The way in which KEF made a marketing plan and implemented it will be analyses in this report. How they make a marketing plan and implement it will be analyses in this report. . Introduction: KEF is the based in USA it is the world’s most popular fried chicken restaurant chain. KEF serves 12 million customers every day in the 109 countries in the world. Its revenue in 2008 was $11 billion and the company is ranked 239 in fortune list of companies (KEF. Com, 2010). KEF is adapting the local culture in the different countries. This report will show its marketing plan of different Muslim countries like Saudi Arabia with respect to culture. And marketing mix of 7, As and how they introduced a product ‘Arabian Rice’ in the countries. KEF is owned by the company YUM Inc.
Which is USA based company and it has umber of franchises and subsidiaries of KEF which works in different countries by adapting the local culture and in the Middle East they are marketing in the same way. 3. Mission: In this marketing planning report of KEF, KEF has launched its restaurants in Saudi Arabia and how they would adapt the local culture; one product which is quite different than other countries is Arabian Rice, which is spicy rice with fried chicken. 4. Standardization Vs. Adaptation Either Standardization or Adaptation can create a competitive advantage for a multinational company competing in different cultural markets.
Standardization is defined as the strategy of following a single criterion for a certain product, and on the other hand, adaptation is the measures of altering and changing those criterion (Graham, 2007). Saudi Arabia Culture. 5. Hefted analysis: Source: Egger-hefted Source: Egger- Hefted According to hosted analysis of Saudi Arabia culture against USA is very interesting as USA has high individuality where as Saudi Arabia is less, it means Arabic people think more collectively according to this KEF has launched a number of family meals in their outlets. . Pest analysis: The-Saudi(2010) said that PEST analysis which are political , economic , social and technical analysis are useful to know the external forces of any corporation during marketing planning it can be used with SOOT analysis (strength, weakness, opportunities and threats) to know the external forces including competitors that can affect corporation.
National and international economy directly affects Macs as if the foreign exchange rate changes, interest rate of host country inflation rate all affects a company growth and profitability and financial position in the supply chain as well economic factors along with lattice factors are need to be noticed whilst doing marketing planning as host government can apply taxation’s and entry barriers in terms of excise duty (Hollowness, 2006:47).
Palinode (1994:367) said that Saudi Arabia has high volume market with low value raw material and has little infrastructure and one more thing very important they have found new wealth they can buy technology or expertise from outside country and get technical services whenever they want in terms of education and industries. Table 1. Saudi Arabia Economic indicators. GAP (Purchasing Power Parity)$585. 8 billion (2009 est.. ) $584. Billion (2008 est.. ) $560 billion (2007 est.. ) I GAP – real growth rate: 0. 2% (2009 est.. ) 4. 4% (2008 est.. 3. 3% (2007 est.. ) I GAP – per capita (APP): $20,400 (2009 est.. ) $20,800 (2008 est.. ) $20,300 (2007 est.. ) I GAP – composition by sector: Agriculture: 3. 2% industry: 60. 4% services: 36. 4% (2009 est.. ) I Unemployment rate: 11. 6% (2009 est.. ) 11. 8% (2008 est.. ) I Exchange rate against USED: 1$ = 3. 750 SARA I Source: CIA Fact book (2010) According to above table there are no such changes in the GAP Purchasing power parity in last three years, but on the other hand GAP growth rate in 2009 s significantly reduced which is 0. % where as in 2008 it was on 4. 4%. If we see contribution of GAP by different sector we would come to know that industry has great contribution and services is almost playing a great role in the GAP, as KEF business lies in the services category so KEF would have great opportunity in Saudi Arabia. Unemployment rate is not that much different since last year which is almost 11%. For SOOT Analysis, See Appendix 1. 7.
Marketing Mix McGrath, J (2001) said that when its services business than in the marketing planning APS should be considered instead of APS model of marketing mix. The as of the marketing mix are; product, price, place, promotion, personal, physical facilities and process management. As KEF is a food services Corporation, the marketing plane of Saudi Arabia will consist of APS and how they adopt the local culture of Saudi Arabia in terms of the marketing mix.. 7. Product: After visiting different KEF websites in different countries, KEF got different range of products from small chicken to snacks, sandwiches and desserts the main product they do is to fry chicken coated with 11 types of ingredients mixed with flour, cooked in special industrial machine with the high pressure (Coefficient, 010), these products are standard products which are available all over the world and some are adapted from the local cultural recipes and developed according to local people’s taste. Table: 2 Shows the products of KEF in different regions.
I KEF united Kingdom KEF Saudi Arabia KEF China I Correspondents All Northeastward * Original [email protected] fried chicken products: * Chicken pieces, wings, nuggets, burgers, wrap and pop corn. * * Fries, coleslaw and corn. * Drinks and desserts: * KEF ice cream Sides: and sodas (e. G. PEPSI). I Variable Products According Cultivatable I Plain Salads 2. Smaller range on Desserts. Choice of known ice cream brands. 3. Launch of Snack options: Cheap Snack Bites. 4. Family feast options – Larger variety. | 1. Hall 2. Rice dishes:Chill Predictability 1. Seafood:Clam fingerprints burgers 2.
