Case Analysis: Yum! China Objectives: 1. To understand some key marketing terms in the case 2. To elaborate on the success and strategies of YUM! China 3. To analyze the marketing problems of YUM!
Case Analysis: Yum! China
Objectives:
1. To understand some key marketing terms in
the case
2. To elaborate on the success and strategies of
YUM! China
3. To analyze the marketing problems of YUM!
1. Some Key Terms
Product localization:
- Adaptation to local conditions (similar to
standardization)
Product standardization:
- Products/services in all markets are
homogenous (uniform) in its marketing mix
(4Ps); design, taste, costs, promotions
packaging, warranty etc.
Franchising:
- A method of business / marketing expansion through
licensing and rights of distribution for a fee.
- Franchisors sells rights to franchisees
Supply Chain:
- the system of organizations, people, technology,
activities, information and resources involved in moving
a product or service from supplier to customer.
Quality:
- Defined as the total features of the product or
service that satisfies needs; or ‘freedom from
defects’
TQM:- Marketers involved in organization-wide
process of continuous improvement to produce
better products, services, business process
Customer Perceived Value (CPV):
- Customers evaluate differences between
benefits and costs of product against other
choices
2. Success of KFCAnalysis
Adapted to changes in the marketing mix (7Ps;) People /
Physical Evidence / Process
Innovative business model that is very localized and
efficient
Good internal distribution systems that allow KFC to cut
costs
Know-how of retail expansion and management
Lesser threats from Mcdonalds etc.
Value proposition:- A statement that provides all total customer
benefits of the product
• Freshness of Product
• 50 range of Chinese KFC products
• Efficient and polite services
• Home delivery services within an hour
• Personalized marketing chicken taste for you
• Delightful dining
Success of KFC
2. Strategies for YUM!
Generic Strategies (Michael Porter)
Differentiation strategies
Marketing Strategies
Marketing Mix adaptation strategies
Mass targeting strategies
Extensive distribution networks
Market penetration of retail stores
Product and Market Development strategies
3. Problems for YUM!Analysis
Complex legal environment of different provinces will
decrease quality of KFC
Little franchises will decrease opportunities to increase stores
The Chinese KFC products are not long-term cash cows
Many supplier levels increase risks and costs in the supply
chain
Too many stores cannibalize each other
Access to remote locations difficult
Mcdonalds always a threat in recession