K-mart is expanding beyond the shores of America and our team has determined Hungary to be a suitable location to open a store. This report examines the situation analysis, communication objectives, target group, creative strategy, promotion strategy, media strategy, budget allocation and control & evaluation that this undertaking will involve. K-Smart Launching K-mart in Hungary By Rebeka Selmeczki, Rina Razali, Elizabeth McCrudden, Aaron Ho (Jin), John Brennan & Danielle Dalla
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K-mart is expanding beyond the shores of America and our team has determined Hungary to be a
suitable location to open a store. This report examines the situation analysis, communication
Situation Analysis........................................................................................................................... 4Mission and Vision.................................................................................................................................... 5Kmart in Australia..................................................................................................................................... 6Kmart Community Program 2010....................................................................................................... 6Past Failures................................................................................................................................................ 7Past and Current Kmart Communication Campaigns...................................................................8Hungarian Retail Market........................................................................................................................ 9SWOT Analysis............................................................................................................................................ 9
Competitor Analysis.................................................................................................................... 10Hungarian Hypermarkets and Supermarkets..............................................................................10Tesco........................................................................................................................................................... 11Louis Delhaize Group............................................................................................................................. 13
Country Selection......................................................................................................................... 14
Country Overview: Hungary..................................................................................................... 17
Market Environment.................................................................................................................. 19Retail in Hungary.................................................................................................................................... 19Trends in the CE Retail Market...........................................................................................................20
Consumers prefer larger shop formats.........................................................................................................20Retail sales are constantly growing................................................................................................................20Discount stores push super- and hypermarkets out of their position............................................21Cities are reaching the point of saturation..................................................................................................21“Polarization” of customers is continuing....................................................................................................21
Communication Objectives....................................................................................................... 22
Advent Calendar......................................................................................................................................................38St. Nicholas Day Mail Out.....................................................................................................................................39Loyalty Cards............................................................................................................................................................39Kmart Wishing Tree.............................................................................................................................................. 40
Among all the countries listed, the study pinpoints both our choices; Malaysia and
Hungary as being safe investment destinations which represent general
opportunities for development in the short or longer term.
Increasing consumer demand and the existence of a burgeoning middle-class make
Malaysia an extremely interesting destination for investment. In addition, a young
population, low unemployment and a growing modern retail sector all contribute to
this country’s extremely attractive investment climate.
On the other hand, Hungary is in the first group of countries to have acceded to the
EU and Budapest, its capital, has a tradition of being a financial and managerial hub
in the region.
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Although it has a fast maturing retail and consumer market, there are still
opportunities left for investment there for hypermarkets, convenience stores and
specialised outlets especially outside the capital.
In order to launch our investment programmes for the long-term, we have to be
aware of the current regulatory constraints in the retail sector and always bear in
mind the unstable political climate in the selected countries. Malaysia has some
constraint and potentially low risk to that as opposed to Hungary, which has non-
significant constraint on the regulatory and has no risk, which puts Hungary slightly
ahead as a choice.
Country Overview: Hungary
Population: 9.9 million.
The main cities are Budapest (1.7mn),Debrecen (204,300), Miskolc (175,700) 17
(IGD, 2008).
Official Language: Hungarian (also known as Magyar)
Currency: Hungarian Forint
€1 = 261 Forints
(ECB, October 2008)
Economy is one of the weakest among the new EU countries.
Huge budget deficit (10% of GDP),rising inflation (due to foreign exchange
differences), and tax hikes forecast
(IMF, 2007).
Unemployment rate
The percent of the labour force that is without jobs is 10.8% (2009) It is at no. 121 in
comparison to the world.
Disposable income
Hungarians have an average of €5,549 per year at their disposal. Budapest is by far
Hungary’s most affluent city with an average per person disposable income of
€7,503, an amount around €1,000 more than the neighbouring county of “Budaors”,
whose inhabitants have a purchasing power of €6,568. Despite Budapest’s high-
ranking position within Hungary, its inhabitants still only have half as much money at
their disposal as Germany’s poorest county. Even so, 21 of Budapest’s 23
municipalities are among Hungary’s 40 most affluent. The most affluent municipality
“Budapest 12” – boasts a purchasing power of €8,988 per person.
