The Study of Increasing Dumex User Retention Rate Strategy.doc

the study of increasing dumex user retention rate strategysubmitted by bili zhustudent id number 072012030014supervised by jintao hua paper submitted in partial fulfillment of the requirements of the degree of bachelor of artsthe institute of online educationbeijing foreign studies university北京外国语大学网络教育学院学士学位论文诚信声明本人郑重声明： 所呈交的学士学位论文，是本人在导师的指导下，独立进行研究工作所取得的成果。论文所涉及的项目为本人亲自负责或者参与实施的项目。除文中已经注明引用的内容外，本论文不含任何其他个人或集体已经发表或撰写过的作品成果。本人完全了解本声明的法律结果由本人承担。学士学位论文作者签名： 日期：2011 年 5 月31日论文摘要多美滋是最早引入中国的进口配方奶粉品牌之一，也是少数采用进口奶源但实现本地生产的进口配方奶粉品牌。受到2008年的三聚氢氨事件和近年频繁曝光食品质量问题影响，消费者对国内生产的奶粉产生信任度怀疑。消费者调研数据显示，多美滋用户的保持率和忠诚度均呈现下降趋势。作为多美滋婴品牌最早开发的中国市场，上海无论是业务比重和市场占有率表现上，都在各省级排行榜上占据的龙头地位。然而，受到各种负面因素的冲击却更为严重，从市场和销售数据显示，近两年的销售增长不仅落实多美滋自身品牌的全国平均水平，也落实于品类的增长速度，导致市场占有率下滑。因此，以加速销量增长为目的，选取上海作为测试用户招募和整合型服务新模式的试点，从而探讨提高消费者保持率的新策略。项目初期设定了招募成功率为70%的目标， 第一段用户到第二段用户的保持率从2010年的平均67% 提高到70%以上，以及市场占有率增长2个百分点的三个目标。通过对消费者使用习惯和态度调查数据分析，发现过半数的多美滋消费者流失主要发生在跨阶段转换期间。专家的有关客户保持和忠诚度的研究数据也反映，消费者的保持率高低与客户互动有效性，以及能否提供增值服务有很大程度的关联。为此，我们制定并推行了以早期孕妇为主要招募对象的金婴会员计划，通过对用户资料进行信息化管理，实施用户分阶段类别分类，提供个性化和阶段化的定制服务，加强与消费者在教育，产品和资讯信息上交流互动。经过近九个月的测试，通过对内外部数据和消费者调查，不仅在消费者保持率上显著提高以及在市场份额取得高于预期的增长，而且多美滋在消费者对品牌认知度和转换率上也得到明显改善。尤为重要的是，保持率和认知度的提升直接刺激了上海地区销量的增速，从而改善了投入产出效率。上海测试项目的成功，为多美滋婴幼儿食品有限公司探索出可推广的新型整合运作模式，通过优质创新的产品与高质量的客户服务相结合增强自身的市场竞争力。关键词：多美滋 消费者保持率 会员计划，金婴会(gbc)abstract this ba degree paper presents a detailed report on the study of increasing dumex user retention strategy in shanghai.retention rate is one important index to evaluate brand awareness and sales potential. according to the consumer survey, dumex users retention and loyalty showed a downward trend after 2009. the situation looked even worse in shanghai, reflecting on sales stagnancy and market share decline. it is hypothesized that losing customer is related to inefficient engagement program and value added service to customer, then a membership activation campaign with inclusion of club member conversation, user segmentation and customized loyalty program will help to improve customer retention. the project aims to reinvent the user recruitment model by implementing a membership activation program. meanwhile, leveraging gbc (gold baby club) membership platform provides the customized service to dumex gbc users based on their needs in different stages, so as to enhance the engagement with our target consumer. the goal of project is to improve the retention rate as well as stimulating our market share recovery. a project team is formed by different functional people. i am appointed as the project leader. a scientific research method of questionnaire and swot analysis were used in the identification and analysis of problems. key finding from consumer usage & attitude study, crm communication strategy and medical detailing strategy were adopted in project design. the project was officially executed from august 2010. after eight months, it achieved the encouraging results, not only on the significant improvement of retention rate, but also on the fast market share gain, which shows that the project has been successfully implemented. more importantly, increasing retention has positive effect on brand awareness enhancement; also directly stimulate the sales growth as well as improving our efficiency of roi (return on investment).the success of this project, explores a new operation module for the dumex company to strengthen our competitive advantage and drive sustainable growth through high-quality innovative products and superior services. key words: dumex, retention rate, membership activation, gold baby club (gbc)table of contentspages1 project introduction 12 project problem identification and analysis22.1 project problem22.2 problem analysis22.2.1 current situation 22.2.2 needs and wants analysis102.2.3 swot analysis102.3 results of problem analysis113 project objective and hypothesis123.1 project objective123.2 project hypothesis124 project rationale125 project design 135.1 planning of activities135.1.1 activities planned to take place135.1.2 project team145.1.3 project schedule with critical path of the planned activities145.1.4 people involved and their responsibilities165.2 cost analysis165.3 risk analysis175.3.1.1 potential risk analysis175.3.1.2 5.3.2protective measures to be taken185.4 monitoring 186 project implementation186.1 general introduction of time, place186.2 the working steps of implementation197 results and discussion197.1 data collection197.2 project finding197.3 result discussion228. conclusion24bibliography24appendix i: questionnaires25appendix ii: project flow chart 28appendix iii: the registration form of gold baby club30appendix iv: the sop of gold baby club point collection 319the study of increasing dumex user retention rate strategy1. introduction dumex is a leading imf (infant formula milk) brand in china, with over 100 years history on baby food category in europe. since last century, dumex basically realized local production for the main stream products by following the same formula as europe and using the imported milk powder from austria and new zealand. regard to (quality & safety) & qa (quality assurance), the standard applied in china is consistent with dumex in other countries which is even higher than the domestic requirement. after 2008 melamine scandal, dumex encountered some challenges on growing business. due to the concerns on safety of the local milk source, consumers worship the imported milk product, particularly imf products. it has caused a big impact to the chinese milk industry. in general, sales of imported products increased significantly, while the performance of those manufactories of local brands or international brands with production in china is behind the growth of category average. the bigger market has the bigger