Prepared by Ryan Graff, Zachary Dobson, Heather Fischer, and Matthew Vercauteren In partial fulfillment of the requirements for Customer Relationship Management Marketing 445‐01 December 9, 2010
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Prepared by
Ryan Graff, Zachary Dobson, Heather Fischer,
and Matthew Vercauteren
In partial fulfillment of the requirements forCustomer Relationship Management
Marketing 445‐01
December 9, 2010
Company Background
• Started in Brookfield, WI in 1962
– Max Kohl
• Sold a variety of products but specialized in 1980s
– BATUS sold shares to management investors
• 2004: “Expect Great Things”, increasing sales
• Carriers the brands: Food Network, Simple Vera Vera Wang and ELLE magazine
• Focused on strategy to propel into 21st Century!
Customers
• Primary target: Middle class, married women ages 25 to 50 years old
– Preferably with children
• Mainly in control of disposable income
• High wallet penetration
• Usually in charge of store selection
Customers
• Website is setup mainly to women
• Men’s, Kids’ and team shop located off to the right on webpage
• Feminine focused theme
– Similar to theme used in this presentation
Competition
• Smaller national retailer, yet successful
• Can’t compete solely on price
– Exclusive brands
– Private labels
– Value to the customer
• Compete against discount stores & mid‐level department stores
Competition
• Top Competitors
– JC Penny (#1)
– Sears
– Target
• Other Competitors
– Bed Bath & Beyond
– Shopko
– Old Navy
– Nordstrom, Inc
– As well as many others..
Kohl’s Marketing Mix
• Product
– Wide variety of products
– Styles cater to men, women, teenagers, mom, dads and everything in between
– Product lines: Apparel, footwear, accessories, cookware, kitchen gadgets, kitchen electric etc.
– Brands: Jumping Beans, Tek Gear, Elle, apt. 9, Croft and Borrow, Nike, Kitchen Aid, Reebok, Hawk, Dockers etc.
Kohl’s Marketing Mix
• Pricing
– Inexpensive prices, quality products and HUGE sales. (Known as the “king” of sales promotions)
– Penetration Pricing Strategy: Lower price to capture more market share
– Large volume discounts: the more you buy, the more you save
– Seasonal Pricing
Kohl’s Marketing Mix
• Promotion
– Utilizes both push and pull strategies
– Push strategy in TV and radio commercial
– Pull Strategy in interactive internet advertising and emails
– “Sales Force” is their to help, not push products on customers
– Perfected Sales Promotion: promotions well known and timed by customers.
• Ex: 15‐20‐30% scratch off event, Kohl’s Cash, Pick‐a‐Day coupons, white tag events, clearance events
Kohl’s Marketing Mix
• Distribution
– Products distributed through:
• Physical locations
• In‐store ordering kiosks and kohls.com
– Sophisticated inventory management system
• Inventory levels managed electronically by corporate
• Inventory levels can be seen across the area by any given store
• Store doesn’t handle reordering out of stock items, done automatically
• Distribution centers across the U.S. serve its 1100 stores nationwide
Internet
• Built around customer interaction/preferences
• Search Bar
• FAQs and useful phone numbers
• In‐your‐face advertising
• Easy maneuverability
– Intuitive
Internet
• Not aesthetically pleasing!
