Tai Siu Teng

SUKD2001692

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1.0 Introduction
Hot pot also known as steamboat. It is one of the most popular folk food in China and is a
Chinese cooking method and it is especially popular in East Asia.

Haidilao was founded by Zhang Yang in 1994. It is an internationally renowned catering

company mainly focusing on hot pot. They opened 868 stores in 164 cities in mainland
China, and 67 stores were located in Hong Kong, Macau, Taiwan and the first overseas store
opened in Singapore in 2012, this makes their catering company first step towards
globalization. Today, Haidilao has opened 935 stores around the world including South
Korea, Japan, United States, Canada, United Kingdom, Vietnam, Malaysia, Indonesia and
Australia[CITATION Hai \y \l 2052 ].

They focus on operating hot pot and integrate hot pot characteristics from various regions or
countries. For example, Haidilao in Malaysia has launched a unique local authentic laksa
soup, but Haidilao in other countries does not available this kind of soup. The products that is
offering are typical hot pot ingredients, including various meats, seafood, vegetables, soy
products, mushrooms, egg products and noodles. People can choose the ingredients according
to their preferences and tastes. Compared with other hot pot restaurants that are only provide
2 soup pots, Haidilao provides 4 soup pots and can choose from different flavours of soup
bases, so that everyone has opportunity to try more delicious soup bases with different
flavours.

As a large chain catering company with operation all over the world, they enhance the
mission of integrity management to ensure the stability and safety of food quality as the
primary prerequisite, provide consumers with high-quality services, and convey healthy hot
pot food culture to food lovers around the world. Communication is a necessary condition for
building trust between people, and Chinese hot pot is an ideal of choice for enhancing the
social interaction at the table. Therefore, their vision is committed to encouraging more
people to chat, enjoy food at the table, and create a table culture favoured by young people all
over the world[CITATION Hai1 \y \t \l 2052 ].

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2.0 Issues related to customer
 Food safety problem
In the food industry, food safety is not a trivial matter, and customer tolerance is getting
higher and higher.

According to a report from China.com.cn, the customer has found hard plastic slices in
black-bone chicken rolls this summer while eating at a Haidilao in Jinan Lian Cheng
Plaza store (Appendix 1). The customer experienced gastrospasm and bloody stool in that
afternoon. The diagnosis showed that consumers suspected of intestinal
bleeding[CITATION Glo20 \l 2052 ].

According to the data from the third-party complaint platform “Black Cat”, Haidilao has
received 165 customer complaints, including dozens of complaints about food safety
issues. As relevant media reports continue, some of customers are disappointed that a big
brand like Haidilao may make such simple mistakes in food safety, and some people are
worried and afraid to eat at Haidilao restaurants[CITATION Jqk20 \l 2052 ].

 Price hike
Haidilao’s price is too expensive for customers. Customers complain that price increases
are unfair to them. Haidilao’s consumption is double than other hot pot restaurants.

Recently, some catering companies have chosen a simple and rude way to operate
restaurants, which is price hike. Of course, Haidilao is no exception. Although people
generally praise Haidilao, but most customers still think that Haidilao’s price increase is
an act of not good[ CITATION Koe20 \l 17417 ].

The news media Sina.com conducted an online poll. This online poll is to ask whether
people are willing to accept Haidilao’s 6% price increase. A total of 122,000 respondents
participated in the online poll. From the online polls, it can be found that most of the
77,000 respondents said they could not accept the price increase more than 16,000
respondents said it was acceptable[ CITATION Koe20 \l 17417 ].

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 Hygiene problem
In addition to the hygiene of the restaurant dining area, the hygiene of the restaurant
kitchen is an extremely important place because kitchen is the place for the production
and processing of the food imported to the customers.

As early as 2017, media exposed that the kitchens of Haidilao’s restaurants were found to
be dirty and messy. In the Haidilao kitchen which was invisible to customers, rats were
rampaging on the floor and employees use colanders used by customers to dig the sewers
(Appendix 2). After such hygiene issues were exposed by the media, Haidilao closed its
two branches in Jinsong and Taiyanggong[ CITATION Liu17 \l 2052 ].

Some people worry that Haidilao have occurred hygiene problem then is it other
restaurants will worse? This series of hygiene problems brought customers unacceptable.
Most of customers said they are waiting for such a long time to eat such a dirty thing.

 Long time in queue (customers lost patience)

As a company known for its services, Haidilao currently has the most impact on customer
experience due to the long queue time. Haidilao always had the problem of long queues,
which is one of the pain points to customers just to eat at Haidilao. There are long queues
in Haidilao every day, especially during holidays or weekends.

At the investor communication meeting, Haidilao said: “The waiting time during peak
hours is 2-3 hours, which is not good for customers.” For impatient customers, they will
become irritable if they wait in line for a long time. If the customer waits for a long time
in queue, they will exceed the limit of patience, the customer will not be happy or even
give up waiting.

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 Over services
Haidilao developed some service features such as helping customers celebrate their
birthdays and they will provide a large plush toy to accompany you when you eaten
alone[ CITATION Gri19 \l 2052 ] . However, sometimes all this service is too intimate and
may cause embarrassment because they ignore a huge group, like those who do not like to
communicate with other peoples and are particularly sensitive to the emotion of
embarrassment.

Some time ago, the title of "Don't let Haidilao know your birthday, it's terrible" in an
article, described a series of enthusiastic but embarrassing birthday experiences of a
customer that have been served by waiters in Haidilao. The waiters hold LED lights and
sings birthday songs, attracting high-profile attention from other customers and became
the most noticeable focus in the store[ CITATION Gri19 \l 2052 ].