(GfK Purchasing Power Europe 2008/2009)
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Market Environment
Retail in Hungary
Retail market structure Top 10
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Source: IGD Analysis, Country Presentation, Hungary
Share of shop types in sales of daily consumer goods in Hungary (%)
Source : GfK Consumer Tracking and GfK expert estimate 2013
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Trends in the CE Retail Market
There are currently several major trends in Central European retail that are to a
certain extent common to all CE countries, such as Hungary:
Consumers prefer larger shop formats
The market share of small businesses, groceries and local markets is constantly
declining in favour of the homogenised supermarkets, hypermarkets and discounts.
Retail sales are constantly growing
Retail sales are likely to continue growing at a substantial rate despite last year’s
slump in some countries. This growth is especially significant in Hungary where,
according to data analyst Mintel, sales are estimated to triple between 2000 – 2010.
Discount stores push super- and hypermarkets out of their position
Discount stores with their aggressive marketing are succesfully attracting increasing
numbers of customers. Partly because of lower levels of income, price is still a
determining factor for a large part of customers in CE. Discount stores are likely to
gain bigger shares of the market and to expand further into more CE countries.
Cities are reaching the point of saturation
As the retail market in major cities is nearing saturation, retail chains are exploring
opportunities further afield in more rural areas, bolstering sales and converting
consumer habits.
“Polarization” of customers is continuing
Despite the determining role of price in consumers decisions described above, the
number of shoppers who choose the best quality products instead of the least
expensive is increasing. More customers are also beginning to better appreciate the 21
quality of services provided as well as ease and comfort of shopping instead of
simply the value for money factor.
The demand for premium products and convenience are the driving factors behind
value growth across the Hungarian retail industry, with consumers increasingly
viewing their purchases as status symbols. Yet, local consumption patterns vary
significantly according to income, with the average wage of US$19,985 being much
lower than professional salaries. The government’s austerity programme, which has
reduced consumer expenditure, also means that many consumers are extremely
price-conscious
Communication Objectives
What we will be trying to achieve with our communication efforts is to launch our
campaign whilst promoting brand awareness among Hungarians. Since K-Mart is an
unknown brand in Hungary, there will be few pre-existing attitudes towards the
company in consumer’s minds. This can be both positive and negative. We will be
entering the Hungarian market with a strategic marketing plan centered on family
and value for money. This approach is grounded in research confirming that
Hungarians are price sensitive shoppers, who treasure their family values and
community spirit. ( Emerald Insight )
Hard discounted shops and hypermarkets are on the rise, and there is a huge
opportunity for stores such as this to be extremely successful. Hungarians seem to
be price sensitive across a range of products and services (Hubpages).
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Included in our campaign will be information leading to general brand awareness, as
very little is known about the brand throughout Hungary. Through this we will be
promoting the wide variety of products that the store offers.
The positioning we want to occupy in the consumers’ minds is that it is a store that
provides the average family with a range of products to suit their everyday needs.
These will all be provided at an affordable price without compromising quality or
service. Family is important to K-Mart because the stores offer goods that are
suitable for many age groups. This aspect will be even more important in Hungary as
the population places such a large importance on community. Hungarians are more
family orientated than westerners, so it is more appropriate to target families rather
than individuals (Filolog).
This campaign will introduce brand recall into the minds of Hungarians, as it will
ultimately lead to consumers thinking of the brand when they desire one of these
family products.
Our communication objectives will be achieved through incorporating these elements
into all aspects of the campaign. Not only will our advertising and promotion educate
consumers on what stocks the brand carries, but it will create brand awareness and
a more long-term positive attitude in the minds of our target audience.
We will be utilising several forms of media to achieve our objectives. For more
information, please see below.
Our communication strategy hinges on our belief that a positive attitude towards a
brand will bring back customers and promote loyalty in our consumers. We will
achieve this loyalty through effective pricing and promotions designed to appeal to
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Hungarians natural family values and their instinct for good value. This will result in a
positive brand image and satisfied customers.
Target Audience
K-mart’s target audience in Hungary will be fundamentally defined by the following:
The Hungarian population is extremely price sensitive so there will be a focus
on the fact that K-mart is affordable for this audience.
The target audience will be apart of the middle-lower income bracket as they
are the part of the population that would be most attracted to affordable
goods.
