Developing an entry marketing strategy incurs a lot of management knowledge from the marketers. KFC is a well known fast-food restaurant producing quality fried chicken dishes. The organization decides to expand its operations in Indian market. The marketing analysis indicates that the firm’s overall performance is perfect and it has the capacity of entering into a new location. Moreover, from the SWOT analysis, the strengths and opportunities outdo weaknesses and threats into the new entry. The target groups include upper class people composing of people in their middle ages. The management is recommended to carryout thorough advertisement and promotion in order to attract customers to the restaurant. From the entry strategy, KFC is encouraged to adopt e-business in various operations in order to be modernized.
Kentucky Fried Chicken (KFC) is a well established company based in Louisville and with more than 11,000 branches in more than 80 countries all over the world. It forms the world’s most popular chicken restaurant chain attracting almost 80 million customers daily. The restaurants deal with original chicken Recipe, Twister and Colonel’s Crispy Strips, and Extra Crispy. The company offers a lot of different products that are enjoyed by customers from United States and Japan, who forms the greatest market. The restaurant was pioneered by Colonel Harland Sanders and managed to grow into one of the best quick food service place in the world. The restaurants are known of their taste Kentucky fried Chicken enjoyed by majority during dinner (Franchising.com 2012).
Quality restaurant services have gained a lot of demand in India due to the large number of people interested in chicken meat and their products. KFC is one of the best hotel Services provision company in the world, and its services have found market in almost every continent. By setting its restaurant in India, KFC would be in a better position to win most of Indian’s food market. Starting new business internationally has many challenges due to the new business environment that requires a lot of knowledge on the new market. Investors who have a better understanding of the market characteristics in the prevailing environment find it easy settling and coping with challenges (Zekiri & Angelova 2011). KFC has explored many locations and its entry in South Africa is likely to face minimal challenges. Developing a perfect market entry strategy assists in overcoming marketing challenges in order to win the competition. Investors should gain loyalty towards their customers by properly analyzing the market needs, and delivering what the customers want.
Overall performance of the firm
KFC has recorded good performances for the last 10 years. The company is market oriented with annual sales of over 3 billion U.S. dollars. The fast-food restaurant sector is very competitive requiring quick and perfect marketing strategies for a restaurant to succeed. In KFC restaurants, quality is measured using the aspects quality, service and cleanliness. On the other hand, operations facilitating review program assists in measuring the process implementations. Knowledge of fundamentals of marketing assist marketing managers in understanding how to create a perfect market entry strategy using value chain.
Chicken meat is considered one of the most nutritious foods that have little effect on people’s health. Restaurants specializing with chicken products record a lot of customers on daily bases as evidence from KFC. Since the fast-food industry has a lot of demand from customers, KFC offers quality chicken products that are very tasty. Today’s marketing challenges requires an organization to create a sustainable business environment taking care of the future changes. The company makes use of customer and market surveys in determining its performance against its competitors. Of late, the company has suffered declining sales in South Central division due to poor management and low speed operation. The management should have a full understanding of the services at different locations by developing perfect entry market strategies for their organization (Kotler & Armstrong 2011).
In order to enjoy business competition must occur from rival companies. The big threat for KFC is MacDonalds Inc that offers the beef services in the same locations as KFC. MacDonalds owns many fast-food restaurants across the world competing with KFC. To cope with the competitive nature of the market, KFC offers spicy products as opposed to MacDonald are that offer burgers and French fries. On the other hand, KFC specializes with chicken that is acceptable in all communities, but MacDonald’s offers beef that has no market in India. KFC hires local staff in its restaurants because they have proper understanding of local customers making sales easier and fast. MacDonald’s staff consists of simple graduates who are trained from United States.
The type of marketing channel used by KFC is very unique since the company always meets its annual goals and objectives. According to Bangs and David (2011), several factors determine marketing channel characteristics, which include critical risks and critical success factors. A risk free business offers the investor an opportunity to venture into the new market and win many customers within the shortest period. The main determinants are the entry methods used sale projections, suppliers, distributers, and business location (Shim & Siegel 1999). The channels of distribution found in Africa are less complicated and KFC has a better opportunity establishing its restaurant in the preferred location. KFC quality services are attributed to their CHAMPS slogan.
C- Cleanliness, H- Hospitality, A- Accuracy, M- Maintenance, P- product Quality, and S- Speed of Service.
First, KFC is the world’s most popular restaurant offering quality chicken meat, and operates more than 11, 000 restaurants in more than 100 countries. This puts it in a better position to win the Indian market. Second. KFC is very famous for production of quality and original recipe of fried chicken made from natural form. This will attract many people who are sensitive to taste. Third, the restaurants generate a lot of income all year round making it have adequate starting capital for the new market. Finally, the restaurant is ranked first among all chicken restaurants in the whole world ().