impact. shanghai is one of strong hold markets of dumex china, accounting for 10% share of business and owning the dominating market leadership. compared with other provinces, shanghai is a relatively well developed market for dumex, there is less opportunity to drive growth via geographical expansion and distribution penetration. business growth of dumex in shanghai became slowing down obviously after 2008, sales in 2009 and 2010 increased by 3% and 17% vs year ago respectively while category kept over 30% growth year after year. as a result, we lost 3 points value share from 37.9% in 2009 average to 34.9% in 2010.according to the u&a (usage & attitude) research report conducted in end of 2009, it showed half of dumex users in starter stage (06 months after birth) switched to another brand in follow-on stage (618months after birth). although retention rate varies from market to market, overall, dumex user retention rate was in a downward trend, and behind our key international competitors. consumer switching out was even worse in high tier cities, such as shanghai. retention rate is an indicator of consumer repeat purchase and the important index of evaluating brand awareness and finance performance. if we could not keep our user as long as expected, we have to increase the number of user recruited to justify the loss on consumption volume. it will lead to cost increase and efficiency decrease. in order to stop market share decline and solve the retention issue, a cross-functional project team was formed by people from marketing, nutrition and sales in mid of 2010, named as “shanghai high-high” project and i became as the project leader. its hypothesized that if losing customer is related to inefficient engagement program and value added service to customer, then a membership activation campaign with inclusion of club member conversation, user segmentation and customized loyalty program will help to improve customer retention. we come up with a membership activation campaign, which targets on our existing users recruited from hospitals by nutrition and stores by our product consultants, which incorporates with club members conversion, user segmentation and loyalty program customized to the club member. the company expects this project will not only improve our business performance in shanghai, but also provide some insights and learning to develop a new operational model, which can be applied in other mature markets.2. problem identification and analysis2.1 project problemthe problem we are facing in shanghai is market share loss due to slow sales growth and low consumer retention rate.2.2 problem analysis2.2.1 current situationl financial situationalthough dumex sales in shanghai were improved to 16.1% increase in 2010 from 8% negative growth in 2009, it was still well below 20% growth of category average. on the other hand, a low profit margin is another challenge for dumex in shanghai associating with the costly advertising and promotion, there was 91 base points lower than total company average in 2009, ranked at bottom no. 3 city in china.l human resourcei am the sales operation associate director, responsible for sales spending control and tracking, sales system development and maintenance, as well as management of national product consultant team. after the regional sales manager of shanghai resigned, i have been taking over the management of shanghai field team. according to our organization structure in field, there are two functional sales force teams, one is sales, and another is nutrition, led by the different regional managers. nutrition team, there are total 35 permanent sales staffs, nearly 500 product consultants, merchandisers and hotline agents employed by the third party agency. the responsibility of nutrition team is to cooperate with hospital to provide nutrition and baby nursing education to pregnant women through the health care practitioner (hcp). sales team focus on product distribution, retail activation and shopper experience. sales team in shanghai has suffered a high people turnover since 2009, 3 of 4 trade marketing people resigned and two manager level positions have not been filled for long. in terms of marketing and customer relationship market (crm) function, they are shared resource with other regions. we need to add 10 agents to enhance the capacity on out-bound to execute series of consumer activation program. l physical resource currently, there are three standalone data systems managing consumers information. they are nutrition key-in-system, which collects user information from hospital channel; the second is crm database to store user information uploaded from nutrition team and on-line, the third is epg data system which is managed by sales team to collect consumer off-take, inventory, retail price, share of shelf and our brand user information got from the retail stores. in order to maximize the usage of information, having the integrated database is very important, through building the data bridge between three systems. besides, we also need to develop the new function of system on auto mapping data to reduce user information duplication, so as to improve the efficiency and accuracy of data. l category and consumer analysischina is the no. 2 biggest market of imf in the world, category kept over 20% annual growth in the past five years. the key drivers contributing such aggressive growth are 1) baby boom triggered by the large population at the late 70s to 80s 2) rapid growing income 3) urbanization and the high portion of working woman4) one child policy, chinese parent tend to provide the best thing to their children as much as they can all four drivers have been making greater effect for the rapid growth of category in shanghai.imf consumers are segmented according to product stage they use.1) stage 0 userthey are pregnant women or mums in breast feeding, who use maternal milk in order to enhance the nutrition level for their own and the babies. 