Hungarians are very family orientated more so than western countries, so
there will be a focus on the fact that K-Mart can offer a happy shopping
environment for the entire family
The main age demographics that will be targeted is 25-55 year old mothers,
since females in Hungary engage in household shopping more than the
males
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The location of K-Mart will be a highlighted feature for the target audience as
all K-Mart stores will be situated in close proximity to smaller cities and towns
throughout Hungary not solely in the bigger cities
Hungary is an ageing population since there are more deaths each year than births.
The average size of a family is 2.6 people. The Hungarian demographic profile
consists of the following recorded statistical fact, recorded in July 2009:
The population rate sits at 9.905.596 million
The age structure shows that 15% of the population is 0-14 years of age
and that 69.3% of the population is between the ages of 15-64 years and
15.8% of the population is over 65 years old
The median age works out to be 39.4 years (Indexmundi)
Teenagers and children are not included as the primary target audience not only
because they are a small percentage of the population but mainly because they do
not have a steady income. The primary target audience is between ages 25-55 year
old mothers, who need to shop for the entire family. The secondary target audience
is the entire family under one collective group. Hungary has many small cities, town
and villages so the location of K-Mart will be spread throughout the country so
consumers can get there easily without having to drive to the closest biggest city.
Some traits in consumer behaviour in Hungary that need to be kept in mind are due
to the fact that the Hungarian market is extremely price sensitive meaning that other
consumer satisfaction measures assume less importance, this means that there is a
huge opportunity for hard discounters to be successful. Consumer brand loyalty and
awareness is not as prominent in Hungary as in other Western countries and lower
than other Central and Eastern European averages. Some ways to improve brand
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loyalty in Hungary is by the introduction of brand loyalty cards, which can be used in
cinemas, hypermarkets, bookstores and so on. This would work well in Hungary
since price is the most important factor in the consumers mind. Electronics has
become a huge demand in Hungary therefore many chains of electronic goods
stores have opened, employing up to 70 000 people, which is a positive fact in the
Hungarian consumers mind since it has opened opportunity for the unemployed. The
winning formats in Hungary are known to be hypermarkets, discount and DIY stores
(Euromonitor).
It is statistically observed that currently there are 8 million people in the Hungarian
population that are subscribed to a mobile phone, the Hungarian population sits at
10 million. The Internet subscribers sit only at 3 million from the entire population,
therefore there is a significant difference in numbers of mobile and Internet users in
Hungary. There has been an increase in internet usage, meaning that our target
audience’s attention can be obtained over the internet yet majority still use telephone
to communicate more and TV to gather daily information, so TV and other mediums
should be more of a priority over internet for this target audience.
In order to establish a set of psychographics in Hungary, the mentality of the people
in this nation need to be looked upon the values, behaviour and thinking are the core
motives behind this task. Unlike many ‘Communist Eastern European’ Hungarians
are not a collectivist culture instead it is better defined as a ‘moderately
individualistic’ culture, although it is viewed as significantly less so than most Anglo-
Western cultures. Below is a list of key differences between Hungarian mentality and
Anglo-Western mentality, this is important to be able to see what really motivates or
does not motivate the target audience:
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Anglo-culture is built on key ideas of competence, product, project, task =
“what I accomplish” whereas Hungarian culture has key ideas built upon
relationships “who I am, who I belong to”
People in Hungary are traditionally expected to put the interest of their family
or group where they belong, before their own interest rather than looking after
individual needs and interests
Hungarians are big on forming their own, unique, different opinions (2
Hungarians means 3 opinions) whereas Anglo-westerners are expected to
have a private opinion
Personal happiness comes from relationships: maintaining a happy family,
creating a progressing society, having fulfilling personal relationships, and
being able to “look in the mirror” with self respect (have not over-compromised
personal values) whereas Anglo-Westerners are driven by self-actualization
by each individual is an ultimate goal
The uncertainty inherent in life is felt as a threat which must be fought
whereas in the Anglo-Western world uncertainty is a normal feature of life and
each day is accepted as it comes
Acceptance of familiar risks; fear of unknown situations and of unfamiliar
risks. What is different is dangerous whereas in the Anglo-Western world what
is different, is curious
Pessimism is a state of mind with Hungarians, realism is a value which in
Anglo-Westerners is the opposite, optimism to always assume the good.
