring organizations to take customer feedback seriously.
The new product did very well in the research stages but ended up being poorly received in test restaurants. Particularly, the problem was because a majority of loyal customers did not approve of the changes made to the product and preferred the old chips while the vocal minority did not approve of the old product.
KFC created a change in perception by employing a marketing campaign that would enable the existing customers to approve of the new product while catering to the need of the new consumers.
To manage the transition, the challenge was to make sure that every customer group was heard. Marketing campaigns addressing the benefits of the new product failed. KFC took a risky approach that used behavioural economics by making the older chips the “monster” through highlighting the criticism and painting a picture of the new fries as the “saviour”.
By using print and digital media, criticism and abuses relating to the older product were amplified to a point where consumers turned to the new chips having been exposed to the issues of the older fries. Behavioural economics is noted by Krajnović, Sikirić, and Bosna (2018) to be a critical influencer to the decision making processes that individuals use in purchasing. Here, the use of this concept paid off as the company gained a larger consumer base in the UK and Ireland.
Marketing Concepts and the Link to the Case
There are two emergent marketing concepts that are relevant to the KFC case study. First, the consumer decision-making concept is highlighted as very important for organizations in terms of meeting the primary objective in profit maximization. In the development of the new marketing campaign, KFC realized that there was a need to alter how consumers perceived the product. Soodan and Pandey (2016) highlight the need for a company to use buying behaviour and the process of consumer purchasing decision making to formulate the marketing mix. In the case study, KFC’s new product was problematic to two consumer groups as noted earlier. Those resistant to change wanted no alterations to the product while the vocal minority were unsatisfied with the old chips/fries. Therefore, the company settled on making a new product and using the promotion segment to create attention and to shift the perception of the loyal group of consumers. Behavioural economics were used to create a psychological campaign that would alter the perceptions held by the existing customers while ensuring new consumers were satisfied with the new product.
The second marketing concept that the case used is the idea of advertising. The objectives of advertising and the appeals used by an organization to meet advertising needs are explored. Advertising is presented by Cole, DeNardin, & Clow (2017) as an effective way to communicate with a target market in the process of trying to maximize sales. In the KFC problem, loyal customers were not ready to embrace the new changes to the product. However, KFC was required to make the changes in order to stay relevant and to ensure that the new generation customers, who are very vocal on social media, approved of their products. Therefore, the marketing concept of appealing to customers through advertisements was employed, adapting to the use of social media marketing to cater for the needs of the vocal consumers, and at the same time being simple and gentle not to lose the existing consumers.
As illustrated in this case, satisfied customers rarely desire change to a product because they have proven it to satisfy their needs, wants, or demands. I have resisted trying a new product before because I felt it would not meet my needs as much as an older or current product did. For example, being an Audi loyal customer, I really loved the second-generation vehicles that gave a lot of comfort, style, power, and a small engine that was very economical. However, the third generation cars were a bit of a challenge for me because of the change in design and the exterior look. I felt that the sportier look would not be as economical as my old car. Kumar, Dalla Pozza, and Ganesh (2013) note that the main concern of a loyal/satisfied customer is that a change in product would not meet the same expectations as previously held. I felt that some aspects of the new product would not completely satisfy me.
Taste scores improved across every measure for those aware of the campaign because they had different expectations. Expectations is defined by Yu et al. (2018) as the set of actions or behaviour describing peoples’ anticipation when interacting with products or brands. Those aware of the campaign already had their own summarization of the product before the campaign. Therefore, upon the implementation of changes to the product, they interacted with the new product while basing their decisions on the old product, thus leading to higher satisfaction.
Case Study 5
The case study looks at Toyota’s journey to making the AYGO a favourite of a specific target market in its large consumer base. The main problem it was facing was that the minicar market segment was declining s people tended to favour crossover models. The AYGO did not have any major updates that would woo existing consumers to buy the same brand. Therefore, Toyota needed to attract a new audience for the AYGO coming from young, pre-family, and emotional decision making categories. The company also wanted to retain its value hunters consumer base made up of 45 year-olds in the post-family, pragmatic, and rational buying category. Because of the versatility of the automotive industry, Slater et al. (2007) stress the need to have a specific target market before making a product. Toyota’s new task was to create a strategy that would appeal to the aforementioned categories while maintaining relevance and increasing sales. The marketing approach taken was simple: a vehicle that enables novelty and discovery and allows for a spontaneous lifestyle, in line with the current mobile and social culture. The Just Go campaign, saw sales increase and the minicar gain a new market category and name.
Marketing Concepts and Connection to the Case
Two marketing concepts are visible in this case study; the usefulness of market segmentation and the concept of market targeting and positioning. Market segmentation refers to a marketing strategy where select groups in the consumer base are not only identified but also pursued in order to present products to them so as to appeal to their consumption interests (Cai, Gautier, and Wolthoff, 2017). The market can be segmented into different categories including the demographic, behavioural, psychographic, and geographic. In the case of Toyota, the marketers used behavioural and psychographic characteristics to create a product that appealed to different consumers. The Toyota AYGO was marketed as a car that would cater for the needs of the young, pre-family, and emotional decision makers, as well as to the 45 year-olds in the post-family, pragmatic, and rational buying category. The AYGO was promoted as a partner that would satisfy both the psychological and the behavioural tenets of the target audience.
The concept of targeting and positioning was also used in the case study. Targeting is mentioned by Paruchuri (2019) to be a process that helps to identify the most attractive markets in line with the segments mentioned earlier. Positioning then follows up to communicate a brand to the targeted market. The aim of Toyota was to make sure that sales for the AYGO model increased and that the car occupied a significant portion of the minicar market segment. To meet this strategy, Toyota made product improvements and increased promotion in order to better target their audiences and to position (communicate) the said advantages to the market.
One notable persona relevant to Toyota’s strategy includes young woman, single, freshly hires, little disposable income, interested in light travelling, adventure and thrill seeking. This persona includes young females out of college and working in a part time job that has a lot of free time. They are not decision makers and hold little to no influence in real life. They are huge on social media with significant following on social sites such as Facebook and Instagram. A day in their lives would include going to local eateries with a group of friends and meeting later for laughs and a good time. This persona would be frustrated by the inconveniences of public transport but also prefers to have a personal means of transport, therefore making the AYGO a great choice for the demands and needs.
The second persona is a 50 year old divorcee living in the city suburbs but craving a quiet lifestyle spent alone with occasional meeting of friends and family. This individual has little to no income and is a very cautious and rational spender. They would find a lot of pleasure in a small car that is able to take them for quiet drives, park easily, and serve as a companion for the lonely trips to neighbouring cities to meet with family. The hustles of public transport and new age online cabs would be very frustrating for the elderly man, thus making the AYGO the perfect car for his needs.
A major risk of a strategy seeking to appeal to new consumers who are quite different to the current core consumer group is that they may not be as profitable as another market segment. For example, a new consumer group may not align best with the product, therefore end up not demanding more of the product as hoped.
Thank you for your time and now will be a good time to ask any questions you may have.
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