Chicken wings 3. Beef wrap 4. Breakfast unyielding healthy advices – All available online. 5. Larger variety of dessert and drinks:Sodas (e. G. PEPSI)LLC quarrelsomeness’s and ice teashop chocolate and milk KEF Products & Brand Diversity In different Cultural Markets (KEF. Com, 2010) Trespasser (1999) said that adaptation of product according to local culture involves customer needs, conditions of use and people ability to buy and company has to take care of different languages in the region while the cost of adaptation is not very high than its more likely to do adaptation.
Hollowness (2006) said that the new product should be inconsistent with the other products of the company as KEF is doing Fridge chicken and one of its product in the Saudi Arabia is Fried rice which is actually spicy rice with the chicken that is the product which is not in Europe or any other region KEF outlets which is specially designed for Arab countries latter on it was served in Pakistani KEF restaurants s well. KEF is doing Hall chicken in the Saudi Arabia because its a Muslim country and people would have only hall Chicken.
And all products of KEF are labeled in the Arabic languages. 7. 1. 1 Packaging. Graham , C (2007) said that packaging includes brand name, logo, brand style, labeling, price and product brief description. Some time labeling in different countries has to be translated more than one language and there are different laws of labeling in different countries for example, Saudi Arabia any company can’t use label ‘chill hot’ they should described that actually ‘spiced chill hot’.
According to the KEF Arabia website all the packages got same brand logo but in some products packaging there are more than one languages. 8. 1. 2 price: Pricing is the most complex and difficult area of market planning its about margining the profit over cost. Market planner must consider the demand, its suppliers and competitors. Pricing are affected by inflation level, currency fluctuation, and government intervention in the taxation and other excise duties.
KEF is doing taking its local suppliers for the products which are manufactured locally developed taste, how much excise duty is implemented by government ND taxation(Haines, 2006), all these indicators are given in table 1 of PEST analysis. KEF has competition with McDonald’s Saudi Arabia so its price is almost same as McDonald’s. 8. 1. 3 Promotion: Palinode(1994:309) said that advertising and promotion has become easier because of telecommunication and information technology and geographical distance has become nil but there are distance in the thinking and psychic of people.
Promotion can be in the form of personal selling, public relation or publicity, sales promotion and advertising. In the global situation of advertising iris KEF needs to focus on per capital GNP because of advertising in the parent country of corporation is always different in the host country and they need to look at expenditure in terms of foreign exchange rate of currencies. Keenan (1989) expressed it in the formula. A=sales/awareness impact of the any particular advertising message.
B= f (effectiveness of advertising) C- potential market size. D = Receptiveness of audience to additional advertising messages. Standardization and adaptability in Global advertisement is really important as, communication should be appropriate according to the local culture in terms f their ethics, languages and liking and disliking. In some countries companies prefer simple translation of their advertisement where as others make new commercials for TV or for news papers.
Different countries have different channels of advertisement depending what people take more attention of (Hollowness, 2005). As Saudi Arabia is a Muslim country where pornography is banned KEF can’t use of these kind of materials in advertising , so as seen from the KEF Arabia website, what they are doing is to make advertisement of family culture in Arabic language which is understandable by the people. While looking t KEF -Saudi website, KEF is offering a free member ship of online fitness and wellness programmer.
Further they are advertising both in English and local language that is Arabic. They producing their products in the Hall (Muslim way to slaughter animal according to ‘Shari’ which is Islamic law). KEF also has advertisements on their website about “become a fan of KEF” on faceable. On the website there are some videos of their commercials which include, family meal commercials and home delivery which are in Arabic and attracting locals for Hall KEF products with some of purely local recipes like Arabian rice with fried hickey (kef-Arabia. Mom, 2010) 7. 1. 4 Place: Place is where is business located, in KEF its actually 4 canals of restaurant place is minimum requirement and in some restaurants drive through is made to serve the customer in very quick way that is the one reason that the KEF is in the list of USSR (Quick Serving Customer). 7. 1 . 5 Process: is another element of the extended marketing mix, or up’s. Some views process as the procedure of marketing. Other things process is to manage marketing planning and its all procedures (Neurotransmitter, 2010).
Marketing of KEF is planned by Marketing Chief Executive of the Regions. 7. . 6 People and Physical Evidence The People element simply includes all people who take part in the delivery process of the product to the consumer (Kettle el at, 2008). As for the physical evidence, KEF Company provides products rather than services. Hence, it is easy for the customers to test and assess the quality of the KEF products (Kettle el at, 2008).
