Overview of China and U.K.'s Marketing Environments for KFC

Business and Marketing
Table of Contents Introduction...................................................................................................................................... 3 KFC Overview................................................................................................................................. 3 Overview of China and U.K.'s Marketing Environments................................................................. 5 China Macro-environment........................................................................................................... 5 U.K. Macroenvironment............................................................................................................... 5 China Microenvironment............................................................................................................. 8 U.K. Microenvironment................................................................................................................ 8 Market Entry Strategies for U.K. and China................................................................................... 9 Market Entry Strategy for China.................................................................................................. 9 Market Entry Strategy for the U.K............................................................................................... 9 Segmentation................................................................................................................................ 10 China.......................................................................................................................................... 10 UK.............................................................................................................................................. 10 KFC’s 4P’s Decisions in China and U.K....................................................................................... 11 Product....................................................................................................................................... 11 Place.......................................................................................................................................... 13 Price........................................................................................................................................... 14 Promotion.................................................................................................................................. 15 Conclusion..................................................................................................................................... 16 References.................................................................................................................................... 18
Introduction
The contemporary business world has become highly competitive primarily due to globalization. It takes proper strategies in all business functions for a company to remain relevant now more than ever. Technology has advanced, and properly managed companies are expanding to pose competition to laggards located in far countries. International business has increased, and while the area may sound lucrative, it is essential to note that even wealthy entrepreneurs in a viable market are doomed to fail if they do not strategize appropriately for their expansion. In this paper, an analysis of the marketing secrets behind the nascent KFC fast-food company will be carried out. An overview will first be provided on its growth path and its expansive status today. There will be a brief examination of the internal and external environment surrounding marketing in China and the U.K., which are the chosen countries for this paper. The company's market entry strategies in both countries will also be discussed, and a justification for them will be provided. After that, the 4Ps marketing decisions the company used in the two countries will be compared before finishing the conclusion paragraph.
KFC Overview
KFC is an abbreviation for Kentucky Fried Chicken. The choice of name was inspired by the fact that the fast-food multinational was founded in Kentucky, U.S., where it is still headquartered. The company specializes in chicken and includes soft drinks, milkshakes, and desserts. KFC was started in 1952, targeting Kentucky enthusiasts of fried chicken, but it has expanded to over 150 countries today. Moreover, when the company had difficulties establishing itself in the United States, Hussain (2014) opines that fewer struggles met its expansion in the international markets. The franchise deals, for instance, consistently failed or were troublesome in the United States but ran smoothly in most foreign nations (Hu and Xie, 2013). Most of KFC's expansions happened between 1980 and 2000, and in 1993, the company's profits doubled, with the international markets reaping more revenues than those of its country of domicile.
This success is mainly attributable to the exceptional competitive strategies that have seen the company rank second to Mcdonald's for multinational food retailers globally. KFC notes to be sensitive to the external environment surrounding different markets and coming up with approaches tailored to suppress the threats and weaknesses and boost the strengths as much as possible. Their service delivery has been key to concurring markets through tactics such as drive-thrus, carry-outs, office-building snack shops, supermarket kiosks, satellite units, and others (Zamani, 2020). Such operationalization offered delightful experiences in a generation when the customers are sensitive to convenience and dignity from the retailers. When many other companies tried to copy the ways of KFC, not many came close to rivaling them (Hussain, 2014). The company now employs over 800,000 workers, and in 2021, it made $2.78 billion in net profits (Chan et al., 2021). They are investing much in R&D to develop more expansion strategies as they seek to make more profound expansions into the emerging nascent markets.
Overview of China and U.K.'s Marketing Environments
China Macro-environment
A range of political, economic, socio-cultural, and technological factors influence marketing in China by providing business benefits or hindrances. The country is a democracy with a stable political status that opens room for all to enter into businesses they like (Tian et al., 2017). It has forged great trade relationships with powerful nations, making it easier for international business to the locals and foreigners. However, it must be noted that the current U.S.- China trade war is a massive threat to their political stability and international business. Labour in China is relatively cheap owing to a large population characterized by enormous unemployment (Wang et al., 2020). Theirs is a high GDP that has improved the purchasing power of residents, although the inflation rate remains scathingly high. China is one of the most technologically advanced nations, and people have innovated reliable e-commerce platforms. It also tightens rules, regulations, and standards to secure its environment from pollution by businesses and other elements (Omer, 2018). They are also championing innovating electric vehicles as one of the tactics meant for resolving the climate crisis.
