International Marketing Assignment – KFC in China
KFC is an acronym for a multinational chain of fast food which stands for Kentucky Fried Chicken. The KFC Company is owned by the YUM Group as of 2002 and is based in America in Louisville, Kentucky. The company was initially founded in 1987. KFC itself was one of the first few fast food restaurants dealing entirely with chicken menus. The company and the brand name have led to spin off and me too product offering companies in both the international, as well as the domestic markets which have also turned out to be profitable in the long term. The popularity of the brand name has made it easily recognizable anywhere in the world.
The company for KFC is related to both the fast food industry and the food and beverage industry in the international and local markets. The company has been building good will and stromg brand reputati9on over a period of 50 plus years. The scope of KFC in china is highly expansive in nature as the company of KFC is sought out to be one of the of famous western fast food restaurants chains in China. “The company operates in 100 countries and territories around the globe. It is headquartered in Louisville, Kentucky and employs about 280,000 people.
The company recorded revenues of $9,561 million during the fiscal year ended December 2006, an increase of 2. 3% over 2005. The operating profit of the company was $1,262 million during fiscal year 2006, an increase of 9. 5% over 2005. The net profit was $824 million in fiscal year 2006, an increase of 8. 1% over 2005. ” (‘Company Overview’, 2007) The marketing strategy employed by the company is of customer orientation and is focused on increasing sale and establishing relationships with clients to encourage repeat purchase behavior. I. Macro (PESTEL) for KFC in china.
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The competitive analysis for the KFC Company in China depicts that the market structure of the Food and beverage market is that of high-level competition in the case of KFC. The company would be establishing its franchises in the region. However there already exists an extensive competition and market for fast food/beverage, and convenience American food in Chins. The presence of all time rival McDonalds in China is also an important factor for driving the competition as well as the standards of operation up for the KFC Company. PESTEL analysis for the Industry in China in relation to KFC is as follows:
Political The relations of the company and the domestic country will raw material exporting countries would be of crucial importance of the establishment and commencement of operation for KFC in China. Aside from this the China US relations and the political stability in thin China will also play a role in the success of the Company. The controls and regulations set by the state and the government will affect the company. Economic There is a constant demand for food and beverage products, and the Americanization of the new younger generation brings opportunity in terms of the acceptance of the brand in China.
Aside for this the development in the country has increased the incomes of the people providing them with higher disposable incomes which can increase the potential target market of the company in the region. Social The effects that can be encountered form the social environment pertain to the change in the use behavior of the target market in terms of easting out and specifically pertaining to the kinds of food they consume in the presence of family, fiends and company.
It is also possible for people to shift to a competitor’s chain of fast food. Technological The technology available in the region will affect the company by improving the operations of the KFC Company making them more efficient. Economic-Legal There economic-Legal environment present some of the same effects that are depicted above. Specifically the rules, regulations and laws of operations, franchising and import and export will effect the operations of the company in China.