2) starter userbabies are within 6 months old after born, imf or beast milk is the main food for them in this stage. they are the heavy user of imf, and very sensitive on the quality, nutrition mix and adaptability of milk3) follow-on userbabies are between 6 months to 18 months, imf is still their main food but already having other solid foods as supplemental4) growing-up milk (gum) userbabies are above one year old to three years old, using imf as the supplemental, solid food has become the main food for babies in this period. l social and policy analysis in china, government is tightening the control and supervision on the cooperation between hospital and manufacture; it could be both opportunity and challenge for us, firstly, the cooperation with hospital will become more orderly and transparent, however, it could weaken the education influence to consumer because more and more activities in hospital are not allowed. meanwhile, according to the law of consumer privacy protection, it would be penalized if any commercial organization to approach consumer without their permissions. it would limit the customer relationship marketing program if we could not find the way to fix it. 2.2.2 needs and wants analysisafter the melamine scandal in 2008, consumer becomes very sensitive in the milk safety, particularly for the source of milk. therefore, a trustworthy brand image is no. 1 factor for consumer on choosing brand. according to the u&a survey (2009), over 64% of pregnant mum will choose to use breastfeed for their babies before birth, 88% of feeding decision is made by themselves and their partners. word of mouth is the major channel for pregnant women when they consider imf brand for their babies, followed by recommendation from hcp, tvc, and magazine. reasons for choose this first brand:1) brand reliability2) benefit superiority3) wide range of product the frequency of switching brand is increased during consumers milk journey; they normally associate with more than two brands. the key factors of switching brand:1) benefit superiority (nutritional need)2) health issue (allergy and laxness)hcp is the main channel to influence mums in baby diet and nutrition. 70% of pregnant mum joins mama class hosted by hospitals, higher ratio in higher tier cities. regard to the service provided by baby food company, they want to have the nutrition seminar by hcp and privilege activity for member. 2.2.3 swot analysisl strengthen a leading brand with over 33% market share international image close cooperation with hcp and kol (key medical opinion leader) hotline service to consumer for free nutrition and baby nursing counseling having wide product portfolio a strong project team supported by multiple functionsl weakness local production instead of 100% imported slowing down growth & low profit margin higher switching rate than key competitors during stage changing stage no distinguish service from other rivals a young and inexperienced sales teaml opportunity increasing demand due to shortening breastfeeding duration for the young mums and longer usage for children on power milk fast growth on specialty due to the high allergic occurrence new supplemental segment category premiumlization more orderly and fair competition on medical channel, mainly in hospitall threat aggressively increasing a&p spending both multination and local vitals non-stop rumor and safety issue crisis reducing influencing effects from the commercial cooperation with hospital due to the interruption of government new regulation on consumer privacy protection competition from liquid milk2.3 results of problem analysissince the melamine scandal in 2008, consumer becomes very sensitive in the safety of production and milk source. therefore, a trustworthy brand image is no. 1 factor for consumer on choosing brand. over 64% of pregnant mum will choose to use breastfeed for their babies before birth, 88% of feeding decision is made by themselves and their partners. word of mouth is particularly important for pregnant women when they consider imf brand for their babies, followed by recommendation from hcp, tvc, and magazine. reasons for choose this first brand:4) brand reliability5) benefit superiority6) wide range of product increasing frequency of switching brand among consumer, they normally associate with more than two brands. the key factors of switching brand:3) benefit superiority (nutritional need)4) health issue (allergy and laxness)hcp is the main channel to influence mums in baby diet and nutrition. 70% of pregnant mum joins mama class hosted by hospitals, higher ratio in higher tier cities. regard to the service provided by baby food company, they want to have the nutrition seminar by hcp and privilege activity for member. the ultimate goal is to resume our growth momentum in shanghai. to achieve this goal, we need to deal appropriately with some of our weaknesses as well as threats. at the same time, we should fully leverage our strengths ( category leadership, international image and the lean-forward support from the company on both people and resource), grasp the golden opportunities (increasing consumption, fast growth of specialty and supplemental segments, orderly and scientific oriented cooperation with hospital and product upgrade), avoid the threats (safety issue, fierce competition from rivals), and overcome our weaknesses (low retention rate, in-differential service, damage on brand reputation and risk on consumer privacy violation), our business will definitely improve. since rebuilding brand reputation needs long way to go and much more rely on marketing effort, we target on increasing