First, the company lacks knowledge about their new customers due to differences in culture and denominations. Second, KFC management lacks focus on future outcomes of the business because they hire new employees from the new location.
Lack of commercial fried chicken restaurant in India makes KFC have a retail boom in the region. Second, most Indians are adopting the Western culture. Also, the Indian economy is improving indicating more revenues from the new market entry. Last, the metropolitan rapid development has encouraged foreign settlers in India who will offer fast market to KFC restaurants.
The presences of political parties protesting against junky food in India pose a great threat to KFC entry in the region. Second, individual who own beef restaurants may hinder the entry of chicken market since most Indian’s are prohibited from taking red meat and would opt for white meat. Moreover, Indians like tandoori chicken that is not offered by KFC (Banga and Mahajan 2012).
Goals and objectives
KFC specific objective is to create entry into the new Indian market and make profits as they expand their business to more locations worldwide. The restaurant aims at winning the competitive advantage in every continent, and ranks at the top in fast-food restaurants. Moreover, KFC aims at opening up more restaurants in different cultures in order to encourage people on advantages of eating white meat as opposed to red meat. Finally, the entry in India aims at providing better, quality, faster, and better customer services.
Mode of entry into target market
An entry market design assists in making successful strategies for the new location, and enables an organization achieve its objectives. The mode of entry into the new market is determined by the target market, and the marketing strategy used. Developing a perfect new market entry plan forms the main success into the new market since it provides an organization with mechanism for directing and coordinating the marketing efforts (Kotler & Keller 2006; 61). The most important marketing concepts for an entry business are: needs, wants, and demands. The need for food from customers who want chicken fried from KFC encourages the restaurant to establish itself.
The company targets upper and middle classes composing of youth. The target market depends on the size and population growth rate. In developing the target market, consumers’ lifestyle plays a major role since it determines the type of products to sell. In India people are adapting different cultures that encourage locals to utilize different products coming from different parts of the world. The high rate of immigration into the region has created mixed cultures that bring a lot of development in India. In addition, the company targets youth population that is growing at a high rate ensuring proper flow of customers throughout the year. The youth market is beginning in India with a quiet number of populations below the age of 14 years.
Organizations should always perform a market analysis that aids in entry strategies formulation. The cost, competitive advantage and government forms the globalization drivers that the country analysis basis the focus. The weaknesses and strengths for a business to participate actively in the international market get analyzed in deciding the target market. International business analysis outlines the potentiality of the business to gain from the market participation. The analysis incorporates strategic levers such as marketing, location and product, and organization analysis such as culture, people, management and structure (MacDonald 2007). On geographical segmentation, KFC focuses on Indian customers with different demands for different products. On the demographic segmentation, the market will compose of groups made up of people of same gender, age group, income, occupation, and religion.
The marketing strategy will enable KFC formulate the best marketing mix that focuses on more sales and high returns. The recommended strategies will ensure a full supply of products to the restaurant and total customer satisfaction.
KFC should adopt a pricing strategy that is customer friendly and enables the restaurant make profits. KFC products are priced high in India targeting upper class people. Adopting cost base price strategy would assist in winning most customers who are willing to eat fried chicken from KFC joint in India. The pricing also takes the form of the standard of the product, whereby the management includes variable and fixed costs in the cost based method (Linton & Donnely 2009).
The company will make use of Ansoff’s strategic planning method in marketing mix that assists in analyzing the new market entry. KFC produces best fried chocken products in the world, which is most demanded. In addition, increased market share for fried chicken improves on its promotion through increased usage, and increased quantity in consumption. KFC aims at expanding market for its products through carrying out promotions and advertisements. The distribution structure adopted by an organization aims in undertaking needs analysis of the new market share. The correct distribution channels will assist KFC in utilizing the available resources of labour and capital to increase its competitive advantage (Khanna, Palepu and Sinha, 2005).
In order to increase their competitive advantage and have well established Services in India, KFC should follow the following recommendations. To start wit, the company should lay a strategy of offering their recipes at affordable prices, but with the same qualities. Secondly, the company should collaborate with one of the established Indian fast-food restaurant; or rather acquire it in order to attract more local customers. On the other hand, the company should carry out an analysis of superior performers in the country, which assists in determining the type of strategies to adopt in order to win the market. Finally, the company should be aware of the changing times and adopt the current ways of doing business that include; use of technology, and creating customer value (Brassington & Pettitt, 2007).
A perfect market entry strategy is essential since it assists a company in concentrating and utilizing the available resources and opportunities to realize profits and become competitive in the market. In developing appropriate market entry strategies, proper assessment of the internal and external environments of the business is essential. The internal environment includes type and nature of product, marketing mix and the distribution constraints. On the other hand, the external environment may include the nature, type and distribution of customers and competition in the market. Other external environmental factors could include technology, cultural, politics, legal and the economic environment. Assessment of the environmental factors helps in the development of appropriate strategic distribution plans (Zekiri & Angelova, 2011).
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