U.K. Macroenvironment
Like China, the U.K. is a stable parliamentary democracy with a constitutional monarchy. However, the aftermath of Brexit leaves the business environment surrounded by myriad uncertainties and debates for a nation that remains in good relationships with powerful countries such as the U.S. and Germany. The U.K. is the sixth-largest economy globally, although still struggling to recover from Covid-19 impacts. Labour costs are also high in the country, whose top exports include automobiles, crude oil, and gold. It is also a significant tourist destination and attractive for foreign direct investors (McCann et al., 2019). The country has a cohesive multicultural population, and firms have diversified products to suit all races. It is also among the top literacy levels, and social mobility is also high. Technological advancements have also increased and have opened reliable platforms for eCommerce (Tian et al., 2017). There are also strict rules and regulations for safeguarding the environment, and the Employment Act 1996 came with strict provisions for employers
Table 1: PESTEL Analysis of China and the U.K.
China
The U.K.
Political
* A democracy with a stable political status
* Great trade relationships with powerful nations
* U.S.- China trade war
* Stable parliamentary democracy
* Brexit uncertainties
* Good relationships with powerful countries such as the U.S. and Germany
Economic
* Labour in China is relatively cheap
* High GDP has improved the purchasing power of residents
* Massive unemployment
* 6th largest economy globally
* Covid-19 aftermath
* Low labour costs
* Top exports include automobiles, crude oil, and gold
* Attractive for foreign direct investors
Social
* Moderate literacy levels
* Cohesive multicultural population
* A major tourist destination
* High literacy levels and social mobility
Technological
* China is one of the most advanced nations technologically
* Reliable e-commerce platforms
* Technological advancements are also high
* Reliable platforms for eCommerce
Environmental
* They are also championing innovative electric vehicles
* Strict rules and regulations for safeguarding the environments
Legal
* Tightening rules, regulations and standards aimed at securing its environment
* Tough provisions in Employment Act 1996
Source: Author
China Microenvironment
China has offered many market opportunities for foreign investors, which has seen an enormous increase in competition for all industries in the last four decades. It has a population of about 1.4 billion that offers a broad market for businesses, and the people are at different levels of the class spectrum (Mao et al., 2019). The one-child per family law was recently lifted, which means that the population will only grow in the years to come. China has a rich culture, and foreign businesses must always note to assess different markets while deciding on the marketing mix to adopt in China (Omer, 2018). The government has provided the necessary enablement for businesses to establish efficient supply chains.
U.K. Microenvironment
Competition in business for all industries continues to grow in the U.K., and companies are using technology as much as possible to outshine each other and remain sustainable and relevant in the long run (Tian et al., 2017). Lawson issues such as patents continue to be enacted to control competition among businesses and keep the business environment as stable as possible. Protectionist policies for consumers are also tight, and big companies have had to pay heavy fines for breaching them in the recent past, while others were forced to close (Zamani, 2020). Consumers are also sensitive and well aware of their rights, making it very necessary for businesses to remain on good terms with them.
Market Entry Strategies for U.K. and China
Market Entry Strategy for China
According to McCann (2019), KFC entered China by forming joint ventures with existing local firms. The Chinese government bargained with KFC to form its first joint venture with the Government Poultry Department to strengthen its poultry industry. This sounded good for KFC since it created a pedestal for cohesive relations with the authorities. A range of reasons made KFC use joint ventures, and chief among them was the tough business regulations present at the time. Joint ventures meant that the local partners understood them better and would help guide the business from getting into unnecessary loggerheads with the authorities (Hu and Xie, 2013). The first joint venture with a government department created a much-needed sense of belongingness in China.
Market Entry Strategy for the U.K.
Contrary to China, KFC entered the U.K. market through franchising. This decision was influenced by the fa...