Even though Place, People and Physical elements played a secondary role on this report analysis, they provide a better understanding of the full marketing mix strategy. 7. 1. 7 Distributions: Hollowness (213241 , 2006) said that distribution channels can be direct from manufacture to consumer or it can have an intermediate which get manufacture goods from different ways either from parent company or local or other manufacturing company and takes order from retailers or restaurants and provide them what they have ordered.
In global distribution channels it can be seen more often. If the host country production is cheaper and it’s expensive to send goods their companies would find local manufactures with company’s standard and easy to distribute. Fig. Shows the Global distribution channel where intermediate is an important component of distribution. manufacture I consumer I manufacture I I intermediate I Source: Hollowness (2006), chapter 9, Marketing mix distribution As KEF is Hall Food and some of the local products are hall as well.
As the foreign currency exchange rate of USA is higher than that of Saudi which is given in table 1, and shows a great deal of labor force in Saudi Arabia so most probably in my perception KEF has local distributors which manufactures or takes from manufacturing companies, as no information is given by any middle east KEF restaurants websites, probably because of business secrets.
Yum annual report 2009) tells about the distribution that principle items are distributed by YUM to the all international restaurants that included chicken, paper items where are the local items are locally manufactured and in some country principle items are even manufactured locally but there is no compromise over the KEF standard quality regardless of the owner ship of restaurant either by the Yum or its franca sis. Budgeting: Hollowness (2006) tells that budgeting is really important for any marketing planning. Normally budget includes ROI (return over investment).
And also focused on productivity. Productivity= output produces/ input used. Marketing planning cannot be completed without the involvement of finance, production and account departments involvement as it needs finance and company feasibility for launch any new product (Hollowness, 2009) Source: yum (130:2009) http://www. Yum. Com/unaltered/PDF /unilateralist. PDF The above table shows the profitability of YUM in U. S. A which is just a sample to provide the decision that KEF can make in the light of profit they get and spend that money either to new project or give share holder maximum value.
And in this table productivity is easy to calculate. Conclusion: By looking at the KEF, marketing planning in the Saudi Arabia and how they are adopting different products of the local tastes while implementing marketing mixture, KEF has availed a great opportunity to launch its products in the middle east and its very successful because of good marketing planning whilst taking care of all aspects internal and external analysis of the market. Appendices: Appendix 1. SOOT Analysis. Strength, weakness, opportunities, threats) Internal Strength: KEF has leading market position as it has ranked 61 in top 100 servicing companies of the world. KEF has strong portfolio of the products and TTS chicken products with other products that are actually adapting the local culture and taste of the people including desserts , salads and rice dishes which are served international not in USA. Tyler,J (2010) reported in the ‘close-up’ telling about the KEF marketing manager in the UK has decided to spend 40 million British pounds on the marketing which is proportional to the increased sale of KEF.
Marketing manger Jejunely Tilling is a brave marketing chief, she has made this bold decision in the time of recession. Where as McDonald’s which is the top competitor are doing opposite. And advertising has given KEF a new born confidence. Weaknesses: Communication with the host country government and market forces is quite difficult because people and governments in developing countries now prefer local companies rather foreigners (marketing’s, 2010).
External Analysis: Opportunity: KEF has opened its restaurants in the new markets and planning to do more with the research and development strategy to make new products which are more focused on the local culture of the host countries (marketing’s, 2010) Threats: As a global recession in the world consumer spends less on the restaurants or other luxuries as in 2008 Saudi Arabia economy was down cause of global recession and the revenue of YUM was down as well.
Yum (2009) states number of risk which are actually threats for the KEF in Saudi Arabia one of them is increased goods price can affect the price raised of the products of KEF that would affect on consumers. And secondly political risks can be a threat such as they can nationalize subsidiaries of KEF.
Other risks are taxation and excise duty for the foreign companies in Saudi Arabia. Tyler, J (2010) published an article in ‘close-up’ telling that KEF got complained that its products are more fitting and they can block the arteries of the heart. Increased minimum wages in Saudi Arabia can be a threat to the KEF, as it can increase the labor cost and profit margin of KEF.
BCC Analysis: To launch a new product, Boston Consulting Group (BCC) is important to know the life cycle of the product they are four stages of the life cycle of the product one stage is named as cash cow where product is taking more money in terms of and promotion and advertising but giving less output next stage is called star where product have more market shares and giving profit as well and it’s the ideal stage of the product and next step is called problem child where he product have high market share in terms of finance taking more money to make it or other aspects like advertising but giving less output and the final or last step is called dog where product is taking less money like management is not investing more or got less market share and it also giving less profit normally it is the product termination stage to avoid this stage at the problem child companies should start promotion or added value to make it again star (palinode:391, 1999). KEF launch Arabian rice in the Middle East market in the begging they invested money in terms of and promotion then this product has become ammos and now this is in the stage of star where it has market share and it is growing as well.