(Filolog- Hungarian Mentality)
So it can be seen quite clearly that the psychographics for Hungarians differ to the
Anglo-Western world. This means the way in which we communicate to our 27
audiences will be different. It appears through this list even more that the
psychographics in Hungary match very much our target audience in the way that
they are very family orientated and that these aspects of lifestyle are highly
prioritized.
“Compared to Americans, Hungarians have a significantly stronger tendency to
avoid life’s uncertainties. This means that new situations, unknown people or
circumstances cause greater stress to the individual, and is usually looked at as a
potential problem or danger, rather than a challenge (Filolog- Hungarian Mentality)”
Hungarians can be afraid of trying new things and don’t appreciate constant change
in their lifestyle. It would therefore be wise to slowly introduce K-Mart to the target
audience rather than advertising it too heavily and not to take an ‘in-your-face’
approach to marketing.
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Message & Positioning
Main Message
The main message we are trying to communicate in this communication plan is that
K-mart is affordable and part of the Hungarian community. Both of these aspects of
the creative are directly linked to ingrained Hungarian beliefs and attitudes. As
mentioned previously, family is incredibly important to the almost the entire
Hungarian population, as is value for money and cost-saving. The primary message
of the campaign will therefore focus on these key elements.
In line with the primary message the brand will be launched just prior to Christmas,
with all marketing promotions relating directly to this event. Christmas is integral to
the Hungarian community and complements our key strategic goals perfectly.
Justification
As mentioned above in the Target Audience profile, Hungarians value respect and
inclusion within their family life. The culture echoes that of their previous political
affiliation, with a high degree of socialist values still present within most communities.
Hungary’s culture is not defined as collectivist, but their society still contains more
elements of this than other Western cultures. Because Hungarians value this aspect
of their lives so highly, we will be promoting K-Mart initially as a store that is part of
the community. We intend for this to establish K-Mart as a trusted and highly
regarded brand that is part of the Hungarian way of life.
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The second key element of our positioning will be the affordability of K-Mart’s
products. Affordability is likely be a determining factor as to whether consumers
decide to shop in our store, as the Hungarian market is extremely price-sensitive.
With brand loyalty exceedingly low, consumers in Hungary, and indeed in most of
Eastern Europe, tend to base their purchase decisions almost purely on price.(REF)
We will therefore be careful to promote K-Mart as a discount brand, one that
represents good value for money. This approach was adopted in a nearby store in
Prague, with great success (REF).
Competitor Comparison
Tesco is Hungary’s main retail hypermarket chain, and will therefore be K-Mart’s
biggest competitor. Tesco’s strategy in Hungary and throughout most countries it has
launched in has been to emphasize its large size and buying power. This approach
has been successful at promoting the company’s superior buying power and the
range of goods available within their stores. However, Tesco has received some
negative publicity centring on their decision to install stores in such large spaces.
Tesco planned to build one of their hypermarkets in Dunaújváros, a small town
located 70km south of Budapest. While residents of the town supported the idea of
having a large retailer nearby, the planned project required that 9 hectares of noise-
reducing forest be cut down. Almost the entire population of the town signed a
petition requesting that Tesco not build there, and legal action was brought against
the company (REF). While these were ultimately unsuccessful, it shows that it is
important for companies entering a new environment to be mindful of local attitudes
and beliefs. Tesco received a large amount of bad press related to the above
incident, with community groups promising to boycott the store once it was
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completed. When considering the above for K-Mart, it is important to take community
attitudes into account before launching.
Global Image
By focussing on families we are supporting the global brand image of K-mart being a
family friendly, community orientated shopping experience. The campaign will also
echo the brand’s discount image, as there will be a large emphasis on the low prices
and savings that can be taken advantage of throughout K-Mart. Our philanthropic
efforts will be consistent with the company’s continuing work with global charities,
while genuinely benefitting local communities. In Hungary K-Mart we will therefore
build on the brand’s American values and image as a trusted store with quality,
reasonably priced products, whilst establishing new elements of the brand, primarily
in the areas of community and convenience.
New Positioning
As mentioned above, K-Mart will be taking on a slightly different positioning than has
been adopted in other areas. Whilst still focussing on family values and affordability,
we will also introduce convenience to the consumer in a completely new way. This
strategy will be drawing on Tesco’s experiences with promotion of a large store, and
the difficulties of such an operation. We also wanted to differentiate K-Mart from
Tesco through this positioning. This plan is outlined below.
