Rice or Fried Chicken?
Xi Chen Jiaqi Guo Liuyi Pei
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Table of Contents
Introduction Background Information Analysis of KFC’s Success in China Porter’s Six Forces Analysis Entry Buyer/Supplier Bargaining Powers Substitutes and Complements Rivalry Competitive Analysis Customer Identification and Customer Base Product Range Marketing Strategy Branding Appealing to the Younger Customers Organization KFC’s Testing Strategies Strategies for the Future Marketing Localization Localization of Food Localization with Respect to Life Style Employing Value/Cost Strategies Expanding Geographically Price Discrimination Conclusion References Appendix A 3 3 3
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Introduction
Within the
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They present the revolutionary idea of western quick-dining, and has a specialized menu focused extensively on chicken. Compared to a home-cooked meal where a lot of smoke and oil is involved as well as a large pile of dirty pots, pans, and dishes, dining at KFC, with its quick service and disposable eating utensils, is much more relaxed. In fact, the Chinese were so attracted to this type of dining that some people even held weddings at KFC6. In addition, KFC’s target customers are also different from those of traditional Chinese restaurants. Rather than targeting families and adults, they look for teenagers who are accepting of new cultures and ideas. They give numerous discounts to high school and college students, hoping to acquire such a group of young adults with a lot of money from their parents to spend as their primary customers. McDonald’s, on the other hand, focuses primarily on children and young parents, spending a lot of money in building playgrounds within the restaurants for kids and giving out toys with kids’ meals, using the same strategy as it does in the U.S. The aims of KFC and other fast food restaurants are different; therefore, it reduces threats to KFC posed by other competitors. Another advantage that is often overlooked lies in the products of the restaurant itself. Chicken in general suits the
In Beijing, McDonald’s was like leisure time for people. For example, people could relax, chat, read, enjoy the music, and celebrate the birthdays in McDonald’s in Beijing (Yan, 72). McDonald’s in Beijing provided friendly environment and moderate place for middle-class people. When people went to McDonald’s, they were getting American culture experience that they had never been before. In Beijing, when customers entered the McDonald’s, they could see the kitchen and how their service works which is different to American culture. In addition, Beijing culture has been changed because of the familiar and peaceful place that McDonald’s provide for their customers. McDonald’s made favorite for young couples “because the eating environment is considered romantic and comfortable” (Watson 50). Also, McDonald’s was children favorite place like in American culture because kids could play and eat at the same time. Even they had receptionist whose responsibility were “to establish long-term friendships with children and other customers who frequent the restaurant” (Watson 61). McDonald’s in Beijing became most favorite placed for people because of affordable restaurant and friendly
My chosen businesses are KFC and NHS. These are the businesses I will be discussing the purpose and ownership. I will also mention the internal and external stakeholders of these two businesses.
This campaign was missing an attitudinal objective. The output and behavioral objectives were not specific and measurable with a timeframe and the informational objective was specific and measurable but did not have a timeframe. A critique would be that this campaign did not make all their objectives specific and
During the Growth Stage, a company aims to develop brand recognition and increase their customer base. The quality of the product is often improved and technical support is usually enhanced. Pricing remains generally stable as demand continues with minimal competition. During the Maturity Stage, the company has successfully established product and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time as KFC, now, has to take into consideration of Porter’s five forces analysis. For instance, other fast food oligopoly such as McDonald’s, Subway, Burger King and so on might come out with similar product of relatively cheaper price as substitute. Moreover, small businesses are able to enter to the market because of reasonable production costs. “A successful strategy needs to be based on assets and competencies because it is generally easier for competitors to duplicate what you do rather than who you are,” said David A.Aaker Strategic Market Management. The firm should invest to regain a dominant position so that it is a point of advantage if other firms are catching up. “A satisfied customer is one who will continue to buy from you, seldom shop around, refer other customers and in general be a superstar advocate for your business,” said Gregory Ciotti Help Scout.
To determine if the fast food brand KFC falls under Tripple Bottom Line standards regarding prosperity, environmental quality and social quality. Through the following research the hypothesis “KFC operates as a successful public company” will either be proven or disproven.
Throughout Kentucky Fried Chicken’s (KFC) lifespan as a division of the company Yum Brands, they have developed and establish grounds that have helped make Yum Brands the company they are today. Within this lifespan, KFC has expanded not only throughout the United States, but globally to more than 125 countries and territories building and establishing more than 20,500 KFC outlets (About KFC). Although expansion is often times a great step for a company, sometimes they are successful and unsuccessful. One of the major countries KFC is successful in is China, and one of the countries they have not been so successful in is India. At the root of KFC success and failures are a few very basic marketing techniques, the four P’s (product, price, promotion, place), their target market, and KFC’s strengths, weaknesses, opportunities, and threats which are continually changing as KFC continues to expand and their market continue to grow.
