A company operating

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1st Jan 1970 International Studies Reference this

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A multinational sometimes known as transnational, is a company operating out of its origin country which involves one or more countries. Multinational corporations growth in alliances, joint ventures and mergers and acquisitions, but this will cause consumers to recognize the brand, rather the parent company. Shell, Caltex, ExxonMobil, Nokia, McDonalds, Toyota, Nestle, Sony, Microsoft corporations are a few example of multinational corporations. It is important as many large corporations tend to increase sales and gain brand recognition at the same time providing jobs opportunities as in the case study of James Dyson and Waterford Wedgwood.

International marketing is the multinational process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives[1].

Today, many multinational corporations are surviving and competing against their competitor’s brand to achieve higher market profits. The companies apply strategic measures to expand their business as well as improving management in order to increase profit income.

The basis of a company running its business is to have a good human resource management, quality control on product or services, maintaining loyal customers and at the same time boosting sales and implementing marketing strategy in their founding region country. For examples the most popular product in the United States are Microsoft Corporation, Apple, and McDonald, where they gain most of their profits from its own founding country.

However, if the same company runs the same system they use in their founding country, it might not be successful if they were to expand their business market onto the international market. This is because different countries have different culture, religion, tradition, mind set, environment and lifestyle and it plays a vital factor that caused the marketing plans to fail if international marketing mix concepts are not brought into consideration. CEO of Coca-Cola, Mr Daft mentioned, ‘it was that the next big evolutionary step of “going global” now has to be “going local”. Most worrying for the global brand-owners, consumers in the newly opened markets started expressing a desire for local products, protection for its local sovereignty and cultural identities[2]. In order for an organization or business to achieve a successful rate in widening their product services internationally, the management team needs to apply the international marketing mix in planning and strategies marketing concept that cater for international market consumers.

In this assignment the multinational company that I’ll examine its international marketing mix operation will be Kentucky Fried Chicken as I’ll investigate and study the strategies of its international marketing mix of the company’s success.

Kentucky Fried Chicken, or famously known as KFC is a very well known fast-food chain restaurant having thousands of franchises throughout the world, serving its famous Colonel Harland Sanders trademark chicken, in both Original Recipe and Extra Tasty Crispy varieties, along with chicken sandwiches, chicken pot pies, crispy chicken strips, mashed potatoes and gravy, and potato wedges.

KFC Corp. is wholly owned by Yum! Brands, Inc., which also operates the Pizza Hut, Taco Bell, Long John Silver’s, and A&W restaurant chains. The headquarters is located in Kentucky, where the brand originated and half of the profits made by this company is through international marketing and sales or via franchising.

The two marketing approach which adapted by KFC in their marketing campaign which I will elaborate more, are standardized, and adaptation marketing approach.

In standardized method, it described as a common market program, where a company uses a standard, fixed marketing plan to run its business in their founding country. One can notice that all the outlets are very identical and the management is really concern on the standard operating procedure (SOP), to ensure highest standard quality of food and services being offered to the customer.

Take Shiseido, a beauty brand as example, where there are employing standardized method, where all their products marketing are the same all over the international market in terms of the product, price, promotion and placement of the product. Same goes to Coca-cola, Pepsi, and Marlboro where standardization strategies are used. Consumer can purchase the same Vanilla Coke, Coke Light and the red tab Coke is sold all around the globe.

However, adaptation strategies is total opposite of standardized where it recommends for product and marketing modification for a certain international market in order to suit the needs of the foreign market in terms of cultural, environment, product knowledge et cetera in order bring success to its marketing plan and to help boost its sales.

Therefore by analyzing Kentucky Fried Chicken international adaptation marketing strategies with Malaysia, which are managed by QSR Brands Berhad[3], there are significant differences of marketing strategies used compare to common standardization marketing uses in their founding country. We can notice the difference by comparing the both countries 4P’s of marketing mix. I shall start with the first marketing mix, which is product.

Product

Product marketing is the first element that deals with the specifications of the goods or services and how it is related to satisfaction of the customers. Products are usually developed to meet up the wishes of the customers. It is sorted according to the five characteristics, quality, features, styling, brand name, and packaging. [4]

Based on the KFC product marketing plans in the US markets, their products are packed using their brand symbolic color of red and white together with the image of Colonel Sanders which is the core of the company’s advertising and branding strategies. It uses standardized approach method to market their product, and also to neighboring countries of Canada, New Zealand and some part of Europe. Other than fried chicken, many KFC restaurants serve side dishes like coleslaw, potato wedges, french fries and mashed potatoes.

But for their international product to Malaysia, it used the same brand name, image, packaging, and preserving its quality of the fried chicken as it is the company’s Unit Selling Proposition. Also, ‘its finger lickin good’ famous catchy slogan are maintained too.

However, there are adaptations done to its products feature and styling of products such as Extra Tasty Crispy in the US, are being replaced by naming it Hot & Spicy in Malaysia, but both products are similar just the features name is different. The culture of Malaysia and the US are different that is why certain products of name are different in one and other. The title Hot and spicy is more suitable in Malaysia rather than Extra Tasty Crispy because of the word spicy as it brings the meaning of hot,.