• Utilizes a simple website template
• Simplifies the customers life and allows quick access
– Target customer friendly
CRM• Customized efforts to achieve a customer‐centric focus
• Main focus to CRM:
1. Kohl’s Charge
• Exclusive benefits
– 10%‐15% off after applying
– Discounts 12x a year
– Pay bill online
– “Pick A Day” coupons
– Kohl’s Cash
• MVC card holder
– Extra perks (newsletter, “pick‐a‐day savings” 6 times per year, etc
CRM
2. Email
• $5 coupon upon giving email address (discount as a substitute for information)
• Click on departments of interest
• Sales alerts
– Send emails based on past purchases to predict future purchase interests
CRM
– Kohl’s Online & Kiosks
– Customer Service
• “Expect great things”
• Survey
– Return & Exchange Policy
– “Smile and Say Hi”
– E3 Manager on duty
– Other policies
• Coupons
• Item not in stock
• Reserve items
Target Market Profiling
• Target Customer: Married women, ages 25‐50, preferably with kids
• Referred to as “her” within the company
• Kohl’s consumer data:
– 64.3% graduated college or went to college
– 40% women ages 25‐55
– 21% men ages 25‐55
– 60% have annual household income above $75,000
– 31.5% reside in the Midwest
– 79.4% own their own home and 85.1% are Caucasian
– Media Consumption: 68% use internet heavily and 64% read magazines heavily
Evaluation of the Database
Customer Data Components
• Basic info: names, address, Zip codes, cell/home phone #’s, email, event related info
• Demographic info: age, gender, marital status, education level, # of people in the household, income level
• Purchase/Transaction history: What, when, how frequently, how much money , how many items, what store etc
• Loyalty Program info: MVC program
• Online Info: Kohl’s account, browsing habits, credit card numbers, sweepstakes, contest or surveys
How The Database Is Used
• Identify the best customers
– Tracking customer transactions and using RFM analysis to reveal the who the best customers are
• Recruiting new customers
– Using best customer profile to select non‐customers
• Customize marketing messages
– Specific messages to specific customers with different product and service needs
How The Database Is Used
• Cross‐selling
– Using purchase history, sell products that fit well with past purchases and lifestyle
• Making sure communication is cost effective
– Are they worth the investment? (RFM Analysis)
• Optimize Promotional Results
– Efficiently promote to customers based on needs and wants
• Personalize Customer Service
– Based on product and service needs and known feedback
Strengths
• Extensively data driven
– Customized and superior decision‐making
• Use of analytics
– Predict
– Analyze
• Customization
– Bases offers for each customer on purchasing habits
– Used to predict what offers customers are more likely to respond to & stock accordingly
– Example: discounts for a customer’s birthday
Strengths
• Optimization
– Lifetime Value
• MVC Kohl’s Charge
– “the biggest spenders”
» targeted for special promotions, additional discounts, etc.
– Detailed history of the customer’s purchases, therefore leading to easy returns.
– “No receipt? No problem!”
– Planning and buying
• What they want, when they want it
Weaknesses
• Unclean data
– Example: policy to honor a coupon for Kohl’s Charge customer based solely on the customer’s word
• Data used for Kohl’s email campaigns
– “Wasted reach”
• Fake /multiple email accounts
• Continued to be sent to people, even those who have not spent money at Kohl’s recently
– Not taken into account
• High‐profile analysts needed to manage database
– Complex & high volume of information
– Training extensive
• Customization
– Integration with other applications & programs
Suggested Improvements
• Data used for the email campaigns
– Identification number on Kohl’s Charge
• Linked with their personal profile.
• Time
– “Active” vs. “Inactive”
• Market accordingly
• If never “clicked‐through” a promotion
– Hold account
– Not validate email address
Data Collection Recommendations
• Social Media
• Mobile Applications
• Online Accounts
– Activities
– Interests
– Hobbies
• Allows for customers to check according to likeness
• Targeted promotions
Connecting with Kohl’s
• Janesville location
• Corporate contact
Customer Life Cycle
• Reach
• Acquisition
• Conversion
• Retention
• Loyalty
Customer Valuation Strategy Email
• Major vs. Minor department
• Reverse focus
• MVC adjustments
• Goal: Customer integration
Customer Valuation StrategySurvey
• In depth survey
– Higher level data (Interval and Ratio)
• Incentive
– Kohl’s card
• Knowledge is power
Customer Contact Strategies
• Mobile
– Brand new
– Increase in web page sales
– In Kohl’s only brand focus
• Television and Radio
– Two 30 second national TV spots
• Dancing with the Stars, Grey’s Anatomy, CSI, Survivor and Modern Family.
– 15 and 30 second TV spots
• Focus on value
– 15 and 30 second radio spots
• Ryan Seacrest, Billy Bush, John Tesh and Lia
Prospecting Strategies
• Use email and direct mail!
• Use social media
– Facebook, Twitter, LinkedIn and Youtube
• 500 million users on Facebook alone!
– Potential customers?
• Utilize Twitter more effectively
Prospecting Customers
• Try a long‐term up‐selling campaign
– Follow the customer!
– Continuous purchase history
• Used to create a better psychographic
Conclusions and Recommendations
• Customer centric
– Providing value
• Extensive database
– Data analysis infinite
• Continue Kohl’s Charge efforts
• Continuing effort of social media exposure
– Real time marketing
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