Young couples often dine there “because the eating environment is considered romantic and comfortable” (Watson 50). They had blocked off sections to accommodate for the young couples that they called “the lovers’ corner” (Watson 51). They even brought the playfulness of the American McDonalds to Beijing which they called the “children’s paradise” where they could play and eat at the same time. They even had receptionist whose tasks were “to establish long-term friendships with children and other customers who frequent the restaurant” (Watson 61). McDonalds in Beijing is considered by most as a high fashioned placed that is fairly affordable especially because the people saw McDonalds as “a formal restaurant where they had paid for full service” (Watson 52).
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Kroger, a grocery store that is slowing evolving into a Walmart or Target was started up by Barney Kroger. Barney used his life savings that consisted of $372 to open the very first Kroger store in downtown Cincinnati. Barney lived by his motto “Be particular. Never sell anything you would not want yourself “. Kroger has an established business ethics and they also have core values set in place. To help support their employees they also have an established labor union along with other strongly supported policies. Kroger was able to achieve its growth by merging with other successful companies.
Quick Service Restaurants have been serving swift and tasty meals since the 1930’s. The industry focuses on a high speed product with a low cost for the satisfying convenience of the valued customer. Behind every commercial, smiling employees serve their customers as they cheerfully claim to adore their job, famous logos line highways that serve as a friendly reminder of the familiar, and “now-hiring” signs deck the interior of hundreds of restaurants that beckon it’s beholders to become part of the great family that is the fast food industry. In fact, to the common eye, the industry seems optimistic, a venue of opportunity – at least for the meanwhile – and an environment of simplistic means. Hardly ever do you hear about the costs of
Fast food restaurants are one of the most stable industries in the world today. Eateries of this order offer a cheap and convenient alternative to traditional dining. There are many very popular fast food franchises. Perhaps the two most popular of these are McDonald's and Burger King. These titans of the industry have targeted the same demographic over the course of several decades, sparking heated debate among friends as to which of the two is superior. In many ways they are the same, but there are also differences.
The procedure begins with an online screening test to ensure that the candidate is fit for the business, and the actual work preview allows the candidate to personally experience the job and then decides to join KFC.
KFC Does two types of planning, Strategic Planning and Operational Planning. Strategic Planning is done to increase its market worth value of the market share and Operational Planning includes launching of new product to change or innovate its product line for the customers. Planning objectives of KFC are to expand the organization on all over the UAE, to create and build superior quality for the customers, to follow marketing mix strategies and to generate superior financial return for KFC and KFC’s employees. Menu planning is done by researching. Supply chain management planning includes the full process related to the supply of raw materials which include chicken, spices and packing material and to increase operation, the objectives of supply chain management planning is to increase the level of outsourcing, increase globalization, increase the supply, increase the competitive pressure and increase the customers.The KFC mission statement is to “sell food in a fast, friendly environment that appeals to pride conscious, health minded consumers”.
Kentucky Fried Chicken (KFC) is a popular fast food chicken restaurant chain around the world. (Bell, Shelman, 2011) It is one of the subsidiary of Yum Brand. This company also operates the Pizza Hut and Taco Bell. (Yum! Brands, Inc, 2016) KFC was founded by Harland Sanders in 1952. (Bell, Shelman, 2011) Sanders was successful in creating the brand, even the logo of KFC brand is the portrait of him. He became a notable figure in American history thanks to his great contribution on creating KFC brand. Nowadays, KFC becomes more and more popular, the sales ranking of KFC was the 11th among the worldwide restaurant brands. (The QSR 50, 2015) The sales of KFC in 2014 was 4200 million dollars. (Details in Appendix 1) It means KFC has a large quantities of consumption needs. Actually, KFC has 14,577 restaurants around the world and 70% of them are located outside America (Yum Brand Annual Report, 2015). The restaurant profit was increased year by year from 2013 to 2015. (Details in Appendix 2) Therefore, it is potential to enlarge the customer base by analyzing consumer behaviors.
Providing customers with the best of both worlds: west meets east. In addition to its radical strategic approach of localization with regard to its food, they extended that viewpoint when selecting their management team. By hiring Chinese executives, Yum! Brands is able to build relationships with the local suppliers more easily and quickly. It definitely helps with their competitive advantage that chicken is a staple meat in China. Given these factors, it is clear that KFC has a competitive advantage in this market. However, taking a closer look at the industry and thinking longer-term, the competitiveness is undesirable but there is still potential to improve profitability. See the analysis