KFC Malaysia’s new product, the X meal Hotrods with smoking hot sauce is somehow similar to Malaysian favorite traditional food ‘Satay’. Same goes to local product of Nasi Lemak Enak where Malaysians can find it in one of the KFC a.m meal, not to mention as well the Colonel Chicken Rice Combo, which are Malaysian local food it is because Malaysian more like to eat rice than American who like to eat mashed potatoes. As majority of Malaysia consume rice as their main carbohydrate source in their daily diet. KFC seems to acknowledge the important of rice in their serving, and therefore offering rice and chicken porridge as an alternate adds-on in their menu.

KFC also provide Milo as a drink of breakfast due to Malaysian use to drink Milo as their hot chocolate drink. KFC in Malaysia also provide Thirst Quenchers with a fun float of scoops of ice-cream with any carbonated drink in these hot seasons in Malaysia. Desserts are ice-cream because of the hot weather of Asia, Malaysian prefer ice-cream rather than parfait in the US to feel cool.

Another distinctive product differences are KFC in the US sells pork ribs in their market but its different in Malaysia whereby this is a Muslim country and the restaurant need to follow regulations for Halal food certification in order to attract Muslim customer. Pork and beef are not permitted and other products are needed to be replaced with alternatives favorites. Apart from the certificate for operational premises, internal controls over raw materials procurement, manufacturing, packaging, storage, transportation and utensils need to be controlled as well.

KFC need to understand the cultures and religions of Malaysia where Halal food is food that complies with Islamic Law stipulates that food consumed to be hygienic, not harmful to health, free from any forbidden parts of animal origin, free from anything regarded as filth under Islamic law. In addition, meat products must be derived from animals that are permissible and slaughtered according to Islamic Law for example pork which are forbidden for Muslims. This is because they need to fulfill the requirement of international marketing mix of Malaysia’s custom, tradition, religion and other factors that need to be concern and also the consumer demographics and psychographics of Malaysians.

Despite Malaysians customs and culture traditions, KFC’s marketing in Malaysia is gaining its ground with unequivocal success by implementing the international marketing mix.

Price

For Price marketing, it refers to the process of setting a price to the product. Price is the only element in the marketing mix that brings revenue to the firm. Pricing strategies are linked with factors of standard of living, population size, age profile, and purchasing pattern of its consumer market. It also deals with ones country economy status.

The prices of all of the items offered by KFC Malaysia are reasonable and suitable with the target market segments. Pricing of KFC chicken is ‘Strength’ for KFC in the SWOT analysis as the meals are comparably cheaper than its competitor of Popeye’s and A&W. Figure below tells that KFC snack plate are more value for money comparing with A&W set.

KFC also introduce JomJimat, which attracts consumers to save more for individual set. Not to forget the affordable yet convenient way of having breakfast, this is called KFC a.m meal that offers local foods. Family feast of mini bucket combo and variety bucket also comes with discounted price.

By having suitable pricing and campaign will help ease the burden of consumer financially as they make KFC their choices when it comes to eating quality yet delicious fried chicken

Place

Place refers to where and how the product gets to the customers. Two basic issues involved in getting the products are channel management and logistics management.

Most of the KFC restaurants around the world are in commercial areas. In the US, it can also be found operating as free-standing units and kiosks in high-traffic crowded areas. Such methods can capture both the consumer market of family and friends gatherings area, and also the busy working class, so that they could grab a bite of KFC anytime, anywhere.

Nontraditional service, often stemming from successful innovations instituted in the company’s international operations, was seen as a way for KFC to enter new markets. Delivery, drive-through, carryout, and supermarket kiosks were up and running. Other outlets in testing were mall and office-building snack shops, mobile trailer units, satellite units, and self-contained kiosks designed for universities, stadiums, airports, and amusement parks.

However in Malaysia, KFC placed its restaurants in most commercial shopping malls, and also in every township. This will be easy for KFC as shoppers roaming around for the purpose of shopping can actually be expected to step in and make a purchase. KFC Malaysia builds a strong affinity with a new generation of young customers by rolling out various strategies such as collaborating with the national zoo of having the restaurant to be placed in its compound. I’m sure every school children are excited to have KFC during their visit to the Zoo. Oh how it reminds me back of my childhood days eating KFC in zoo with its Chicky Mascot.

Besides that, by offering 24-hour restaurant service to its consumer, it will surely satisfy the late hungers of KFC fans. Drive through are also another way of providing fast serving of food to rushing busy Malaysians who without the need of getting down from their vehicle to make orders. With over 350 KFC outlets situated in Malaysia, It is by far the most popular restaurant chain in the Malaysia

Promotion

Promotion refers to the various methods of promoting the product. The four promotional tools available to the marketing managers are advertising, sales promotion, publicity, and personal selling. At KFC, Promotion is the main tool to bring all chicken lovers attention towards its delicious one-of-a-kind.