This unique positioning will focus on smaller stores with higher output and quicker
sales. Referring to (REF), this method will promote the store as a “fast retailer,”
which is smarter and more convenient for both the customer and the store owner.
The benefit to the consumer with this approach will be twofold. Firstly, the stores will
be more convenient and centrally located, because they will be smaller and easier to 32
fit into existing shopping centres. This will mean less travel time and expenses for
the consumer, and increased numbers of walk-by shoppers for the retailer.
Secondly, the smaller stores will be more personal and relatable than a store with a
large and unfriendly warehouse design. Consumers will feel more comfortable and
will be able to navigate their way through the stores faster and easily with this layout.
K-Mart will be the fast retailer in both location and size with a limited store layout
ensuring customers don’t spend hours searching for the perfect gifts for their families
during Christmas. The store will however be big enough to offer a range of clothes,
toys, food, electrical appliances and other home goods at reasonable prices.
K-mart will be positioned as a store that is larger than traditional local shops, whilst
maintaining the prices of its ‘superstore’ competitors, such as Tesco. This is because
Tesco promotes their stores size, which has resulted in negative community attitudes
towards the brand. We will instead focus on highlighting why K-mart is smaller and
its benefits to the consumer. The store will be positioned as more conveniently
located and easier to navigate than its major competitors, while still providing similar
low cost, quality products.
Single Selling Idea
K-Mart’s core selling proposition will relate to the values associated with the
Hungarian family. All secondary selling ideas stem directly from families and
Hungarian community values. From this core selling proposition the links to
Christmas and convenience are clearly drawn, and from this the price and the
affordability of goods becomes important. Christmas is a time for families, sharing,
gift-giving and ultimately shopping. Convenience in their shopping experience is
highly important for families as this is crucial period when an individual’s time is so
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important. And lastly, affordability of family items is crucial for every household,
especially in Hungarian culture, as they are extremely price sensitive. It is clear then
that by focussing on K-Mart’s relationship with the average family in our creatives,
we will encompass all of the relevant selling propositions. This also reinforces part of
K-Mart’s mission statement to create long lasting relationships with its customers.
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Media
For this campaign we are focusing heavily on media that directly targets women with
families aged 25-45 years in middle to low-income house holds. To do so we are
using media that reaches the audience in their homes and reminds them of their
families. We are using direct mail and radio as our main media lines as well as
newspapers; magazines and event sponsorship to further convey our message.
Hungary has tight regulations regarding what children can be shown doing in
advertisements including touching dogs, eating ice putting things in their mouths,
and walking around without shoes. We have taken these into consideration when
designing our campaign and have ensured that they are adhered to.
We are launching the campaign in time for Christmas in Hungary and are using key
dates such as the 6th of December (St Nicholas day) to launch each phase. Direct
mail will arrive at targeted households on the day (see creative for details), and
advent calendars and radio promotions will keep K-mart in top of mind positioning
throughout.
After the festive season, sporting events such as water polo and football (soccer)
and charity (heart disease & cancer) fundraising days will continue to promote K-
mart to the Hungarian target market.
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Competitive Environment
In 2009, the Hungarian Competition Office (GVH) fined Tesco HUF8m ($42,000 US)
for its use of "unfair business practices.” Tesco was investigated for infringing
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Hungary's Act on Unfair Commercial Practices, after it infringed ‘point five’ of the
blacklist, which bans bait advertising. Tesco advertised goods without sufficient
stocks, resulting in consumers not being able to buy the goods they desired to.
Tesco was also found to be advertising electronic devices to have attributes they did
not have in reality. This is an important issue Kmart will have to take into
consideration as Kmart in the past has had serious issues with being out of stock on
fast moving items.
Louis Delhaize has a strong brand affiliation with eco-homecare products. The
Belgium company has committed itself to enlarging and promoting the set of eco-
friendly product ranges within their points of sale from 2009 to 2012.
Tone
The tone of the creative campaign to launch K-Mart in Hungary will be friendly and
personable. It is important that family values and the affordability of K-Mart’s
products are accentuated, whilst differentiating the company from its main
competitors. Because of our unique approach to shop location and size, our
customers will be able to do their Christmas shopping in an area nearby; the K-Mart
will almost act as a local store. The tone of our advertising will highlight this
community orientated personality and image of the store.