It is undeniable that Haidilao's other services are still recognized and praised by many
people, but more and more customers are resisting and rejecting this kind of birthday
service. Especially for social fear patients who came to Haidilao for dinner, they were
embarrassed and helpless in the face of the enthusiastic waiter.

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3.0 CRM Value discipline

CRM value discipline is a term create by Michael Treacy and Fred Wiersema to describe
different ways of distinguishing between a company and its competitors. CRM value
discipline is not just a statement of revenue, it is a statement of strategic focus and provides a
background for the company to set corporate vision and goals, target the most profitable
customers, and focus on and adjust its activities. It can be identified by three value discipline,
which is product leadership, customer intimacy and operational excellent.

Haidilao is the food industry that focus on such customer intimacy. Haidilao is good at
maintaining close relationships with customers. Compare with any other restaurant, Haidilao
is better in its customer service market and meet the needs of customers because Haidilao
always adheres to the concept of "service first, customer first". Haidilao is a food industry
pursuing customer intimacy strategy and will continue to customize and shape characteristic
services, taking attentive service as the basic concept, and is committed to providing
customers with "intimate, warm and comfortable" services.

Haidilao will undergo employee recruitment and provide good training program to them
because they want to make sure that each employee provides consistent and outstanding
services to customers. The purpose of the Haidilao training system is to ensure that their
employees have an ability to solve problems and improve their overall quality. Well-trained
employees may help Haidilao manage the relationship with customers and better understand
the customer intimacy.

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4.0 Recommendation
As an industry, Haidilao need to find an effective solution in order to improve the CRM
performance. These solutions must be affordable, achievable and customer-friendly[ CITATION
Coh18 \l 2052 ].

For a well-known food chain company, food safety is basic. If food safety is not guaranteed,
many sincere apologies are useless.

Therefore, the first step to ensure food safety is to recommend Haidilao to conduct food
safety self-inspection. Carrying out food safety self-inspection not only can avoid food safety
problems to a large extent but also can subtly improve the quality of its own products and
services. Haidilao needs to publish a food safety self-inspection report on its website once a
month to announce its food safety hazards and rectification requirements to the outside world.

In addition, Haidilao must choose a regular supplier and check whether the supplier
implements and follows a good food safety plane make sure it does not become a problem for
Haidilao[ CITATION Chi19 \l 2052 ].

Haidilao’s price hike will have a certain impact on passenger flow, and many customers are
not patronizing because of the price increase. For Haidilao, this is the most unwilling result.
Therefore, in order to avoid this phenomenon and ensure the profit in the store, the best way
to retain customers as much as possible is to launch a rewarding food campaign. Haidilao can
make its own discount ticket according to its actual situation. Consumers can give one free
after each consumption and accumulate several tickets to exchange for corresponding dishes.

Haidilao should choose an appropriate price hike strategy based on its own dishes and the
characteristics of its customer base to avoid the loss of customers and achieve a win-win
situation for customers and profits.

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Haidilao implements training programs for all employees on how to ensure follow with
hygiene specifications. Through training, the risk of hygiene problems can be reduced.
Haidilao supervises and trains employees in hygiene practices[ CITATION Lyo19 \l 2052 ].

Pest control plays an important role. Therefore, Haidilao can eliminate pests by themself or
ask a professional pesticidal company to conduct pesticidal treatment once or twice a month.
The purpose of regularly eliminating potential food sources and insect breeding sites is to
reduce the risk of pests such as rodents, flies and cockroaches appear in food preparation and
kitchens. In addition, it is recommended that Haidilao invest in pest control monitoring and
testing to help prevent pests from entering the kitchen and food processing sites, thereby
helping to meet food safety standards[ CITATION Lyo19 \l 2052 ].

Effective management of customers’ queueing up is particularly important. Haidilao must be

good at seizing opportunities to create pleasant experiences for customers. The objective
factor of long queue time in Haidilao may be difficult to avoid. In order to avoid loss of
customers, Haidilao has designed a comfortable waiting area where customers can shine their
shoes for free, and even surf online and manicure (Zhao, 2016).

While customers are waiting, they can freely enjoy free drinks and snacks provided by
Haidilao, such as popcorn, ice cream cups, fruits, milk and juice. In addition, Haidilao also
provide Chinese checkers and poker to attract customers who come together to pass the time,
because this not only shortens the queue time but also enhances the limit of customer
tolerance and patience (Zhao, 2016).

Haidilao must bring the service concept to the extreme, in order to be deeply rooted in the
hearts of the customers and leave a deep impression on customers through the expansion of
the Haidilao. As long as Haidilao makes efforts in queuing, customers will feel value-added
service experience and these services will also become one of Haidilao's characteristics and
symbols (Zhao, 2016).

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In essence, Haidilao just wants customers to eat well. It is just that everyone has a different
understanding of "eat well", and in different situations, they will have different needs. In this
regard, in order to solve over service problem and better meet the individual needs of
different customer groups, Haidilao launch a smart solution which is "do not disturb" service [
CITATION Gri19 \l 2052 ].

This “do not disturb” flip board has some specific options, such as "order your own food",
"no detailed service required" and so on. Customers can choose according to actual needs.
The table of every Haidilao restaurant chain should be equipped with a "do not disturb" flip
board. If the customer does not want the waiter to be too intimate during their meal, they can
put this service flip board on the table, then Haidilao's waiter will no longer provide too much
meticulous service, they only will normally serve the customer, clear empty dishes and other
basic services[ CITATION Gri19 \l 2052 ].

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Appendix 1

Figure 1 plastic found in meat

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Appendix 2

Figure 2 employee cleaning the drain using a hot pot strainer

Figure 3 rats were rampaging on the floor

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