  • Advertising

KFC’s advertisements can be seen throughout local media in Malaysia via billboard and banners in public transportations of LRT and bus, including major highway. Leaflets and page spreads can be seen advertised in newspaper, magazine, commercials can be seen and heard in radios and television as well as the internet. KFC aired their Variety Bucket commercials during dinner time in ASTRO Wah Loi Toi, to attract its target consumer of Chinese adult family where they spend time watching Chinese drama.

For its KFC Hot Rods, its commercial can mostly be seen in 8tv and ntv7 channel where its younger targeted consumer watched youth programs. And for those consumer who browse internet searching for KFC information. KFC also provide website to visit.

KFC Malaysia also stimulates repeat purchases of its products Using Reminder advertisements. The company anthem “finger linkin good” is a wakeup call to the consumer to remind them how good they felt the last time they ate KFC chicken

The website of KFC Malaysia tends to have more multimedia graphical elements comparing with the dull yet boring US website. By using video, animation, colors and images, it will draws consumer’s attention towards the product and stay on longer in browsing the website and this will make a good marketing approach towards Malaysians.

KFC uses the theme ‘good things come together with KFC’ as their promotion campaign which focus on family ties, friendships, and togetherness and at the same time, also focusing unity of 3 races of Malaysia which works well with the 1Malaysia unity concept. KFC uses family sentimental approach in targeting their target market. This is because family value comes first for most Asians. Totally different from US, where its advertisement are focusing on low fat and healthy diet campaign, 0 Gram Transfat nutrition.

Another commercial for the fish burger in Malaysia TV channels, where it shows two Malay boys eating fish burger and it attracts many cats to surrounding them both. By applying and understanding Malaysian Malay culture where first, Malays are only fond to cats and not other animals especially dogs, and at the same time, showing that cats loves fish and the smell of the burger able to tempts the cats.

  • Sales & Promotion

KFC Malaysia offers its customers with various forms of incentives to buy its Chicken. Using coupons that are inserted in local newspaper print ads, customers can enjoy the benefits of discounted price or free add-ons, which the customer must cut and bring along, serves as a pull factor to attract consumer to dine in its restaurant.

  • Publicity

As KFC it grew in popularity, KFC turned to the ‘psychological appeal’ wherein customers also contributed to the various community services via their purchases. Widely adopted by renowned global brands, this unique marketing approach termed ’cause-related’ involves donation of a certain percentage of the purchase price to a specific charity project focusing on corporate social responsibility.

This was how ‘KFC Care Fund’ [5]was introduced, this being one of the most memorable corporate social responsibility projects initiated to help underprivileged children from 68 homes throughout Malaysia. PR effectively conveyed the ‘feel good’ factor to customers that a certain percentage of their KFC Kids Meal purchases were being pooled for these charitable causes. All the more giving they became in helping out a good cause.

As globalization has creates a unique yet sophisticated demanding consumer market, creative measures must be implemented in order to reach its target market. KFC need to foresee and follow with the pace of consumers purchasing and eating behavior in constantly changing its marketing strategies. For example setting up small stalls or express kiosk in major busy streets of Kuala Lumpur would be a good approach to meet consumers demand.

Another suggestion, KFC Malaysia only provides drive thru placement in certain busy areas, but still a lot of branches in Malaysia don’t have drive thru benefits to their customers. KFC must take action about this matter so that can keep more loyal customer even in their busy time they still willing to drive thru to buy KFC rather than McDonalds. Other than that, KFC Malaysia didn’t provide delivery services to consumer’s home or office. They really need to take this as serious way to improve their sales and branding.

Product wise, KFC may applies diffusion of innovations strategies and come out with special sets for vegetarian as well as introduce more chicken flavor other than Original Recipe and Hot & Spicy. This can attract difference types of market segmentation consumer and with new product introductions it will keep pace with its competitors and gain market standings.KFC can also promote healthy eating campaign that targets the healthy conscious consumers to curb the perception of fast food equivalent to bad health and obesity. These would be the changes I would like to see in the future marketing mix of KFC Malaysia.

In conclusion, international marketing mix strategies played an important factor in the role of multinational corporation dealings its business via the international level as local needs of a certain country needed to be accountability for in order to drive the sales and demand for its product internationally. The combinations of 4p’s marketing mix are an essential tool to breakthrough the consumer market and serves their needs and at the same time, maintaining and respecting their cultural traditional heritage. KFC has certainly reached its goal in the marketing plan, by creating standardized and adapted products that suits all market segmentation in all its international franchises and become a successful brand and position KFC as a multinational fast-food company.

  1. F. Robert Dwyer and John F. Tanner, 2006 Business Marketing. 3rd ed, international, McGraw-Hill
  2. Stuart wall and Bronwen rees. 2004 International Business. 2nd ed Essex, Pearson Education limited pg.30
  3. http://www.qsrbrands.com/English/NonFlashSite/BusinessUnits/BizU_Poultry_Integration.asp
  4. Stuart wall and Bronwen rees. 2004 International Business. 2nd ed Essex, Pearson Education limited
  5. http://www.qsrbrands.com/English/NonFlashSite/Communities/TabungPenyayang.asp

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