We will be communicating to our target audience that won’t have to drive out to the
outlying areas of town for a good deal, but will instead be offered the convenience of
a large retailer in a central location. Our tone will reflect this through advertisements
that are friendly, relatable, and emphasize K-Marts commitment to the Hungarian
community.
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Non-traditional Media
Both traditional and non-traditional forms of media will be used in this campaign. As
the primary consumption of media in Hungary is through newspapers, magazines
and radio, a series of advertisements will be developed for each of these. As well as
these, several non-traditional forms of advertising will be developed. These include:
Advent Calendar
This promotional effort will reflect the Christmas season and will promote brand
awareness and draw people for the first time into the store. The advent calendar will
be a fun and interactive activity for families. It will essentially be an innovative
catalogue, with a calendar counting down the days until Christmas. It will feature 25
windows (one for each day up until Christmas) that the user may open, inside which
will be information for a discount on a particular item in store, or a simple holiday
greeting. One of the windows will have a direction to draw awareness to the “K-Mart
wishing tree,” which will be operating on that day in stores across Hungary. The
window for the 6th of December will reference St. Nicholas day, and will remind
people to put their stockings out for the event. The calendar will feature Christmas
images, and of course will be K-Mart branded. This form of promotion is integral to
our branding strategy of family, as Christmas is something that the whole family
looks forward to celebrating together; this calendar will help them count down the
days until this is possible.
The advent calendar will be available in-store, but will also be distributed through
direct mail initiatives and will be included as a lift-out in major newspapers and
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magazines. The calendar encourages interaction and offers genuine discounts to
customers who have one. (See Appendix 2 for sample)
St. Nicholas Day Mail Out
The 6th of December is St. Nicholas day in Hungary, a traditional holiday where
children put their best boots out in order to be filled with presents and Hungarian
string chocolates. We plan to tie K-Mart to this event through a direct mail out
promotion that will be received by customers just before St. Nicholas day. These
mail-outs will be distributed among areas of the population where our target
audience are located, as this is traditionally who celebrates this holiday.
The mail-out will be in the shape of a boot, to make an obvious connection with the
holiday. The user must rip open the envelope through a perforated edge at the top of
the boot, and will find inside a K-Mart branded, flat, string chocolate. These flat
chocolates are traditional in Hungary and are an integral part of the holiday(REF).
Included in each boot will be a special offer for customers, likely a “Buy one get one
free for a friend” type of promotion, used to encourage more first-time customers into
the store. This will draw comparisons between the brand and the event, and will
bring K-Mart to the forefront of the consumers mind when considering St. Nicholas
day. The promotion will also promote goodwill and K-Mart’s commitment to
remaining a family brand. (See Appendix 3 for sample)
Loyalty Cards
Loyalty cards will be available for customers to sign-up to. Users will submit their
details, and in return they will receive a card that entitles them to 5% off in-store. In
addition, loyalty card holders will be invited to special events, be given information
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about sales and offers in-store via targeted direct mail-outs, and will be privy to
“Loyalty card only” deals on selected items. This tactic is particularly important in
Hungary because consumers rarely practice brand loyalty and are swayed mostly by
price. By introducing a system that effectively tempts consumers to be loyal through
repeated discounts, we will ensure continued sales. The card will also link to our key
selling proposition of family by referring to the loyalty members as part of the “K-Mart
Community Club,” driving sales through consumers need to belong. (See Appendix
4 for sample)
Kmart Wishing Tree
The K-Mart wishing tree is an existing element of the global brand that we feel can
be replicated successfully in Hungary. The idea revolves around helping a charity of
choice (in this case, for disadvantaged children) that has relevance for the local
community. Patrons enter the store and shop as usual, and are able to donate gifts
or money to the cause. This tree helps create the warm and selfless atmosphere that
is present at Christmas and also provides legitimate help to those that need it. The
Wishing tree is consistent with our key selling propositions of Christmas, community
and family, and is also an integral part of the global image of the brand.
Audience Appeal
This campaign will engage our target audience through a variety of appeals. The
principal appeal will be emotional and will be directed at our Target Audience’s family
values and beliefs. Family and community will be emphasised in the campaign
through depiction of the Hungarian way of life, and how K-Mart can influence this
with its affordable products.
