KFC China and its Marketing

1525 WordsSep 29, 20147 Pages
Case Study 2 Introduction KFC China is a quick service restaurant that’s has dominated the local fast-food market. Marketing has significantly contributed to its success. This report covers KFC-China’s current localized marketing strategy consisting of product, promotion price and placement strategies. It will also discuss the potential issues that may affect business operations in the near future, these include; increasing costs, emerging seniors market, economic slowdown and supplier issues. Analysis Product: KFC’s products include a large variety of mainly food-items which have been localized and diversified to differentiate from its competitors (Yum!2012). China’s mass-consumer market encapsulates traditionalist-tastes…show more content…
Thus the current customized promotional strategy is being implemented effectively. Price: KFC’s localized pricing strategy allows it to successfully reach its objectives. Its current pricing incorporates the value added approach evidenced by the fact KFC charges at a price point of approximately $3.50, significantly higher to its closest competitors (Bell2011). However because KFC China has positioned itself as a high price, high quality restaurant (Bell2011), its prices need to be kept higher than its competitors to ensure image preservation. Nevertheless, Stein (2012) suggests that due to the recent economic slowdown in China, consumers are conscious of their purchases, so, a market-based pricing should be used where price is based on supply and demand. However, whilst market based pricing can ensure greater amount of people being attracted to KFC, presumably not all consumers would be in its target market hence these customers cannot be satisfied from KFC-China. Dissatisfied customers can spread negative word of mouth, tarnishing KFC’s image. Moreover, KFC is in the position where it’s able to set higher prices rather than match its competitors, whilst still maintaining its market leadership. Its brand image and intensive new product introduction strategy (which helps satisfy existing consumers’ needs and wants) make consumer demand price inelastic (Li2013). By charging higher mark-up on its existing customers, it’s able to make
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