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Action Prompts
Consumers will be driven to action through K-Mart’s association with the festive
season, and through our direct marketing attempts. The original positioning of the
company will involve a strong link with Christmas and everything it stands for. The
values of family, togetherness and community associated with Christmas are
conveniently inherent and are treasured in Hungarian culture. The holiday therefore
synergises well with the launch of K-Mart, as the company will be positioned as a
welcoming, family brand. Christmas is also important in the launch of K-Mart as it
gives consumers a legitimate avenue to purchase gifts, food and other items that are
associated with the event. As K-Mart’s prices are “affordable,” the link with Christmas
will imply that customers will be able to shop for their entire family, whilst keeping
their expenditure low. This is important as shopping demand in Hungary is so price
sensitive.
Several action prompts will also be included in our direct marketing. The advent
calendar that will be distributed will contain special discounts on certain items on
certain days. This will influence consumers by giving them a specific action to
perform, and will also appeal to their sense of value. The discounts will be genuinely
good deals, and will all be on items that might be required for Christmas. Hungarians
will most likely need to buy these products anyway, so we will be promoting K-Mart
as the place to go to get these essentials at an affordable price.
Differentiation Points
The primary method of differentiation from K-Mart’s main competitors will be to
position the company as a smaller and more convenient hypermarket, as previously
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explained. The focus will be on family, smaller outlets (while still maintaining the
competitive pricing of the larger stores) and central, more convenient locations.
Whilst we would like to differentiate K-Mart from Tesco and other competitors, it is
important to look at their successes. A prime example of integration into the local
culture occurred when Tesco moved into a small town in the UK. When confronted
with a major retailer on her doorstep, a local bookshop owner complained to the
company that it was stealing her customers. She was unable to compete with Tesco
on price, but did offer a much larger range of books than the hypermarket. Rather
than simply continuing to compete and ultimately drive the smaller bookshop out of
business, Tesco arrived at a mutually beneficial agreement. They resolved to
continue selling books at their regular low price, but allowed the smaller bookshop to
advertise their larger range within the Tesco store. From this, both the small
business and the large retail market prospered, and were able to exist in harmony. It
is important to take this success and put the key factors into practice within Hungary.
K-Mart in Hungary would be wise to work with, rather than against, existing small
businesses in order to keep negative attitudes to a minimum.
Cultural Considerations
One important thing to consider when entering the retail market in Hungary, and
Eastern Europe in general, is that most markets and hypermarkets include food in
their product selection (REF). Therefore we will be recommending K-Mart includes
food in their product range. The main types of food included will be semi-perishable,
such as dried meats, pastas and cheeses. Canned goods and other non-perishables
will also be stocked. This is important because Hungarians expect to be able to buy
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food from major retailers. To deny them of this would be contradictory to their cultural
expectations. This plan will also be relevant when assessing our strategic plan, as
most families need to buy certain foods at Christmas time.
Rules and Regulations
As mentioned above, we have taken all Hungarian advertising regulations into
account when developing our creatives. There are only a few that are relevant to the
retail-marketing sector, and we have adhered to all of them. The rules relating to
children are the most restrictive, so we have been careful not to infringe any of them.
No child will be depicted patting a dog, licking an ice cream, or walking without shoes
on in any of our advertisements.
Tag Line
The Christmas tagline for K-Mart will be: “Your Christmas memories... Brought to you
by K-Mart” in Hungarian it will be “Kelemes Karacsonyi emlekeid… a K-Martol” and
will be integrated into all print and direct mail promotion. After Christmas, K-Mart
Hungary will be united under the one line: “Providing for your family” in Hungarian “A
csaladnak”. Both of these tag-lines will of course be translated into Hungarian to be
accessible to the average family in the country.
43
Evaluation
The success of this campaign will be evaluated and assessed through several
processes:
Brand recognition survey
We will have post-campaign surveys done amongst Hungarians to determine
whether they have more awareness of the brand Kmart. It is a measure of the
extent to which the target audience was exposed to the campaign
respondents able to recall any of the campaign or brand elements.
Sales and number of customers will be monitored
Based on this we will monitor the sales and the number of customer coming to
the store to measure how many people actually comes and spend on our
stores.
Feedback from consumers and clients
We will have questionnaires and focus groups to find out what our consumers
and clients think of the stores. This is to help improve the quality of our
services in the future.
44
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